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Entrepreneurship Successfully Launching New Ventures 6th Edition Summary
Summary of the course Project Company assigment
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Voorbeeld van de inhoud
Project: Company Assignment SummaryChapter 1: Introduction to Entrepreneurship
o Entrepreneurship:
- The process by which individuals pursue opportunities without regard to resources they currently control
for the purpose of exploiting future goods and services.
- The art of turning an idea into a business that satisfies a need.
- Assembling and then integrating all the resources need – the money, people, business model, strategy,
technology – to transform an idea into a viable business.
o Corporate Entrepreneurship: the conceptualization of entrepreneurship at the company level. Highly
entrepreneurial companies are proactive, innovative, and risk-taking. The position of the firm on continuum
that ranges from highly conservative to highly entrepreneurial is the entrepreneurial intensity.
Types of Start-up firms
o Salary-Substitute firms: firms that basically provide their owner or owners a similar level of income to what
they would be able to earn in a conventional job. Most small business fit in this category.
o Lifestyle firms: firms that provide their owner(s) the opportunity to pursue a particular lifestyle and make a
living at it. They promote a sport, hobby, or pastime that may employ only the owner or just a handful of
people.
o Entrepreneurial firms: firms that bring new products and services to the market by creating and seizing
opportunities regardless of the resources they currently control. They create value (i.e. worth, importance,
utility) and then disseminate that value to consumers
o Intrapreneurship: the act of behaving like an entrepreneur while working within a company. Intrapreneurs
desire to bring new ideas for their companies, obtaining the freedom to do so without passing through all of the
processes that exist within large companies.
Why people become entrepreneurs
1) Desire to be their own boss
2) Desire to pursue their own ideas – as established firms often resist innovation, employees are left with good
ideas that go unfulfilled.
3) Pursue Financial Rewards – this motivation typically secondary to first two & often fails to live up to its hype.
Characteristics of a successful entrepreneur
1) Passion for their business – Important for both for-profit and non-profit organizations because passion enables
the ability to learn and iterate, there’s a willingness to work hard for an extended period of time, enables the
ability to overcome setbacks and “no’s”, enables the ability to listen to feedback on the limitations of your
organization and yourself, harbours perseverance and persistence when the going gets tough.
o Passion can be transmitted to employees by positive feelings for the venture and a sense of identity
relevance for it. Identity connection can be enhanced through transformational leadership, such as goal
alignment and identification as part of the founding team.
2) Product/customer focus – also involves the diligence to spot product opportunities and to see them through to
completion.
3) Tenacity Despite Failure – the possibility of failure exists; setbacks and failures inevitably occur during this
process, and entrepreneurs’ test is their ability to persevere through setbacks and failures.
4) Execution Intelligence – the ability to fashion a solid idea into a viable business is a key characteristic of
successful entrepreneurs.
o Effectively executing a business idea 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” – everyone has the potential to become one, it’s all a function of
environment, life experience, and personal choices.
- However, people with self-employed parents are more likely to become entrepreneurs, people who know
an entrepreneur are more than 2x likely to be involved in starting a new firms.
2) ”Entrepreneurs are gamblers” – entrepreneurs are rather moderate risk takers.
- Myth originates from the fact that entrepreneurs have jobs that are typically less structures, and that many
entrepreneurs have a strong need to achieve and often set challenging goals that is sometimes equated to
risk taking.
,3) ”Entrepreneurs are motivated primarily by money” – money is rarely the primary reason entrepreneurs start
new firms and persevere; they also say it can be distracting.
4) “Entrepreneurs should be young and energetic” – entrepreneurial activity is fairly even spread out over age
ranges; majority in their thirties and forties and have work experience prior to launching own venture. Investors
prefer experience, maturity, and a solid reputation.
5) “Entrepreneurs love the spotlight”: some are flamboyant, yet the vast majority do not attract public attention
and because they are working on proprietary products/services they avoid public notice.
Changing Demographics of Entrepreneurs
1) Women entrepreneurs: while men are more likely to start businesses than women, the number of women-
owned businesses is increasing.
2) Minority Entrepreneurs: there’s a substantial increase in minority entrepreneurs in US, they outpaced the
growth of non-minority firms in gross receipts, employment, and number of firms. An important factor
facilitating the growth of minority entrepreneurs is the number of organizations that promote and provide
assistance.
3) Senior entrepreneurs: number of seniors (50+) starting businesses Is substantial and growing. This can be
attributed to corporate downsizing, an increased desire among older workers for more personal fulfilment in
their lives, and growing worries among seniors that they need to earn additional income to pay for future
healthcare services. 50+ people also have substantial business experience, financial resources they can draw
upon, and excellent vigor and health, making them ideal candidates. There’s also increased life expectancy.
4) Young entrepreneurs: desire to pursue entrepreneurial career is high among young people.
Positive effects of entrepreneurship and entrepreneurial firms
Creative destruction: the development of new products/technologies that over time make current products and
technologies obsolete – stimulates economic activity and may increase productivity.
Increased life satisfaction (founders from Finland, Hungary, and the Netherlands have the highest life
satisfaction).
1) Innovation: the process of creating something new, which is central to the entrepreneurial process.
- Innovations of new products and services make our lives easier, enhance work productivity, improve our
health, and entertain us. Yet, innovations do create moral and ethical issues with societies are forced to
grapple.
- Entrepreneurial firms also positively impact larger firms due to R&D, as evidence shows that many
entrepreneurial firms have built their entire business model around producing products and services that
increase the efficiency or effectiveness of larger firms.
2) Job creation: small business create new jobs, yet the only downside of small business jobs is that employee pay
tends to be less than is the case in larger companies.
The Entrepreneurial Process
1) Deciding to become an entrepreneur: a triggering event prompts an individual to become an entrepreneur.
2) Developing successful business ideas: includes opportunity recognition, feasibility analysis, the development of
an effective business model, industry analysis, and writing a business plan.
- Business model: plan or recipe for how it creates, delivers, and captures value for its stakeholders.
- Business plan: a written document that describes all the aspects of a business venture in a concise manner.
This is usually necessary to attract high-quality business partners.
3) Moving from an idea to an entrepreneurial firm: first step is to prepare an ethical and legal foundation for a
firm, including selecting an appropriate form of business ownership.
4) Managing and growing the entrepreneurial firm
Chapter 2: Recognizing opportunities and generating ideas
Idea: a notion, an impression, which may or may not meet the criteria of an opportunity.
Opportunity: a favourable set of circumstances that creates a need for a new product, service, or business.
o Externally stimulated means that an entrepreneur decides to launch a firm, searches for and recognizes an
opportunity, and then starts a business.
o Internally stimulated means an entrepreneur recognizes a problem (opportunity gap) and creates a business
to address the problem or fill the identified gap.
Common mistake entrepreneurs make is picking a currently available product/service that they’re passionate
about and then trying to build a business around a slightly better version of it. This isn’t sensible because the key to
opportunity recognition is to identify a product/service that people need and are willing to buy NOT one that the
entrepreneur wants to make and sell.
, Window of opportunity: a metaphor describing the time period in which a firm can realistically enter a new
market. Once the market for a new product is established, its window of opportunity opens. When the market
matures, the window of opportunity closes.
Three ways to identify opportunities
1) Observing Trends: most important trends to follow are economic trends, social trends, technological advances,
and political action and regulatory changes.
o it’s important to distinguish between trends and fads, and trends are interconnected and should be
considered simultaneously when brainstorming new business ideas.
o Economic forces: helps in determining what areas are ripe for new business ideas and what areas to avoid.
If the economy is strong, people have more money to spend and buy products. When the economy is
weak, people have less money to spend and are more reluctant to spend money fearing the economy will
worsen and they’ll lose their job. It’s important to evaluate who has money to spend and what they spend
it on.
o Social forces: understanding social forces on trends and how they affect new product, service, and
business ideas is a fundamental piece of the opportunity recognition puzzle. Often, the reason that a
product or service exists has more to do with satisfying social need that the more transparent need the
product fills.
- Changes in social trends alter how people and business behave and how they set their priorities. These
changes affect how products and services are built and sold.
- Social trends include aging of the population, increasing diversity of the workforce, growth in the use
of the mobile device, continual migration, desire for personalization.
o Technological advances: advances in technology frequently dovetail with economic and social changes to
create opportunities. These advances also provide opportunities to help people perform everyday tasks in
better or more convenient ways.
- Once a technology is created, products often emerge to advance it.
o Political action and regulatory changes: -they provide the basis for business ideas, for ex, new laws spur
start-ups that are launched to take advantage of their specifications. In some cases, entire industries hinge
on whether certain government regulations evolve in a manner that is favourable to the industry.
- Political change also engenders new business and product opportunities.
2) Solving a problem: -second approach is to recognize problems and find ways to solve them. Problems can be
recognized by observing challenges people encounter in their daily lives and through simple means such as
intuition, serendipity, or chance.
o Advances in technology often result in problems for people who can’t use technology in the way it was
sold to the masses.
o When there’s difficulty in solving a problem, you can look at a similar problem that was solved and then
apply that solution to your problem.
o Business ideas emerge by recognizing problems that are associated with emerging trends.
3) Finding Gaps in the Marketplace: -a gap in the marketplace is often created when a product or service is
needed by a specific group of people but doesn’t represent a large enough market to be of interest to
mainstream retailers.
o A common way that gaps in marketplace are recognized is when people become frustrated because they
can’t find a product or service that they need and recognize that other people feel the same way.
o Another technique is to take an existing product/service and create a new category by targeting a
completely different target market; so create a gap and then fill it.
o Regardless of whether the opportunity results from changing environmental trends, solving a problem, or
finding gaps in the marketplace, the opportunity must ultimately be fashioned into a successful business.
Opportunity recognition: the process of perceiving the possibility of a profitable new business or new product or
service. That is, an opportunity can’t be pursued until it’s recognized.
Personal Characteristics of the entrepreneur
1) Prior experience: -studies show prior experience helps entrepreneurs recognize business opportunities.
o By working in an industry, individuals may spot an a niche market that is underserved, it also helps them
build a network which could provide insights that lead to opportunities.
o Yet, anecdotal evidence suggests that people outside the industry could enter it with a new set of eyes,
and thus innovate in ways that people with prior experience may find difficult.
2) Cognitive Factors: ->entrepreneurial alertness: the ability to notice things without engaging in deliberate
search. Research concludes that alertness goes beyond noticing things and involves purposeful effort.
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