Entrepreneurship

Lecture 1: What is Entrepreneurship?

AITI – Kenya 2007

Hotmail

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Technology Initiative
©2007
 How did it start?
• Sabeer Bhatia and Jack Smith, fellow
employees at Apple
• Noticed the Internet was getting big
• Colleagues from Stanford had recently
started Yahoo

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Technology Initiative
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 Inspiration
• Company’s firewall prevents them from
dialing to personal email accounts
• Were exchanging information via
floppies and handwritten notes
• Realized they could make email
available through web browser

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Technology Initiative
©2007
 Funding
• Went to several Venture Capatalists
until found one
• Had to carefully disclose their idea else
risk certain imitation
• Finally got $300,000

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 Growth
• 100,000 subscribers in first 3 months
• 7 million by 1st year anniversary
• Sold to Microsoft for $300 million 20
months after beginning

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Technology Initiative
©2007
 Keys to Success
• Great attention to careful engineering
(both were hardware designers)
• Offered free advertising to build
clientele
• A solid business plan from the
beginning – importance of
communicating ideas well
• Great public relations (@hotmail.com
attached to every email)
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Technology Initiative
©2007
 Entrepreneurship

”Entrepreneurship”

Resources Opportunity

YOU
MIT-Africa Internet
Technology Initiative
©2007
 Who is an entrepreneur?
• A person who:
- Creates and manages change by the
recognition of opportunities (needs, wants,
problems, and challenges)
- Thinks “outside the box”
- Develops resources to take advantage of
the opportunity
- Are entrepreneurs born? Can
entrepreneurship be taught?
• Entrepreneur vs. employee
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Technology Initiative
©2007
 Why Entrepreneurship?
• Do you see the cons?
 Risky
 Time consuming
 Unsecure
 Stressful
• Do you see the pros?
 Death of the ”psychological contract”
 Greater control over your own life
 Fun
 You get the full benefit of your work
 Patriotic duty!
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 Importance of Entrepreneurship
• Entrepreneurship is essential for the
economic development of every country
• Create new jobs and wealth
• Through innovations processes and
products improve – important
• Consumers vs. producers
- Producer: a person or organization
generating or bringing forth material
- Consumer: a person or organization taking
in or making use of what is produced

MIT-Africa Internet
Technology Initiative
©2007
 Consumers and Producers
• Consuming requires money, producing
creates wealth
- Are you a net consumer or producer?
- What about Africa?
• In 2001, Africa exported $114.3B and imported $124.8B
worth of goods
• Currently, Africa contributes about 5% to the world’s
goods and services but has 67% of world’s debt
- If we think about countries/large institutions, does
consumer (spending more than she can afford) or
producer (financing the spending of the consumer)
have more power?

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 Restoring Balance
• Can reduce consumption
- Africa has only limited possibilities to do this
- Can increase production
- Africa has unlimited potential because Africa as a
continent has vast unexploited resources
- Producing more both what is needed in Africa and
what can be exported important
- The ones who do not need to worry about survival,
can focus on the bigger picture
- This is where entrepreneurship comes into picture!

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Business Plan

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 What is a Business Plan
• A means of communicating your vision
to the outside world to help you attract
talent and money to your enterprise

• The quality of a business plan is

measured by its ability to hire
employees, gain contracts from
potential customers and negotiate
monetary investment from an investor
who’s interest is solely to make profit
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Technology Initiative
©2007
 Qualities of a good Business Plan

• Well thought-out and can be visualized

• Articulates the strengths and the vision
of your business
• Clearly outline the risks associated
• Present clear evidence of the viability of
the venture
• Should compel action and get investors
excited

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Technology Initiative
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 Business Plan Components pg.1/2
I. Cover Sheet
II. Table of Contents
III. Executive Summary
IV. Context
V. Profile of Business
VI. Profile of Market
Continued…..

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Technology Initiative
©2007
 Business Plan Components pg.2/2
VII.Anticipated Challenges/Planned
Responses
VIII.Marketing Plan
IX. Financial Projections
X. Implementation Schedule
XI. Statement of Resource Needs
XII.Appendix

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 Order we will follow
1. Management Team
2. Product/Service Description
3. Market Analysis
4. Marketing Strategies
5. Financial Information
6. Objectives
7. Executive Summary

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Technology Initiative
©2007
 Management Team
• What are the backgrounds of the
management team and directors?
• What does each team member bring to
the business?
• What are the team’s previous
successes in new ventures?
• How does the management team form a
cohesive unit which can work efficiently
together?

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Technology Initiative
©2007
 Product/Service Description
• Describe your product in as much detail
as you can.
• If possible, have a prototype of your
product or service
• Show how the product/service would be
used by the consumer
• Explain the requirements for producing
your product

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Technology Initiative
©2007
 Market Analysis
• How did your company identify the
opportunity?
• What is the market size in Shillings ?
• What resources does the company have that
allows it to fulfill the needs?
• How will you enter the market?
• How will you expand?
• Where do you see the company in the future?
• What value does your company create?
• Who is your competition and what edge do
you have?

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Technology Initiative
©2007
 Marketing Strategy

• Describe the customer’s demographics

• How will the customer realize value
from your product or service?
• How does the company intend to reach
the customer and keep her/him?
• How will the company safeguard the
customer from the competition?
• How does the company intend to keep
customers and enter new markets?

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Technology Initiative
©2007
 Financial Information
• In this part you show a budget for your
business
• Explain how much you intend to raise to
get started
• What are your projected expenses and
revenues
• In what period do you expect to be
profitable and show a return to your
investors?

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Technology Initiative
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 Objectives
• What do you hope to accomplish 1 year
from now? 2 years? 5?
• Do you just want to make money?
• Are you out to make yourself known?
• How do you see your product or service
making an impact?

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 Executive Summary
• Describe your business and how it’s different
from the other businesses
• An overview of the team and relevant
skills/experiences they bring to the biz
• Define the customer and how you business
will reach her/him
• Who are your potential competitors?
• How much money do you need to raise and
how much profit should investors expect?

MIT-Africa Internet
Technology Initiative
©2007