E F F E C T U AT I O N

CHAPTER 1: 
Entrepreneurs and Entrepreneurship 
 At the end of the lesson, Fundamentals
of Entrepreneurship students will be
able to:
 LEARNING  
1. Differentiate between the
OUTCOMES:    entrepreneurial mindset in theory and
  in practice. 
ENTREPRENEURS AND
ENTREPRENEURSHIP 2. Identify the sources and ways to 
  generate good ideas.

3. Locate slack resources in starting

  ventures.

4. Recognize and learn from failure.

5. Review the plunge decision.

 TOPICS COVERED

01 02 03 04 05
Roadmaps and Good Ideas - The truth about Failure, Failing The Plunge 
Myths Where Do They New Ventures Cheap and
Come From and Capital Learning As
You Go Along
ROADMAP & MYTHS 
OF  ENTREPRENEURS  
AND 
ENTREPRENEURSHIP
 Roadmap to
Success
Everyone defines success
differently..

What is SUCCESS for you?

ROADMAPS AND MYTHS OF
ENTREPRENEURS AND
ENTREPRENEURSHIP

Searches for a new high potential opportunity;

Has a  lightbulb moment!

Writes a business plan;

Raises lots of investment money

Hires a great team;

Builds the product

 Orchestrates a big launch;

Achieves steady or hockey stick growth;

Sells the venture or has an IPO;

 ROADMAPS AND MYTHS OF
ENTREPRENEURS AND
ENTREPRENEURSHIP

...and retires to the Bahamas! 

 The REALITY of the COMMON
Entrepreneur...
• Only 28% of a sample of Inc. 500 firms completed a
formal business plan;
• More than 73% of IPO are not funded by VCs;
• The average amount of money it takes to create a
business in the US is less than $30k;
• There is little magic in an initial idea;
• Most ventures start with an idea that has little relation
to the company which subsequently emerges;
• Success is active perspiration, not divine inspiration;
What is ENTREPRENEURSHIP, really?

One way to understand

what entrepreneurship is -
is to focus on activities
entrepreneurs engage in –
What they do.
 What is ENTREPRENEURSHIP, really?

Defining entrepreneurship in terms of activities is it shifts the focus

away from seeing entrepreneurs as special people with particular
personality characteristics 
– to what they do and how these activities can be learned and done
well. (Gartner, 1988)
Key Activities of Entrepreneurs

Creating New Developing New

Ventures Markets

Discovering &
Creating Entrepreneurship
Opportunities Inside Corporations
Search or Divine Inspiration?

Opportunity can be found by

anyone SMART and ALERT

Entrepreneurs can assess the

value and risks in the
opportunity when discovery
Entrepreneurs searching for an
opportunity & having a
lightbulb moment

How to predict the returns of creating a bookstore online?

Or an airline we hope you love? HINDSIGHT
 What holds
entrepreneurs
back from starting
a venture?
1. I don’t have a good idea
2. I don't have the money
3. I am afraid to fail
4. I don’t know where to start
 Newsworthy stories of $10 TA K E Expectation of the mythical
million in venture funding.
entrepreneur. Real ones –
Real ones start with little to
none.
AWAY S iterated and co-created.

A good learning and part of the Break through the

process. How do you survive the barriers and Let's Start! 
failure and use this for future
ventures. 
GOOD IDEAS:
Where do they
come from?
Ideas : Uncertainty

Clear Fact : It is not possible to know with any certainty if your
             idea will turn out to be a good business opportunity.

Go ahead and give it a TRY!

• Most first-time entrepreneurs worry about finding the right opportunity.

Hence, the wait for an idea that is GOOD.
Finding the RIGHT Opportunity
A common worry for first-time
entrepreneurs:

Who When & how

Where do decides do you 
What is a good ideas whether an recognize an
good idea?​ come idea is idea is feasible?
from? good?
Where do GOOD IDEAS come from?... In theory

Patent Office Government Technology

Trade Shows
Gazette (NASA) Transfer

Doctoral Invention
Brainstorming
Dissertations Expositions
Where do GOOD IDEAS A personal satisfaction or dissatisfaction

come from?
In Practice... Market knowledge from prior job

Hobbies

Other people

The news

Customers
Ways to Generate IDEAS....

Things we wish we had Think of things we like/dislike

Things we care about Things we would like to get rid of

 THE
IDEA-TO-VENTURE 
FORMULA 
 Idea to Venture
• Let's create our own ROADMAP
• We start by acknowledging that IDEAS are a good and important step in the
idea to venture formula

IDEA = ANYTHING + YOU the means that you

already have
Idea to Venture

It is action that turns an

OPPORTUNITY = IDEA + ACTION idea into a valuable
opportunity

We know that ideas are

plentiful and
commonplace
IDEAS...
Money/Deal with Client

 ACTION
Product/Protoype
NOT: Gathering information,
observation, calculation to invoke
transformation is not action;
 
Action is a function of interaction Partners
with the world;
IDEA to Venture

Viable Venture = Opportunity +Commitment 

 The Idea-Venture Formula

IDEA – 
transformation of means you Idea = Anything  + You
already have.
Ideas are plentiful. It is action
that turns an idea into a Opportunity = Idea + Action
valuable opportunity.

Action is a function of
interaction with the world; Action = Function (Interaction) on Money,
Product, Partners....
Opportunity is transformed
into a viable business through Viable Venture = Opportunity  + Commitment
commitment.
  Good Ideas are from customers 

Vision can change during the course

Take Away
Knowing your means to know what to do
and what not to do

 Too many ideas

The Truth About New
Ventures and Capital
The MAIN reason why budding entrepreneurs don't start their
ventures:

MONEY – Lack of Start-up Capital

 TWO Key Insights to this problem:

NEW VENTURES CAN BE IDEAS DON’T BECOME

CREATED WITH THINGS THAT OPPORTUNITIES UNTIL
ALREADY EXISTS; SOMEBODY ACTS
 Creative Capital

• Convert fixed costs into variable costs.

• Creative thinking leads to the discovery of
slack resources
• Instead of buying a machine for RM 500,000,
you can rent it or use units of it from someone
who already owns one.
Slack Resources

Labour Facility Machines

Creative Capital: Caveats

• Paying Premium Price

• Exposure to renegotiated terms
from suppliers

Choose which fixed costs should be converted into variable costs depending on your
business.
Bootstrapping
What is Bootstrapping? Starting the venture with personal
savings or resources in hand.

• You can start NOW.

• You can start LEARNING now.
• Cut your WASTE.
• Limit your DOWNSIDE.
• Increase your UPSIDE.
• Increase your CREATIVITY.
 Take stock of your monthly expenses and
ask yourself, how much you could do
without.
What Now? What slack resources could you tap into
that belong to other people?

Imagine that it is illegal to raise money for

you to develop your new venture. How
would you then start your new venture?
Failure, Failing
Cheap and
Learning As
You Go Along
Fail Cheap and Learn Quickly
• No entrepreneur sets out to fail. But what exactly is FAILURE?

Business closing down due to debt to

creditors?
Earning less than they could working for
others.
ES S Quitting is a form of
UCC
S
failure
Making
Own
IPO a decent
living Boss
Success             Success
If closing with no debt,
then chances of
succeeding is 92%.  
100
%
80%

60%
If IPO is success, then
40 chances of succeeding is
% less than 2%.  
20
%
0%
CLOSE WITH SURVIVE SURVIVE SURVIVE CLOSE WITH IPO
NO DEBT 2  YEARS 4  YEARS 8  YEARS PROFIT
Success          Money 

• On average, the self-employed earn about the same as those employed and working
for a wage.
• Earnings is skewed by a few superstar entrepreneurs who make incredible amounts
of money. Most entrepreneurs earn below the average.
• Those earning below average earn about 1/3 less than an employed person.
Failed Venture          Failed Individual 

• Entry into the market is common although survival is less so.

• Many companies enter a market in its infancy and only the fittest survive as it
matures.
• Most founders of failed firms dust themselves off and go on to start other firms.
• Corporations are built to separate the success or failure of the firm from the
individual.
• Closing businesses equal individual failure? No.
Failed Venture          Learning 
• Without failure, there would be no learning, no progress. 
• Through false hypotheses, we get closer to workable
truths that lead to valuable technologies and cures for
diseases.
 PASSION
• Important in managing
failure and building
resilience necessary to learn
from mistakes.​

• Don't fail alone. ​

• What is your passion?

THE PLUNGE
 The Plunge.
How many of you here would
like to start a venture?

WHY? WHY NOT?

The Plunge Decision

 1. What you can lose

 2. Toes first

 3. Opportunity cost 

 4. Walk before you jump

 Take Aways

Roadmap and Good Ideas Ventures Fail Fast and The Plunge
Myths Cheap
THANK
YOU