Dr.Daleep ParimooDr.Daleep Parimoo

EENTREPRNTREPREENEURSHINEURSHIPP

THE PEOPLE WHO GET ON THIS WORLD ARE THE

PEOPLE WHO GET UP AND LOOK FOR CIRCUMSTANCES

THEY WANT, AND IF THEY CAN’T FIND THEM, THEY MAKE THEM

GEORGE BERNARD SHAW

CONCEPTS AND DEFINITIONS -CONCEPTS AND DEFINITIONS -ENTREPRENEUR, ENTREPRENEURSHIPENTREPRENEUR, ENTREPRENEURSHIP,

CONCEPTS AND DEFINITIONS -CONCEPTS AND DEFINITIONS -ENTREPRENEUR, ENTREPRENEURSHIPENTREPRENEUR, ENTREPRENEURSHIP,

ENTREPRENEURAn entrepreneur is a person who starts an enterprise. He searches for change and responds to it.

The economists view him as a fourth factor of production along with land labour and capital.

The sociologists feel that certain communities and cultures promote entrepreneurship

Still others feel that entrepreneurs are innovators who come up with new ideas for products, markets or techniques.

To put it very simply an entrepreneur is someone who perceives opportunity, organizes resources needed for exploiting that opportunity and exploits it.

ENTREPRENEUR

An entrepreneur is a person who starts an enterprise. He searches for change and responds to it.

The economists view him as a fourth factor of production along with land labour and capital.

The sociologists feel that certain communities and cultures promote entrepreneurship

Still others feel that entrepreneurs are innovators who come up with new ideas for products, markets or techniques.

To put it very simply an entrepreneur is someone who perceives opportunity, organizes resources needed for exploiting that opportunity and exploits it.

For the purposes of the study by Entrepreneurship in India by National Knowledge Commission 2008 and keeping in mind its key role in creating value, NKC defines Entrepreneurship as follows:

‘Entrepreneurship is the professional application of knowledge, skills and competencies and/or of monetizing a new idea, by an individual or a set of people by launching an enterprise de novo or diversifying from an existing one (distinct from seeking self employment as in a profession or trade), thus to pursue growth while generating wealth, employment and social good’.

Entrepreneurship has been understood to mean, among other things: ‘the ability to create and build something from practically nothing’ (J.A. Timmons, “The Entrepreneurial Mind”, 1989);

‘the creation of new economic opportunities’ (Wennekers and Thurik, “Linking Entrepreneurship and Economic Growth”, 1999);

‘creating and managing vision and demonstrating leadership’ (Wickham, “Strategic Entrepreneurship: A decision making approach to new venture creation and management”, 1998, page 34);

‘the ability to see and evaluate business opportunities’ (Meredith, “The Practice of Entrepreneurship”, 1982, page 3;

‘an ability to assemble or reassemble from what is available into a new kind of activity’ (Peter Marris, ‘The Social Barriers of African Entrepreneurship’, Journal of Developing Societies, October, 1968, as quoted in Thomas A. Timberg,

‘ The Marwaris: From Traders to Industrialists’, 1978, page 19); ‘the shifting of economic resources out of an area of lower productivity into one of higher productivity and yield’ (The Economist, October 13, 2007, page 18 of the special section on Innovation, quoting Jean Baptiste Say) as well as ‘an activity characterized by the goals of profitability, growth and innovative practices’ (see Joseph Schumpeter’s worksgenerally, quoted in Kirby)

Entrepreneur is a French word (Noun) which means :Contractor

Entrepreneur is a person who starts /undertakes any venture and Would like to Make things happenHave his own way of doing thingsPull together events and situations that may appear bizarre to Average person

Entrepreneurship is undertaking any venture -With Profit/Non-Profit Motive

EntrepreneurEntrepreneur

John Stuart Mill...describes an entrepreneur as a business founder

Carl Menger...Principles of Economics: “Economic change does not arise from circumstances but from an individual’s awareness and understanding of those circumstances

Entrepreneur

“A Treatise on Political Economy”...describes an entrepreneur as one who possessed certain arts and skills of creating new economic enterprises, yet a person who had exceptional insight into society’s needs and was able to fulfill them.Influences society and is influenced by it.

Entrepreneur

1725: Richard Cantillon: An entrepreneur is a person who pays a certain price for a product to resell it at an uncertain price, thereby making decisions about obtaining and using the resources while consequently admitting the risk of enterprise.

1803: J.B. Say: An entrepreneur is an economic agent who unites all means of production- land of one, the labour of another and the capital of yet another and thus produces a product. By selling the product in the market he pays rent of land, wages to labour, interest on capital and what remains is his profit. He shifts economic resources out of an area of lower and into an area of higher productivity and greater yield.

1934: Schumpeter: According to him entrepreneurs are innovators who use a process of shattering the status quo of the existing products and services, to set up new products, new services.

1961: David McClleland: An entrepreneur is a person with a high need for achievement [N-Ach]. He is energetic and a moderate risk taker.

1964: Peter Drucker: An entrepreneur searches for change, responds to it and exploits opportunities. Innovation is a specific tool of an entrepreneur hence an effective entrepreneur converts a source into a resource.

1971: Kilby: Emphasizes the role of an imitator entrepreneur who does not innovate but imitates technologies innovated by others. Are very important in developing economies.

1975: Albert Shapero: Entrepreneurs take initiative, accept risk of failure and have an internal locus of control.

1983: G. Pinchot: Intrapreneur is an entrepreneur within an already established organization.

An individual does not have to invent something to be considered entrepreneur an individual can pick up something that already exists and make it different-By his/her innovative ideas

Entrepreneur

“one who shifts economic resources out of an area of lower and into an area of higher productivity and greater yield “

Peter Drucker, guru on management theory

“..human, creative act that builds something of value…pursuit of opportunity…..requires a vision and passion and commitment…..calculated risks…”

Jeffrey Timmons, author of the entrepreneurial mind

EntrepreneurEntrepreneurE: Examines Needs & wants of the society at large for which he/she feels some solution can be found to satisfy these needs/wants

N:Narrows the possible opportunities down to specific opportunities

T: Thinks of Innovative Ideas

R: Researches the opportunities and ideas thoroughly

E: Enlists the best source of advice and assistance that can be found

P: Plans the venture and looks for the possible problems that may arise on setting of the venture

R:Ranks the Risks and Possible Rewards

E:Evaluates the Risks/Possible rewards & makes Decision

N:Never hangs on an idea , if research shows it would not work

E:Employs Resources necessary for venture

U:Understands that any venture will take a great deal of long & hard work

R:Realizes a sense of accomplishment from successful ventures and learns from failures.

ENTREPRENUERSHENTREPRENUERSHIPIP

EntrepreneurshipEntrepreneurship

Is a dynamic process of creating incremental wealth. This wealth is created by individuals who assume the major risks in terms of equity, time and career commitment of providing value for some product or service

The entrepreneur must somehow infuse value to the product or service...

“Entrepreneurship is more of an 'art form' than a lot of people give it credit for...I think that you are a business producer...Just as Steven Speilberg creates movies, I think that entrepreneurs create businesses... it is just a different canvas.”

Tim DeMello '81 ,Streamline.com

EntrepreneurshipEntrepreneurship

•Entrepreneurship is a creative activity.

•An entrepreneur is one who innovates, i.e. carries out new combinations or enterprise.

•Entrepreneurs are essentially motivated and talented class of people.

•Entrepreneur sees an opportunity and exploits it.

•An Entrepreneur is a problem solver

EntrepreneurshipEntrepreneurship

“The pursuit of opportunity beyond the resources you currently control”– Howard Stevenson, Harvard Business School

What is entrepreneurship?

Long ago two people went to a lonely Island in search of Shoe Market. Both of them visited extensively this Island and found People bare-footed.

One of the person sent telegram to his parents saying

NO MARKET EXISTS, SO COMING BACK.NO MARKET EXISTS, SO COMING BACK.

The other one wrote to his parents saying

HUGE POTENTIAL EXISTS, HENCE STAYING BACK.HUGE POTENTIAL EXISTS, HENCE STAYING BACK.

EntrepreneurshipEntrepreneurship

Entrepreneurship can be described as a process of action an entrepreneur undertakes to establish his enterprise. Entrepreneurship is a creative activity. It is the ability to create and build something from practically nothing. It is a knack of sensing opportunity where others see chaos, contradiction and confusion. Entrepreneurship is the attitude of mind to seek opportunities, take calculated risks and derive benefits by setting up a venture. It comprises of numerous activities involved in conception, creation and running an enterprise.

According to Peter Drucker Entrepreneurship is defined as ‘a systematic innovation, which consists in the purposeful and organized search for changes, and it is the systematic analysis of the opportunities such changes might offer for economic and social innovation.

Entrepreneurship is a discipline with a knowledge base theory. It is an outcome of complex socio-economic, psychological, technological, legal and other factors. It is a dynamic and risky process. It involves a fusion of capital, technology and human talent. Entrepreneurship is equally applicable to big and small businesses, to economic and non-economic activities. Different entrepreneurs might have some common traits but all of them will have some different and unique features. If we just concentrate on the entrepreneurs then there will be as many models as there are ventures and we will not be able to predict or plan, how and where, and when these entrepreneurs will start their ventures.

Entrepreneurship is a process. It is not a combination of some stray incidents. It is the purposeful and organized search for change, conducted after systematic analysis of opportunities in the environment. Entrepreneurship is a philosophy- it is the way one thinks, one acts and therefore it can exist in any situation be it business or government or in the field of education, science and technology or poverty alleviation or any others.

Entrepreneurship is the ability/ attitude of an individual to see opportunities, where others see only problems. They solve problems and take advantage of opportunities. They are interested in progress and change

EntrepreneurshipEntrepreneurship

Entrepreneurial Entrepreneurial CultureCulture

Entrepreneurial CultureEntrepreneurial CultureCulture refers to set of values, Norms and traits that are prevalent in any society and entrepreneurial Culture is set of values, norms and traits that are conducive for its growth in a country. It is this culture, which focuses on the emergence of new opportunities, the means of capitalizing on them and creation of structure appropriate for pursuing them. The difference between administrative and entrepreneurial culture is between what resources to control and where is the opportunity ?

When we say what resources to control, we talk about ADMINISTRATIVE CULTURE and then we talk about opportunity, we are talking about ENTREPRENEURIAL CULTURE

DIFFERENCE BETWEEN ENTREPRENEUR AND ENTREPRENEURSHIP

The term entrepreneur is used to describe men and women who establish and manage their own business. The process involved is called entrepreneurship. Entrepreneurship is an abstraction whereas entrepreneurs are tangible people. Entrepreneurship is a process and an entrepreneur is a person. Entrepreneurship is the outcome of complex socio-economic, psychological and other factors.

Entrepreneur is the key individual central to entrepreneurship who makes things happen. Entrepreneur is the actor, entrepreneurship is the act. Entrepreneurship is the most effective way of bridging the gap between science and the market place by creating new enterprises. An entrepreneur is the catalyst who brings about this change.

FUNCTIONS OF AN ENTREPRENEUR

An entrepreneur frequently has to wear many hats. He has to perceive opportunity, plan, organize resources, and oversee production, marketing, and liaison with officials. Most importantly he has to innovate and bear risk. The main functions of an entrepreneur are as follows:

Innovation: Innovation is one of the most important functions of an entrepreneur according to Schumpeter. An entrepreneur uses information, knowledge and intuition to come up with new products, new methods of reducing costs of a product, improvement in design or function of a product, discovering new markets or new ways of organization of industry. Through innovation, an entrepreneur converts a material into a resource or combines existing resources into new and more productive configurations. It is the creativity of an entrepreneur that results in invention [creation of new knowledge] and innovation [application of knowledge to create new products,services or processes.] Systematic innovation means monitoring the following for innovative opportunity:

An entrepreneur frequently has to wear many hats. He has to perceive opportunity, plan, organize resources, and oversee production, marketing, and liaison with officials. Most importantly he has to innovate and bear risk. The main functions of an entrepreneur are as follows:

Innovation: Innovation is one of the most important functions of an entrepreneur according to Schumpeter. An entrepreneur uses information, knowledge and intuition to come up with new products, new methods of reducing costs of a product, improvement in design or function of a product, discovering new markets or new ways of organization of industry. Through innovation, an entrepreneur converts a material into a resource or combines existing resources into new and more productive configurations. It is the creativity of an entrepreneur that results in invention [creation of new knowledge] and innovation [application of knowledge to create new products,services or processes.] Systematic innovation means monitoring the following for innovative opportunity:

i. The unexpected success or failure or any unexpected outside event, (e.g. when the IT bubble burst the ITES sector started growing.)

ii. Innovation based on process need [e.g. plate based cameras, film based cameras, digital cameras]

iii. Changes in industry and market structure [e.g. video cassette VCD, DVD, Blue ray disc]

iv. Demographics changes (e.g. increasing number of working women and nuclear families in most metropolitan cities)

v. New knowledge (e.g. Pentium chip)

2. Risk and uncertainty bearing: According to Hozelist an entrepreneur performs the function of risk and uncertainty bearing. Every decision pertaining to development of new products, adapting new technologies, opening up new markets involves risk. Decision-making in an environment of uncertainty requires anticipation of risk. Profit is said to be the reward for anticipating and taking such risks. However it is pertinent to mention that the entrepreneur is not a gambler, he only takes calculated risks. An entrepreneur develops the art of decision-making under conditions of uncertainty as amatter of survival.

3. Organization building: An entrepreneur has to organize men, material and other resources. He has to perform the functions of planning, co-ordination and control. He has to use his leadership qualities to build a team, generate resources and solve problems. With his organizational skills an entrepreneur builds an enterprise from scratch, nurtures it and makes it grow. His vision sows the seeds for a sound and vibrant organization and synergies are built in the enterprise.

According to Kilby in a developing country even the imitator entrepreneurs are very important and the entrepreneurial role encompasses the following:

i. Perception of market opportunitiesii. Gaining command over scarce resourcesiii. Purchasing inputsiv. Marketing the productsv. Dealing with bureaucratsvi. Managing human relations within the firmvii. Managing customer and supplier relationsviii. Managing financeix. Managing productionx. Acquiring and overseeing assembly of the factoryxi. Industrial engineeringxii. Upgrading process and productxiii. Introducing new production techniques and products

ENTREPRENEUR vs. MANAGERENTREPRENEUR vs. MANAGERRELATIONSHIPRELATIONSHIP

Are all small entrepreneurs managers? Are all small business managers entrepreneurs? The terms entrepreneur and manager are many times used interchangeably yet they are different. An entrepreneur starts a venture then a manager takes over to organize and co-ordinate continuous production. An entrepreneur is being enterprising as long as he starts something new then the routine day-to-day management of the business is passed on to the manager. The main differences between the two are summed up below:

Entrepreneur ManagerAn entrepreneur is involved with the start-up process

A manager with running the businessover a long period of time

An entrepreneur assumes financial,material and psychological risks

A manager does not have to bear risks

An entrepreneur is driven by perception of opportunity

A manager by the resources hecurrently possesses

An entrepreneur initiates change

A manager follows rules & procedures

An entrepreneur is his own boss A manager is a hired employee

An entrepreneur gets uncertain rewards

A manager gets fixed rewards andsalary

Peter Drucker claims that the process of entrepreneurship is directing the use of resources to progressive activities rather than for “administrative efficiencies”. This really clarifies the role of an entrepreneur from that of a manager. Please note that in most small businesses the entrepreneur who starts the venture also has to perform the role of a manager in nurturing it and making it grow and managers frequently have to think of new ways to capture markets, face competition etc.

Entrepreneurship ProcessEntrepreneurship Process

The Idea Realizing the opportunity

Engaging the idea &

opportunity

Exploiting the opportunity

to build something of

value

The Inventor

The Opportunity Spotter

The Project Champion

Entrepreneur Process DiagramEntrepreneur Process Diagram

Motivation to make a difference

Spotting & Exploiting

Opportunities

Finding the required

resources

Using networks

extensively

Overcoming Obstacles

Controlling the

Business

Financial, Social,

Aesthetic Capital

Showing determination in the face of

adversity

Managing Risk

Why India Requires EntrepreneursWhy India Requires Entrepreneurs ??

•Global Competition•Survival

•Today’s Mantra is Innovate or PerishToday’s Mantra is Innovate or Perish

•One can survive in Global Competition Only when we are innovating.-Intel

•Innovation is possible when you have People with entrepreneurial zeal, who Also create space for others to innovate

Million dollar company built on a failure

He started his first Internet Company, Radio FM, a streaming online radio portal, when he was a mere 17 year old.

His father was not happy that his teenaged son was wasting most of his time online, rather than preparing for his exams. His stand was vindicated when his son's maiden venture failed to produce any profits.

Vishal Sampat, CEO of Convonix.com wasn't about to give up. He maintained his faith in the Internet, and transformed Radio FM into Khopcha.com which, in turn, became the genesis for Convonix.com, a search engine optimization company.

Convonix is a one million dollar company and by 2008-2009, Vishal is confident of doubling his company's turnover.

Vishal Sampat

Million dollar company built on a failure-Contd

Started his first online radio streaming business in 1999-2000

The reason he started the venture was that he believed there was a huge audience abroad who would be interested in Indian music and, for that matter, in knowing what's happening back in their own country?

A cousin of his who was into radio got for him some audio capsules which he could play in between the 20-30 minute programme. They used to have songs as well as the RJ (Radio jockey) capsules in the middle

Basically, none of the people who were with him knew what they were doing and Vishal had no money. So what they did was they got free space from various free web hosting companies that operated at that time, like Geocities. They managed to get the load balanced with these servers and got their online music channel

going.

He invested Rs 3,000-4,000, with his father footing the Internet bills , which at that time was very expensive. His father wasn't very happy about that.

He did not make any profit. He did succeed in getting around six and a half million visitors, but it was too expensive to carry out this business online. Being in college and having no sense of economy helped them make no profits. Finally, this website transitioned into another website named khopcha.com, a portal for teenagers.

What inspired him to start the streaming online music portal then?

It was something that just struck to them. It was huge market that was waiting to be tapped. The late 1990s and the early 2000s was an era of the dot com boom and everybody wanted to be online then. This venture was something that they thought they might try and make a lot of money out of, which actually didn't happen.

What did He learn or gain from this failure?He does not call it a failure as such.? It was lot of fun. When Radio FM and khopcha were both online, he did not have money to market the product and services they offered online. This was the genesis of his current venture

He used search engines to market both the services; He used online portals; He learned about banner exchanges; all kinds of online marketing tools. This experience helped him a lot in offering various products under the Convonix .

Convonix's business model

Main business of Convonix is, search engine optimization or SEO

Suppose a bank wants to sell credit cards. When people search for such services online, they get a list of links on which they click to avail the service. What Convonix do is they consult the banks that want to do business online and get maximum traffic directed to their portal. The org identifies who is searching for their products and services, estimate the number of searches, what are the key words they are using for their search and where they are looking out for their requirements

Other Business is :paid advertising business.

The company has around 50 employees spread across our two offices in Mumbai. In 2007, the company purchased a new 10,000 sq ft office in Navi Mumbai that will help them to triple the headcount

Interesting journey from an online radio streaming business to a one million dollar company Convonix?…in his own words:

It was indeed an exciting and interesting journey to begin with. Every day we learn something new, and adapt it to improve our businesses. Initially, when I started Radio FM, people didn't know what I was doing. To add to it I wasn't making any money from the business. And I was wasting a lot of time online, according to my dad, instead of studying . That was difficult, but from 2002-2003 when I started explaining to people about my first business the germ of Convonix started taking roots.

It was me and,two of my colleagues from my engineering college, Pallav Jain and Sarfraz Khimani - the former passed out from IIM-A and the latter will pass out from IIM-K in March 2008. I had pulled these guys midway from their engineering courses, and they were firm on completing their academics. We are still very close friends; we used to work out of my bedroom. That's when the revenues started flowing, and that's when my parents started believing in my business. After that everyone started supporting me.

The reason why I am here today is because I got the best team that I could have ever got and great support from my family and friends. ????????????

His advice to budding entrepreneurs

First thing would be, if you believe in yourself and that what you are doing is right and has a future, then you should persevere and work honestly towards your goal. If you do this, you will surely be successful one day. You will get a million people who will laugh it off and discourage you from doing what you are doing, but you have to persevere. The world will never believe in you till you achieve something. That perhaps is the most difficult aspect for the people who are starting on their own.