Entrepreneurship

Chapter 2 ENTREPRENEURIAL JOURNEY AND PATHWAYS

PowerPoint Image Slideshow
Chapter Outline
• 2.1 Overview of the Entrepreneurial Journey
• 2.2 The Process of Becoming an Entrepreneur
• 2.3 Entrepreneurial Pathways
• 2.4 Frameworks to Inform Your Entrepreneurial Path
Figure 2.1

College graduates face numerous choices and challenges when deciding which pathway will lead to career satisfaction and
success. (credit: modification of “commencement graduation ceremony” by “Goodfreephotos_com”/Pixabay, CC0)
Learning Objectives
• 2.1 Overview of the Entrepreneurial Journey
• Explain the entrepreneurial journey to explore and discover entrepreneurship
as a career choice
• Identify the steps, decisions, and actions involved in the entrepreneurial
journey
• Recognize the rewards and risks of the steps in the entrepreneurial journey
Feature Box
Are You Ready?: Taking the First Step
• Is there a venture you’ve always thought you should start but never
did?
• Think about what factors are stopping you. Consider your mindset
and how you might change your mindset so that your venture could
become a reality.
• What are some possible trigger events that could make the difference
between starting your venture and waiting to start your venture?
Figure 2.2

For some, preparing for an entrepreneurial journey may seem like going on a river-rafting adventure that combines beautiful
scenery with some exciting, but perhaps frightening, challenges. (credit: “Hands Up” by Jeramey Jannene/Flickr, CC BY 2.0)
Figure 2.3

The entrepreneurial journey might also include potential obstacles and barriers that travelers on this path must overcome.
(credit: “Flickr - The U.S. Army - Camp Taji obstacle course” by The U.S. Army/Wikimedia Commons, Public Domain)
Hiking and Entrepreneurial Journey Metaphor

Type of Hiker Mountain Hiking Skill Level Entrepreneurial Journey Equivalent

Walker • Basic or limited hiking experience • New or limited entrepreneurial exposure
• Never started a venture

Climber • Moderate hiking experience • Some entrepreneurial knowledge or

• Special skills for adventure, difficult experience
terrain • Exposure to entrepreneurship (family or
friend in business)

Mountaineer • Experienced hiker with technical skills • Experienced entrepreneur

for climbing hills and mountains • Attempted or launched a venture (solo or
with partner)

Table 2.1
Figure 2.4

The journey to entrepreneurship is as important as reaching your destination. (credit: “raise challenge landscape mountain”
by “mohamed_hassan”/Pixabay, CC0)
Figure 2.5

When inspired to start an entrepreneurial venture, one questions whether they can do it and identifies obstacles that might
present challenges. (attribution: Copyright Rice University, OpenStax, under CC BY 4.0 license)
Figure 2.6

It is important to plan out your entrepreneurial journey, as you would plan out a trip. (credit: “#conservationlands15 Social
Media Takeover, August 15th, Santa Rosa and San Jacinto National Monument in California” by Bureau of Land
Management/Flickr, CC BY 2.0)
Figure 2.7

In preparing for your venture, you need to ask what you want to accomplish, what you want to offer, and who you want to
target. You also need to consider what potential obstacles might present challenges. (attribution: Copyright Rice University,
OpenStax, under CC BY 4.0 license)
Figure 2.8

Assessing relationships and resources allows for reflection on your idea and intentions. (attribution: Copyright Rice University,
OpenStax, under CC BY 4.0 license)
Figure 2.9

During a trial run, you can use a limited market to test your product or service. (attribution: Copyright Rice University,
OpenStax, under CC BY 4.0 license)
Figure 2.10

Writing a business plan before launching a venture can give you important insights into your idea and can help you modify
your business before launch to give it a better chance of success. (attribution: Copyright Rice University, OpenStax, under CC
BY 4.0 license)
Figure 2.11

Navigation involves being prepared for and making changes when faced with obstacles. (attribution: Copyright Rice
University, OpenStax, under CC BY 4.0 license)
Discussion Questions
1. What does it mean to have an entrepreneurial mindset?
2. Discuss the basis for defining a target market. How does a focus on a
target market assist with the development or adjustment of an idea?
3. Explain the importance of being self-reflective and honest before,
during, and after starting an entrepreneurial journey.
4. Using the information on the steps for an entrepreneurial journey,
give your own example with connections to this section’s main
concepts.
5. Consider the potential questions that you might ask yourself before
you launch a venture. Discuss two or three questions that resonate
with you and your personal experiences. Why or how do these
questions influence you more than others?
Learning Objectives
• 2.2 The Process of Becoming an Entrepreneur
• Describe the evolution of entrepreneurship through American historical
periods
• Understand the nine stages of the entrepreneurial life cycle
Feature Box
Are You Ready?: Entrepreneurial Personality Test
• Think about your results. Are you a generalist or a specialist?
• Once you know this information, what other entrepreneurial
personality types do you fit into?
• How can you use this information in your pursuits as an
entrepreneur?
• What does this information tell you about selecting members of
your startup team?
Figure 2.12

Madam C. J. Walker developed her own hair care line, which is still sold today. (credit: Collection of the Smithsonian National
Museum of African American History and Culture, Gift from Dawn Simon Spears and Alvin Spears, Sr.)
Notable Early US Inventors and Entrepreneurs
Inventor or Entrepreneur Contribution(s) Significance
Pierre-Esprit Radisson (1640– Founded Hudson’s Bay trading Offered bartering of furs for
1710), French explorer company textiles and guns
William Penn (1644–1718), colonist Founded Commonwealth of Early social entrepreneur
Pennsylvania as a sanctuary for
Quakers
Sybilla Masters (1676–1720), Invented method to clean and refine Patent for a process for cleaning
inventor Indian corn grown by early settlers and milling Indian corn (1715)
Thomas Hancock (1703–1764), Founded trading house that furnished Sought alternative funding sources
merchant multiple goods to finance business interests

Benjamin Franklin (1706–1790), Established printing franchises and an Epitome of an inventor and serial
inventor, publisher, statesman infrastructure for his apprentices to entrepreneur
launch in other colonies

Table 2.2
Figure 2.13

(a) William Penn founded the Commonwealth of Pennsylvania as a sanctuary for persecuted Quakers. This colony could be considered an
early form of social entrepreneurship. Shown is his first draft of The Frame of Government in Pennsylvania. (b) As one of the country’s
founders, Benjamin Franklin contributed to the Declaration of Independence. His accomplishments as a printer, writer, postmaster,
diplomat, and scientist (he contributed to the understanding of electricity) epitomize serial entrepreneurship. In this painting by Charles
Mills, a young Ben Franklin is seen operating a printing press. (credit (a): modification of “William Penn - The First Draft of the Frame of
Government - c1681” by University of Pennsylvania/Wikimedia Commons, Public Domain; credit (b): modification of “Franklin the printer”
by Library of Congress/Wikimedia Commons, Public Domain)
Figure 2.14

Inventions abounded during the First Industrial Revolution. (a) A US patent was granted to Eli Whitney in 1794 for the cotton
gin. (b) This sketch shows Samuel Morse’s telegraph. (c) Elias Howe invented the sewing machine. (credit (a): modification of
“Patent for Cotton Gin (1794)” by “Gamaliel”/Wikimedia Commons, Public Domain; credit (b): modification of “Morse
telegraph” by Unknown/Wikimedia Commons, Public Domain; credit (c): modification of “Elias Howe Sewing Machine 1846”
by Unknown/Wikimedia Commons, Public Domain)
Figure 2.15

(a) The first commercially successful typewriter was produced by Christopher Latham Sholes and Carlos S. Glidden; this is
their 1873 prototype model. (b) The Wright brothers are among the best-known pioneers of early flight. In this photo, Orville
flies over their air field in 1904. (credit (a): modification of “Sholes typewriter” by George Iles/Wikimedia Commons, Public
Domain; credit (b): modification of “1904WrightFlyer” by “DonFB”/Wikimedia Commons, Public Domain)
Figure 2.16

Many important corporations developed in the decades after World War I. (attribution: Copyright Rice University, OpenStax,
under CC BY 4.0 license)
Figure 2.17

Your entrepreneurial process may involve changing directions many times. (credit: modification of “this way or that” by
Robert Couse-Baker/Flickr, CC BY 2.0)
Figure 2.18

This image displays the phases that a new venture moves through as the idea is developed then created as a prototype. The
prototype is then perfected in preparation for stage 4, when sales are generated. Stage 4 leads to the start of the growth
stage, shown in Figure 2.19. Growth occurs through an increase in sales of the product. At this point, in the product life cycle,
adding features or enhancements to the product will encourage increasing sales. (attribution: Copyright Rice University,
OpenStax, under CC BY 4.0 license)
Figure 2.19

This image demonstrates the phases a business moves through from origination through the death of the business. The
yellow line represents sales, or success of the business’s products. We see the most sales dollars in the growth and maturity
phases. At this point, the owner or entrepreneurial team must make decisions for the rebirth of the business, at which time
the business returns to the growth phase. (attribution: Copyright Rice University, OpenStax, under CC BY 4.0 license)
Figure 2.20
The life cycle of a
venture roughly
parallels the life cycle of
a person through
different stages that
span pre-birth through
infancy, youth, maturity,
retirement, and then an
end or a restart.
However, unlike in the
human life cycle, the
venture stages do not
have to be static or
sequential. (attribution:
Copyright Rice
University, OpenStax,
under CC BY 4.0 license)
Discussion Questions
6. Think about yourself within the context of the “nature or nurture,”
“born or made” argument. How do you feel these perspectives
combine in your own potential as an entrepreneur?
7. What are the similarities and differences between the life cycle
stages of a person and a venture? How can these two concepts
assist you in creating a successful venture?
8. Consider the historical information on entrepreneurship and
innovation. How does our current economy, which is based on
technology and knowledge, support entrepreneurial activity?
Learning Objectives
• 2.3 Entrepreneurial Pathways
• Understand how venture opportunities present different pathways to
entrepreneurship
• Describe methods for finding your personal path to entrepreneurship
Figure 2.21

There are many different pathways you can take on your entrepreneurial journey. (credit: “Explorer” by Sakeeb
Sabakka/Flickr, CC BY 2.0)
Discussion Questions
9. Consider the multiple pathways to entrepreneurship. How might
your own current situation reflect a potential pathway to
entrepreneurship?
10. Is there a difference between a soft launch and a soft open? Why
are two different terms used?
11. What are the benefits of a soft launch? What are the negatives of a
soft launch?
Learning Objectives
• 2.4 Frameworks to Inform Your Entrepreneurial Path
• Identify common frameworks used to shape an entrepreneurial venture
• Compare how some frameworks better fit certain venture types
• Define an action plan and identify tools available for creating an action plan
• Describe some common types of entrepreneurs
Figure 2.22

Here is an example of a Business Model Canvas with a framework to identify key components of the venture. (attribution:
Copyright Rice University, OpenStax, under CC BY 4.0 license)
Figure 2.23

Here is an example of Lean Strategy Canvas, a framework to assist in developing the business model, and competitive
advantage and related areas aligning the product and market for the venture. (attribution: Copyright Rice University,
OpenStax, under CC BY 4.0 license)
Figure 2.24

The design thinking process is a systematic approach for solving problems. (attribution: Copyright Rice University, OpenStax,
under CC BY 4.0 license)
Figure 2.25

The Four Lenses Strategic Framework involves stakeholder engagement, culture management, resource
mobilization/application, and knowledge development, and can provide synergies and insights in building compatible and
aligned actions. (attribution: Copyright Rice University, OpenStax, under CC BY 4.0 license)
Frameworks
Framework Description Typical Use
Business Model A one-page tool that maps out nine basic building Helps prepare a sustainable
Canvas blocks that are necessary for a successful business business model
model
Lean Startup Outlines a quick feedback loop through customer Used for fast-paced industries and
input quick idea validation
Design Thinking Outlines a systematic, results-oriented process to Used for the development of STEM
Process address and solve problems fields with expansion into
entrepreneurial ventures, products,
and processes; applicable to all
areas

Four Lenses Strategic A practitioner-driven model that considers four Used for the development of social
Framework perspectives to support and develop a client- ventures
focused ecosystem

Table 2.3
Action Plan Support Tools
Tool Description Use
Vision or Dream A visual tool to present the ideal situation Wireframing
Board that you are working towards achieving

Storyboard A scene-by-scene visual of the activity Downloading method (IDEO)

process from start to finish
Mind map A visual tool that assists with categorizing Brainstorming
brainstorming types of ideas

Hypothesis A proposition or statement as a basis for Interviewing

further testing or investigating
Logic Map Visual representation of relationships Questionnaires
between various components or variables

Table 2.4
Figure 2.26

From this mind map of disasters

that occur and actions to take,
we could focus on one action
area that matches our interests,
passions and skills. After
selecting an area of interest, we
could create another mind map
focused on our area of interest
to identify solution sets. Next,
we could apply one of the
frameworks listed in Table 2.3.
From there we could create an
action plan of actions needed to
become more informed about
the idea or solutions. As you can
see, an action plan fits into
multiple areas. (attribution:
Copyright Rice University,
OpenStax, under CC BY 4.0
license)
Potential Barriers to Entrepreneurial Funding
Potential Barrier Challenges
Geographical barriers Close to 80 percent of about $21.1 billion in venture-capital funding in the first quarter of 2018
was disbursed in five regional clusters—San Francisco (North Bay Area), Silicon Valley (South Bay
Area), New England, New York City metro, and LA/ Orange County—with slightly more than 44
percent in the North and South Bay Areas.

Gender bias Women are substantially less likely to start businesses than men. In 1996, the rate of new
entrepreneurs for women was 260 per 100,000 people, compared to 380 per 100,000 for men. In
2017, the rate of new entrepreneurs for women was 270 per 100,000 for men.

Racial and ethnic bias The landscape of entrepreneurship in the United States is marked by significant differences across
racial and ethnic groups. Minority-owned firms are found to face significant barriers to capital. For
example, minority-owned firms are disproportionately denied when they need and apply for
additional credit. One study compared sources of finance and found that new black-owned
businesses start with almost three times less in terms of overall capital than new white-owned
businesses, and that this gap does not close as firms mature.

Table 2.5
Potential Barriers to Entrepreneurial Funding (continued)
Potential Barrier
Lack of initial wealth
Shift in the banking industry
Information asymmetry
Table 2.5
Challenges
Low-income individuals without initial (pre-existing) wealth also face significant barriers to
capital. Research on liquidity constraints showed that the top ninety-fifth percentile of wealthy
individuals in the United States is more likely to start businesses than other income groups,
and that personal and household wealth are important drivers of entry. Research at the
neighborhood level found that in New York City, the richer third of neighborhoods had more
than twice the rate of self-employment than the poorest third. A higher household net worth
of a founder is linked to larger amounts of external funding received, even after accounting for
human capital, venture characteristics, and demand for funds.
Large banks have become larger, while there are fewer small and medium-size banks. Larger
banks survived the Great Recession with balance sheets restored, while small banks—the ones
more likely to lend to entrepreneurs—were limited by both economic conditions and new
regulatory barriers
The persistence of information asymmetry in capital markets between the supply of capital
(investors) and the demand for capital (entrepreneurs) gives rise to barriers faced by
entrepreneurs. Entrepreneurs face a larger challenge than established businesses in accessing
capital because established businesses can leverage their longer track records and existing
relationships.
Feature Box

What Can You Do?: Barriers to Funding

• What challenges do you face in these areas?
• What steps might you take to help mediate those challenges?
Discussion Questions
12. Outline your background and training, and then discuss the
importance of connecting your background and training with a
potential entrepreneurial pathway.
13. How does creating an action plan help you become a successful
entrepreneur?
14. What is the connection between an action plan and a framework?
How are they different?
15. Why are more individuals pursuing nontraditional entrepreneurship
opportunities?
16. What is the difference between an immigrant entrepreneur and a
minority entrepreneur? What are the similarities?
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