Chapter 1 Entrepreneurs and Entrepreneurship

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Chapter 1Entrepreneurs and Entrepreneurship
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ENTREPRENEURSHIP

• Entrepreneurship involves creation of value, the
  process of starting or growing a new profit
  making business, the process of providing new
  products or service, and the intentional creation
  of value through organization by an individual
  contributor or a small group of partners.
• The creation and management of new businesses,
  small businesses, and family businesses.

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What is Entrepreneurship?

• Common Themes in Definitions of Entrepreneurship
• The role of the entrepreneur-
• Innovation
• Organization creation
• Creating value
• Profit or Not-for-Profit
• Growth
• Uniqueness
• Process

• The person is central
• Changing, Transforming
• Some organized efforts, must
• New Products, approaches
• Indian Tribes jewelry making
• Unlike small businesses
• New Combination Experimentation
• Not a one time phenomenon

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What is Entrepreneurship?

• Entrepreneurship
• The process whereby an individual or group of
  individuals use organized efforts to pursue
  opportunities
• To create value and grow by fulfilling wants and
  needs through innovation and uniqueness
• regardless of personal resource situation.

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Historical Perspectives on Entrepreneurship
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Creative Destruction

• A term coined in 1942 by Joseph Schumpeter in his
  work, Capitalism, Socialism and Democracy, to
  denote a "process of industrial mutation that
  incessantly revolutionizes the economic structure
  from within, incessantly destroying the old one,
  incessantly creating a new one."
• In other words, creative destruction occurs when
  something new kills an old thing. A great example
  of this is personal computers. The industry, led
  by Microsoft and Intel, destroyed many mainframe
  computer companies--but in doing so,
  entrepreneurs created one of the most important
  inventions of this century.

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Creative Destruction NewParadigm - Discontinuity

• Entrepreneurs create new and better solutions or
  ways of
• conducting business in existing branches for a
  given market or
• group of customers.
• Corporations failing to meet this new competition
  will loose their
• position in the market an may eventually face
  liquidation
• J. Schumpeter called this Creative Destruction.
• Managed Creative Destruction within corporations
  and
• companies. This starts with a stage called
  Discontinuity leading
• to Transformational Innovation of the business as
  a whole.
• Business leaders using discontinuity as an
  approach to create
• change lead the way and have a clear vision
  backed up by
• the Board of Directors.

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THEN.
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NOW.
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WHAT NEXT ????
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Misconceptions About Entrepreneurship

• Five Misconceptions
• Successful entrepreneurship needs only a great
  idea
• Entrepreneurship is easy
• Entrepreneurship is a risky gamble
• Entrepreneurship is found only in small
  businesses
• Entrepreneurial ventures and small businesses are
  the same thing

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Super Smokers BBQ
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Super Smoker History

• Super Smokers BBQ is a world-class barbecue
  competition team, a catering company, and a
  restaurant business. That theme hasnt changed
  from the beginning, though almost everything else
  has.
• The guys who started Super Smokers BBQ all love
  barbecue. Terry Black and Skip Steele met in
  college. In 1987, they entered their first
  Memphis In May-sanctioned barbecue contest, held
  in Little Rock. It was not an auspicious
  beginning the team finished 13th out of 14
  teams. Two years later, the teams Championship
  Sauce won in that same competition, and it won
  again the following year, too, beating three
  world champions each time.

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Wondering what happened to the catering business?

• Its thriving. Super Smokers BBQ feeds World
  Championship Barbecue to fans of the St. Louis
  Rams and the St. Louis Cardinals, workers at
  every major corporation in town and thousands of
  families. They have even catered for the White
  House. Read all about it on the Catering page.
  Other happy customers include music stars Jimmy
  Buffet, Tom Petty, Matchbox 20, Randy Travis, and
  the Red Hot Chili Peppers.
• Thats the story. It all started with three guys
  who love barbecue and who consider themselves
  lucky enough to live in a country where they can
  barbecue every day for a living!

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Small Business and Entrepreneurial Ventures The
Differences

• Small Business
• Independently owned, operated, and financed
• has fewer than 100 employees
• doesnt engage in new or innovative practices
• Has relatively little impact on its industry
• Entrepreneurial Ventures
• An organization pursuing opportunities
• Characterized by innovative practices
• Main goals are profitability and growth

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Current Importance of Entrepreneurship

• Three areas of importance
• Innovation
• Process of creating, changing, experimenting,
  transforming, and revolutionizing
• Number of New Start-ups
• Important because new firms contribute to
  economic development through benefits such as
  product-process innovation
• Job Creation
• Vital to the overall long-term economic health of
  communities, regions, and nations

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The Impact of Entrepreneurship Globally
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The Entrepreneurial Process

• Exploring the Entrepreneurial Context
• Identifying Opportunities and Possible
  Competitive Advantage
• Opportunities are positive external trends or
  changes that provide unique and distinct
  possibilities for innovating and creating value
• Competitive advantage is what sets an
  organization apart its competitive edge
• Starting the Venture
• Managing the Venture

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Types of Entrepreneurs

• Novice Entrepreneur
• Has no prior business ownership experiences as a
  business founder, inheritor, or purchaser
• Habitual Entrepreneur
• Has prior business ownership experience
• Nascent Entrepreneur
• In the process of starting a new business
• Can be either a novice or a habitual entrepreneur

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Types of Entrepreneurs (contd)

• Serial Entrepreneur
• Has sold or closed an original business and
  establishes another new business
• Continues the cycle of selling/closing and
  establishing
• Portfolio Entrepreneur
• Retains an original business and builds a
  portfolio of additional businesses
• Through inheriting, establishing, and purchasing
  the businesses

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Demographic Profile of Entrepreneurs

• Family birth order and gender
• Tend to be first born and men more likely to
  start businesses than women
• Work experience
• Prior entrepreneurial experience positively
  correlated to being an entrepreneur
• Education
• Having a high school diploma sharply raises odds
  of trying to start a business
• Entrepreneurial family
• Tend to have parents who were entrepreneurial

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Personality Profile of Entrepreneurs

• Personality Characteristics Include
• High level of motivation
• Abundance of self-confidence
• Ability to be involved for the long term
• High energy level
• Persistent problem solver
• High degree of initiative
• Ability to set goals
• Moderate risk taker

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What Entrepreneurs Do

• Initially, an entrepreneur is engaged in
  assessing the potential for the entrepreneurial
  venture,
• Then dealing with start-up issues
• Once the entrepreneurial venture is up and
  running,
• The entrepreneurs attention switches to managing
  the venture

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The Rewards and Challenges of Being an
Entrepreneur