chapter 1 - the nature and importance of entrepreneurs
TRANSCRIPT
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ChapterChapter11
The Nature and Importance The Nature and Importance of Entrepreneursof Entrepreneurs
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Development of EntrepreneurshipDevelopment of Entrepreneurship
McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.
Earliest Period- Marco PoloEarliest Period- Marco PoloMiddle Ages- Theater, Middle Ages- Theater,
Architectural WorksArchitectural Works1717thth Century- Mississippi Century- Mississippi
CompanyCompany1818thth Century- Edison & Whitney Century- Edison & Whitney1919thth & 20 & 20thth Centuries Centuries
Organize/OperateOrganize/Operate InnovationInnovation
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Environmental FactorsEnvironmental Factors Affecting OrganizationsAffecting Organizations
HypercompetitionHypercompetitionChanging TechnologyChanging TechnologyShort Product Life CyclesShort Product Life CyclesNew MarketsNew MarketsChanging Employee Drives/MotivesChanging Employee Drives/MotivesFocus on Sales/ProfitsFocus on Sales/ProfitsAvailable CapitalAvailable Capital
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EconomiesEconomiesMarket-OrientedMarket-Oriented ControlledControlled
CUBACUBAUNITED STATESUNITED STATES
Market Market ConditionsConditions
Innovation Innovation OrientationOrientation
Investment Investment CommunityCommunity
Entrepreneurship Entrepreneurship CultureCulture
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Market ConditionsMarket ConditionsLarge MarketLarge MarketEasy To Form CompanyEasy To Form CompanyPositive Tax StructurePositive Tax StructurePositive Media CoveragePositive Media CoverageCode of Business/Contract LawCode of Business/Contract LawStrong Gov’t Agencies- No Strong Gov’t Agencies- No CorruptionCorruption
Standard-Setting AssociationsStandard-Setting AssociationsIndividual Investment MentalityIndividual Investment Mentality
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Principles forPrinciples for Successful New VentureSuccessful New Venture
1)1) Define MarketDefine Market2)2) Durable Products- Durable Products-
18 Month Customer 18 Month Customer PaybackPayback
3)3) Market Growth = Market Growth = 30-50% in 5 Years30-50% in 5 Years
4)4) Patent ProtectionPatent Protection5)5) No Product No Product
Substitutions Substitutions AvailableAvailable
6)6) Products VariantsProducts Variants7)7) No Strong No Strong
Competition Competition PresentPresent
8)8) Quick Market Quick Market DominanceDominance
9)9) Gross Margin 30-Gross Margin 30-50%50%
10)10)Staged FinancingStaged Financing11)11)ROI = 10X in 5 Years ROI = 10X in 5 Years
(25-30%/Year)(25-30%/Year)12)12)Positive Cash Flow Positive Cash Flow
in 18 Monthsin 18 Months13)13)Strong Management Strong Management
in Industryin Industry
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Infrastructure Infrastructure Needed for InnovationNeeded for Innovation
Long-Term ThinkingLong-Term Thinking
Investment CommunityInvestment CommunityBanksBanks
Venture CapitalistsVenture Capitalists
Informal/Informed Private Informal/Informed Private Investors (Angels)Investors (Angels)
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Entrepreneurship CultureEntrepreneurship Culture
More New More New Ventures Than Ventures Than Anywhere In The Anywhere In The WorldWorld
Concentrated Concentrated AreasAreas
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Successful EntrepreneurSuccessful EntrepreneurInitiates Creation ProcessInitiates Creation ProcessDevotes Time/EffortDevotes Time/EffortAssumes RiskAssumes RiskReceives RewardsReceives Rewards• IndependenceIndependence
• SatisfactionSatisfaction
• MoneyMoney
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Entrepreneurial DecisionEntrepreneurial Decision
Present Present LifestyleLifestyle
New EnterpriseNew EnterpriseDesirableDesirablePossiblePossible
CatalystCatalyst
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Drivers of NewDrivers of New Venture FormationVenture Formation
Desirability InfluencesDesirability Influences Culture/SubcultureCulture/Subculture Family/PeersFamily/Peers TeachersTeachers
Possibility FactorsPossibility Factors GovernmentGovernment BackgroundBackground MarketingMarketing Role ModelsRole Models FinancesFinances
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Types of StartupsTypes of StartupsLifestyleLifestyle
FoundationFoundation
High PotentialHigh Potential
GazellesGazelles
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Entrepreneur &Entrepreneur & Economic DevelopmentEconomic Development
Product-Evolution ProcessProduct-Evolution Process
Iterative SynthesisIterative Synthesis
InnovationInnovation TechnologicalTechnological
BreakthroughBreakthrough
GovernmentGovernment
Technology TransferTechnology Transfer
Intrapreneurship vs. EntrepreneurshipIntrapreneurship vs. Entrepreneurship
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Product EvolutionProduct Evolution
Need RecognitionNeed Recognition
Initiate InnovationInitiate Innovation DevelopmentDevelopment
Press To InventPress To Invent
IndustrialIndustrial
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Careers/EducationCareers/EducationLife SpaceLife Space
Work/OccupationWork/Occupation Individual/PersonalIndividual/Personal Nonwork/familyNonwork/family
Skills RequiredSkills Required TechnicalTechnical Business ManagementBusiness Management PersonalPersonal
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Skills RequiredSkills Required of Entrepreneurof Entrepreneur
TechnicalTechnicalBusinessBusiness
ManagementManagement PersonalPersonal
WritingWriting PlanningPlanning Inner ControlInner Control
Oral Oral CommunicationCommunication
Decision Decision MakingMaking Risk TakingRisk Taking
Monitoring The Monitoring The EnvironmentEnvironment
Human Human RelationsRelations InnovativeInnovative
Use TechnologyUse TechnologyMarketingMarketing(Selling)(Selling)
Change-Oriented Change-Oriented VisionaryVisionary
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Ethics & Social ResponsibilityEthics & Social Responsibility
Ethics- Behavior/Morals in Ethics- Behavior/Morals in BusinessBusiness
Value SystemValue SystemPeer PressurePeer PressureSocial NormsSocial NormsCompetitorsCompetitors Individual vs. CommunityIndividual vs. Community
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FutureFutureEntrepreneurial Education Entrepreneurial Education
Government- PromotionGovernment- Promotion
Society’s SupportSociety’s Support
Corporate IntrapreneurshipCorporate Intrapreneurship
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Entrepreneurial UniversitiesEntrepreneurial Universities
ActivitiesActivities
SeminarsSeminars
ConsultingConsulting
ResearchResearch
Case DevelopmentCase Development
Technology Development Technology Development
& Transfer& Transfer
Joint Ventures & Joint Ventures &
Strategic AlliancesStrategic Alliances
StructuresStructures Business Assistance Business Assistance
CentersCenters IncubatorsIncubators Innovation CentersInnovation Centers Industrial ParksIndustrial Parks Enterprise Development Enterprise Development
CentersCenters Venture Capital ExchangesVenture Capital Exchanges
InputsInputs Guest LecturesGuest Lectures Board of Advisors/TrusteesBoard of Advisors/Trustees InternshipsInternships Student ProjectsStudent Projects Source of FundsSource of Funds