Entrepreneurship © Ed "~~ (MG-481) fetnenebnen BD Faraz dutyan fe Department of Mechanical Engineering NED University of Engineering & Technology Learning 7Entrepreneurs +The essence of entrepreneurship is creating value and then disseminating that value to customers. In this context, value refers to worth, importance, or utility. + Entrepreneurial firms bring new products and services to market by creating and then seizing opportunities. + Having recognized an opportunity, the entrepreneurs leading companies of this type create products and services that have worth, are important to their customers, and provide a measure of usefulness to their customers that they wouldn’t have otherwise. Introduction to Entrepreneurship There is tremendous interest in entrepreneurship in the U.S. and around the world,What is Entrepreneurship + Academic Definition (Stevenson & Jarillo) + Entrepreneurship is the process by which individuals pursue opportunities without regard to resources they currently control. * Venture Capitalist (Fred Wilson) * Entrepreneurship is the art of turning an idea into a business. + Explanation of What Entrepreneurs Do + Entrepreneurs assemble and then integrate all the resources needed -the money, the people, the business model, the strategy—needed to transform an invention or an idea into a viable business. Corporate Entrepreneurship * Corporate Entrepreneurship + Is the conceptualization of entrepreneurship at the firm level. * All firms fall along a conceptual continuum that ranges from highly conservative to highly entrepreneurial. + The position of a firm on this continuumis referred to as its entrepreneurial intensity. Entrepreneurial Firms Conservative Firms * Proactive * Take a more “wait and see” posture + Innovative * Less innovative * Risk taking * Risk adverse3 Reasons People decide to be Entrepreneurs Pursue franca 4 Primary Characteristics of Successful Entrepreneurs5 Reasons Why Passion is so Important . The ability to learn and iterate . willingness to work hard for an extended period of time . Ability to overcome setbacks and “no’s’ . The ability to listen to feedback on the limitations of your organization and yourself 5. Perseverance and persistence when the going gets tough Rene 5 Common Myths3 Types of Start-up Firms Lifestyle cd Effects of Entrepreneurship & Entrepreneurial Firms on Economies & Societies * Joseph Schumpeter, an Austrian economist, argued that entrepreneurs develop new products and technologies that over time make current products and technologies obsolete. Schumpeter called this process 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 stimulates economic activity. * The creative destruction process is initiated most effectively by start-up ventures that improve on what is currently available. Small firms that practice this art are often called “innovators” or “agents of change.” The process of creative destruction is not limited to new products and technologies; it can include new pricing strategies, new distribution channels, or new retail formats.Effects of Entrepreneurship & Entrepreneurial Firms on Economies & Societies 1. Economic Impact of Entrepreneurial Firms 1. Innovation 2. Job Creation 2. Entrepreneurial firms’ impact on Society 3. Entrepreneurial firms’ impact on larger firms The Entrepreneurial ProcessStep1 Ea— eer cerns 146Entrepreneurial Mind-Set + Entrepreneurship involves action. * Before action, individuals use their knowledge and motivation to overcome ignorance to form a belief that there exists an opportunity for someone. They then need to determine if this opportunity for someone matches their knowledge and motivation—is it an opportunity for them? + Individuals engaging in the entrepreneurial task think differently from those engaged in other tasks, such as managerial tasks. The process requires that the individual and the firm have an entrepreneurial mind-set (Involves the ability to rapidly sense, act, and mobilize, even under uncertain conditions) . How Entrepreneurs Think Entrepreneurs think structurally and effectually, which challenges traditional notions of the wa that entrepreneurs think about thet tasks. _ Entrepreneurs meking do by applying combination ofthe resources at hand to new problems and opportunities - Brcolage By thinking structurally and not being distracted by superficial features, entrepreneurs are able to identity opporuntties by making cofacctions between a technology aad a market that may Mot beobvious Furthermore, although entrepreneurs think about some task ina causal way, thay also are Ikeh fo" think about ome. tase effectually (and some entrepreneurs more "s6 than other entrepreneurs} -Eftectuation Rather than starting with the desired outcome in mind and then focusing on the means to aehieving that outcome, entrepreneus sometimes approach tasks by looking t Wha they have > ieir means--and selecting among possible outcomes, Who is to say whether the ‘causal chef” who starts with 3 menu or the “effectual chet” who starts with what is in the cupboard produces the best meal? But we can say that some expert entrepreneurs think effectually about ‘opportunities.The Intention to act Entrepreneurially 1. Entrepreneurial Intention The motivational factors that influence individuals to pursue entrepreneurial outcome 2. Entrepreneurial Self-Efficacy The conviction that one can successfully execute the entrepreneurial process 3. Perceived Desirability The degree to which an individual has a favorable or unfavorable evaluation of the potential entrepreneurial outcomes Recognizing Opportunities and Generating IdeasWhat is An Opportunity? What is an Opportunity? An opportunity has four essential qualitiesFirst Approach: Observing Trends *The most important trends are: * Economic forces. * Social forces. * Technological advances. + Political action and regulatory change. Second Approach: Solving a Problem *Sometimes identifying opportunities simply involves noticing a problem and finding a way to solve it. *These problems can be pinpointed through observing trends and through more simple means, such as intuition, or change.Third Approach: 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 or manufacturers. Personal Characteristics of the Entrepreneur Characteristics that tend to make some people better at recognizing opportunities than othersTechniques For Generating Ideas Protecting Ideas From Being Lost or Stolen * Step 1 + The idea should be put in a tangible form such as entered into a physical idea logbook or saved on a computer disk, and the date the idea was first thought of should be entered. * Step 2 + The idea should be secured. This may seem like an obvious step, but is often overlooked. * Step 3 *+ Avoid making an inadvertent or voluntary disclosure of an idea, in a manner that forfeits the right to claim exclusive rights to it.