The Entrepreneurial Process

Chapter ThreeChapter Three

DowlingDowlingBA 560BA 560

Fall Term 2006Fall Term 2006

BA560 Venture Planning Prof. DowlingBA560 Venture Planning Prof. Dowling 22

Entrepreneurship DefinedEntrepreneurship Defined

EntrepreneurshipEntrepreneurship—a way of thinking, —a way of thinking, reasoning, and acting that is reasoning, and acting that is opportunity obsessed, holistic in opportunity obsessed, holistic in approach, and leadership balancedapproach, and leadership balanced

BA560 Venture Planning Prof. DowlingBA560 Venture Planning Prof. Dowling 33

Entrepreneurship ResultsEntrepreneurship Results

Value:Value:– CreationCreation– EnhancementEnhancement– RealizationRealization– RenewalRenewal

For:For:– OwnersOwners– StakeholdersStakeholders– All ParticipantsAll Participants

BA560 Venture Planning Prof. DowlingBA560 Venture Planning Prof. Dowling 44

Entrepreneurial RequirementsEntrepreneurial Requirements

Willingness to take risksWillingness to take risks– Personal Personal – FinancialFinancial– CalculatedCalculated

Shift the odds of successShift the odds of success

Balancing risks with rewards Balancing risks with rewards

BA560 Venture Planning Prof. DowlingBA560 Venture Planning Prof. Dowling 55

Classic Entrepreneurship: The Classic Entrepreneurship: The StartupStartup

Raw startup companyRaw startup company—an innovative idea that —an innovative idea that develops into a high growth companydevelops into a high growth company

Qualities of a startup companyQualities of a startup company– Strong leadership from the main entrepreneurStrong leadership from the main entrepreneur– Complementary talents and outstanding teamwork Complementary talents and outstanding teamwork

of team membersof team members– Skill and ingenuity to find and control resourcesSkill and ingenuity to find and control resources– Financial backing to chase opportunityFinancial backing to chase opportunity

BA560 Venture Planning Prof. DowlingBA560 Venture Planning Prof. Dowling 66

Exhibit 3.1Exhibit 3.1

BA560 Venture Planning Prof. DowlingBA560 Venture Planning Prof. Dowling 77

Exhibit 3.2Exhibit 3.2

BA560 Venture Planning Prof. DowlingBA560 Venture Planning Prof. Dowling 88

The Entrepreneurial ProcessThe Entrepreneurial Process

It is It is opportunityopportunity driven driven

It is driven by a It is driven by a lead entrepreneurlead entrepreneur and an and an entrepreneurial teamentrepreneurial team

It is resource It is resource parsimoniousparsimonious and and creativecreative

It depends on the It depends on the fitfit and and balancebalance among these among these

It is It is integratedintegrated and and holisticholistic

BA560 Venture Planning Prof. DowlingBA560 Venture Planning Prof. Dowling 99

Think Big for Higher Potential Think Big for Higher Potential VenturesVentures

Don’t think too smallDon’t think too small

Smaller often means higher failure oddsSmaller often means higher failure odds

Getting the odds in your favor Getting the odds in your favor

Entrepreneurship should not be a job Entrepreneurship should not be a job substitutesubstitute

Odds for survival, growth, and a higher level of Odds for survival, growth, and a higher level of success, changes when the ventures reaches success, changes when the ventures reaches a size of 10-30 people with $2-$3 million in a size of 10-30 people with $2-$3 million in revenuesrevenues

BA560 Venture Planning Prof. DowlingBA560 Venture Planning Prof. Dowling 1010

Exhibit 3.3Exhibit 3.3

BA560 Venture Planning Prof. DowlingBA560 Venture Planning Prof. Dowling 1111

Exhibit 3.4Exhibit 3.4

BA560 Venture Planning Prof. DowlingBA560 Venture Planning Prof. Dowling 1212

Exhibit 3.5Exhibit 3.5

BA560 Venture Planning Prof. DowlingBA560 Venture Planning Prof. Dowling 1313

Exhibit 3.6Exhibit 3.6

BA560 Venture Planning Prof. DowlingBA560 Venture Planning Prof. Dowling 1414

Exhibit 3.7Exhibit 3.7

BA560 Venture Planning Prof. DowlingBA560 Venture Planning Prof. Dowling 1515

Exhibit 3.8Exhibit 3.8

BA560 Venture Planning Prof. DowlingBA560 Venture Planning Prof. Dowling 1616

The Entrepreneurial TeamThe Entrepreneurial Team

An entrepreneurial leaderAn entrepreneurial leader

Learns and teaches—faster, betterLearns and teaches—faster, better

Deals with adversity, is resilientDeals with adversity, is resilient

Exhibits integrity, dependability, honestyExhibits integrity, dependability, honesty

Builds entrepreneurial culture and organizationBuilds entrepreneurial culture and organization

BA560 Venture Planning Prof. DowlingBA560 Venture Planning Prof. Dowling 1717

The Entrepreneurial TeamThe Entrepreneurial Team

Quality of the TeamQuality of the Team

Relevant experience and track recordRelevant experience and track record

Motivation to excelMotivation to excel

Commitment, determination, and persistenceCommitment, determination, and persistence

Tolerance of risk, ambiguity, and uncertaintyTolerance of risk, ambiguity, and uncertainty

CreativityCreativity

BA560 Venture Planning Prof. DowlingBA560 Venture Planning Prof. Dowling 1818

Minimize and Control Minimize and Control versusversus Maximize and OwnMaximize and Own

Unleashing creativityUnleashing creativity

Financial resourcesFinancial resources

AssetsAssets

PeoplePeople

Your business planYour business plan

Think cash last!Think cash last!

BA560 Venture Planning Prof. DowlingBA560 Venture Planning Prof. Dowling 1919

ExhibitExhibit 3.9 (a)3.9 (a)

BA560 Venture Planning Prof. DowlingBA560 Venture Planning Prof. Dowling 2020

Exhibit 3.9Exhibit 3.9 (b)(b)

BA560 Venture Planning Prof. DowlingBA560 Venture Planning Prof. Dowling 2121

Exhibit 3.9Exhibit 3.9 (c)(c)

BA560 Venture Planning Prof. DowlingBA560 Venture Planning Prof. Dowling 2222

Exhibit 3.9Exhibit 3.9 (d)(d)

BA560 Venture Planning Prof. DowlingBA560 Venture Planning Prof. Dowling 2323

Entrepreneur’s Fit and BalanceEntrepreneur’s Fit and Balance

Mind-setMind-set

Know-howKnow-how

Relevant experienceRelevant experience

Track record of teamTrack record of team

Track record of resourcesTrack record of resources

Attractiveness of the venture opportunityAttractiveness of the venture opportunity