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Welcome!

BBA220, S2 2017
Week 1: What to expect today?

Introduction to Entrepreneurship and New Venture


Management

Lecture from Chapter 1

Our first guest speaker Julian Moss Founder/CEO of Vodka0


passionate/consummate entrepreneur!

Adapted from 2016 Pearson Education Ltd.


Chapter 1

Introduction to
Entrepreneurship
About this unit
Check ilearn for all information on this unit : weekly lecture slides,
recordings of lectures, announcements, make use of discussion boards, links
to resources, assessment tasks and gradebook
https://ilearn.mq.edu.au/login/index.php

Post general enquiries and questions on ilearn General discussion or other


relevant panels

Specific/individual enquiries email me or your tutor. Academics will only


respond to emails from mq student email account

When you email (use only your mq student email), please state Unit code,
tutorial time. Address your tutors appropriately, use appropriate English (eg.
refrain from twitter/text speak).

Be respectful and courteous to academics and fellow students


Summary of assessments
Task 1 Task 2 Task 3

Title/name Individual Case Essay Team Project Exam


New venture Business Plan

Description 3000 words individual report. Team work on a new business venture. Answer four essay
Critical reflection of the Max 6 groups per tut. Each group 4 to 5 questions
meaning and different students. Identify, assess and develop a
perspectives of an business concept culminating in written a
entrepreneur. Include preliminary business plan
secondary and primary
research. Interview a
business owner.

Due Date Week 6, 4 September, by Business Plan in Week 11, 25 Oct by 9am Exam period
9am
Pitch presentation: in class in Week 12
and 13

Weighting 30% 15+15 = 30% 40%

Submission Upload to turnitin on iLearn. Team business plan upload to turnitin Formal closed
method No hard copies. book exam
Team and individual presentations upload
slides to iLearn before presentation
We have expectations of you

Take responsibility for We are here to guide you and


facilitate your learning. NOT do the
your own learning work for you.
Do the work
Attend classes. Lectures AND
Recognise who to ask tutorials. If you do not, you will fall
what questions behind. Do not come and see us for
catch ups as this is not what we are
here for.

Work consistently. Otherwise, you


will fall behind.

Be respectful to others your


classmates and teaching staff.

When in doubt, always clarify BUT


Courtesy slide from MKTG309
Know who to ask the right questions.
What does entrepreneur mean to you? Why
have you signed up for this Unit?
Any of these?
Chapter 1 Learning Objectives
1. Describe entrepreneurs, corporate entrepreneurship, and the
characteristics of entrepreneurial firms.
2. Discuss three main reasons people decide to become
entrepreneurs.
3. Identify four main characteristics of successful
entrepreneurs.
4. Explain five common myths regarding entrepreneurship.
5. Describe three types of start-up firms.
6. Discuss the changing demographics of entrepreneurs in the
United States.
7. Discuss the positive effects of entrepreneurship and
entrepreneurial firms on economies and societies.
8. Explain the entrepreneurial process.
Introduction to Entrepreneurship

- Men twice as likely to start a


There is tremendous business
interest in - Proportion of women early-
stage entrepreneurs jumped
entrepreneurship around
45% between 2003-6 and
the world. 2013-16
- UK above European average
for female early-stage
http://www.gemconsortium.org/ entrepreneurship, with
Canada taking top spot
among advanced economies
Indications of Increased Interest
in Entrepreneurship
Books
Amazon.com lists over 36,900 books dealing with
entrepreneurship and 89,900 focused on small business.
College Courses
In 1985, there were about 250 entrepreneurship courses
offered across all colleges in the United States.
Today, more than 2,000 colleges and universities in the
United States (which is about two-thirds of the total) offer at
least one course in entrepreneurship.

https://www.youtube.com/watch?v=3LEprgHwv9o
Sunrise Young entrepreneurs
What is Entrepreneurship?
Academic Definition (Stevenson & Jarillo)
process by which individuals pursue opportunities without
regard to resources they currently control.
Venture Capitalist (Fred Wilson)
art of turning an idea into a business.
Explanation of What Entrepreneurs Do
assemble and integrate all the resources needed the
money, the people, the business model, the strategy to
transform an invention or an idea into a viable business.

Check out this weeks and next weeks reading list!


Entrepreneurship conceptual/theoretical
perspectives
Economic perspective
- individuals who harness factors of production to bring about
for economic growth, jobs, wealth
Innovation perspective
- creativity, foresight, discovery, new ways to doing things,
creative destruction, disruptive technology
Opportunity-seeking and alertness
- existing knowledge and experience, ties and connections
Resource acquisition/orchestration behavior
- resource-based views, resource-dependency theory
Social cultural, psychological attributes
- environment (family, education), personality traits
More types of entrepreneurs

Business entrepreneurs driven by profit motives, constantly


innovating for market share

Social entrepreneurs driven by a mission to fill gaps left by the


market and public sector

Small business owners prefer more stable, less aggressive


approach, exploit existing opportunities, operate in existing
markets

Corporate entrepreneurs individuals with entrepreneurial


mindset/characteristics, work in corporation, problem-solving,
adding value
Why Become an Entrepreneur?

The three primary reasons that people become


entrepreneurs and start their own firms

Desire to be their own boss

Desire to pursue their


own ideas

Financial rewards

What about you? Why and why not?


Characteristics of Successful Entrepreneurs
1 of 3

Four Primary Characteristics


Characteristics of Successful Entrepreneurs
2 of 3

Passion for the Business


number one characteristic shared by successful
entrepreneurs, a passion for their business.
passion typically stems from the entrepreneurs belief that
the business will positively influence peoples lives.
Product/Customer Focus
second defining characteristic of successful entrepreneurs
is a product/customer focus.
An entrepreneurs keen focus on products and customers
typically stems from the fact that most entrepreneurs are, at
heart, craftspeople.
Characteristics of Successful Entrepreneurs
3 of 3

Tenacity Despite Failure


Because entrepreneurs are typically trying something new,
the failure rate is naturally high.
A defining characteristic for successful entrepreneurs is
their ability to persevere through setbacks and failures.
Execution Intelligence
The ability to fashion a solid business idea into a viable
business is a key characteristic of successful entrepreneurs.
https://addicted2success.com/quotes/images-
21-entrepreneur-picture-quotes-for-victory-in-
business-in-life/
Common Myths About Entrepreneurs
1 of 7

Myth 1: Entrepreneurs Are Born, Not Made


This myth is based on the mistaken belief that some people
are genetically predisposed to be entrepreneurs.
The consensus of many studies is that no one is born to
be an entrepreneur, everyone has the potential to become
one.
Whether someone does or doesnt become an entrepreneur
is a function of their environment, life experiences, and
personal choices.
Common Myths About Entrepreneurs
2 of 7
Although no one is born to be an entrepreneur, there are common traits and
characteristics of successful entrepreneurs

A moderate risk taker Optimistic disposition


Persuasive A networker
Promoter Achievement motivated
Resource assembler/leverager Alert to opportunities
Creative Self-confident
Self-starter Decisive
Tenacious Energetic
Tolerant of ambiguity A strong work ethic
Visionary Lengthy attention span
Common Myths About Entrepreneurs
3 of 7

Myth 2: Entrepreneurs Are Gamblers


Most entrepreneurs are moderate risk takers. Risk
mitigators?
The idea that entrepreneurs are gamblers originates from
two sources:
Entrepreneurs typically have jobs that are less structured, and so
they face a more uncertain set of possibilities than people in
traditional jobs.
Many entrepreneurs have a strong need to achieve and set
challenging goals, a behavior that is often equated with risk taking.
Common Myths About Entrepreneurs
4 of 7

Myth 3: Entrepreneurs Are Motivated Primarily by


Money
While it is nave to think that entrepreneurs dont seek
financial rewards, money is rarely the reason entrepreneurs
start new firms. (consider Schumpeters views)
In fact, some entrepreneurs warn that the pursuit of money
can be distracting.
Common Myths About Entrepreneurs
5 of 7

Myth 4: Entrepreneurs Should Be Young and


Energetic
Entrepreneurial activity is fairly easily spread out over age
ranges.
While it is important to be energetic, investors often cite
the strength of the entrepreneur as their most important
criteria in making investment decisions.
What makes an entrepreneur strong in the eyes of an investor is
experience, maturity, a solid reputation, and a track record of
success.
These criteria favor older rather than younger entrepreneurs.
Common Myths About Entrepreneurs
6 of 7
Common Myths About Entrepreneurs
7 of 7

Myth 5: Entrepreneurs Love the Spotlight


While some entrepreneurs are flamboyant, the vast majority
of them do not attract public attention.
As evidence of this, consider the following question: How
many entrepreneurs could you name?
Most of us could come up with Jeff Bezos of Amazon.com, Mark
Zuckerberg of Facebook, Steve Jobs of Apple, and maybe Larry
Page and Sergey Brin of Google.
But few could name the founders of Twitter, YouTube, Netflix, or
DIRECTV, even though we frequently use those firms services.
Types of Start-Up Firms

Examples of each ?
Changing Demographics of Entrepreneurs
1 of 4

Women Entrepreneurs
While men are more likely to start businesses than women,
the number of women-owned businesses is increasing.
There were 8.6 women-owned businesses in the United
States in 2013, generating over $1.3 trillion in revenue and
employing nearly 7.8 million people.
In some industries, women control a significant share of the
business.
Women-owned businesses account for 52% of all businesses in
health care.
Changing Demographics of Entrepreneurs
2 of 4

Minority Entrepreneurs
There has been a substantial increase in minority
entrepreneurs in the United States.
Between 2002 and 2007 (the most recent statistics
available), minority-owned firms outpaced the growth of
non-minority firms in gross receipts, employment, and
number of firms.
In 2007, there were about 1.9 million African American-
owned firms in the United States, 1.5 million Asian
American-owned firms, and 2.3 million Hispanic-owned
firms.
Changing Demographics of Entrepreneurs
3 of 4

Senior Entrepreneurs
The numbers of seniors (those 50 years old and older)
starting businesses is substantial and growing.
In 2012, 20% of new businesses were started by people
between 50 and 59 years old, while another 12.5 percent
were founded by individuals 60 years old and older.
This increase is attributed to corporate downsizing, an
increasing desire among older people for more personal
fulfillment in their lives, growing worries about the cost of
health care, and similar factors.
Changing Demographics of Entrepreneurs
4 of 4

Young Entrepreneurs
A desire to pursue an entrepreneurial career is high among
young people.
According to a recent Gallop survey, about 4 in 10 kids in
grades 5-12 say they plan to start their own business.
About 59% of students in grades 5-12 say their school offers
classes in how to start a business.
About one-third of young people say their parents or
guardians have started a business, which provides them a
firsthand look at the entrepreneurial lifestyle.
Economic Impact of Entrepreneurial Firms

Innovation
Is the process of creating something new, which is central to
the entrepreneurial process.
Small innovative firms are 16 times more productive than
larger innovative firms in terms of patents per employee.
Job Creation
Small businesses create a substantial number of net new jobs
in the United States.
Firms with 500 or fewer employees create 65% of new jobs
on an annual basis.
http://www.abs.gov.au/ausstats/abs@.nsf/mf/8165.0
http://www.theaustralian.com.au/business/opinion/bernard-salt-demographer/australia-
a-nation-of-small-businesses/news-story/a73834c0f227f0d0a83f0aefb3e8ff3b
Entrepreneurial Firms Impact on Society
and Larger Firms
Impact on Society
The innovations of entrepreneurial firms have a dramatic
impact on society.
Think of all the new products and services that make our
lives easier, enhance our productivity at work, improve our
health, and entertain us in new ways.
Impact on Larger Firms
Many entrepreneurial firms have built their entire business
models around producing products and services that help
larger firms become more efficient and effective.
The Entrepreneurial Process

The Entrepreneurial Process Consists of Four Steps


Step 1: Deciding to become an entrepreneur.
Step 2: Developing successful business ideas.
Step 3: Moving from an idea to an entrepreneurial firm.
Step 4: Managing and growing the entrepreneurial firm.
Steps in the Entrepreneurial Process
1 of 2

Step 1 Step 2
Developing Successful Business Ideas
Steps in the Entrepreneurial Process
2 of 2

Step 3 Step 4
In closing

Please check out and be familiarised with whats on our iLearn


site

Read all your assessment guidelines in readiness to discuss and


ask questions at your first tutorial next week. Tut 1 please read
the Case Prim: How a lack of passion and resolve p.33

Next weeks lecture topic on Ch. 2 Recognizing opportunities


and ideas