Project: Company Assignment
Summary notes from Bruce R. Barringer and R. Duane Ireland’s “Entrepreneurship: Successfully Launching New
Ventures” and from the lectures given by Dr Angelo Tomaselli and guest lecturers.
Chapter 1: Introduction to Entrepreneurship 2
Chapter 2: Recognising Opportunities and Generating Ideas 11
Chapter 3: Feasibility Analysis 19
Chapter 5: Industry and Competitor Analysis 32
Art of Business – Bob van Luijt 41
Chapter 4: Developing an Effective Business Model 42
Design Thinking – Linde Erinkveld 54
Chapter 6: Writing a Business Plan 55
Chapter 8: Assessing a New Venture’s Financial Strength and Viability 69
Chapter 10: Getting Financing or Funding 81
Designing a Website or App Mock-Up – Angelo Tomaselli 94
Web Site Design and User Experience – Elena Tisato 95
Designing the Business Process Behind Your Website (or App) Mock-Up – Angelo Tomaselli 97
,Chapter 1: Introduction to Entrepreneurship
Introduction to Entrepreneurship
• Global Entrepreneurship Monitor (GEM), which is a joint research effort among several international
universities and the International Council for Small Business, tracks entrepreneurship in 112 countries.
• Although the highest rates of entrepreneurial start-up activities occur in low-income
countries, where good jobs are not plentiful, the rates are also impressive in high-
income countries such as Germany (4.7%), UK (6.9%), and the USA (11.9%).
o What the 11.9% means for the United States is that almost 1 out of every 8
1/2 American adults is actively engaged in starting a business or is the
owner/manager of a business that is less than three-and-a-half-years old.
• The majority of people across the countries the GEM study follows are drawn to
entrepreneurship to take advantage of attractive opportunities, rather than starting
out of necessity to earn an income.
• One criticism of entrepreneurship, is that the majority of new businesses fail.
o The often used statistic that 9 out of 10 businesses fail in their first few years is an exaggeration.
In the United States, according to the Bureau of Labor Statistics, over half the businesses
started are still in existence five years later.
The number drops to just over a third after 10 years, but some of the businesses disappeared
because they were successful and were sold or were acquired by another firm.
• The percentage of firms that do fail shows that a motivation to start and run a business isn’t enough; indeed,
motivation must be coupled with a solid business idea, good financial management, and effective execution to
maximize chances for success.
What is Entrepreneurship and Why is it important?
• The word entrepreneur derives from the French words entre, “between,” and prendre, “to take.”
o The word was originally used to describe people who “take on the risk” between buyers and sellers or
who “undertake” a task such as starting a new venture.
• Inventors and entrepreneurs differ from each other.
o An inventor creates something new.
o An entrepreneur assembles and then integrates all the resources needed—money, people, business
model, strategy, and risk-bearing ability—to transform the invention into a viable business.
• Entrepreneurship is defined as the process by which individuals pursue opportunities without regard to
resources they currently control for the purpose of exploiting future goods and services.
o Entrepreneurship is the art of turning an idea into a business that satisfies a need.
o “Entrepreneurs are individuals who exploit market opportunity through technical and/or
organizational innovation” (Schumpeter, 1965).
• An entrepreneur’s behavior finds him/her trying to identify opportunities & putting useful ideas into practice.
o The tasks called for by this behavior can be accomplished by either an individual or a group and
typically require creativity, drive, and a willingness to take risks.
• Typically, established firms with an entrepreneurial emphasis are proactive, innovative, and risk-taking.
• Established firms with an orientation toward acting entrepreneurially practice corporate entrepreneurship.
o Corporate entrepreneurship is the conceptualization of entrepreneurship at the company level.
• All firms fall along a conceptual continuum that ranges from highly conservative to highly entrepreneurial.
o The position of a firm on this continuum is referred to as its entrepreneurial intensity.
• Entrepreneurial firms are typically proactive innovators and are not averse to taking calculated risks.
o Firms with higher entrepreneurial intensity regularly look for ways to cut bureaucracy.
• In contrast, conservative firms take more of a “wait and see” posture, are less innovative, and are risk averse.
• Intrapreneurship is the act of behaving like an entrepreneur while working within a company (Pinchot, 1984).
o Intrapreneurs desire to bring new ideas for their companies, obtaining the freedom to do so without
passing through all the processes existing in companies.
• Why is entrepreneurship so important?
o Impact on job
Looking at start-ups and scaleups, on average, they have 12.8 employees from different
countries and are planning to hire another 7.5 people within the next 12 months.
This results in 18,015 jobs that are being created within Europe.
o Impact on wealth
, Dutch start-ups raised €557 million in growth capital in 2018 with more than 130 deals.
o Impact on life satisfaction
Finland (7.9), Hungary (7.8) and the Netherlands (7.8) have the highest life satisfaction
(index: 0 to 10). Sample size: 2,515 startups.
Why do People Become Entrepreneurs?
• Be Their Own Boss
o Many entrepreneurs want to be their own boss because either they have had a long-time ambition to
own their own firm or because they have become frustrated working in traditional jobs.
o Some entrepreneurs transition from a traditional job to owning their own business more gradually, as
shown by a decision to initially operate their firm on a part-time basis.
While this approach isn’t possible in all situations, by starting a business part time individuals
can gain valuable experience, tuck away the money they earn, and find out if they really like
the business before deciding to leave their job.
In some businesses, such as catering or financial planning, it takes time to build a client list.
• Some entrepreneurs will time the departure from their job with the point in time at
which their client list is large and profitable enough to support a full-time business.
• Pursue Their Own Ideas
o Some people are naturally alert, and when they recognize ideas for new products or services, they
have a desire to see those ideas realized.
o Corporate entrepreneurs who innovate within the context of an existing firm typically have a
mechanism for their ideas to become known.
o Established firms often resist innovation and employees are left with good ideas that go unfulfilled.
Because of their passion and commitment, some employees choose to leave the firm
employing them in order to start their own business as the means to develop their ideas.
o This chain of events can take place in non-corporate settings, too.
For example, some people, through a hobby, leisure activity, or just everyday life, recognize
the need for a product or service that is not available in the marketplace.
If the idea is viable enough to support a business, they commit tremendous time and energy
to converting the idea into a part-time or full-time firm.
• Pursue Financial Rewards
o This motivation, however, is typically secondary to the first two and often fails to live up to its hype.
The average entrepreneur does not make more money than someone with a similar amount
of responsibility in a traditional job.
o The financial lure of entrepreneurship is its upside potential.
People such as Jeff Bezos of Amazon.com, Mark Zuckerberg of Facebook, and Larry Page and
Sergey Brin of Google made billions of dollars building their firms.
o Money is also a unifier – Making a profit and increasing the value of a company is a solidifying goal
that people can rally around.
o But money is rarely the primary motivation behind the launch of an entrepreneurial firm.
Some entrepreneurs even report that the financial rewards associated with
entrepreneurship can be bittersweet if they are accompanied by losing control of their firm.
• Solve people’s problems
• According to the European Start-up Monitor, 79.1% of people
decided to become an entrepreneur because of intrinsic rewards
(self-fulfilment), 63.0% because of extrinsic rewards (making
money), 62.9% because of independence, 45.3% because of
keeping up family tradition, 7.6% because of opportunity (in the
market), 6.0% because of necessity (did not find a job), and 4.4%
because of other reasons.
Characteristics of Successful Entrepreneurs
• #1 = Passion for the Business
o Frequently, it’s the passion for an idea that gets a
business going and keeps it going when times are tough.
, o Making a difference in people’s lives is the primary motivator behind many social enterprises, which
are often started by people who set aside promising careers to pursue a social goal.
o Passion is particularly important for both for-profit and not-for-profit entrepreneurial organizations
because although rewarding, the process of starting a firm or building either a profit-making
corporation or a social enterprise is demanding.
o Passion is an emotional meta experience, it is more than a simple attribute.
It can be transmitted to employees by positive feelings for the company and a sense of
identity relevance for it (Cardon, 2008).
Reason Passion Is Important Explanation
1. The ability to learn and iterate Founders don’t have all the answers. It takes passion and drive to solicit feedback, make
necessary changes, and move forward. Needed changes won’t always be obvious. Passion
makes the search for the right answers invigorating and fun.
2. A willingness to work hard for Commonly, entrepreneurs work longer hours than people with traditional jobs. You can only do
an extended period of time that on a sustained basis if you’re passionate about what you’re doing.
3. Ability to overcome setbacks It’s rare that an entrepreneur doesn’t experience setbacks and hear many “no’s” from potential
and “no’s” customers, investors, and others while building an entrepreneurial business or a social
enterprise. The energy to continue comes from passion for an idea.
4. The ability to listen to You’ll meet plenty of people along the way—some with good intentions and some without—
feedback on the limitations of who will tell you how to improve your organization and how to improve yourself. You have to be
your organization and willing to listen to the people with good intentions and make changes if it helps. But you also
yourself have to be able to brush aside feedback from people with bad intentions without letting them
get you down.
5. Perseverance and persistence Perseverance and persistence come from passion. As an entrepreneur, you’ll have down days.
when the going gets tough Building an entrepreneurial organization is fraught with challenges. Passion is what provides an
entrepreneur the motivation to get through tough times.
Each of these reasons reflects a personal attribute that passion engenders.
• Removing just one of these qualities would make it much more difficult to launch
and sustain a successful entrepreneurial organization.
o Note of caution: While entrepreneurs should have passion, they shouldn’t wear rose-coloured glasses
It is important to be enthusiastic about a business idea, but it is also important to understand
its potential flaws and risks.
In addition, entrepreneurs should understand that the most effective business ideas take
hold when their passion is consistent with their skills and is in an area that represents a
legitimate business opportunity.
• #2 = Product/Customer Focus
o Being able to understand the needs of the customers
o While it’s important to think about management, marketing, finance, etc., none of those functions
makes any difference if a firm does not have good products with the capability to satisfy customers.
o A product/customer focus also involves the diligence to spot product opportunities and to see them
through to completion.
• #3 = Tenacity Despite Failure
o Because entrepreneurs are typically trying something new, the possibility of failure exists.
o Developing a new business idea may require some experimentation before success is attained.
Setbacks and failures inevitably occur during this process.
The litmus test for entrepreneurs is their ability to persevere through setbacks and failures.
o It’s also important that entrepreneurs have sufficient tenacity to overcome personal obstacles along
with professional ones.
o Tenacity is the ability to not give up.
In the European Start-up Monitor report (2016), on 2515 start-ups, 62% of respondents
stated that, if their current start-up failed, they would start a new one.
o Why? Because we can learn from failure:
Lesson #1: Experience: we realize it isn’t the end of the road, but only the beginning.
Lesson #2: Knowledge: Thomas Edison famously failed nearly 10,000 times to create a viable
lightbulb. With each failure, he gained the knowledge of one more avenue that didn’t work.
