Becamex Business School

Entrepreneurship
BUS 101
Contents

1. How to Entrepreneurship?

2. What is Entrepreneurship?

3. Why is Entrepreneurship important?

What is Entrepreneurship?

• INNOVATION: solution for a

problem

• VALUE: customer acceptance

• RISK: Uncertainty
 People

Market Capital

Profit/lost Prototyping

Communication Operation

Leadership
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What is entrepreneurship?

Self-employment Aspiration Entrepreneurship

Entrepreneurship

Creation and management of a new enterprise to accomplish some objective.

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 Carl Dietrich
CEO Terrafugia
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Entrepreneurship – Financial Sustainability

Q (p-c) > F

Where:
Q: quantity sold per unit time (e.g., openers/year)
p: price per unit (e.g., 50 USD/opener)
c: cost per unit (e.g., 20 USD/opener)
F: fixed cost to operate the business per unit time (rent, advertising,
salaries, etc.) (e.g., 400,000 USD/year)
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Entrepreneurship – Financial Sustainability
Q (p-c) > F
2,000 units/year x (50 USD/unit - 20 USD/unit) > 400,000 USD/year
600,000 > 400,000 à sustainable!

Where:
Q: quantity sold per unit time (e.g., openers/year)
p: price per unit (e.g., 50 USD/opener)
c: cost per unit (e.g., 20 USD/opener)
F: fixed cost to operate the business per unit time (rent, advertising, salaries,
etc.) (e.g., 400,000 USD/year)
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Entrepreneurship – Financial Sustainability - Services
LTV > CAC

Where:
LTV average customer lifetime value (e.g., 5,000 USD/customer)
churn rate
service fee per unit time
duration of engagement
additional services adopted
CAC customer acquisition cost (e.g., 3,000 USD/customer)
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Profile of Entrepreneur
The vision of the founder

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WHARTON ONLINE Entrepreneurship

Profile of the Entrepreneur
• The average age for a founder of a successful company is 42
• Success for macro giant success in a startup company peaks between ages
45 and 52.
• Around 38 % of all businesses in the US are started by women.
• 36%t of all businesses in the US are started by members of minority groups.
• Overconfidence increases entrepreneurial efforts, but not success
• Passion seems to be positive, but we are not entirely sure
• No one personality type

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Types of Enterprises
• Many ways of categorizing

• Lifestyle

• Small Business

• High growth startups

• Intrapreneurship

• Social Venture
Types of Enterprises - Lifestyle
• Businesses run as hobbies or supplemental sources of income

• Goal: Enjoy what you are doing

• Funding: Usually minimal

• Scaling: No scaling

• Exit: No exit planned

 Types of Enterprises – Small Business
• The most common business type around the world
• Goal: “Feed the family,” be one’s own boss
• Funded: Usually funded through loans, personal investment, or friends
and family
• Scaling: Over 2/3 do not want to grow
• Exit: No exit planned
 Types of Enterprises – High growth startups

• The Silicon Valley startup

• Goal: Be the next Google/Uber/Facebook... or be bought by them
• Scaling: Goal is to grow quickly
• Resources: Venture capital, angel funding
• Exit: IPO or Acquisition
Types of Enterprises – Intrapreneurship
• Startups inside larger companies
• Goal: Develop a new and innovative company
• Resources: Internal company resources
• Scaling: Varies
• Exit: Adoption into larger firm
Types of Enterprises – Social Venture

• Venture whose primary goal is to do accomplish a social mission

• Goal: Creating value for society
• Resources: Grants, volunteers
• Exit: None planned
Types of Enterprises – Conclusion

• There are many types of businesses

• Differ in many dimensions
– Goals
– Resources needed
– Where you can do them
– Time used
• Adapt lessons as needed
Venture Creation’s Role in Society

• Rate of entrepreneurship in 2018 :

14.7 out of 1,000 adults are self-employed

• SMEs represent 98.1% of the 714,755 VN enterprises

(White Book VN Enterprises 2019)
Why is entrepreneurship important?
• Creates economic value

• Creates higher paid jobs

• Creates income

• Attracts and retains talented people

• Builds the economy

• Smart City
The Promise of Entrepreneurship
• Economic development angle: economic
growth, employment generation
• Technological innovation is the biggest
engine of growth for the U.S. economy.
• Technological change has facilitated the
globalization of economic growth.
• It is responsible for the biggest productivity
gain achieved in the US in 19 years posted
in Q1 of 2002.
• Deng Xiaopeng (1978): "It is time to
prosper. China has been poor a thousand
years … to get rich is glorious"
Scale Up Ecosystems for Growth Entrepreneurship
2009, 2010, 2011 Daniel Isenberg
Labor
• Skilled and unskilled
• Serial entrepreneurs
• Later generation family
• General degrees (professional and •
• Specific entrepreneurship training
Support professions
• Legal
• Accounting
• Investment bankers
• Technical experts, advisors
Leadership
• Unequivocal support
• Social legitimacy
• Open door for advocate
• Entrepreneurship strategy
Early Customers
• Urgency, crisis and challenge
• Early adopters for proof-of-concept
• Expertise in productizing
Government
• Reference customer • Institutions e.g. Investment, support
• First reviews • Financial support e.g. for R&D, jump start funds
• distribution channels • Regulatory framework Incentives e.g. Tax benefits
Networks • Research institutes
• Venture-friendly legislation
• Entrepreneur’s networks • e.g. Bankruptcy, contract enforcement, property rights, and labor
• Diaspora networks Policy
Markets
• Multinational corporations
Financial Capital
• Micro-loans
• Angel investors friends and family
Human • Zero-stage venture capital
Capital Entrepreneurship Finance • Venture capital funds
Educational Institutions
• Private equity
Public capital markets
academic) • Debt
Supports Culture Success Stories
Infrastructure • Visible successes
• Wealth generation for founders
• Telecommunications • International reputation
• Transportation & logistics
• Energy
• Zones, incubators, co-
Societal norms
working, clusters Non-Government Institutions
• Tolerance of risk, mistakes, failure
• Entrepreneurship promotion in non- • Innovation, creativity, experimentation
profits • Social status of entrepreneur
• Business plan contests • Wealth creating
• Ambition, drive, hunger
Activity #1: Pass the Problem (1)
• Purpose: To discover multiple solutions and opportunities from a single problem.
• In teams, each person should think about a current problem or concern that needs a
solution or a need that hasn’t been met.
• You should try to come up with a problem that the typical consumer or business is facing.
• You will have five minutes to think and write their problem or need on a piece of paper.
• When I give the cue, each should pass the paper to the person next to him or her.
• That person reads the problem or need just received and jots below it the first thoughts that come to
mind to solve the problem or address the need.
• You have 30 seconds to do this.
• This is repeated every 30 seconds until each person gets his or her own sheet back.
Activity #1: Pass the Problem (2)
• Discussion Questions:
• Did anyone discover novel solutions that you had not previously considered?
• Can you see any value in trying some of these suggestions?
• Do some of these suggestions trigger other ideas or solutions for you?
• What lesson does this teach us about reaching out to people without business
experience to assist them in recognizing opportunities?
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 Becamex Business School

Thank You!