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Chapter

The Nature and Importance of Entrepreneurs

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Development of Entrepreneurship
Earliest Period- Marco Polo PeriodMiddle Ages- Theater, AgesArchitectural Works 17th Century- Mississippi CenturyCompany 18th Century- Edison & Whitney Century19th & 20th Centuries
Organize/Operate Innovation
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Environmental Factors Affecting Organizations

Hypercompetition Changing Technology Short Product Life Cycles New Markets Changing Employee Drives/Motives Focus on Sales/Profits Available Capital
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Economies
MarketMarket-Oriented
UNITED STATES

Controlled
CUBA

Market Conditions

Innovation Orientation

Investment Community

Entrepreneurship Culture

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Market Conditions
Large Market Easy To Form Company Positive Tax Structure Positive Media Coverage Code of Business/Contract Law Strong Govt Agencies- No AgenciesCorruption StandardStandard-Setting Associations Individual Investment Mentality
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Principles for Successful New Venture

1) 2) 3) 4) 5) 6) 7) Define Market Durable ProductsProducts18 Month Customer Payback Market Growth = 3030-50% in 5 Years Patent Protection No Product Substitutions Available Products Variants No Strong Competition Present 8) Quick Market Dominance 9) Gross Margin 303050% 10)Staged 10)Staged Financing 11)ROI 11)ROI = 10X in 5 Years (25(25-30%/Year) 12)Positive 12)Positive Cash Flow in 18 Months 13)Strong 13)Strong Management in Industry
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Infrastructure Needed for Innovation

LongLong-Term Thinking Investment Community
Banks Venture Capitalists Informal/Informed Private Investors (Angels)
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Entrepreneurship Culture
More New Ventures Than Anywhere In The World Concentrated Areas
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Successful Entrepreneur
Initiates Creation Process Devotes Time/Effort Assumes Risk Receives Rewards
Independence Satisfaction Money
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Entrepreneurial Decision
Present Lifestyle Catalyst New Enterprise
Desirable Possible
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Drivers of New Venture Formation

Desirability Influences
Culture/Subculture Family/Peers Teachers

Possibility Factors
Government Background Marketing Role Models Finances
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Types of Startups
Lifestyle Foundation High Potential Gazelles
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Entrepreneur & Economic Development

ProductProduct-Evolution Process Iterative Synthesis Innovation
Technological Breakthrough Government

Technology Transfer Intrapreneurship vs. Entrepreneurship

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Product Evolution
Need Recognition Industrial

Initiate Innovation

Development

Press To Invent
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Careers/Education
Life Space
Work/Occupation Individual/Personal Nonwork/family

Skills Required
Technical Business Management Personal
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Skills Required of Entrepreneur

Technical
Writing Oral Communication Monitoring The Environment Use Technology

Business Management
Planning Decision Making Human Relations Marketing (Selling)

Personal
Inner Control Risk Taking Innovative ChangeChangeOriented Visionary
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Ethics & Social Responsibility

EthicsEthics- Behavior/Morals in Business Value System
Peer Pressure Social Norms Competitors Individual vs. Community
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Future
Entrepreneurial Education GovernmentGovernment- Promotion Societys Support Corporate Intrapreneurship
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Entrepreneurial Universities
 Activities
 Seminars  Consulting  Research  Case Development  Technology Development & Transfer  Joint Ventures & Strategic Alliances

 Structures

 Business Assistance Centers  Incubators  Innovation Centers  Industrial Parks  Enterprise Development Centers  Venture Capital Exchanges  Guest Lectures  Board of Advisors/Trustees  Internships  Student Projects  Source of Funds
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 Inputs