Entrepreneurship

Entrepreneurship is the process of designing, launching and

running a new business, which is often initially a small business.
The people who create these businesses are
called entrepreneurs. An entrepreneur is a person who is willing
and able to convert a new idea or invention into a successful
innovation. Entrepreneurship employs what Schumpeter called
"the gale of creative destruction" to replace in whole or in part
inferior innovations across markets and industries, simultaneously
creating new products including new business models. In this
way, creative destruction is largely responsible for the dynamism
of industries and long-run economic growth. The supposition that
entrepreneurship leads to economic growth is an interpretation of
the residual in endogenous growth theory and as such is hotly
debated in academic economics. An alternative description
posited by Israel Kirzner suggests that the majority of innovations
may be much more incremental improvements such as the
replacement of paper with plastic in the making of drinking straws.
The exploitation of entrepreneurial opportunities may include:

 Developing a business plan

 Hiring the human resources
 Acquiring financial and material resources
 Providing leadership
 Being responsible for both the venture's success or failure
 Risk aversion
Entrepreneurs are leaders willing to take risk and exercise
initiative, taking advantage of market opportunities by planning,
organizing and deploying resources,often by innovating to create
new or improving existing products or services. In the 2000s, the
term "entrepreneurship" has been extended to include a
specific mindset resulting in entrepreneurial initiatives, e.g. in the
form of social entrepreneurship, political
entrepreneurship or knowledge entrepreneurship.
Relationship between small business and entrepreneurship
The term "entrepreneur" is often conflated with the term "small
business" or used interchangeably with this term. While most
entrepreneurial ventures start out as a small business, not all
small businesses are entrepreneurial in the strict sense of the
term. Many small businesses are sole proprietor operations
consisting solely of the owner—or they have a small number of
employees—and many of these small businesses offer an
existing product, process or service and they do not aim at
growth. In contrast, entrepreneurial ventures offer an innovative
product, process or service and the entrepreneur typically aims to
scale up the company by adding employees, seeking international
sales and so on, a process which is financed by venture
capital and angel investments. In this way, the term
"entrepreneur" may be more closely associated with the term
"startup". Successful entrepreneurs have the ability to lead a
business in a positive direction by proper planning, to adapt to
changing environments and understand their own strengths and
weakness.
Uncertainty perception and risk-taking
Theorists Frank Knight and Peter Ducker defined
entrepreneurship in terms of risk-taking. The entrepreneur is
willing to put his or her career and financial security on the line
and take risks in the name of an idea, spending time as well as
capital on an uncertain venture. However, entrepreneurs often do
not believe that they have taken an enormous amount of risks
because they do not perceive the level of uncertainty to be as
high as other people do. Knight classified three types of
uncertainty:

 Risk, which is measurable statistically (such as the probability

of drawing a red color ball from a jar containing five red balls
and five white balls)
 Ambiguity, which is hard to measure statistically (such as the
probability of drawing a red ball from a jar containing five red
balls but an unknown number of white balls)
 True uncertainty or uncertainty, which is impossible to estimate
or predict statistically (such as the probability of drawing a red
ball from a jar whose contents, in terms of numbers of colored
balls, are entirely unknown)

Strategies
Strategies that entrepreneurs may use include:
 Innovation of new products, services or processes
 Continuous process improvement (CPI)
 Exploration of new business models
 Use of technology
 Use of business intelligence
 Use of economical strategies
 Development of future products and services
 Optimized talent management

Predictors of success
Factors that may predict entrepreneurial success include the
following:
Methods

 Establishing strategies for the firm, including growth and

survival strategies
 Maintaining the human resources (recruiting and retaining
talented employees and executives)
 Ensuring the availability of required materials (e.g. raw
resources used in manufacturing, computer chips, etc.)
 Ensuring that the firm has one or more unique competitive
advantages
 Ensuring good organizational design, sound governance and
organizational coordination
 Congruency with the culture of the society
Market

 Business-to-business (B2B) or business-to-consumer (B2C)

models can be used
 High growth market
 Target customers or markets that are untapped or missed by
others
Industry
 Growing industry
 High technology impact on the industry
 High capital intensity
 Small average incumbent firm size
Team

 Large, gender-diverse and racially diverse team with a range of

talents, rather than an individual entrepreneur
 Graduate degrees
 Management experience prior to start-up
 Work experience in the start-up industry
 Employed full-time prior to new venture as opposed to
unemployed
 Prior entrepreneurial experience
 Full-time involvement in the new venture
 Motivated by a range of goals, not just profit
 Number and diversity of team members' social ties and breadth
of their business networks
Company

 Written business plan

 Focus on a unified, connected product line or service line
 Competition based on a dimension other than price (e.g.
quality or service)
 Early, frequent intense and well-targeted marketing
 Tight financial controls
 Sufficient start-up and growth capital
 Corporation model, not sole proprietorship
Entrepreneurial Process:

Importance of Entrepreneurship:

Entrepreneurship offers the following benefits:

1. Development of managerial capabilities:

The biggest significance of entrepreneurship lies in the fact that it

helps in identifying and developing managerial capabilities of
entrepreneurs. An entrepreneur studies a problem, identifies its
alternatives, compares the alternatives in terms of cost and benefits
implications, and finally chooses the best alternative.This exercise
helps in sharpening the decision making skills of an entrepreneur.
Besides, these managerial capabilities are used by entrepreneurs in
creating new technologies and products in place of older technologies
and products resulting in higher performance.

2. Creation of organization:

ADVERTISEMENTS:

Entrepreneurship results into creation of organisations when

entrepreneurs assemble and coordinate physical, human and financial
resources and direct them towards achievement of objectives through
managerial skills.

3. Improving standards of living:

By creating productive organisation, entrepreneurship helps in

making a wide variety of goods and services available to the society
which results into higher standards of living for the people.Possession
of luxury cars, computers, mobile phones, rapid growth of shopping
malls, etc. are pointers to the rising living standards of people, and all
this is due to the efforts of entrepreneurs.

4. Means of economic development:

Entrepreneurship involves creation and use of innovative ideas,

maximisation of output from given resources, development of
managerial skills, etc., and all these factors are so essential for the
economic development of a country.
 HUDA KATTAN: HUDA BEAUTY

Huda Kattan is a self-made millionaire with a beauty

company Forbes recently valued at $1 billion. At this writing, she
has more than 2 million subscribers on YouTube and 28 million
followers on Instagram.

This founder and beauty influencer never planned to become a

businesswoman. In fact, nearly a decade ago she was like a lot of
recent grads, working hard at jobs that didn’t always reflect her
true passion.

As she made her way, she would make an important realization:

Success wasn’t just about working hard, which she had always
done. Success was about finding fulfillment.

BEGINNING
The U.S.-born middle daughter of Iraqi immigrants who settled in
Oklahoma, Kattan grew up in a small, mostly white and Baptist
town. Struggling with self-confidence due to bullying about her
ethnicity, she used to tell her young classmates that her name was
Heidi. Comforted by cosmetics, she started wearing heavy
makeup at age 12. “I always felt like a misfit. Even now, I still
struggle with this a little bit. And I think that's what probably
motivates me so much,” Kattan says. “You internalize. Kids used
to tell me I was weird all the time. When I got older, I wanted to
embrace my name and I put it on everything. And I also wanted to
embrace being weird.”

CAREER

In 2013, Huda founded a cosmetics line which, like her blog, is

also called "Huda Beauty." Her first product, a series of false
eyelashes, was released through Sephora The Huda Beauty label
achieved success with the sales of the false eyelashes, which
were famously worn by Kim Kardashian.
Huda's company, which is based out of Dubai, later began to offer
other beauty products, including eye shadow palettes, liquid
lipsticks, lip liners, highlighter palettes, foundations, concealers,
baking powders and liquid eyeshadows.
Huda achieved popularity on Instagram, attaining more than 35
million followers as of 2019. Huda is ranked #1 on the "2017
Influencer Instagram Rich List", earning $18,000 for each post of
sponsored content Huda has been described as "a Kim
Kardashian West of the beauty influencer economy" and was
declared one of the "ten most powerful influencers in the world of
beauty" by Forbes magazine.She was chosen as one of "The 25
Most Influential People on the Internet" by Time magazine in
2017.

STRUGGLE
 She briefly trained in Los Angeles but struggled to get clients
back in Dubai and worked mostly for free. In 2010, Kattan started
a beauty blog. It took off as fans became taken with Kattan’s how-
to videos. As her fame rose, she realized she had a knack for
understanding what products work best.When she couldn’t find
premium false eyelashes that worked well, she decided to start
making them herself. Kattan borrowed $6,000 from her sister
Alya and spent another $10,000 from her savings for the
packaging.

She didn’t have enough money to do the manufacturing, so

Kattan’s distributors paid for it and took a cut of sales. In 2013,
Kattan launched her own line of synthetic and faux mink lashes,
made in Indonesia. She sold out on her first day and lucked out
when Kim Kardashian became a vocal, early fan. Retail sales hit
$1.5 million that first year and jumped to $10 million the next.
Soon she was making all sorts of cosmetics and peddling them on
her website – which is now the most viewed beauty blog on the
Internet – as well as on Instagram, where she has close to 26
million followers.

The TSG Consumer Partners investment was a turning point for

Huda Beauty, which Kattan still affectionately calls “a baby
brand.” While much of Huda Beauty’s sales come directly through
the website, which gives the company a greater share of profit on
each sale, it is also expanding its in-store presence. It’s already the
top-selling cosmetics brand at Sephora in the Middle East. But by
the end of 2018, Huda Beauty will be in more than 900 stores
across the U.S. including Sephora and J.C. Penny, as well as
another 600 globally, up from just 200 overall at the start of the
year. The company will also open its first U.S. office, either in San
Francisco or Los Angeles, by year’s end. Revenue for 2018 is
expected to be roughly $300 million.
ACHIEVEMENTS

Kattan is a cross-cultural, cross-platform star: the 33-year-old is a

millennial who instinctively knows what kind of content works on
every platform, from Instagram (she has 18.3 million followers) to
Facebook (she was an early adopter). She grew up in Tennessee
to Iraqi-American parents — attending the University of Michigan-
Dearborn — but tired of working in finance very quickly post-
graduation. She decided to become a makeup artist instead,
breaking with her family’s wishes, who wanted a more stable life
for her.

Now she's the CEO of her own cosmetics company, Huda

Beauty. The 33-year-old grew up online and found fame there,
most notably with her beauty blog and YouTube makeup tutorials.
Watching Kattan execute a tutorial on cream contouring, for
example, is to watch her turn an advanced, intimidating makeup
technique into something fun that even a beginner could try. (3.9
million people watched.)
“She would create these insane lashes,” Kattan remembers. “She
spent so much time putting on the mascara, separating the
lashes. Watching her — it
was like an art.”
Biggest career high and
your biggest career low:
High: Getting our investors
on board was a huge thing for
us. They’ve been wonderful
partners. To be honest, I’m
not really into the private
equity world – I’m more
focused on magic and (being)
creative. I think we’re really fortunate to work with investors who
understand that and really accept that, and really want to cultivate
it.
Low: After getting the investment, our concealer launch was a
disaster and then – boom – we lost almost $2 million worth of
product, and we didn’t have anything new to put in its place. It
definitely created a lot of anxiety for me. It was the best lesson,
and I don’t think I would have done that any other way because I
don’t want to learn something like that later on. I needed to learn
that at that moment, right then and at that period of time.
BRAND VALUE
BoF declares that make-up mogul Huda Kattan's
eponymous beauty label, Huda Beauty, is valued at an
astounding Dhs4. 4 billion ($1.2 billion). According to Forbes'
2018 Richest Self-Made Women list, Huda, ranking 37th globally,
is valued at Dhs2 billion ($550 million).The blogger-and-makeup
artist-turned-billionaire, with an enviable Instagram following upwards
of 35 million and over 3 million YouTube subscribers, arguably owes
much of her success to her direct personal engagement with her
consumers through her Instagram and YouTube videos.