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SESSION 1:

INTRODUCTION TO
ENTREPRENEURSHIP.
THE PROFILE OF THE
ENTREPRENEUR
Raquel Antoln Lpez

WHAT IS
ENTREPRENEURSHIP?

WHAT IS ENTREPRENEURSHIP?
The process through which entrepreneurs
(person) establish a new organization

The process of discovering, creating, evaluating, and


exploiting economic opportunities by innovative actors
that engage in business activities to earn a profit or be
succesful.
Shane & Venkataraman (2002)

ACTORS AGENTS OF CHANGE

INNOVATION

OPPORTUNITY

CORE ELEMENTS OF THE DEFINITION

ENTREPRENEURSHIP

NEW VENTURE
CREATION

INTRAPRENEURSHIP

CORPORATE
ENTREPRENEURSHIP
Business units
Departments

Ent orientation

ESTABLISHED COMPANIES

A4

Myth or reality:

The terms entrepreneurial


venture and small
companies can be used
interchangeably

WHAT IS ENTREPRENEURSHIP?

New Ventures
Organizations that pursue opportunities, are characterized by
innovative practices, and have growth and profitability as their
main goals. (Entrepreneurial ventures)
Most of new ventures are small or micro-companies, but not
always

Small Business
A firm that:
is independently owned, operated, and financed;
has fewer than 100 (250) employees; <1M - 2,5M sales
doesnt necessarily engage in new or innovative practices,
and has relatively little impact on its industry

WHAT IS ENTREPRENEURSHIP?

Spin-off: A firm created from


an existing company/division
of
a
parent
company
(incubator). The company has
commercial, technical and
legal independence.

Spin-off

Business incubator: A company


that helps new and startup
companies
to
develop
by
providing services such as
management training or office
space.

Independent
company

wether big, small


or micro

New
venture
creation

Franchise

Microenterprise: A firm with 10 or


fewer
employees,
with
initial
capitalization requirements of under
$35,000 and high operational
involvement
of
the
owner
(Frequently a family business)

Start-up
Start-up: An innovative
and
technology-based
company that develops a
new
technology
or
innovation.

Franchise: A business that markets a product or service developed


by a franchisor, typically in the manner specified by that franchisor.

WHAT IS ENTREPRENEURSHIP?
COLLECTIVE ENTREPRENEURSHIP: is the association of
entrepreneurs that results from the combination of skills of a
group of individuals who come together to create and
innovate.
Cooperative

Limited Company

WHY BEING AN
ENTREPRENEUR?

MOTIVATIONS TO CREATE YOUR OWN


COMPANY
What are common motivators for entrepreneurs to star t a new
venture?
Money

Freedom
Create
Independence
Help
Self-fulfillment

Control over your compensation /making profits

Control over your time


Changing the world? A new technology, innovation,
service
Control over your working conditions
Social and environmental entrepreneurship
(improve society)

COSTS / BENEFITS
Benefits

Independence
Satisfaction
Financial reward
Self-esteem
Contribution to society

Costs
Business failure
Obstacles

Loneliness
Financial insecurity
Long hours/hard work

Strain on personal
relationships
Compete responsability

WHY NOT ENTREPRENEURSHIP?

Entrepreneurship

Employee
Peer pressure: popular
among your friends?
Family pressure: the risk is
worth taking?
Oppor tunity cost: a job
somewhere else?

RISK (risk of time, risk of


money): you are likely to fail.
Uncertainty: will you be
successful or unsuccessful?

KNOWING
ENTREPRENEURS:
THEIR PROFILE
ATTITUDES

SKILLS

ENTREPRENEURIAL
ATTITUDES

Myth or reality:

Entrepreneurs have a
natural desire to take risks
at a higher level than nonentrepreneurs

ENTREPRENEURIAL ATTITUDES:
RISK TOLERANCE
Research studies show that entrepreneurs and traditional managers do
not show differences in natural tendencies or desire to take risks.
Why do entrepreneurs accept risks that traditional
managers may avoid?

However, entrepreneurs do perceive risk differently: the risk is in the eye


of the beholder)
Risk is conceptualized based on the individual entrepreneurs assessment
of risk and uncertainty in a decision.
The risk tolerance of entrepreneurs may be higher based on their
perception of the risk-reward scenarios that they face.
Entrepreneurs see greater potential in the rewards of their decisions than
do non-entrepreneurs.

ENTREPRENEURIAL ATTITUDES:
SELF-ACHIEVEMENT
Achievement orientation: satisfying objectives addressing challenges
Pursuing changes

Challenging but
attainable goals/targets

ENTREPRENEURIAL ATTITUDES:
SELF-EFFICACY
Self-confidence
Self-esteem
Proactivity

Overconfidence?

Beware of overconfidence. Overconfidence refers to an


individuals tendency to overestimate their own
capabilities, knowledge and skills. This results in being
overly optimistic of the future. While confidence helps
entrepreneurs to successfully face the multiple
hurdles of starting and managing a venture,
overconfidence explains why most new ventures fail.

ENTREPRENEURIAL ATTITUDES:
PERSEVERANCE
Medium Long term
orientation

ENTREPRENEURIAL
SKILLS/CAPABILITIES

Myth or reality:

Entrepreneurs do not
become successfull on their
first venture

ENTREPRENEURIAL SKILLS:
FAILURE TOLERANCE
Failure: Part of the
Creative Process!
For every 3,000 new product
ideas:
Four make it to the
development stage
Two are actually
launched
One becomes a success
in the market

ENTREPRENEURIAL SKILLS:
CREATIVIT Y
CURIOSITY

OPPORTUNITY
RECOGNITION

PASSION

INNOVATION

FLEXIBILITY

INNOVATIVE
MANGEMENT

ENTREPRENEURIAL SKILLS:
LEADERSHIP AND MOTIVATION

Being able to make decisions and to involve your employees and


other members of the team

Leadership position in your sector

ENTREPRENEURIAL SKILLS:
COMMUNICATION AND NEGOTIATION
Skills to relate to un-known people
Skills to listen to other people
Skills to talk and transmit to other people
Persuative skills

FIND INVESTORS

NEGOTIATE
WITH BANKS

SELL YOUR
PRODUCT/SERVICE

ASSOCIATION WITH OTHER ENTREPRENEURS

ENTREPRENEURIAL SKILLS:
COOPERATION & NETWORKING
Social capital
Which is the more valuable measure of your social capital?

The diversity of the people that you know.


.
The number
of people that you know

While the number of people that you know is valuable, it is more


valuable for entrepreneurs to have (a) a diverse network than (b) a large
network of similar people. The richness of your social capital depends
on the size, quality, and diversity of your networks. In terms of diversity,
it is very valuable to know people of different skill sets, with different
company experiences, in different cities and regions, and with
diversified types of people that they know.

ENTREPRENEURIAL SKILLS:
COOPERATION & NETWORKING
Social capital

Why build social capital?


.

To be a more valuable collaborator

To be a more efficient problem solver


To be more creative
To be better informed
Team work

THE ENTREPRENEURIAL
PROCESS

Myth or reality:

It is necessary to have
access to money to become
an entrepreneur

Google

Amazon

Yes, the world's most famous search engine was


actually started in a garage. Larry Page and Sergey
Brin, graduates of Stanford University, rented a garage
from a friend, Susan Wojcicki, in September of 1998.
They worked day and night for a number of months and
developed what would be known as Google. Their main
goal while creating the website was to organize and
maintain all kinds of information on a single platform
accessible to common people all over the world. Today,
Google is the most commonly used search engine in
the world and has also launched other useful websites
and applications like Gmail, Google+, and Google Drive.

Amazon.com is a well-known online shopping


website that was created in 1994 as an online
bookstore by Jeff Bezos. He created the website
in his garage in Washington, originally investing
nearly $40,000 to enable him to order, sell, and
deliver books to 48 different countries. He
succeeded in selling his first book in July 1995,
and since then has built Amazon into the largest
online shopping store in world.

Microsoft
Every computer user knows the Microsoft brand. It's the
remarkable and famous software that was once
created in a small Albuquerque garage by Bill Gates
and his friend Paul Allen. Both of them gave more
importance to programming language and software
operations and worked in collaboration with IBM. They
got their first operating system licensed for $80,000.
They kept working hard and some years later they
developed their most impressive and exceptional
operating system, called Windows. Today, Windows is
the most widely used software on the globe. About 80%
of computers worldwide are running this operating
system.

Apple
Apple is another insanely popular international
brand, but few people realize that it was
started in a California garage by three young
men. Steve Jobs, Steve Wozniak, and Ronald
Wayne developed the first Apple computer in
1976 in the garage of Steve Jobs' parents' house.
The Apple I was sold as a motherboard to a local
store for $500 and shortly thereafter, the team
continued on to create the Apple II computer. The
founders' products and company became famous
when they got a break from their Macintosh line
of products, from which they earned millions of
dollars. Now, Apple is leading a technological
revolution with its various devices, including Mac
computers, iPhones, iPods, and iPads.

Disney
Walt and Roy Disney created their first films in their uncle's
garage in 1923. They started their career by creating "Alice
Comedies," which were actually a part of the original Alice in
Wonderland animation series. Disney faced a lot of
hardships in the journey toward success and was only
accepted by investors after enduring plenty of struggle and
strife. Now, Disney is one of the most popular and highestearning media houses and franchises in the world, and is
the leading name in producing cartoons, children's movies,
and animated films.

Hewlett-Packard (HP)
Two friends, Bill Hewlett and Dave Packard, founded HP in Packard's
garage in 1939 with an initial investment of only $538. The product that
eventually boosted their career was an audio oscillator (HP200A), which
was sold to Walt Disney to improve its sound system for the
movie Fantasia. Walt Disney bought eight oscillators and gave HP the
biggest break of its life. Today, the Packard's garage in Palo Alto is
famous as the birthplace of HP and Silicon Valley. Since its inception,
HP has developed into a powerful and active company, developing
various computers, laptops, and other computer-centric accessories with
advanced technologies.
All of these companies started with little investment capital and small
physical space, but hard work and unwavering dedication led them to
huge success. With the same type of passion and determination you,
too, could be the founder of the next $25B+ enterprise.

The entrepreneurial
cycle

BUSINESS MODEL
(CANVAS
METHOD)
IDEA
ATTRACTIVENESS
ASSESSMENT
IDEA

Be curious first and


critical later

Yes
No

FINANCIAL
VIABILITY

OPPORTUNITY

GROUP
BUSINESS
PROJECT

OPPORTUNITY
EXPLOTATION

Founding your company

OPPORTUNITY
EXPLORATION

CANVAS Method or
Business plan

OPPORTUNITY
ANALYSIS

OPPORTUNITY
RECOGNITION

Identification o a business
idea

Validation of the idea as a


business opportunity (viable
and feasible)

THE BENEFITS OF
ENTREPRENEURSHIP IN
SOCIETY

WHY IS ENTREPRENEURSHIP IMPORTANT


FOR SOCIET Y?
Innovation
Engage in the creative destruction process
Act as agents of change: Industry standards, business models, business
power, economic power, Push for new laws
Provide new solutions to old problems
Push for equality of opportunities, democracy, etc.
Oppor tunities for diverse people
Ex. For minorities and Women: A way to break the glass-ceiling
Balance work and family responsibilities
Avoid unpleasant firm politics
Obtain more challenge and autonomy (and wealth)
Rural areas
Job Creation and countr y growth
New ventures create 60-80% of net new jobs

THE ROLE OF ENTSHIP IN SOCIET Y


Business and social needs are key sources of
entrepreneurial opportunities
Venture philanthropy: funding models designed to yield social
impact as well as a financial return on their investments.
Social entrepreneurship. Social entrepreneurs are individuals
with innovative solutions to societys most pressing social
problems.
Green entrepreneurship. Environmental entrepreneurs are
individuals who create new, for-profit, ventures that help
address environmental challenges climate change, loss of
biodiversity, pollution, etc.

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