INTRODUCTION TO ENTREPRENEURSHIP

CHARACTERISTICS OF SUCCESSFUL ENTREPRENEURS
 PASSIONATELY SEEK NEW OPPORTUNITIES  PURSUE OPPORTUNITIES WITH ENORMOUS DISCIPLINE  PURSUE ONLY THE BEST OPPORTUNITIES  ADAPTIVE EXECUTION  SYNERGY IN ENERGY

Entrepreneur
Entre + Prendre
An entrepreneur is a person who habitually creates and innovates to build something of recognized value around perceived opportunities

Entrepreneur Process Diagram
Finding the required resources Using networks extensively

Motivation to make a difference

Spotting & Exploiting Opportunities

Overcoming Obstacles

Controlling the Business

Financial, Social, Aesthetic Capital

Showing determination in the face of adversity

Managing Risk

Entrepreneurship Process
The Inventor The Opportunity Spotter The Project Champion

The Idea

Realizing the opportunity

Engaging the idea & opportunity

Exploiting the opportunity to build something of value

Napoleon's First Principle
The first principle of a general-in-chief is to calculate what he must do, to see if he has the means to surmount the obstacles with which the enemy can oppose him and, when he has made his decision, to do everything to overcome them

Intel moved over from Memory Chips to Integrated Chips

Napoleon's Second Principle
A plan of campaign should anticipate everything which an enemy can do, and contain within itself the means of thwarting him. Plans of campaign may be infinitely modified according to the circumstances, the genius of the commander, the quality of the troops, and the topography of the theater of war

Bill Gates staved off competition from Sun Microsystems, IBM, Netscape, Linux and a host of other competitors

Napoleon's Third Principle
Read over and over again the campaigns of Alexander, Hannibal, Caesar, Gustavus, Turenne, Eugene,and Frederic. Make them your models. This is the only way to become a great general and to master the secrets of the art of war. With your own genius enlightened by this study, you will reject all maxims opposed to those of these great commanders

Sam Walton used to regularly visit Kmart, Woolco and other retail chains and learn best practices from them

Napoleon's Fourth Principle
When you have it in contemplation to give battle, it is a general rule to collect all your strength and to leave none unemployed. One battalion sometimes decides the issue of the day

Dhirubhai Ambani concentrated all his resources to beat the bears that tried to pull down the Reliance Stock

Napoleon's Fifth Principle
The first qualification of a general-in-chief is to possess a cool head, so that things may appear to him in their true proportions and as they really are .
IBM Chief Lou Gerstner understood that IBM was losing money in the product business and moved over to services

Napoleon's Sixth Principle
An irresolute general who acts without principles and without plan, even though he lead an army numerically superior to that of the enemy, almost always finds himself inferior to the latter on the field of battle

In the 60s, Kmart had 700 retail stores when Walmart had 7.Today Kmart has disappeared while Walmart is the market leader. In the 90s, Daewoo was a fast growing company while Samsung had a shoddy doddy image. Today, Daewoo has gone bankrupt, Samsung is the market leader in consumer durables.

Napoleon's Seventh Principle
The effect of discussions, making a show of talent and calling councils of war will be what the effect of those things has been in every age: they will end in the adoption of the most pusillanimous or the most prudent measures, which in war are almost uniformly the worst that can be adopted. True wisdom, so far as a general is concerned, consists in energetic determination

GE & Coca Cola weathered through all crisis in 100 years because their core competence is strong. Infosys & Wipro survived the Dotcom Crash because of their strong resolution.

Napoleon's Eighth Principle
It is exceptional and difficult to find all the qualities of a great general combined in one man. What is most desirable and distinguishes the exceptional man, is the balance of intelligence and ability with character or courage.

Infosys & Indus League has grown because it has been set up by a team of entrepreneurs.

Napoleon's Ninth Principle
Nothing is more important in war than unity in command. When, therefore, you are carrying on hostilities against a single power only, you should have but one army acting on one line and led by one commander

Indiainfo could not grow as their promoters could not agree on any issue. Rediff grew phenomenally under the command of Ajit Balakrishnan

Napoleon's Tenth Principle
The camps of the same army should always be so placed as to be able to sustain each other.

When Tata Motors was in trouble, Tata Finance bailed them out and vice versa. The problems with tringtring.com lead to the collapse at Aptech

Napoleon's Eleventh Principle
It is not by harangues at the moment of engaging that soldiers are rendered brave. Veterans hardly listen to them and recruits forget them at the first discharge of a cannon. If speeches and arguments are at any time useful, it is during the course of the campaign by counteracting false reports and causes of discontent, maintaining a proper spirit in the camp, and furnishing subjects of conversation in the bivouacs.

NIIT has a portal that allows the employees to interact with each other and also at the top level

Napoleon's Twelfth Principle
You should by all means encourage the soldiers to continue in the service. This you can easily do by testifying great esteem for old soldiers. The pay should also be increased in proportion to the years of service. There is great injustice in giving no higher pay to a veteran than to a recruit

GE has grown every year because they manage to retain the top talent.

Enterprise Creation & Development

Challenge of Entrepreneurship

CHALLENGE OF ENTREPRENEURSHIP
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Entrepreneurship in KBE Who is the Entrepreneur? What is the Entrepreneurial Process? Social Responsibilities Why be an Entrepreneur? Entrepreneurial Attributes Why businesses fail? Myths of Entrepreneurship Checklist for Aspiring Entrepreneurs

Recommended Reading

Donald F Kuratko and Richard M Hodgetts, ENTREPRENEURSHIP – THEORY, PROCESS AND PRACTICE, 6th Edition, 2003, Thomson South-Western, Chapters 1, 2, 3, 4 and 6. Jeffry A Timmons and Stephen Spinelli, NEW VENTURE CREATION – ENTREPRENEURSHIP FOR THE 21ST CENTURY, 6TH Edition, 2003, McGraw-Hill, Chapters 1, 2, 7, 8 and 10. Megginson, Byrd, Megginson - Small Business Management, an entrepreneurs guidebook, 5th edition, Chapter 1

ENTREPRENEURSHIP : AN EVOLVING CONCEPT
“Most of what you hear about entrepreneurship is all wrong. It’s not magic; it’s not mysterious; and it has nothing to do with genes. It’s a discipline and, like any discipline, it can be learned.”
Peter F. Drucker Innovation and Entrepreneurship

KNOWLEDGE-BASED ECONOMY

“What does Bill Gates own ? No land, no gold, no oil, no buildings, no machines. What he does is that he controls knowledge, which makes him the wealthiest person in the world.” Lester Thurow

The Entrepreneurial Process involves ____, ________, and _________ an opportunity by overcoming the strong forces that resist the creation of something new.

.

1. Identify and evaluate the opportunity

Opportunity 2. Develop Business Plan

3. Determine and attract resources required

Entrepreneur

4. Lead and manage resulting enterprise

Resources

Organisation

Entrepreneurial Venture vs Small Business

Entrepreneurial Venture : __________ and ______ Small Business : ____________ owned and operated, is not dominant in its field, and doesn’t engage in new or innovative practices.

The Pyramid of Social Responsibility
PHILANTHROPIC Goodwill Be a good corporate citizen. ETHICAL Responsibility Be ethical. Obligation to do what is right, just, and fair. Avoid harm. LEGAL Obligations Obey the law. Law is society’s codification of right and wrong. Play by the rules of the game. ECONOMIC Responsibility Be profitable The foundation upon which all other levels rest. Contribute resources to the community: improve quality of life.

“To be able to contribute to society and to help those in need to build a better life, that is the ultimate meaning in life. I would gladly consider this to be my life’s work.” Dr Li Ka Shing

Social Entrepreneur

A pragmatic visionary who achieves large scale, systemic and sustainable social change through a new invention, a different approach, a more rigorous application of known technologies or strategies, or a combination of these. Combines the characteristics represented by Richard Branson and Mother Teresa. For more info : www.schwabfound.org

80% 70% 60% 50% 40% 30% 20% 10%

72%

Best things about owning a business Control 10% 10% Others 8%
Survey by Padgett Business Services USA Inc. (Adopted from Small Business Management, 5th edn, Megginson, Byrd, Megginson

0% Independence

Satisfaction

70% 60% 50% % of very 40% satisfied 30% 20% 10% 0% Great Britain 46% 29%

63%

27%

Self Employed Working for Others

United States

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Achieve ____________ Obtain Additional _______ Help Their Families Provide Products Not Available Elsewhere

Managers

Managers of large companies tend to seek :  ________

______ _______ _________

“one who shifts economic resources out of an area of lower and into an area of higher productivity and greater yield “
Peter Drucker, guru on management theory

“..human, creative act that builds something of value…pursuit of opportunity…..requires a vision and passion and commitment….. calculated risks…”
Jeffrey Timmons, author of the entrepreneurial mind

Key Elements in Entrepreneur’s Background

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Supportive childhood family environment. Having a father who is selfemployed helps. Education is important. Aged 22-45 when starting venture. Work history: dissatisfied with company job but has technical knowledge.

Bill Gates

Successful Entrepreneurs
•Age : 34, Net Worth : US$90 million. •Son of Michigan State University computer science professor •While following in his father's footsteps in academics, he became an honors graduate from the University of Michigan, where he earned a bachelor of science degree in engineering, with a concentration on computer engineering

While in the Ph.D program in computer science at Stanford University, he met Sergey Brin and together they developed and ran “ ? ”, which began operating in 1998 and currently employing more than 1900 employees.

?

Successful Entrepreneurs

Age : 45, self made Value of company : S$270 mil. Adopted at birth by an elderly woman, never knew her biological parents Hometown : Kampar, a poor Malaysian mining town Worked her way through college and graduated with a B.Science (Hons) from NUS.

Started company 15 yrs ago, at age 28, with $20,000 savings. Nominated MP and Her World Magazine “Woman of the Year 2002”.

?

Entrepreneurship – Theory, Process, Practice Chap 4 pg 114-121

Types of Skills Required in Entrepreneurship
Technical Writing Oral Communication Monitoring the Environment Business Management Planning Leadership Interpersonal Personal Inner Control Risk Taking Innovative Change-oriented visionary

Using Technology Marketing (Selling)

The Causes of Business Failures Are Many and Complex
Other Insufficient Capital Other Heavy Operating Expenses Burdensome Debt Insufficient Profits Industry Weakness

Economic, Finance

Inexperience Neglect

Techniques taught in Entrepreneurship
Generate opportunities Assess opportunities Analyse business environment Exit Strategies Identify your market Entry strategies Reach your customers Protect your business ideas Raise $$$ Keep business afloat Put vision on a Plan Budgeting

MYTHS OF ENTREPRENEURSHIP
Entrepreneurs are doers, not thinkers Entrepreneurs are _____, not made Entrepreneurs are always inventors Entrepreneurs are academic and social _______
“Entrepreneurship, Theory, Process and Practice” Chapter 2 “Entrepreneurship, Theory, Process and Practice, Chapter 2”

MYTHS (continuation)
    

Entrepreneurs must fit the “profile” All you need is ______ to be an entrepreneur All you need is _____ to be an entrepreneur Ignorance is bliss for an entrepreneur Entrepreneurs seek success but experience high failure rates Entrepreneurs are extreme risk takers (gamblers)

Checklist for Aspiring Entrepreneurs
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Do it for passion not money Do something you know about Don’t give up too early Have a mentor Have appropriate funding Be a good cash manager Build sales first Don’t try to rush Be wary of bad advice or suppliers

Summary
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Entrepreneurial Process Different Entrepreneurial Attributes Causes of Business Failures Checklist for Entrepreneurs Video Screening – The Makings of an Entrepreneur