Entrepreneurship and Innovation

Learning Objectives
• Define entrepreneurship/intrapreneurship
• Identify characteristics of entrepreneurs and
intrapreneurs
• Correlate the applicability of entrepreneurship
principles to pharmacy
• Recognize opportunities to develop
components of a business plan to evaluate,
pursue and implement an innovative concept
 Entrepreneurship Definition
1. Text: “the process by which individuals pursue
opportunities without regard to resources
they currently control”
2. End goal = achieve the “vision”
3. Requires research, passion and perseverance
4. Involves personal and financial risks
5. “Identify problems and proactively turn them
into opportunities to improve the situation”
Michael Morris – Syracuse University
 Intrapreneur Definition
• An intrapreneur: employee who is given the
authority and support to create a new
product/service/idea/concept/program
• No concern about resources required
• No concern about generating revenue
• AKA “corporate entrepreneurship”
• Same characteristics as an entrepreneur
• Less risk and usually less reward
 Notable Entrepreneurs
• Steve Jobs
• Elon Musk
• Bill Gates
• Mark Zuckerberg
• Oprah Winfrey
• [your name]
– Call me before your IPO
 What did these pharmacist “entrepreneurs”
do?

• Alexander Fleming • Created Coca-Cola

• Jesse Boot • Elected VP of the US

• Separated morphine from opium

• John Pemberton
• Discovered penicillin
• Hubert Humphrey
• Globalized what is now
• Friedrich Serturner Walgreens (WBA)

• Invented the time release capsule

• Rudolph Blythe
 Why be an Innovator/Entrepreneur?

• Economic Growth
• Organizational Survival
• Competitive Advantage
• Opportunity for Growth and Development
• Creativity
• Improved Performance
• Accumulation of Wealth
• Improve the Human Condition
Entrepreneurship in Health System
Pharmacy?

ASHP Pharmacy Forecast

 Characteristics of Entrepreneurs
1. High level of motivation to achieve
2. Passion
3. Internal focus on control
4. Tolerance for the unknown and ambiguity

What Entrepreneurs are NOT:

• Not high-risk gamblers – They tolerate some risk
• Not experts in all areas – They “know people”
• Not quitters – They persevere
 Steve Jobs on Becoming a Entrepreneur

https://youtu.be/gFE-Tdz24hM

1:13
 Four Types of Entrepreneurs
PERSONAL ACHIEVERS SUPER SALES PEOPLE
Need for feedback Capacity to understand others, empathize
Need for accomplishment Belief that social processes are important
Strong commitment Good at building external relationships
Internal locus of control Belief in sales force
EXPERT IDEA GENERATORS REAL MANAGERS
Build venture around new products Desire to take charge, compete, be
decisive, stand out
Involved in high-tech companies Desire to be corporate leader, desire for
power
Desire to innovate Positive attitude toward authority
Intelligence & creativity provides a
competitive advantage

John Miner The Four Routes to Entrepreneurial Success (Miner 1996)

 Entrepreneurial Process:
ID an Opportunity or Solve a Problem

1. Changing demographics
2. Emergence of new market segments
3. Process needs
4. New technologies
5. Incongruities
6. Regulatory change
7. Social change

Morris M, Kuratko DF, Schindehutte M. Towards Integration: Understanding entrepreneurship through frameworks. International
Journal of Entrepreneurship and Innovation, Vol 2, No 1, February 2001
 Developing the Concept
• New products, new services, new programs
– IMZ services, Anticoagulation clinics, MTM/CMR programs

• New processes
– adherence packaging, specialized compounding

• New markets
– China, Africa, new molecular entities, lifestyle drugs

• New organizational structure/form

– Mergers/acquisitions/affilitions, Telepharmacy

• New technologies
– wearable health devices, “pick to light” will call system

• New sales or distribution channels

– omnichannel shopping including online purchasing, home delivery

Morris M, Kuratko DF, Schindehutte M. Towards Integration: Understanding entrepreneurship through frameworks.
International Journal of Entrepreneurship and Innovation, Vol 2, No 1, February 2001
 Other Concept Development Factors

1. Feasibility analysis
2. Business plan
a) Corporate entrepreneurship- aka Intrepreneurship
– Organizations often weigh competing plans
– Internal opportunities sought after by companies
– Possible Pitfalls:
• Envy among coworkers
• Piracy of ideas
• Little recognition or reward
• Disappointment if concept is not accepted
Morris M, Kuratko DF, Schindehutte M. Towards Integration: Understanding entrepreneurship through frameworks.
International Journal of Entrepreneurship and Innovation, Vol 2, No 1, February 2001
 Determine All the Required Resources
• Skilled employees
• General management
expertise
• Marketing and sales
expertise
• Technical expertise
• FINANCING
• Distribution channels
• Sources of supply
• Facilities/Equipment
• Licenses, patents and
legal protection

Morris M, Kuratko DF, Schindehutte M.

Towards Integration: Understanding
entrepreneurship through frameworks.
International Journal of Entrepreneurship
and Innovation, Vol 2, No 1, February 2001
 Short Lesson on Intellectual Property
COPYRIGHT TRADEMARK PATENT
Level of Easy Moderate (search High
Difficulty through the US In terms of time
Patent and and money
to Obtain Trademark Office)
Cost Least Costly Moderate Cost High (takes at least
($35 - $85 from US ($750 + possible 2 years and many
Copyright Office) lawyers fees if used thousands to file +
for search) legal fees for IP
lawyers)
Level of Least protection More Protection of Highest
Protection Only protects the names, brands, Protects the idea,
form, or original logos and other process, method
work which is the distinctive and design of
end result of the marketing devices products and
idea/concept businesses
Acquiring the Necessary Resources
• $ from Debt – personal • Supplier financing –
funds, loans e.g. drug wholesaler
• $ from Equity –
shares/stock
• Joint ventures
• Leveraging – intellectual • Partnerships
property • LOOK FOR:
• Grant funding – Angel investors
• Leasing • Funding from connected
individuals
• Contract labor – Mentors to provide
• Temporary staff guidance
• Management team – Crowdfunding
Morris M, Kuratko DF, Schindehutte M. Towards Integration: Understanding
entrepreneurship through frameworks. International Journal of
Entrepreneurship and Innovation, Vol 2, No 1, February 2001
 Return on Investment
ROI = Net Return on Investment​× 100%
Cost of Investment
• ROI is typically expressed as a percentage

• Assume an investor bought 1,000 shares of a company at $10 per share.

One year later, the investor sold the shares for $12.50/share. The investor
earned dividends of $500 over the year. The investor also spent a total of
$125 on trading commissions in order to buy and sell the shares.

• ROI = ([$12.50 – $10.00) * 1000 + $500 - $125] / ($10.00 * 1,000)) *100

28.75%
 Incubators

• Entity with expertise to help get a new businesses

started
• Usually for an equity stake – piece of the action
• Often connected to academic institutions
• Siena College - Stack Center for Innovation and
Entrepreneurship
– David Stack ‘76 ACPHS
• CEO Pacira Pharmaceuticals
• ACPHS Board of Trustees
• Stack Family Center for Biopharmaceutical Education and
Training
 Execute/Implement and Manage
• Implementation of concept - operationalize
• Monitoring of performance – cash flow important
• Payback of resource providers
• Reinvestment
• Expansion
• Achievement of performance goals

• IMPORTANT ATTRIBUTES
– Perseverance
– Decision-making abilities
Morris M, Kuratko DF, Schindehutte M. Towards Integration: Understanding
entrepreneurship through frameworks. International Journal of
Entrepreneurship and Innovation, Vol 2, No 1, February 2001
 Harvest the Venture

• Incorporate into ongoing operations

• Licensing of rights
• Family succession
• Sell the venture
• Go public – IPO – sell stock
• Shut down the venture
– Sell assets
– Pay back investors
Morris M, Kuratko DF, Schindehutte M. Towards Integration: Understanding
entrepreneurship through frameworks. International Journal of Entrepreneurship
and Innovation, Vol 2, No 1, February 2001
 Definition of a Pharmapreneur
• IDs, creates & pursues • Responsive to changes in
new opportunities healthcare or markets
• Successfully implements • Willing to make sacrifices
new ideas into practice • Includes social
• Willing to take risks entrepreneurship &
• Fills unmet or intrapreneurship
unrecognized needs • Leverages knowledge,
• Creates value through skills & resources
innovation • Goes beyond traditional
• Improves patient care roles in pharmacy
Mattingly, TJ, Abdelwadoud, M, Mullins CD, Eddington, N. Pharmapreneur - Defining a Framework for Entrepreneurship in
Pharmacy Education. AJPE 2019;83(10)Article 7548
 Disruptive Innovation
• Simple but innovative products or services that
displace established competitors
• Smaller company with fewer resources that challenge
and disrupt established businesses
– Est. business overlook some market segments (low-end or
new-markets)
• Dollar Stores – low prices and in many locations
– Deliver functionality but may initially be considered inferior
• Early Korean cars
– Frequently at a lower price
• No contract, pre-paid phones
Examples of Disruptive Innovations
DISRUPTOR DISRUPTEE
Personal computers and tablets Mainframe and other large
computers
Cellular phones Landline telephones
Community colleges 4-year colleges & universities
Discount mass merchandisers - Full-service department stores
Walmart - Macys
Online buying Brick and mortar stores
Online movie streaming Video rental stores
Uber and Lyft Taxi cabs
Student loans or
 When to start thinking about your own
entrepreneurial business venture
• Creative idea, vision or passion for a business
venture
• Some extra cash, credit cards or access to $
• Issues with your current job
• Know someone who has the answers you don’t have
• Talked to people who have started out on their own
• Know people with whom you would like to work or
collaborate
• Talked to future potential customers/clients
 ACPHS Student Innovator Initiatives
• Price Chopper Ultimate Innovation Competition
– 2009 – College Care Packages
– 2010 – Get Fit Challenge
– 2011 – Chopper Change and Healthy-U-Challenge
– 2012 – HEALTH Center
– 2012 – The Taste of Price Chopper - 1st place
• NCPA Student Business Plan Competition
– 2014 – High End Suburban Community pharmacy
– 2015 – Pet Oriented Community pharmacy
– 2016 – Pain Management Specialty pharmacy
– 2017 – 340-B contract pharmacy
– 2018 – Senior care focused pharmacy – TOP 10 IN US
– 2019 – Pharmacy adjacent to multiple clinics – Amb Care/MH
• PSSNY Student Business Plan Competition
– 2020 – POC Testing Pharmacy – First Place in NYS competition
15 Characteristics of Effective Entrepreneurs

https://youtu.be/BhoocSXyNXc

6:20