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What is the entrepreneurship concept?
The process by which individuals pursue opportunities without the resources they currently control
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What are three important features of the entrepreneurship concept?
- 1. pursuit of opportunities-risk taking
- 2. accumulation and configuration of resources
- 3. it is a process of 4 steps
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Explain the entrepreneurial process
- a. decision
- b. business idea
- c. moving from idea to a firm
- d. managing and growing
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What are the three types of start-up firms?
- 1. salary-substitute: provides owner similar level of income to a conventional job
- 2. lifestyle firms: owner can pursue a particular lifestyle and make a living at it
- 3. entrepreneurial firms: new products/services by creating opportunities regardless of current resources
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What is corporate entrepreneurship?
conceptualization at the firm level, how conservative or how entrepreneurial a firm is is called its entrepreneurial intensity
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Compare entrepreneur vs. inventor
- inventor creates something new
- entrepreneur puts together the resources and the risk bearing ability to transform the invention into a viable business
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What are the 3 main reasons to become entrepreneurs?
- 1. desire to be your own boss
- 2. desire to pursue own ideas
- 3. financial rewards
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What are the 4 primary characteristics of successful entrepreneurs?
- 1. passion
- 2. product/customer focus
- 3. tenacity despite failure
- 4. execution intelligence
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What are the changing demographics of entrepreneurial firms?
Describe the trend and the size of each category.
- 1. women - 28.2% of national total (23 mil)
- 2. minority - 1.1 mil af-amer, 1.1 asian,1.6 hispanic
- 3. senior - 2.1 mil
- 4. young - 7/10
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What is the economic impact of entrepreneurship?
- innovation - 55% of all US innovations from small firms
- job creation - 60-80% of net new jobs
- globalization
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What is entrepreneurship's impact on society?
innovations makes lives easier, enhances productivity, improves health, entertains us
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What is entrepreneurship's impact on larger firms?
- provide product components
- provide designs
- help large firms be more efficient
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What are the 5 common myths regarding entrepreneurship?
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What is the concept of opportunity?
a favorable set of circumstances that creates need for a new product or service
attractive - timely - durable - anchored in a prod/service that creates or adds value for its buyer
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Explain the diff between an opportunity and an idea.
opportunity has research, idea is just a thought
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What is a window of opportunity?
a metaphor describing the time period in which a firm can realistically enter a new market
when the market matures, the window for new entrants closes
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List and understand five forms of biz opportunity.
•New product or service
•New market
•New production method
•New way of organizing
•New raw material
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Describe the three general approaches
entrepreneurs use to identify opportunities
- 1. observe trends
- 2. solve a problem
- 3. find gaps in the marketplace - small boutiques
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Identify the four environmental
trends that are most instrumental in creating business opportunities.
- a. economic forces
- b. social forces
- c. tech advances
- d. political/regulatory changes
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List the personal characteristics
that make some people better at recognizing business opportunities than others.
- prior experience
- cognitive factors
- social networks
- creativity
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Social networks: Strong tie vs. weak tie
strong: like minded people, reinforces insights people already have
weak: casual acquaintances, not usually like-minded so convo may spark a completely new ida
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What are the 3 primary techniques for generating ideas?
- Brainstorming
- surveys
- focus groups
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What is brainstorming & its purpose
- used to generate a large number of ideas and solutions to problems quickly
- should be targeted to a specific topic
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Rules of a brainstorming session
- no criticism
- freewheeling is encouraged
- should move quickly
- leap-frogging is encouraged
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What is ‘focus group’ and the weakness of conducting a focus group for generating ideas
5-10 ppl with common characteristics relative to the issue, effectiveness depends on moderators ability to ask questions to keep the discussion on track, can help generate new business ideas
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Describe how to use surveys to generate new business ideas
- gathering info from a sample of indiv
- generate new product because they ask specific questions and get specific answers
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What is the concept and importance of feasibility analysis?
- process of determining whether a biz idea is viable
- purpose is determining whether the idea is worth pursuing
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When is the time to conduct feasibility analysis?
early in the thinking through the prospects for a new biz
screen the ideas before spending resources on them
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What are the 4 components of feasibility analysis?
- Product/service feasibility
- industry/market
- organizational
- financial
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Product/service feasibility analysis:
Concept testing- What is concept statement? Its purpose?
concept statement one pg description of a business that is distributed by a startup entrepreneur to ppl who are asked to provide feedback on its potential
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Product/service feasibility analysis:
Define usability testing and explain its importance.
What is protoype?
Beta test?
method by which users of a product are asked to perform certain tasks in order to measure the products ease of use and users perception of the experience
prototype: first physical depiction of a new product
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Industry/market feasibility analysis:
What are the 4 dimensions of analyzing what types of industries favor new firms?
- market size
- market growth potential
- market penetration rate
- estimation assumptions & sources of data
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Industry/market feasibility analysis:
What is R&D intensity of an industry
greater intensity is more favorable to new firms - invention of new technologies is a source of opportunity for biz ideas
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Industry/market feasibility analysis:
What types of market are favorable to new firms?
Niche/horizontal market
Vertical market
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Industry/market feasibility analysis:
What is industry life cycle?
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Industry/market feasibility analysis:
SWOT analysis & perceptual mapping
- strengths
- weaknesses
- opportunities
- threats
perceptual mapping: how product dimensions compare with competitors
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Describe the purpose of organizational feasibility analysis and list the two primary issues to consider in this area
how well the firm can organize its intellectual and physical resources to make profit
2 important factors: biz model and the team
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List the most critical issues to consider in financial feasibility analysis
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- Availability of affordable office or lab space.
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- Likelihood of local and state government support of the business.
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- Quality of the labor pool available.
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- Proximity to key suppliers and customers.
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- Willingness of high quality employees to join the firm.
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- Likelihood of establishing favorable strategic partnerships.
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- Proximity to similar firms for the purpose of sharing knowledge.
- Possibility of
- obtaining intellectual property protection in key areas
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How to estimate the proposed start-up’s financial performance
compare it to similar established businesses
- 1. industry trend analysis and reports on firms
- 2. observational research
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Where to find data: Primary vs. secondary research
- primary: original and collected by the entrepreneur
- secondary: data already collected - govt stats, competitors websites, industry reports
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