Lecture - 1

Basics of Entrepreneurship
 Entrepreneurship is the practice of starting new
organizations or revitalizing mature organizations,
particularly new businesses generally in response to
identified opportunities.

REAL entrepreneurs base their direction on purposeful

Innovation in response to consumer demand and not
on the desire to make a quick buck
The difference between an Employee
and an Entrepreneur?
Reasons for growth of Entrepreneurship
• New Technologies
• Deregulation and privatization
• Increased demand for variety
• Govt. incentives and subsidies
• Entrepreneurial education
• Return on innovation
• Entrepreneur as an hero
• Self-employment is highly valued
• Rising dissatisfaction at job
Impact of Entrepreneurial Firms

• Job creation
• Economic growth
• New technology
• Serving big & small markets
Types of Entrepreneurship

• Replicative versus innovative

• Opportunity-based versus necessity-based
• Corporate Venturing
• Social Venturing
 Replicative vs. Innovative Entrepreneur
• Replicative entrepreneurs function as efficient
coordinators of resources
– start and maintain businesses that mimic predecessors
– provide more of existing goods and services
• Innovative entrepreneurship reshapes industries
and has the potential to add huge value to
economies
– e.g. Google, Intel, Facebook, and e-Bay
 Necessity-based vs. Opportunity-based
Entrepreneurship

• Necessity-based entrepreneurs start businesses due

to a lack of alternatives
– small, low-capital ventures
– almost always replicative
– common in emerging economies
• Opportunity-based entrepreneurs are motivated by idea
– accounts for virtually all innovative entrepreneurship
– most frequently found in developed economies
• Corporate venturing is for projects requiring
– large and complex research teams
– generic testing equipment
– lengthy development times

• social Venturing
• Primary objective of the venture’s product or
service is to address a social issue
• Financial returns are traded off against social
objectives