Entrepreneurship – Successfully Launching New Ventures – Fifth Edition
Summary
,Chapter 1: Introduction to Entrepreneurship
Entrepreneurship is defined as the process by which individuals pursue opportunities without regard to
resources the currently control for the purpose of exploiting future goods and services. Entrepreneur’s
behavior finds him or her trying to identify opportunities and putting useful ideas into practice. Established
firms can also be entrepreneurial, as they are proactive, innovative, and risk-taking. These firms practice
the so-called corporate entrepreneurship.
Why do people become entrepreneurs?
• Be their own boss
• Pursue their own ideas
• Pursue financial rewards
An average entrepreneur does not make more money than someone with a similar amount of responsibility in a
traditional job. This is rarely the primary motivation behind the launch of an entrepreneurial firm.
4 Primary Characteristics of Successful Entrepreneurs:
• Passion for the Business, why?
1. The ability to learn and iterate
2. A willingness to work hard for an extended period
3. Ability to overcome setbacks and “no’s”
4. The ability to listen to feedback on the limitations of your organization and yourself
5. Perseverance and persistence when the going gets tough
• Product/Customer focus
• Tenacity Despite Failure
1. Keep going after failures to find the successful combination
• Execution Intelligence
1. The ability to fashion a solid idea into a viable business is a key characteristic of
successful entrepreneurs. This means developing a business model, putting together a
new venture team, raising money, establishing partnerships managing finances leading
and motivating employees, etc.
Common Myths About Entrepreneurs:
1. Entrepreneurs are born, not made
2. Entrepreneurs are gamblers à moderate risk takers
3. Entrepreneurs are motivated primarily by money
4. Entrepreneurs should be young and energetic
5. Entrepreneurs love the spotlight
There are three types of start-up firms: salary-substitute firms, lifestyle firms, and entrepreneurial firms.
Salary-substitute firms are small firms that yield a level of income for their owner or owners that is
similar to what they would earn when working for an employer. Lifestyle firms provide their owner or
owners the opportunity to pursue a particular lifestyle and earn a living while doing so. Entrepreneurial
firms bring new products and services to the market. The essence of entrepreneurship is creating value and
then disseminating that value to customers. Value refers to worth, importance, or utility. These firms bring
new product and services to the market by creating and then seizing opportunities.
Over the past 10 years, the demographic makeup of entrepreneurial firms has changed in the United States
and around the world. Women, minorities, seniors, and young people own an increasingly larger number of
them.
Looking at the positive effects of entrepreneurship and entrepreneurial firms on economies and societies, it
can be described as the process of creative destruction. Because new products and technologies are
, typically better than those they replace and the availability of improved products and technologies increases
consumer demand, creative destruction therefore stimulates economic activity.
• Economic impact of entrepreneurial firms
Because of two reasons, innovation and job creation, entrepreneurial behavior has a strong impact
on an economy’s strength and stability. First, innovation is the process of creating something new,
which is central to the entrepreneurial process. Second, small businesses create a substantial
number of net new jobs in the United States.
• Entrepreneurial firms’ impact on society
The innovations made by these firms have a dramatic impact on a society. All the products that
make our lives easier, enhance our productivity at work, improve our health, and entertain us.
Though, these innovations do create moral and ethical issues with which societies are forced to
grapple.
• Entrepreneurial firms’ impact on larger firms
These types of firms also have a positive impact on the effectiveness of larger firms. It can be
shown that many entrepreneurial firms have built their entire business models around producing
products and services that increase the efficiency of effectiveness of larger firms.
The Entrepreneurial Process: (This process will be discussed throughout the book.)
1. Deciding to become an entrepreneur.
2. Developing successful business ideas.
3. Moving from an idea to an entrepreneurial firm.
4. Managing and growing the entrepreneurial firm.
