The 7 Truths of Entrepreneurship

#1 Entrepreneurship is not reserved for startups

#2 Do not have a special set of personality traits
#3 Can be taught
#4 Are not extreme risk takers
#5 Collaborate more than they compete
#6 Act more than they plan
#7 Entrepreneurship is a life skill

Startup
a temporary organization in search of a scalable business model

Effectuation
The idea that the future is unpredictable yet controllable; focus on creating a
future rather than predicting it

Emergence of the Self-Made Man (Before 1776)

-land of opportunity
-freedom for reinvention
-started new ventures, created new markets, and exploited opportunities in
exploration, agriculture, trade
-Benjamin Franklin

An Entrepreneurial Nation (First Industrial Revolution 1776-1865)

-Constitution launched creativity and innovation
-explosive economic growth
-improved transportation and increased population

The Pinnacle of Entrepreneurship (Second Industrial Revolution

1865-1920)
-golden age of entrepreneurship
-ore into steel led to skyscrapers and railroads
-technical innovation
-telephone, lightblub, dishwasher invented

Rise of Institutional America (interwar and postwar)

-big corporations
-Great Depression
-invention of transistor radio, musical synthesizer, videotape recorder, word
processor, and the microchip
Confined Re-Emergence (knowledge economy 1975-present)
-the entrepreneur identifies, creates, and acts on new opportunities
-rise of information technology
-changes in patent laws
-"tech entrepreneur" born

Millennials will make up_____ of workforce by 2025

75%

________ is a process of creating new products, ventures, processes,

or renewal within large organizations
Corporate entrepreneurship or intrapreneurship

_________ consist of employees who think and act entrepreneurially

within organizations.
Entrepreneurs inside

Difference between corporate entrepreneurs and entrepreneurs

inside?
entrepreneurs inside can exist and function in any type of organization, big
or small, including government agencies, nonprofits, religious entities, self-
organizing entities, and cooperatives.

________often need to gain inside support from senior managers or

other team members for their initiatives.
Entrepreneurs inside

What do inside entrepreneurs have in common with other

entrepreneurs?
the desire to create something of value, be it a new groundbreaking
initiative, or a new department, product, service, or process.

What did French supermarket chain Intermarché do as a way of

reducing food waste?
campaign showing images of grotesque-looking vegetables at prices 30%
less than their more perfect counterparts
________ is a type of license purchased by an entrepreneur
(franchisee) from an existing business (franchisor) that allows the
entrepreneur to trade under the name of that business
Franchise

________ are a share of the proceeds based on sales revenue.

Royalties

Today there are over _______ franchise establishments in the United

States
750,000

________ is the process of sourcing innovative solutions to social and

environmental problems.
Social Entrepreneurship

Benefit Corporation (B Corp)

-subcategory of social entrepreneurship
-rated on how its employees are treated, its impact on the environment, and
how it benefits the community in which it operates
-certified by the nonprofit B Lab that ensures that strict standards of social
and environmental performance, accountability, and transparency are met

__________ is a business that is owned and managed by multiple

family members typically for more than one generation
Family Enterprise

What percent of the US workforce is employed by a family business?

65%

_________ are people who start several businesses, whether

simultaneously or one after another.
Serial or habitual entrepreneurs

Shechtman believes that education and learning are the keys to

fostering the right entrepreneurial mindset. True or False?
True
According to the GEM report, the percentage of entrepreneurs in
the United States has reached ____%.
13% which is highest on record

_________ are individuals who believe they have the capacity and
know-how to start a business without being burdened by the fear of
failure.
Potential Entrepreneurs

__________ are individuals who have set up a business they will own or
co-own that is less than three months old and has not yet generated
wages or salaries for the owners.
Nascent Entrepreneurs

________ are former nascent entrepreneurs who have been actively

involved in a business for over three months but less than three and
a half years.
New business owners

________ are still active in business for over three and a half years.
Established business owners

The main reason that established business owners discontinued

business was because they failed.
True or False?
False-became serial entrepreneurs or joined companies to become inside
entrepreneurs

_________ are individuals who are pushed into starting a business

because of circumstance.
Necessity Based Entrepreneurs

_________ are individuals who make a decision to start their own

businesses based on their ability to create or exploit an opportunity,
and whose main driver for getting involved in the venture is being
independent or increasing their income, rather than merely
maintaining their income.
Opportunity Based Entrepreneurs

_________ is the percentage of the population of each country

between the ages of 18 and 64, who are either nascent
entrepreneurs or owner-managers of a new business.
Total Entrepreneurial Activity (TEA)

What are the conditions for the Entrepreneurial Ecosystem? -

Financial resources
-Support from government
-Entrepreneurship Education
-R&D Transfer
-Commercial and Legal Infrastructure
-Entry Regulation
-Physical Infrastructure
-Cultural and Social Norms

________ is the annual rate of change in markets.

Market Dynamics

________ is the degree to which new businesses have the freedom to

enter new markets.
Market Openness

In a _____ _____ , people perceive their talents and abilities as set

traits.
-fixed mindset
-People with a fixed mindset will tell themselves they are no good at
something to avoid challenge, failure, or looking dumb.

In a _______ ______, people believe that their abilities can be

developed through dedication, effort, and hard work
-growth mindset
-they see failure as an opportunity to improve their performance, and to
learn from their mistakes
Recent studies have found that overly praising or being praised
simply for our intelligence can create a growth mindset.
True or False?
False- Fixed mindset

Having an ______ _______is the ability to quickly sense, take action,

and get organized under uncertain conditions
entrepreneurial mindset

Cognitive strategies are the ways in which people solve problems

such as reasoning, analyzing, experimenting, and so forth.
True or False?
True
________ is the way in which we understand our own performance or
the process of "thinking about thinking"
Metacognition

_______ is an intense positive emotion, which is usually related to

entrepreneurs who are engaged in meaningful ventures, or tasks
and activities, and which has the effect of motivating and
stimulating entrepreneurs to overcome obstacles and remain
focused on their goals.
Passion

A ______ is a sometimes unconscious pattern of behavior that is

carried out often and regularly.
Habit

___________ is a process whereby people can influence and control

their own behavior, actions, and thinking to achieve the self-
direction and self-motivation necessary to build their
entrepreneurial business ventures.
Self-leadership

_______ ________ strategies help increase self-awareness to manage

behaviors particularly when dealing with necessary but unpleasant
tasks.
Behavior-focused
Self-observation raises our awareness of how, when, and why we
behave the way we do in certain circumstances.
True or False?
True

_______ is a process that allows us to examine our own behaviors in a

constructive way in order to reshape these behaviors
self correcting feedback or self punishment

________ is the process of setting individual goals for ourselves.

self goal setting

What is Self-Cueing?
reminder of your desired goals by using post it notes or motivational posters

What are natural reward strategies?

-building in breaks to listen to music or eat a snack (rewarding yourself)
-focusing on the benefits and value of what you are working on

_______ _______ _______ help us to form positive and productive ways of

thinking that can benefit our performance.
constructive thought patterns

______ is the capacity to produce new ideas, insights, inventions,

products, or artistic objects that are considered to be unique,
useful, and of value to others.
Creativity

Which emotional roadblock has the most detrimental effect on our

capacity to be creative?
Fear

______ is the art of spontaneously creating something without

preparation.
Improvisation
______ _______ is the belief entrepreneurs have in their ability to begin
new ventures.
Entrepreneurial Self-Efficacy

In general, people with high levels of self-efficacy tend to put in a

higher level of effort, persist with an idea, and persevere with a
task more than those people who possess low levels of self-efficacy.
True or False?
True

______ _______ is the process of sourcing innovative solutions to social

and environmental problems.
Social Entrepreneurship

_______ ________ are large, complex social problems where there is no

clear solution, where there is limited, confusing, or contradictory
information available, and where a whole range of people with
conflicting values engage in debate.
Wicked Problems

What is the aim of social purpose ventures?

to resolve a social problem and make a profit
________ __________ ________ describes a for-profit venture whose
primary market impact is social.
Social Consequence Entrepreneurship

_______ _______ are a form of social entrepreneurship where both the

venture mission and the market impact are for social purposes.
-Enterprising Nonprofits
-any profits made must be channeled back into the organization

What is a hybrid model of social entrepreneurship?

an organization with a purpose that equally emphasizes both economic and
social goals.

Hybrid models are _____ likely to receive venture capital funding or

philanthropic donations.
-Less
-in a gray zone between business and charity
For-profits can also seek investment from_____ ______ ______, also
known as impact-investment funds. These funds look both for a
return on investment and to make a specific social/environmental
impact.
Social Venture Capitalists (SVC)

What is the goal of a "community" fund?

to invest in economic development and job creation in impoverished areas

________ are small short-term loans to the poor to enable them to set
up their own businesses.
microloans

What are the three primary attributes of stakeholders to consider

when you are trying to achieve your objectives?
power, legitimacy, urgency

________ stakeholders are those whose actions are appropriate,

proper, and desired in the context of the company, organization, or
community
-Legitimate
-who youd ask for advice

_______ describes the extent to which stakeholders demand your

attention.
Urgency

A stakeholder in a position of _____ has the ability to either help or

hinder your social objectives.
power

________ stakeholders hold power but do not tend to use that power
unless they are given a reason to do so.
Dormant "sleepers"

__________ stakeholders have no power to influence and no urgent

claims, but they have legitimacy.
Discretionary

__________ stakeholders possess the urgency attribute. They have no

power or legitimacy and may be the only dissenting voice in the
room.
-Demanding
-protestors are an example

________ stakeholders have both power and legitimacy, which gives

them strong influence in your organization.
Dominant

________ stakeholders have both urgency and legitimacy but lack the
power to influence. These stakeholders are the most passionate,
and their passion is likely to attract dominant stakeholders.
Dependent

_________ stakeholders possess both power and urgency but may use
this power to coerce or even resort to violence.
-Dangerous
-competing organization using slander to steal clients

________ stakeholders are the only ones who possess all three
attributes of power, legitimacy, and urgency.
Definitive
_________ ________ _________ describes the efforts taken by corporations
to address the company's effects on environmental and social well-
being in order to promote positive change.
Corporate Social Responsibility

What is the difference between social entrepreneurs and corporate

social responsibility?
-CSR adds social objectives while still pursuing the main goal of making a
profit
-social entrepreneurs place equal emphasis on social and economic goals

What is a work integration social enterprise?

a social enterprise whose mission is to integrate people who have been
socially excluded into work and society through productive activity.
According to the text, which of the following is the least important
when launching a company?
creating a business plan

During the ______, everyone had a fairly equal chance of being an

entrepreneur; inventors became more commonplace, producing new
products and services alongside the merchants and industrialists.
First Industrial Revolution (1776-1865)

What generation is considered to be the most exposed to

entrepreneurship education?
Millennials

Social entrepreneurship is defined as the process of innovating new

social media business opportunities. True or False?
False

What is the process of creating new products, ventures, processes,

or renewal within large organizations?
intrapreneurship

What percentage of U.S. businesses are family-owned or controlled

by a family?
80% to 90%

Risk cannot be averted by an entrepreneur's activity or attitude.

True or False?
False

Joseph is a sales manager for ETC Corporation. ETC is a

manufacturer of high-end kitchen appliances for restaurants. Joseph
has been lobbying his manager to allow him to design and sell a
range of consumer-grade appliances using ETC's design and
manufacturing resources. Joseph is a(n) ______.
entrepreneur inside
ICHOR Restaurant Group was started by Brian Bailey and Tim Hug in
2006 and has since opened three successful restaurant concepts,
Old Carolina BBQ, Smoke: The Burger Joint, and Baja West Coast
Kitchen with a dozen corporate-owned locations. They have begun
to allow external entrepreneurs to purchase a license to operate
their own location(s). Entrepreneurs purchasing such a license are
engaging in ______.
franchising

Sarah is an accountant with desires to open her own business. She

is looking for office space at a reasonable rate along with Internet
service. Of the conditions that need to be put in place for the
Entrepreneurial Ecosystem, she needs ______.
physical infrastructure

______ is based on the idea that because the future is unpredictable

yet controllable and that entrepreneurs can affect the future.
Effectuation

Expert entrepreneurs who engage in deliberate practice are

generally more skilled at understanding the meaning of complex
patterns. True or False?
True

The means of identifying an opportunity, understanding resource

requirements, acquiring resources, planning, implementing, and
harvesting is called a(n) ______.
Process

Brenda is very critical of her own actions; if something goes wrong,

she assesses why it went wrong and how she can avoid making this
mistake in the future. This is an example of ______.
self-correcting feedback

Having a strong and effective mindset is important to being a

successful entrepreneur. True or False?
True
A recent study showed that ______.
improvisational behavior was more evident in entrepreneurs starting new
ventures

People at work know not to frustrate Bill as he tends to just give up.
Bill ______.
has the fixed mindset

Stakeholders who hold no power to influence and no urgent claims

but who have legitimacy are considered ______.
discretionary stakeholders

Labor unions can be considered a stakeholder in the context of

entrepreneurship. True or False?
True

Organizations using the hybrid model of social entrepreneurship

prioritize social goals over economic goals. True or False?
False

According to the text, what is the most common form of value?

Economic

The ______ approach is a concept that assumes that opportunities

exist independent of entrepreneurs and are waiting to be
discovered.
Finding

If an invention does not reach the market or appeal to consumers,

then it will be rendered useless. True or False?
True

Typically, entrepreneurs go through three processes before they are

able to identify an opportunity for a new business venture: idea
generation, creativity, and opportunity recognition. True or False?
True
Pattern recognition is the process of identifying links or connections
between ______.
unrelated things or events

The purpose of the creativity stage is to transform ideas into

opportunities. True or False?
True

According to the text, on what dimension would today's smartphone

score the highest in the idea framework?
Innovation

Put the following in order of increasing relevance (from low to high)

to founding new ventures:
idea generation, creativity, opportunity recognition

Bette Nesmith Graham's Liquid Paper correction fluid is an example

of an ______.
invention that developed into an innovation

In what area does the difference between innovation and invention

lie?
Demand

Entrepreneurship is a relatively new concept which began in 1880.

False

What factor did contribute to the golden age of entrepreneurship?

All of these:
improved transportation
growth in the economy
increase in population

The media often cover the meteoric rise of entrepreneurs such as

Bill Gates (Microsoft), Steve Jobs (Apple), Mark Zuckerberg
(Facebook), Elon Musk (Tesla), and Travis Kalanick (Uber). According
to the text, these stories _________.
Have not captured the public imagination
B-Corp certification recognizes organizations that achieve five or
more years of consistent profitable growth. True or False?
False
According to the 2015/16 GEM report, the percentage of
entrepreneurs in the United States has declined to 3% -- the lowest
on record. True or False?
False

Total entrepreneurial activity (TEA) is the percentage of the

population of each country between the ages of 18 and 64, who are
either __________.
A nascent entrepreneur or owner-manager of a new business

Some of the positive effects of passion can be ________.

All of these:
Energy
Resilience
Joy

With improvisation, all of the following statements are true EXCEPT

__________.
Answer: Everything is unimportant
True Statement options for this question were:
Improvisation is not just for actors or musicians
There's no such thing as being wrong
Nothing suggested is questioned or rejected

Some of the negative effects of passion can be ___________.

All of these:
Failure to heed warning signs
Failure to hear negative feedback
Failure to see other opportunities

A person who believes he can learn anything that he wants has a

fixed mindset. True or False?
False (growth mindset)

The entrepreneurial mindset is about ___________.

Who you are
Janis is an intense person who uses positive emotion to work on
entrepreneurial ventures with tasks and activities. Janis ___________.
is passionate

Debra is always told by her faculty that she tries hard. As an

entrepreneur, Debra ____________.
has the growth mindset

Improvisation is defined as the art of ____________.

Spontaneously creating without preparation

Paul is a very driven person who believes his effort and attitude
determines everything. Paul _________.
has the growth mindset

Stakeholders who have both urgency and legitimacy but lack the
power to influence are considered ___________.
Dependent stakeholders

A NGO is __________.
A nongovernmental organization

Social entrepreneurs and traditional entrepreneurs are similar in

that _________.
Both identify opportunities

The organic clothing company PACT designs, manufactures, and

distributes premium cotton underwear without using pesticides,
fertilizers, or chemicals. PACT is an example of a __________.
Social purpose venture

Describe the tailored-financing characteristics of venture

philanthropists.
written answer (see pg. 97 of textbook):
combines financial assistance with a high level of engagement from the
funder
share experience with nonprofit entrepreneurs
help grow (the economy) and scales the economy in order to drive social
change

Earned income activities are the sale of products or services that

are used as a source of revenue generation.
True

A company where improvising social issues is core to its mission is

engaged in corporate social responsibility.
False

The "buy one give one" campaign of companies wanting to be

socially aware may be causing more problems than the problem
they are trying to solve. For example, Tom's Shoes might actually be
injuring the local businesses as it stifles local industry and
potentially increases local unemployment in the country getting the
give-away shoes.
True

Discuss the pros and cons of a buy-one, give-one business model.

Written answer (see textbook pg. 101):

Pros:
-has the ability to help those living in poverty by donating the product to
people living in impoverished countries when a customer purchases the
product
-has won numerous awards for the money raised and/or products donated
-has attracted a great deal of media attention

Cons:
-"wreaks havoc" on local businesses as it stifles local industries
-increases local unemployment
-The people living in poverty that are receiving these goods for free are not
learning anything from this model causing them to become dependent on
this rather than being empowered to learn how to deal with the deeper
causes of poverty

Microloans are small short-term loans given to people living in

poverty that enable them to engage in entrepreneurship.
True