CIE

UNIT –II
MBA(FT),PIMR
SNEHAL VYAS TRIVEDI

RESEARCH SCHOLAR
INTRODUCTION TO ENTREPRENEURSHIP
5 SKILLS EVERY ENTREPRENEUR SHOULD HAVE

• Communication
• Every entrepreneur needs to be an effective communicator. Whether a person is a solo
entrepreneur or runs a Fortune 500 company, they need to understand how to
communicate effectively to all stakeholders and potential stakeholders that touch the
business.
• It is imperative for an entrepreneur to be able to communicate with
employees, investors, customers, creditors, peers, and mentors. If an entrepreneur
cannot communicate the value of their company, it’s unlikely the company will be
successful.
• Sales
• As an entrepreneur, this person needs to be able to sell anything and everything. An
entrepreneur needs to sell the business idea to potential investors, the product or
service to customers, and themselves to employees.
• In the beginning, it's natural for entrepreneurs to be the first salespeople at their
respective companies. Those sales skills are necessary to demonstrate value for all
stakeholders inside and outside the company.
• Focus
• The path to successful entrepreneurship is riddled with ups and downs. There are the
highs of successes and the despairs of setbacks. A successful entrepreneur needs to be
able to focus so they can stay the course when the going gets tough.
• This skill can also be thought of as thinking with the end in mind. No matter what
struggles an entrepreneur goes through, a successful entrepreneur has the focus
necessary to keep an unwavering eye on the end goal and can push himself to achieve it.
• Ability to Learn
• The ability to learn is one of the most important skills to have in life, let alone in
entrepreneurship. If someone is building a business, however, the ability to learn is
required for success.
• The ups and downs an entrepreneur goes through are unavoidable. An entrepreneur
needs a high ability to learn—and a desire to learn. If a person is able to learn in any
situation, even failure, they have the skills necessary to become a successful
entrepreneur. Failure can help expand one's knowledge and understanding of business.
• Business Strategy
• Often, entrepreneurs achieve success in their businesses through their own sheer
strength of will. By employing effective communication skills, sales skills, a deep focus,
and a high ability to learn, an entrepreneur can actually learn a business strategy on the
fly. When structuring and growing a business, however, it's important that the structure
and growth strategy is based on sound business sense and skills. A successful
entrepreneur needs to have a solid strategy to take their business from good to great.
SOME OTHER SKILLS REQUIRED FOR AN SUCESSFUL
ENTREPRENEUR

LEADERSHIP
INNOVATION & CREATIVITY
MANAGEMENT SKILLS
ENTREPRENEURIAL DECISION PROCESS

• Identification Of Problem Or Opportunity.

• Generate Alternative Solutions.
• Analyse The Alternative Solutions.
• Selection Of The Best Alternative.
• Implementation Of The Alternative.
• Review The Performance.
CONCEPT OF STARTUPS

• What Is a Startup?
• The term startup refers to a company in the first stages of operations. Startups are
founded by one or more entrepreneurs who want to develop a product or service for
which they believe there is demand. These companies generally start with high costs and
limited revenue, which is why they look for capital from a variety of sources such
as venture capitalists.
KEY TAKEAWAYS

• A startup is a company that's in the initial stages of business.

• Founders normally finance their startups and may attempt to attract outside investment
before they get off the ground.
• Funding sources include family and friends, venture capitalists, crowdfunding, and loans.
• Startups must also consider where they'll do business and their legal structure.
• Startups come with high risk as failure is very possible but they can also be very unique
places to work with great benefits, a focus on innovation, and great opportunities to
learn.
UNDERSTANDING STARTUPS

• Startups are companies or ventures that are focused on a single product or service that
the founders want to bring to market. These companies typically don't have a fully
developed business model and, more crucially, lack adequate capital to move onto the
next phase of business. Most of these companies are initially funded by their founders.
• Many startups turn to others for more funding, including family, friends, and venture
capitalists.
• Startups can use seed capital to invest in research and to develop their business plans.
Market research helps determine the demand for a product or service, while a
comprehensive business plan outlines the company's mission statement, vision, and
goals, as well as management and marketing strategies.
SPECIAL CONSIDERATIONS

• Here are a number of different factors that entrepreneurs must think of as they try to get
their startups off the ground and begin operations. We've listed some of the most common
ones below.

• Location

For example, a technology startup selling virtual reality hardware may need a physical storefront
to give customers a face-to-face demonstration of the product's complex features.

• Legal structure
• Funding
PROS

• More opportunities to learn

• Increased responsibility
• Flexibility
• Workplace benefits
• Innovation is encouraged
• Flexible hours
CONS

• Risk of failure
• Having to raise capital
• High stress
• Competitive business environment
6 DIFFERENT TYPES OF STARTUPS YOU NEED TO
KNOW ABOUT
• Lifestyle startups
• These entrepreneurs basically earn by living the lifestyle they love and
working for themselves rather than someone else. Lifestyle entrepreneurs
are generally freelancers who love their job.
• Small business startups
• These startups aren’t really designed to scale or grow. These startups just
earn enough to feed the family of the entrepreneur. These include grocery
stores, plumbers, salons, etc.
• Scalable startups
• These startups are just born to be big. They always just hire the cream of the
applicants. They always look for venture capital to boost their businesses. Such
businesses often club together to launch something really big and innovative.
Some really common examples are Google, Microsoft.
• Buyable startups
• These startups are created to be bought by big entrepreneurs. The startups that
offer web applications etc. fall into this category. The main aim of such startups is
not to grow or be scalable but to be sold to big companies in exchange of some
good amount of cash.
• Large company startups
• These companies have a finite lifespan. Changes in consumer preferences, rivalry
in the market, demand for new ideas, new technologies create pressure on such
companies to create new innovative products. Basically, these companies either
innovate or die! A common example is Google and Android.’
• Social startups
• These are focused on making an impact. Bringing about a change in society’s
mindset is their major goal. They are passionate about making the world a better
place.
FEATURES OF VENTURE CAPITAL
ADVANTAGES OF VC

• Helps gain business expertise

• Business owners do not have to repay
• Helps in making valuable connection
• Helps to raise additional capital
• Aids in upgrading technology
DISADVANTAGES OF VC

• Reduction of ownership stake

• Give rise to conflict of interest
• Receiving approval can be time consuming
• Availing VC can be challenging
ENTREPRENEURSHIP ECOSYSTEM
AND ITS ELEMENTS
• An entrepreneurship ecosystem is the social and economic environment
affecting the local or regional entrepreneurship. It is defined as a set of
interdependent actors and factors coordinated in such a way that they enable
productive entrepreneurship within a particular territory. The entrepreneurial
ecosystem often narrows entrepreneurship down to high-growth startups or
scaleups, claiming that this type of entrepreneurship is an important source of
innovation, productivity growth, and employment.
ENTREPRENEURSHIP ECOSYSTEM
STAKEHOLDERS
1. Venture capitalist
2. Evangelist
3. Mentors & advisors
4. Co-working spaces
VENTURE CAPITALIST

• A venture capitalist (VC) is a private equity investor that provides capital to companies
with high growth potential in exchange for an equity stake. This could be
funding startup ventures or supporting small companies that wish to expand but do not
have access to equities markets.
KEY TAKEAWAYS

• A venture capitalist (VC) is an investor that provides young companies with capital in
exchange for equity.
• New companies often turn to VCs for the funding to scale and commercialize their
products.
• Due to the uncertainties of investing in unproven companies, venture capitalists tend to
experience high rates of failure.
• Some of the most well-known venture capitalists include Jim Breyer, an early investor in
Facebook, and Peter Fenton, an investor in Twitter.
THE RESPONSIBILITIES AND CHALLENGES OF EVANGELISTS

• Many new roles are emerging with the growing need of both enterprises and startups to
continually drive forward innovation and progress.
• Joining the chief disruption officer and the chief innovation officer is the chief evangelist.
His or her role is to promote their company in a way that exceeds traditional sales and
marketing.
TYPES OF EVANGELIST AND ROLE

• The Startup Evangelist :- every startup needs an Evangelist. Beyond believing in the
success of the company, the role of the evangelist is to preach their benefit and convince
all “non-believers” of the value of the company.
• They need to believe that the company will disrupt the market, transform an industry
and/or encounter wild success. But they also need to be able to sell the company to
everyone who isn’t already sold.
• The Enterprise Evangelist:- In enterprises, the role of chief evangelist is often closely tied
to the marketing and branding departments. They need to be able to inspire passion in
employees and consumers, creating an inspiring story that people can connect to and
want to be a part of.
WHY EVERY ENTREPRENEUR NEEDS A GREAT MENTOR

• A business mentor is someone with business experience and is willing to act as a trusted
confidante over an extended period of time with an objective to provide advice, counseling
from a fresh perspective, collaborate and help an entrepreneur stay focused on their long-
term goal of making their venture a success.
1. Mentors act as navigators
2. Mentors can provide unbiased views
3. Mentors can help you mark the milestones
4. Mentors can help with investments
5. Mentors help you not have to re-invent the wheel.
IMPORTANCE OF GETTING ADVISORS TO INVEST IN YOUR
BUSINESS

• Advisors are undoubtedly critical for any startup to succeed, especially in the earliest stages
where mentorship and coaching are as important, if not more so, than capital. They provide a
crucial knowledge base of skills, sector-specific expertise, connections and recruiting ability,
and are often critical to closing key commercial transactions, important personnel.
• In all early stage companies, advice and coaching are often as critical as capital. Advisors
provide expertise, guidance and connections that can make or break a young company.
• Conversely, advisors may also underperform over the long term due to misaligned incentives.
• The best means to address this is to make all advisors investors as well. This ensures a better
opportunity to meet KPIs(Key performance indicators).
HOW COWORKING SPACES ARE IDEAL

1. No Capital Investment & Easy Expansion.

2. Vibrant Ambience and Synergy.
3. Customized & Managed Office Spaces.
4. A Pool of Talented Individuals.
5. Zero Operational Headaches.
6. Networking Opportunities.
7. Reduce loneliness.
8. Increse productivity.
WHAT ARE INCUBATORS

• Every start-up would face problems like fierce competition, financial matters, decision
making, gaining the patronage of its customers etc. Here comes a business incubator
to assist startups to grow by giving them necessary management training or office
space.
• Sherman and Chappell have defined “Business incubator as an economic development
tool primarily designed to help create and new businesses in a community.”
Incubators provide various services in developing business, marketing, networking
Business incubators help emerging businesses by providing various support services,
such as assistance in developing business and marketing, networking with highly
specialised professionals, providing office space and equipment.
INCUBATOR FUNDING

• Incubator does not generally provide investment, they are funded by universities
or economic organisation because they focus on the formation of the Company,
which may not necessarily require investment in the initial stage. But the third
generation Incubator provides access to an external network, which allows
interacting with various investors, like angle networks and venture capitalist.
WHAT ARE ACCELERATORS

• They provide startup to build up their initial product, to find potential customers,
procure resources; to be precise Accelerator is limited duration assistance. They give a
small working capital, working space and networking support.
• The general features of an accelerator are according are:
• “• it is open and highly competitive.
• They provide for seed investment for exchange of equity.
• instead of individuals they focus on a small team
• Startups supported in cohort batches or ‘classes’.”
DIFFERENCE BETWEEN INCUBATOR AND
ACCELERATOR
INCUBATOR
• Clients are Science based business
(biotech, medical devices, nano
technology ) etc.
• (Selection process)Competitive
selection, mostly from the same region.
• (Term of assistance)Ranges from 1 to 5
years.
ACCELERATOR
• Mostly IT based, like web designing,
cloud computing.
• Competitive selection of firms from
wide regions or even nationally (or
globally)
• Short term assistance from 1-3 months.
• (Services)They provide service like • Gives idea, procure resources and
consultation, specialised advice in investments, find customer.
IPR, skill development.

• They invest money in companies and

• (Investments)They do not have funds take equity.
to invest directly, create an network
to expand the business, they do not
take equity.
WHICH IS BETTER FOR A STARTUP

• The general characteristics of the incubator are the following:-

• It is not for profit and regularly associated with colleges and universities.
• Office space will be provided at reasonable rates.
• Focus on local startup companies.
• Characteristics of accelerators: -
• “• It is open and highly competitive.
• They provide for seed investment for exchange of equity.
• Instead of individuals they focus on small team
• Startups supported in cohort batches or ‘classes.”
CONCLUSION

• Both the incubator and accelerator are best suited for a startup, based on the
purpose, duration, application process, investment etc., startup can decide their
best-suited model for the development of their business.