Chapter 1

Understanding
Entrepreneurship
 Tonight

• Administration, Comments and Questions

• Review and Recap Last Class

• Present Homework and Findings

• Chapters 1 and 2

• In Class Group Exercise

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 Learning Objectives
• Define entrepreneurship

• Explain the role of entrepreneurship

• Distinguish entrepreneurial ventures from small

businesses.

• Describe the evolution of entrepreneurship

• Identify today’s broad trends in the field of

entrepreneurship.
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 Definition of Entrepreneurship

An Entrepreneur

One who
Organizes, Manages and Assumes Risk of a
Business or Enterprise

Merriam-Webster

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 Entrepreneurship

Entrepreneurship is a mindset

– Opportunity-focused
– Innovative
– Growth-oriented

Can you add additional

Characteristics and/or Attributes…

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 The Promise of Entrepreneurship

• An integrated input/output model

• The career assessment approach
• The new venture creation process

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 Figure 1.1:
The Entrepreneurship Process

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Figure 1.2: Entrepreneurship and
Technological Change

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 Outcomes of Entrepreneurship

• Economic growth
• New industry formation
• Job creation

> Knowledge, Wealth, Philanthropy <

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 New Industry Formation

• New industries are born when technological

change produces a new opportunity that an
enterprising entrepreneur seizes.
• Disruptive or metamorphic technologies that
destroy previous technologies and create new
industries and display a different pattern of
behavior.
• The pattern of growth, shakeout, stabilization,
and decline of industry can be interrupted at
any time by the entry of another disruptive
technology.

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 Job Creation

• The most recent data from 2003 indicate that

small businesses created 1,990,326 net new
jobs as compared to 994,667 for large firms.*
------------------------------------------------

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 The Nature of Entrepreneurial Start-ups

• An entrepreneurial venture brings something to

the marketplace.

• Three primary characteristics

1. Innovative
2. Value-creating
3. Growth-oriented

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 New Business Formation

• Entrepreneurs use identifiable milestones to

measure their progress:
– Deciding to start a business
– Researching the concept
– Preparing for launch
– Securing the first customer
– Obtaining the business license
And other activities which signal the business is
in operation

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 Figure 1.4: Social, Political, and Economic Context
of the Entrepreneurial Process
–The main difference between an entrepreneur vs. intrapreneur is that an entrepreneur starts their own
company, whereas an intrapreneur works at a company that someone else founded.

Source: Paul D. Reynolds. (2000) National Panel of U.S. Business Start-ups: Background and Methodology.
Databases for the Study of Entrepreneurship, Amsterdam: JAI/Elsevier Inc. Vol. 4, pp. 153-227.

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 New Business Failure

• Not all entrepreneurs succeed in growing their

start-up into an established business.

• Survival has been attributed to sufficient

capital, having employees, and the
entrepreneur’s intention in starting the
business.

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Socially Responsible Entrepreneurship

• Today more than 85 percent of the company’s

employees are involved in philanthropy.

• One company uses the following mission: The

mission is to “use Salesforce.com’s people,
technology and relationships to improve our
communities, inspire youth to be more
successful, support the world during times of
extreme need, and promote compassionate
capitalism.”

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 The Entrepreneurial Revolution

• Free enterprise as foundation of

entrepreneurial motivation

– Marc Andressen, Netscape Communications

– Howard Schultz, Starbucks

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 Figure 1.5:
The Entrepreneurial Evolution

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 Entrepreneurial Trends

• Women and minority-owned businesses

• Social responsibility
• The Internet
• Globalization

Can you think of additional trends…

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Looking Ahead…Launching New Ventures

• Part One: The Opportunity

– Chapter 1: Introduction to Entrepreneurship
– Chapter 2: The Entrepreneur’s Perspective
– Chapter 3: Opportunity Recognition
– Chapter 4: The Business Concept and
Model
• Part Two: Feasibility Analysis (Ch 5-8)
• Part Three: The Business Plan (Ch 9-16)
• Part Four: Growth and Change (Ch 17-19)

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 Do The Venture Checklist

• Keep as a Journal/Work Papers

• Bring to Every Class

• Your Ideas…Write Them Down On Paper…!!!

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 Summary…You should be able to…
• Define entrepreneurship
• Explain the role of entrepreneurship in
economic growth
• Distinguish entrepreneurial ventures from
small businesses in terms of their purpose
and goals.
• Describe the evolution of entrepreneurship
as a field of study since the 1960s
• Identify today’s broad trends in the field of
entrepreneurship.

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Entrepreneurship is a complex
phenomenon that has been shaped by a
wide range of disciplines, including
economics, psychology, and sociology.

Economics was the first discipline to

consider the origins of ‘enterprise’ to
understand how societies function through
trade.

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Economic Perspective
From the perspective of the economist, an entrepreneur
brings resources together (people, materials, vision) to
innovate or increase product or service value and
hopefully employ others.

Psychological Perspective
To a psychologist, it is a person’s personality and
characteristics that motivate them to be an entrepreneur.

From this viewpoint, entrepreneurs are born with the

innate capability to be successful because of who they
are; personally motivated and driven by a need for
achievement.
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The Sociological Perspective
This perspective takes into consideration a person’s social
context such as social class and the opportunities that this
affords or denies them; gender, religion, age, education, and
location are among the many other factors that impact an
individual’s choices and outlook.

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1. Email Marketing is still loved much
2. Entrepreneurs making their move to IoT

3. Hybrid work culture will be promoted

4. Micro influencers / Nano influencers are in demand
5. Optimization of content to the next level
6. Advanced skills are required for modern
entrepreneurship in 2023
7. Niche market services

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 A gig economy is a free market
8. The escalation of the gig system in which temporary positions
are common and organizations hire
economy independent workers for short-term
commitments. The term "gig" is a
9. Social commerce slang word for a job that lasts a
social Media Platform specified period of time.

10. Mobile optimization

Evolution of Entrepreneurship
Entrepreneurship has a fascinating history that has evolved over
time. It started with the emergence of trade and bartering in
ancient civilizations, where individuals recognized opportunities
to create value and meet people's needs.

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 Entrepreneurship Myths
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