The Power of

Entrepreneurship
Chapter 1
 Video 01

Copyright © 2014 John Wiley & Sons, Inc.

 DEFINITION OF
ENTREPRENEURSHIP
Schumpeter
An entrepreneur is the person who destroys the existing economic
order by introducing new products and services, by introducing new
methods of production, by creating new forms of organization, or by
exploiting new raw materials.

Simpler
An entrepreneur is the person who perceives an opportunity and
creates an organization to pursue it.

Copyright © 2014 John Wiley & Sons, Inc.

 BUSINESS IN THE U.S.

Full-time 33% are

businesses incorporated
(14 million)

28 million
businesses
99.9% are small
businesses Part-time
(with 500 or fewer businesses
employees) (14 million)

Copyright © 2014 John Wiley & Sons, Inc.

10-YEAR SURVIVAL RATES

2 5 10
1 YEAR
YEARS YEARS YEARS

81% 65% 40% 25%

survive survive survive survive

Copyright © 2014 John Wiley & Sons, Inc.

 DJIA COMPANIES
1896 1928 2012
American Cotton Oil Allied Can 3M
American Sugar Allied Chemical Alcoa
American Tobacco American Smelting & Refining American Express
Chicago Gas American Sugar AT&T
Distilling & Cattle Feeding American Tobacco Bank of America
General Electric Atlantic Refining Boeing
Laclede Gas Light Bethlehem Steel Caterpillar
National Lead Chrysler Chevron Corporation
North American General Electric Cisco Systems
Tennessee Coal, Iron & Railroad General Motors Coca-Cola
U.S. Leather General Railway DuPont
U.S. Rubber Goodrich ExxonMobil
  International Harvester General Electric
  International Nickel Hewlett-Packard
  Mack Trucks The Home Depot
  Nash Motors Intel
  North American IBM
  Paramount Publix Johnson & Johnson
  Postum JPMorgan Chase
  Radio Corporation UnitedHealth Group
  Sears, Roebuck McDonald's
  Standard Oil (NJ) Merck
  Texas Corporation Microsoft
  Texas Gulf Sulphur Pfizer
  Union Carbide Procter & Gamble
  U.S. Steel Travelers
  Victor Talking Machines United Technologies Corporation
  Westinghouse Verizon
  Woolworth Walmart
  Wright Walt Disney

Copyright © 2014 John Wiley & Sons, Inc.

NEW TECHOLOGY ADOPTION
TIME FOR NEW TECHNOLOGIES TO
PENETRATE 25% OF U.S. POPULATION
Household electricity (1873) 46 years
Telephone (1875) 35 years
Automobile (1885) 55 years
Airplane travel (1903) 54 years
Radio (1906) 22 years
Television (1925) 26 years
VCR (1952) 34 years
PC (1975) 15 years
Mobile Phone (1983) 13 years
World Wide Web (1992) 5 years
Source: The Wall Street Journal, June 1997;
http://en.wikipedia.org/wiki/Advanced_Mobile_Phone_Service;
www.netbanker.com/2000/04/internet_usage_web_users_world.html

Copyright © 2014 John Wiley & Sons, Inc.

INTERNET PENETRATION
AROUND THE WORLD
WORLD INTERNET USAGE AND POPULATION STATISTICS

Population Internet Users Internet Users Penetration Growth

( 2011 estimate) Dec. 31, 2000 Dec. 31, 2011 (% Population) 2000-2011
Africa 1,037,524,058 4,514,400 139,875,242 14% 2988%
Asia 3,879,740,877 114,304,000 1,016,799,076 26% 790%
Europe 816,426,346 105,096,093 500,723,686 61% 376%
Middle East 216,258,843 3,284,800 77,020,995 36% 2245%
North America 347,394,870 108,096,800 273,067,546 79% 153%
Latin America/Caribbean 597,283,165 18,068,919 235,819,740 40% 1205%
Oceania/Australia 35,426,995 7,620,480 23,927,457 68% 214%

WORLD TOTAL 6,930,055,154 360,985,492 2,267,233,742 33% 528%

Source: internetworldstats.com http://www.internetworldstats.com/stats.htm

Copyright © 2014 John Wiley & Sons, Inc.

 ENTREPRENEURSHIP
STRIKES GOLD
Netscape Communications

$6 million of own money + $6 million of VC money = $2.2 billion of

market capitalization on the first day of IPO

eBay
Benchmark Capital’s investment of $5 million in eBay multiplied 1500-fold
in just two years – the all-time record for Silicon Valley

Copyright © 2014 John Wiley & Sons, Inc.

SHIFTING INFLUENCES ON
ENTREPRENEURSHIP
Cultural norms
Education &
Physical
training
resources

Government
People
resources Entrepreneurial
Framework

R&D transfer
Financial

Internal market Commercial &

openness legal

Copyright © 2014 John Wiley & Sons, Inc.

21st CENTURY ECONOMIES
ANGLO-SAXON OR SOCIAL MODELS?

Anglo-
Saxon
Economic
Systems

Anglo-Saxon economic systems have a high prevalence rate of high-

expectation entrepreneurial activity

Copyright © 2014 John Wiley & Sons, Inc.

 Video 02

Copyright © 2014 John Wiley & Sons, Inc.