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Summary Entrepreneurship - Successfully Launching New Ventures
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What is entrepreneurship?Academic definition (Stevenson and Jarillo) Entrepreneurship is the process by which
individuals pursue opportunities without regard to
resources they currently control.
Alternative view Entrepreneurship is the art of turning an idea into
a business.
Explanation of what entrepreneurs do Entrepreneurs assemble and then integrate all the
resources needed – the money, the people, the
business model, the strategy – to transform an
invention or an idea into a viable business.
Corporate entrepreneurship
Is the conceptualization of entrepreneurship at the firm level.
All firms fall along a conceptual continuum that ranges from highly conservative to highly
entrepreneurial.
The position of a firm on this continuum is referred to as its entrepreneurial intensity.
<———————————————Entrepreneurial intensity————————————————>
Entrepreneurial Firms Conservative Firms
Proactive Take a more “wait and see”
Innovative posture Less innovative
Risk taking Risk averse
A historical flashback: The entrepreneurial traditions
The economic ——————>The social- psychological——————>The process- oriented
1934-1960 1960-1980 Today
Emergence Opportunity
Entrepreneurs actions Who is the entrepreneur? Formation of Discovery,
influences the market Studying individual personality new evaluation &
– new opportunities traits, socialization etc. organizations exploitation of
Creative destruction opportunities
(Schumpeter) Salary substitute firm
Lifestyle firm
Three types of start-up firms Entrepreneurial firm
Remember...
When we talk about ‘entrepreneurs’
we refer to a broad definition, which
covers all three categories.
But: Be aware about our own
understanding, definition and use of
words.
Economic Impact of Entrepreneurial Firms
Innovation Is the process of creating something new, which is central
to the entrepreneurial process.
Small innovative firms are 16 times more productive than
larger innovative firms in terms of patents per employee
Job Creation Small businesses create a substantial number of net new jobs.
Firms with 500 or fewer employees created two million of the
roughly three million private sector jobs in 2014 (for the US).
Entrepreneurial Firms’ Impact on Society and Larger Firms
Impact on Society The innovations of entrepreneurial firms have a dramatic impact on
society. Think of all the new products and services that make our
lives easier, enhance our productivity at work, improve our health,
and entertain us.
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,Impact on Larger Firms Many entrepreneurial firms have built their entire business models
around producing products and services that help larger firms
become more efficient and effective.
Why become an entrepreneur?
The three primary reasons that people become entrepreneurs and start their own firms:
1. Desire to be their own boss
2. Desire to pursue their own ideas
3. Financial rewards
Characteristics of successful entrepreneurs
Passion for the Business The number one characteristic shared by successful entrepreneurs
is a passion for the business. This passion typically stems from the
entrepreneur’s belief that the business will positively influence
people’s lives.
Product/Customer Focus A second defining characteristic of successful entrepreneurs is
a product/customer focus. An entrepreneur’s keen focus on
products and customers typically stems from the fact that most
entrepreneurs are, at heart, craftspeople.
Tenacity Despite Failure Because entrepreneurs are typically trying something new, the failure
rate is naturally high. A defining characteristic for successful
entrepreneurs is their ability to persevere through setbacks and
failures.
Execution Intelligence The ability to fashion a solid business idea into a viable business is a
key characteristic of successful entrepreneurs.
What is your entrepreneurial personality?
The Entrepreneurial Process
The Entrepreneurial Process Consists of Four Steps
Step 1: Deciding to become
an entrepreneur.
Step 2: Developing
successful business ideas.
Step 3: Moving from an idea
to an entrepreneurial firm.
Step 4: Managing and growing
the entrepreneurial firm. 2 von 20
, The difference between opportunities and ideas
Idea: ...is a thought, an impression, a notion.
Opportunity: ...is a favorable set of circumstances that creates a ned for a new product,
service, or business.
So, an idea comes prior to an opportunity. Ideas might become opportunities...
Crucial is: Does the idea fill a need and satisfy the criteria for an opportunity?
What is an opportunity?
Opportunity (rather than just an idea) Attractive
Timely
Durable
Anchored in a product, service, or business that
creates or adds value for its buyer or end user.
Three ways to identify an opportunity
1. Observing trends Economic forces: State of the economy
Level of disposable income
Consumer spending patterns
Social forces: Social cultural trends
demographic changes.
What people think is “in”
Technological advances: New technologies
Emerging technologies
New uses of old technologies
Political and Regulatory changes New changes in political arena
New laws and regulations
> Business, Product or service Difference between what is
opportunity gap available and what is possible
> New business product and
service ideas.
2. Solving a problem
3. Finding gaps in the marketplace
Personal characteristics of the entrepreneur
Characteristics that tend to make some people better at recognizing opportunities than others:
Prior Industry Experience
Cognitive Factors
Social Networks
Creativity
Prior industry experience
Studies have shown that prior experience in an industry helps an entrepreneur recognize business
opportunities.
By working in an industry, an individual may spot a market niche that is underserved.
It is also possible that by working in an industry, an individual builds a network of social contacts
who provide insights that lead to recognizing new opportunities.
It is also important to note that anecdotal evidence suggests that people outside an industry can
sometimes enter it with a new set of eyes, and as a result innovate in ways that people with prior
experience might find difficult.
For example, Elon Musk, the founder of Tesla, had no prior experience in the auto industry.
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