Module 1 : Introduction to Evolution of Entrepreneurship

Entrepreneurship
1. 18th Century France, Richard
Entrepreneurs Cantillon
➔ individuals who recognize ➔ associated the "risk-bearing" activity
opportunities where others see in the economy with the
chaos, contradiction, and confusion entrepreneur
➔ aggressive catalysts for change
within the marketplace 2. Industrial Revolution, England
➔ start companies and create jobs at a ➔ the entrepreneur playing an
breakthrough pace important role in risk taking and the
transformation of resources
Small Businesses
➔ independently owned and operated, Robert C. Ronstadt put together a
are not dominant in their fields, and summary description:
usually do not engage in many new ➔ Entrepreneurship is the dynamic
or innovative practices process of creating incremental
➔ they manage their businesses by wealth. This wealth is created by
expecting stable sales, profits, and individuals who assume the major
growth risks in terms of equity, time, and/or
career commitment of providing
Entrepreneurial Ventures value for some product or service.
➔ those for which the entrepreneur's
principal objectives are innovation, Integrated Definition in 21st Century
profitability, and growth ➔ Entrepreneurship is a dynamic
➔ characterized by innovative strategic process of vision, change, and
practices and sustainable growth creation. It requires an application
of energy and passion toward the
Entrepreneurial Mindset creation and implementation of
➔ represents the cognition and innovative ideas and creative
commitment to view the world with solutions.
an innovative perspective
➔ composes the entrepreneurial
potential in every individual

Entrepreneur
➔ derived from the French word
entreprendre
➔ Meaning “to undertake”
Myths of Entrepreneurship Macro View
➔ statements about entrepreneurship ➔ presents a broad array of factors
that most people thought to be true that relate to success or failure in
but, now these are proven incorrect. contemporary entrepreneurial
ventures
1. Entrepreneurs are Doers, Not ➔ includes external processes that are
Thinkers sometimes beyond the control of the
2. Entrepreneurs are Born, Not Made individual entrepreneur, for they
3. Entrepreneurs are Always Inventors exhibit a strong external locus of
4. Entrepreneurs are Academic and control
Social Misfits
5. Entrepreneurs must Fit the Profile Environmental School of Thought
6. All Entrepreneurs Need is Money ➔ deals with the external factors that
7. All Entrepreneurs Need is Luck affect a potential entrepreneur's
8. Entrepreneurship is Unstructured lifestyle (positive or negative)
and Chaotic ➔ e.g. social group (the atmosphere of
9. Most Entrepreneurial Initiatives Fail friends and relatives can influence
10. Entrepreneurs are Extreme Risk the desire to become an
Takers entrepreneur)

Theory of Entrepreneurship Financial/Capital School of Thought

➔ a verifiable and logically coherent ➔ based on the capital-seeking
formulation of relationships, or process
underlying principles, that either ➔ individuals are pushed towards
explain entrepreneurship, predict entrepreneurship by the availability
entrepreneurial activity, or provide and or unavailability of funds
normative guidance
Displacement School of Thought
Schools-of-Thought Approach ➔ focuses on the negative side of
➔ divides entrepreneurship into group phenomena, in which
specific activities, either macro or someone feels out of place or is
micro in viewpoint, but both address literally "displaced" from the group
the conceptual nature of ➔ it holds that the group hinders a
entrepreneurship person from advancing or eliminates
certain critical factors needed for the
person to advance

Political Displacement
➔ caused by factors ranging from an
entire political regime that rejects
free enterprise to governmental
regulations and policies that limit or
redirect certain industries
Cultural Displacement Strategic Formulation School of Thought
➔ deals with social groups precluded ➔ emphasizes the planning process in
from professional fields successful venture development
➔ e.g. ethnic background, religion, ➔ leveraging of unique elements
race, and sex ➔ unique markets, unique people,
unique products, or unique
Economic Displacement resources are identified, used, or
➔ concerned with the economic constructed into effective venture
variations of recession and formations
depression
➔ e.g. job loss, capital shrinkage, “bad Process Approach
times” ➔ way to examine the activities
involved in entrepreneurship
MIcro View
➔ examines the factors that are Integrative Approach
specific to entrepreneurship and are ➔ provided by Morris, Lewis, and
part of the internal locus of control Sexton
➔ the potential entrepreneur has the ➔ built around the concepts of input to
ability, or control, to direct or adjust the entrepreneurial process and
the outcome of each major influence outcomes from the entrepreneurial
in this view process
➔ five key elements: environmental
Entrepreneurial Trait School of Thought opportunities, individual
➔ grounded in the study of successful entrepreneur, organizational context
people who tend to exhibit similar & unique business concepts,
characteristics that, if copied, would resources
increase success opportunities for
the emulators Dynamic States Approach
➔ e.g. achievement, creativity, ➔ developed by Jonathan Levie &
determination, and technical Benyamin B. Lichtenstein
knowledge ➔ depicts ventures being dependent
on their environment for survival
Venture Opportunity School of Thought ➔ a network of relationships and
➔ focuses on the opportunity aspect of systems that convert opportunity
venture development tension into value for a venture's
➔ developing the right ideas at the customers, generating new
right time for the right market niche resources that maintain the dynamic
is the key to entrepreneurial success state
➔ new pathways or opportunities will
arise that lead entrepreneurs in
different directions
 Variations in Entrepreneurship Social Cognition Theory
➔ introduces the idea of knowledge
1. Intrapreneur structures that are ordered in such a
➔ applies their innovative idea within way as to optimize personal
the organization into which they effectiveness within given situation
belong to the study of entrepreneurship

2. Multipreneur Entrepreneurial Cognition

➔ actively involved in more than one ➔ knowledge structures that people
entrepreneurial projects use to make assessments,
judgements, or decisions involving
3. Ultrapreneur opportunity evaluation, venture
➔ has many profit-generating pursuits creation, and growth
at the same time ➔ understanding how entrepreneurs
use simplifying mental models to
4. Social Entrepreneur piece together previously
➔ Establishes an enterprise with the unconnected information that helps
aim of solving problems affecting them to identify and invent new
social change products or services, and to
assemble the necessary resources
Module 2 : The Mindset to start and grow businesses
➔ offers an understanding as to how
Cognition entrepreneurs think and "why" they
➔ refers to mental processes do some of the things they do
➔ includes attention, remembering,
producing and understanding Cognitive Adaptability
language, solving problems, and ➔ can be defined as the ability to be
making decisions dynamic, flexible, and self-regulating
➔ used to refer to the mental functions, in one's cognitions given dynamic
mental processes (thoughts), and and uncertain task environments
mental states of intelligent humans
Metacognitive Model
Cognoscere ➔ integrates the combined effects of
➔ latin word which means "to know," entrepreneurial motivation and
"to conceptualize," or "to recognize" context, toward the development of
➔ refers to a faculty for the processing metacognitive strategies applied to
of information, applying knowledge, information processing within an
and changing preferences entrepreneurial environment
 Who are Entrepreneurs?
5. Seeking Feedback
★ Entrepreneurs driven by an intense ➔ strong desire to know how well they
commitment and determined are doing and how they might
perseverance, work very hard improve their performance
★ They are optimists who see the cup ➔ actively seek out and use feedback
as half full rather than half empty ➔ feedback is also central to their
★ They strive for integrity learning from mistakes and setbacks
★ They burn with the competitive
desire to excel 6. Internal Locus of Control
★ They use failure as a tool for ➔ do not believe that the success or
learning failure of their venture will be
★ They have enough confidence in governed by fate, luck, or similar
themselves to believe that they forces
personally can make a major ➔ believe that their accomplishments
difference in the final outcome of and setbacks are within their own
their ventures control and influence, and that they
can affect the outcome of their
Characteristics Associated with the actions
Entrepreneurial Mindset ➔ consistent with a high-achievement
motivational drive, the desire to take
1. Determination & Perseverance personal responsibility, and
➔ total dedication to success as an self-confidence
entrepreneur can overcome
obstacles and setbacks 7. Tolerance for Ambiguity
➔ exists when the entrepreneur can
2. Drive to Achieve deal with the various setbacks and
➔ internally driven by a strong desire to changes that constantly confront
compete, to excel against them
self-imposed standards, and to
pursue and attain challenging goals 8. Calculated Risk-taking
➔ they do everything possible to get
3. Opportunity Orientation the odds in their favor, and they
➔ the constant awareness of often avoid taking unnecessary risks
opportunities that exist in everyday
life

4. Persistent Problem Thinking

➔ not intimidated by difficult situations
➔ extremely persistent, they are
realistic in recognizing what they can
and cannot do where they can get
help to solve difficult but unavoidable
tasks
9. High Energy Level Module 3 : The Entrepreneurial Traits :
➔ the extraordinary workloads and Creativity & Innovation
stressful demands placed on
entrepreneurs put a premium on Opportunity Identification
their energy ➔ central to the domain of
➔ many entrepreneurs fine tune their entrepreneurship
energy levels by carefully monitoring
what they eat and drink, establishing Creativity
exercise routines, and knowing ➔ the ability to see opportunities or
when to get away for relaxation value that others would overlook

10. Creativity & Innovation Innovation

➔ often possess a collective creativity ➔ process by which entrepreneurs
that emerges from the joint effort of convert opportunities (ideas) into
the founders and personnel and marketable solutions
produces unique goods and services
Role of Creative Thinking
11. Vision ➔ important to recognize the role of
➔ they have a vision or concept of creative thinking in the innovative
what their firms can be process.
➔ creativity is the generation of ideas
12. Passion that results in the improved
➔ characterized by a discrete emotion efficiency or effectiveness of a
that is quite intense being described system
as an underlying force that fuels our
strongest emotions, or the intensity Process
felt when engaging in activities that ➔ goal oriented; it is designed to attain
are of deep interest, or the energy a solution to a problem.
that enables entrepreneurs to
achieve peak performance People
➔ the resources that determine the
13. Team Building solution
➔ the desire for independence and
autonomy does not preclude the The Nature of the Creative Process
entrepreneur's desire to build a
strong entrepreneurial team ★ Creativity is a process that can be
developed and improved
★ E = f(e) which means ★ Everyone is creative to some degree
entrepreneurship is a function of the ★ Some individuals have a greater
entrepreneur aptitude for creativity than others
★ Some people have been raised and
educated in an environment that
encouraged them to develop their
creativity
★ For others, the process is more 4. Evaluation & Implementation
difficult because they have not been ➔ the most difficult step of a creative
positively reinforced; if they are to be endeavor and requires a great deal
creative, they must learn how to of courage, self-discipline, and
implement the creative process perseverance
★ Most people also wrongly assume ➔ successful entrepreneurs can
that some people are born creative identify ideas that are workable and
whereas others are not and that only that they have the skills to
the gifted or highly intelligent person implement
is capable of generating creative
ideas and insights Developing Creativity

The Creative Process ★ Recognizing Relationships

★ Developing a Functional Perspective
1. Background or Knowledge ★ Using Your Brains
Accumulation ★ Eliminating Muddling Mindsets
➔ involves extensive reading, ➢ Either/Or Thinking
conversations with others working in ➢ Security Hunting
the field, attendance at professional ➢ Stereotyping
meetings and workshops, and a ➢ Probability Thinking
general absorption of information
relative to the problem or issue Arenas of Creativity
under study
1. Idea Creativity
2. Incubation Process ➔ thinking up a new idea or concept,
➔ often occurs while they are engaged such as an idea for a new product or
in activities totally unrelated to the service or a way to solve a problem
subject or problem
2. Material Creativity
3. Idea Experience ➔ inventing and building a tangible
➔ often the most exciting, because it is object such as a product, an
when the idea or solution the advertisement, a report, or a
individual is seeking is discovered photograph
➔ Sometimes referred to as the
"eureka factor," this phase is also 3. Organization Creativity
the one the average person ➔ organizing people or projects and
incorrectly perceives as the only coming up with a new organizational
component of creativity form or approach to structuring
➔ Some also refer to this phase as the things
"lightbulb moment" ➔ e.g. organizing a project, starting a
new type of venture, putting together
or reorganizing a work group, and
changing the policies and rules of a
group
4. Relationship Creativity Types of Innovation
➔ an innovative approach to achieving
collaboration, cooperation, and 1. Invention
win-win relationships with others ➔ the creation of a new product,
➔ the person who handles a difficult service, or process, often one that is
situation well or deals with a novel or untried
particular person in an especially
effective manner is being creative in 2. Extension
a relationship or one-on-one context ➔ the expansion of a product, service,
or process already in existence
5. Event Creativity ➔ such concepts make a different
➔ producing an event such as an application of a current idea
awards ceremony, team outing, or ➔ e.g. Ray Kroc of McDonald's and
annual meeting Mark Zuckerberg of Facebook
➔ the creativity here also
encompasses decor, ways in which 3. Duplication
people are involved, sequence of ➔ the replication of an already existing
happening, settings, and so forth product, service, or process
➔ the duplication effort, however, is not
6. Inner Creativity simply copying but adding the
➔ changing one's inner self; being entrepreneur's own creative touch to
open to new approaches to how one enhance or improve the concept and
does things and thinking about beat the competition
oneself in different ways; achieving a ➔ e.g. Bayad Center
change of heart or finding a new
perspective or way to look at things 4. Synthesis
that is a significant departure from ➔ the combination of existing concepts
how one has traditionally looked at and factors into a new formulation
them ➔ this involves taking a number of
ideas or items already invented and
7. Spontaneous Creativity finding a way that they can form a
➔ acting in a spontaneous or new application
spur-of-the-moment manner, such ➔ e.g. laser technology is redesigned
as coming up with a witty response to be used in medicine (it combines
in a meeting, an off-the-cuff speech, the idea of an existing machine with
a quick and simple way to settle a another existing technology).
dispute, or an innovative appeal
when trying to close a sale.
Major Misconceptions of Innovation 4. Process Needs
➔ venture capitalists often refer to
★ Innovation is planned and process needs in the marketplace as
predictable "pain" and to innovative solutions to
★ Technical specifications must be these needs as "painkillers"
thoroughly prepared
★ Innovation relies on dreams and 5. Industry & Market Changes
blue-sky ideas ➔ continual shifts in the marketplace
★ Big projects will develop better caused by changes in consumer
innovations than smaller ones attitudes, advancements in
★ Technology is the driving force of technology, and growth in the
innovation success structure, design, or definition of
markets or industries are sources of
Sources of Innovative Ideas emerging opportunities

1. Trends 6. Demographic Changes

➔ signal shifts in the current paradigm ➔ changes in population size, age,
(or thinking) of the major population education, occupation, geographic
➢ Societal Trends: aging locality, and similar demographic
demographics, health and variables often catalyze new
fitness growth, senior living entrepreneurial opportunities
➢ Technology Trends: mobile
technology, e-commerce, 7. Perceptual Changes
Internet advances ➔ perceptual changes in people's
➢ Economic Trends: higher interpretation of facts and concepts
disposable incomes, dual may be intangible but meaningful
wage-earner families,
performance pressures 8. Knowledge-based Concepts
➢ Government Trends: ➔ inventions, which are the product of
increased regulations, new thinking, new methods, and
petroleum prices, terrorism new knowledge, often require the
longest time period between
2. Unexpected Occurrences initiation and market implementation
➔ successes or failures that, because because of the need for testing and
they were unanticipated or modification
unplanned, often prove to be major
sources of innovation

3. Incongruities
➔ exist in the gap between
expectations and reality
 Principles of Innovation

★ Be action oriented
★ Innovators always must be active
and searching for new ideas,
opportunities, or sources of
innovation.
★ Make the product, process, or
service simple and understandable
★ Make the product, process, or
service customer-based
★ Start small
★ Aim high
★ Try/test/revise
★ Learn from failures
★ Follow a milestone schedule
★ Reward your efforts
★ Work, work, work