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Intro reading materials
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De-Pe
Intro to Entrepreneurship
2
Intro to Entrepreneurship
Introduction to Entrepreneurship
• Peter F. Drucker entrepreneurship is not:-– Magic– Mysterious– But It is a DISCIPLINE and it can be
LEARNED.
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Intro to Entrepreneurship
Types of Companies
Lifestyle– Provide a family income/support desired lifestyle– Fulfill personal goals– Generally $1M or less in annual sales– Limited upside– Sole proprietorship, LLC, S-Corp
High Growth– Fewer than 1 in 20 businesses– Possibly very large returns– Generally require more funds– Fiduciary responsibilities
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Intro to Entrepreneurship
Manager vs Entrepreneur
Entrepreneur Growth FirmPursuit of growth and personal wealth important
Owner Manager Lifestyle FirmOften trade or craft based. Will not grow to any size
Manager Manages a business belonging to someone elseWill build an organisation putting in appropriate controlssimilar to a large firm
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Intro to Entrepreneurship
Classical Viewpoint of the Entrepreneur
Entrepreneur
Risk-taker New Product Combinations
Manager
Uncertainty
Market Opportunities
Capitalist Organises Production
Decision-maker
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Intro to Entrepreneurship
Identifying entrepreneurial characteristics
• INTRODUCTION– Entrepreneurs are individuals who
recognize opportunities where others see chaos or confusion
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Intro to Entrepreneurship
Entrepreneurial Culture
• Always seeking something new• Restless, constantly on the move• Strong preference for freedom of choice
for the individual• Rebellious non-conformist youth is the
accepted norm
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Intro to Entrepreneurship
Entrepreneurial Culture
• Ability think big• Try to do the impossible• They prefer the new or at least the
improved• They worship innovation• They are tolerant of those who make
mistakes• Things need to get done quickly rather
than always get done perfectly
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Intro to Entrepreneurship
Hofstede’s Dimensions of Culture
Individualism
Power Distance
Uncertainty Avoidance
Masculinity
High(upper quartile countries)
Low(Lower quartile countries)
USA, Australia,New Zealand, UK,Canada, France, Germany
South America,Pakistan
Malaysia, Philippines,France, South America
UK, USA, Scandinavia,Germany
Greece, Portugal,Uruguay, Guatemala,France
Hong Kong, Singapore,UK, USA
Japan, Austria, Italy, UK, USA,Germany
North Europe
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Intro to Entrepreneurship
Hofstede’s Dimensions of Culture• Individualism vs Collectivism
– The degree to which people prefer to act as individuals rather than groups
• Power Distance– The degree of inequality among people that a community is willing
to accept
• Uncertainty Avoidance– The degree to which people prefer to avoid ambiguity, resolve
uncertainty and prefer structured rather than unstructured situations
• Masculinity vs Femininity– This defines quality of life issues. Masculine virtues are those of
assertiveness, competition and success. Feminine virtues are those such as modesty, compromise and cooperation
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Intro to Entrepreneurship
Benefits of Being an Entrepreneur
• Do what you enjoy• Control your own destiny• Contribute to society• Potentially huge financial rewards
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Intro to Entrepreneurship
Entrepreneurship is easier than a job?
• The average working week for a self employed person is 64 hours
• Most people do not increase their income by becoming self employed
• 1 in 5 Entrepreneurs do not earn anything within the first 12 months
• Support of the spouse or partner is critical
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Intro to Entrepreneurship
“ The only place success comes before work is in a dictionary” ANON
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Intro to Entrepreneurship
Entrepreneurship is risky because…..?
• Few entrepreneurs actually know what they are doing
• They lack the methodology• Management incompetence• Poor financial control• Failure to develop a plan• Uncontrolled growth• Improper inventory control
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Intro to Entrepreneurship
Entrepreneurship is risky because…..?
• “ Entrepreneurs who start out with the idea that they will make it big - and in a hurry - can be guaranteed failure “
Drucker pg31
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Intro to Entrepreneurship
Entrepreneurship
• Entrepreneurship is behavior rather than personality trait (Drucker pg23)
• Entrepreneurs see change as the norm and as healthy
• The entrepreneur always searches for change and responds to it
• Entrepreneurship does not have to be high risk!!
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Intro to Entrepreneurship
Things To Do
• Commit to your business, raising funds often forces this
• Have skin in the game• Fail fast, fail small, try again, find a model• Get excited, be confident and think big• Focus on revenues, margins – this will make raising
money easier and valuations better• Don’t try to be a big business too soon• Focus on the size of the pie and not the size of your
piece• Look for similar business models
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Intro to Entrepreneurship
Question?
• What is your understanding of entrepreneurship?
Please answer this question at de-pe.com/faq/
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Intro to Entrepreneurship
1.4 The myths of entrepreneurship
• Myth 1: Entrepreneurs are doers, not thinkers
• Myth 2: Entrepreneurs are born, not made
• Myth 3: Entrepreneurs are always inventors
• Myth 4: Entrepreneurs must fit the “Profile”
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Intro to Entrepreneurship
1.4 The myths of entrepreneurship (cont)
• Myth 5: All entrepreneurs need is money or luck
• Myth 6: Your ideas is the most important thing and must be protected
• Myth 7: Entrepreneurs seek success but experience high failure rates
• Myth 8: Entrepreneurs are extreme risk taker (gamblers)
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Intro to Entrepreneurship
Question?
• What is are some of your own myths about entrepreneurship?
Please answer this question at de-pe.com/faq/
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Intro to Entrepreneurship
What is creativity?
• “…involves the development of UNIQUE and NOVEL responses to problems and opportunities” (Online Ticketing, E-Banking)
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Intro to Entrepreneurship
Barriers to creativity
• Personal Beliefs• Institutional Inertia• Fear of Criticism• Over-Management
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Intro to Entrepreneurship
What is innovation?
• “…finding ways to deliver new or better goods or services.” (Kinicki and Williams, 2003)
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Intro to Entrepreneurship
3.7 Types of innovation
• Invention – creation of a new process or method
• Extension – iterating on existing ideas to make them more useful
• Duplication – apply an existing idea to a different audience or field
• Synthesis – combining two existing ideas to create something novel
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Intro to Entrepreneurship
3.8 Sources of innovation
• Process needs• Unexpected events• New knowledge• Changes of demographics
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Intro to Entrepreneurship
Questions?
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Intro to Entrepreneurship
Thank You