Introduction to Entrepreneurship

What is an Entrepreneur
What is an
Entrepreneur
 Tenacity
They don’t compliant, they don`t
care

It`s not what you have to be

It`s starting a crazy business
Someone who never fit in and always clicks
They want to do what they want to do

It is Hard to define, it is all different types

of personalities
Make something that happens

Someone who can make

something out of nothing
 Basically relentlessly focus on
energy

Affect change whether he makes

money or social change
 Entrepreneur who sees the vision not
necessarily what the world sees.
I don’t care with what they see I care with
what I see AND this is the way where I want
to go with that.

They don’t feel fear of failure and full of

tremendous optimism and energy
Unflinchingly) (‫بال تردد‬positive

Have a sense of what you want to

achieve and grow up and find the
way to make it work and build it
Have thick skin, never give up and
go on when people cannot go on

They are Driven, they don’t care about

what other people say, they have an
idea and drive towards that idea
relentlessly, they don’t stop ever
 Entrepreneurs
• Business Entrepreneur
• Political Entrepreneur
• Creative Entrepreneur
• Social Entrepreneur
 What is being entrepreneurial?
• Schumpeter suggested that an entrepreneur
was someone who:
– Noticed significant events;
– Brought into existence ‘innovative combinations’,
– Delivered an impact of ‘creative destruction’ on
passive or inefficient existing markets.
– An entrepreneur is a person;

“who breaks away from the path of routine”

Origins of the Term "Entrepreneur"
Late 18th century, French economist,
Say:
Entrepreneurs shift economic
resources out of areas of lower
into areas of higher productivity
and yield (Value creators)

20th century, Austrian economist,

Schumpeter:
The function of entrepreneurs is
More Recent Theories
Professor Peter Drucker, management guru:
The entrepreneur always searches for
change, responds to it, and exploits it as an
opportunity (Opportunity-oriented)

Professor Howard Stevenson, Harvard:

Entrepreneurship is the pursuit of
opportunity without regard to resources
currently controlled (Resourceful)
 What is Entrepreneurship?

• Academic Definition (Stevenson & Jarillo)

– Entrepreneurship is the process by which individuals pursue
opportunities without regard to resources they currently control.

• Venture Capitalist (Fred Wilson)

– Entrepreneurship is the art of turning an idea into a business.

• Explanation of What Entrepreneurs Do

– Entrepreneurs assemble and then integrate all the resources
needed –the money, the people, the business model, the strategy
—needed to transform an invention or an idea into a viable
business.
 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
Personality Profile of Entrepreneurs
– 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
 Characteristics of Successful Entrepreneurs
• be passionate about achieving their goals
• have a spirit of adventure (in fact, the word "adventure" is derived
from the Latin word meaning "to venture")
• have a strong need to achieve and seek personal accomplishment
• be self-confident and self-reliant
• be goal-oriented
• be innovative, creative, and versatile
• be persistent
• be hardworking and energetic
• have a positive attitude
• be willing to take initiative
• have a strong sense of commitment
 Characteristics of Successful Entrepreneurs
• An eye for opportunity: Many entrepreneurs start by finding a need and
quickly satisfying it.
• Independence: Even though most entrepreneurs know how to work within
the framework for the sake of profits, they enjoy being their own boss.
• An appetite for hard work: Most entrepreneurs start out working long, hard
hours with little pay.
• Self-confidence: Entrepreneurs must demonstrate extreme self-confidence
in order to cope with all the risks of operating their own business.
• Discipline: Successful entrepreneurs resist the temptation to do what is
unimportant or the easiest but have the ability to think through to what is
the most essential.
• Judgment: Successful entrepreneurs have the ability to think quickly and
make a wise decision.
 Characteristics of Successful Entrepreneurs

• Ability to accept change: Change occurs frequently when you own

your own business, the entrepreneur thrives on changes and their
businesses grow.
• Make stress work for them: On the roller coaster to business
success the entrepreneur often copes by focusing on the end result
and not the process of getting there.
• Need to achieve: Although they keep an "eye" on profits, this is
often secondary to the drive toward personal success.
• Focus on profits: Successful entrepreneurs always have the profit
margin in sight and know that their business success is measured
by profits. Is this your profile or would you rather do your job, pick
up your paycheck and leave the headaches to someone else? Most
of us, quite easily, choose the later.
 7 Key Qualities of Entrepreneurs
1. Inner Drive to Succeed:
Entrepreneurs are driven to succeed and expand their
business. They see the bigger picture, very ambitious, set
massive goals for themselves and stay committed to
achieving them.
2. Strong Belief in themselves:
Successful entrepreneurs have a healthy opinion of
themselves, assertive personality, focused and
determined to achieve their goals. Their self optimism
can often bee seen by others as flamboyance or
arrogance.
 7 Key Qualities of Entrepreneurs
3. Search for New Ideas and Innovation:
All entrepreneurs have a passionate desire to do things
better and to improve their products or service. They're
creative, innovative and resourceful.
4. Openness to Change:
Entrepreneurs know the importance of keeping on top of
their industry by evolving and change with the times.
They're up to date, and are always ready to change.
5. Competitive by Nature:
Successful entrepreneurs thrive on competition to reach
their goals and live up to their self imposed high
standards.
 7 Key Qualities of Entrepreneurs
6. Highly Motivated and Energetic:
Entrepreneurs are always on the move, full of energy
and highly motivated. They are driven to succeed and
have an abundance of self motivation.
7. Accepting of Constructive Criticism and Rejection:
Innovative entrepreneurs are often at the forefront of
their industry and hear the words "it can't be done”.
They readjust their path if the criticism is constructive
and useful to their overall plan, otherwise they will
simply disregard the comments as pessimism.
Ten Deadly Mistakes of Entrepreneurship

1. Management mistakes
2. Lack of experience
3. Poor financial control
4. Weak marketing efforts
5. Failure to develop a strategic plan
Ten Deadly Mistakes of Entrepreneurship

6. Uncontrolled growth
7. Poor location
8. Improper inventory control
9. Incorrect pricing
10.Inability to make the
“entrepreneurial transition”
 Entrepreneurship: Successfully Launching New
Ventures
Sixth Edition, Global Edition

Chapter 1
Introduction to
Entrepreneurship

Copyright © 2019 Pearson Education, Ltd. All Rights Reserved.

 Learning Objectives (1 of 2)

1.1 Describe entrepreneurship, corporate entrepreneurship, and

the characteristics of entrepreneurial firms.
1.2 Discuss three main reasons people decide to become
entrepreneurs.
1.3 Identify four main characteristics of successful
entrepreneurs.
1.4 Explain five common myths regarding entrepreneurship.
1.5 Describe three types of start-up firms.
 Learning Objectives (2 of 2)

1.6 Discuss the changing demographics of entrepreneurs in

the United States.
1.7 Discuss the positive effects of entrepreneurship and
entrepreneurial firms on economies and societies.
1.8 Explain the entrepreneurial process.
1.9 Learn how understanding entrepreneurship and the
entrepreneurial process can facilitate career success.
 Introduction to Entrepreneurship

There is tremendous interest in

entrepreneurship in the U.S.
and around the world.
• According to the 2015/2016 According to the 2010 GEM
study, 7.6% of Americans
GEM study, 11.9% of
are actively engaged in
Americans are actively starting a business or are
engaged in starting a the owner/manager of a
business or are the business that is less than
owner/manager of a three years old.
business that is less than
three years old.
 Indications of Increased Interest in
Entrepreneurship
• Books
– Amazon.com lists over 58,510 books dealing with
entrepreneurship and 80,686 focused on small business.
• College Courses
– In 1985, there were about 250 entrepreneurship
courses offered across all colleges in the United
States.
– Today (2012), more than 2,000 colleges and
universities in the United States (which is about
two-thirds of the total) offer at least one course in
entrepreneurship
 What Is Entrepreneurship?
• Academic Definition (Stevenson and Jarillo)
– Entrepreneurship is the process by which individuals pursue
opportunities without regard to resources they currently
control.
• Alternative View
– Entrepreneurship is the art of turning an idea into a business.
• Explanation of What Entrepreneurs Do
– Entrepreneurs assemble and then integrate all the resources
needed – the money, the people, the business model, the
strategy – to transform an invention or an idea into a viable
business.
 Corporate Entrepreneurship (1 of 2)
• Corporate Entrepreneurship
‒ Is the conceptualization of entrepreneurship at the firm
level.
‒ All firms fall along a conceptual continuum that ranges
from highly conservative to highly entrepreneurial.
‒ The position of a firm on this continuum is referred to as
its entrepreneurial intensity.
 Corporate Entrepreneurship (2 of 2)

Entrepreneurial Firms Conservative Firms

• Proactive • Take a more “wait and see”
• Innovative posture
• Risk taking • Less innovative
• Risk averse
 Why Become an Entrepreneur?
• The three primary reasons that people
become entrepreneurs and start their own
firms.

– Desire to be their own boss

– Desire to pursue their own ideas

– Financial rewards
Characteristics of Successful Entrepreneurs
(1 of 3)

Figure 1.1 Four Primary Characteristics of Successful Entrepreneurs

Characteristics of Successful Entrepreneurs
(2 of 3)

• Passion for the Business

– The number one characteristic shared by successful
entrepreneurs is a passion for the business.
– This passion typically stems from the entrepreneur’s belief that
the business will positively influence people’s lives.
• Product/Customer Focus
– A second defining characteristic of successful entrepreneurs is a
product/customer focus.
– An entrepreneur’s keen focus on products and customers
typically stems from the fact that most entrepreneurs are, at
heart, craftspeople.
Characteristics of Successful Entrepreneurs
(3 of 3)

• Tenacity Despite Failure

– Because entrepreneurs are typically trying something new,
the failure rate is naturally high.
– A defining characteristic for successful entrepreneurs is
their ability to persevere through setbacks and failures.
• Execution Intelligence
– The ability to fashion a solid business idea into a viable
business is a key characteristic of successful entrepreneurs.
 Common Myths About Entrepreneurs (1 of 7)

• Myth 1: Entrepreneurs Are Born, Not Made

– This myth is based on the mistaken belief that some people
are genetically predisposed to be entrepreneurs.
– The consensus of many studies is that no one is “born” to
be an entrepreneur; everyone has the potential to become
one.
– Whether someone does or doesn’t become an
entrepreneur is a function of their environment, life
experiences, and personal choices.
 Common Myths About Entrepreneurs (2 of 7)

Although no one is “born” to be an entrepreneur, there are common

traits and characteristics of successful entrepreneurs
• A moderate risk taker • Optimistic disposition
• Persuasive • A networker
• Promoter • Achievement motivated
• Resource assembler/leverager • Alert to opportunities
• Creative • Self-confident
• Self-starter • Decisive
• Tenacious • Energetic
• Tolerant of ambiguity • A strong work ethic
• Visionary • Lengthy attention span
 Common Myths About Entrepreneurs (3 of 7)

• Myth 2: Entrepreneurs Are Gamblers

– Most entrepreneurs are moderate risk takers.
– The idea that entrepreneurs are gamblers originates from
two sources:
• Entrepreneurs typically have jobs that are less
structured, and so they face a more uncertain set of
possibilities than people in traditional jobs.
• Many entrepreneurs have a strong need to achieve
and set challenging goals, a behavior that is often
equated with risk taking.
 Common Myths About Entrepreneurs (4 of 7)

• Myth 3: Entrepreneurs Are Motivated Primarily by Money

– While it is naïve to think that entrepreneurs don’t seek
financial rewards, money is rarely the reason
entrepreneurs start new firms.
– In fact, some entrepreneurs warn that the pursuit of
money can be distracting.
 Common Myths About Entrepreneurs (5 of 7)

• Myth 4: Entrepreneurs Should Be Young and Energetic

– Entrepreneurial activity is fairly evenly spread out over
age ranges.
– While it is important to be energetic, investors often cite
the strength of the entrepreneur as their most important
criterion in making investment decisions.
• What makes an entrepreneur “strong” in the eyes of
an investor is experience, maturity, a solid reputation,
and a track record of success.
• These criteria favor older rather than younger
entrepreneurs.
 Common Myths About Entrepreneurs (6 of 7)

Table 1.4 Age Distribution of Business Owners

Age Percentage of Business Owners

20-34 24.7
35-44 22.9
45-54 26.6
55-64 25.8

Source: R. W. Fairlie, A. Morelix, E.J. Reedy, and J. Russell, 2015 The Kauffman Index of
Startup Activity: National Trends.
 Common Myths About Entrepreneurs (7 of 7)

• Myth 5: Entrepreneurs Love the Spotlight

– While some entrepreneurs are flamboyant, the vast
majority of them do not attract public attention.
– As evidence of this, consider the following question: “How
many entrepreneurs could you name?”
• Most of us could come up with Jeff Bezos of
Amazon.com, Mark Zuckerberg of Facebook, Larry Page
and Sergey Brin of Google or maybe Elon Musk of Tesla
and SpaceX.
• But few could name the founders of Netflix, YouTube,
or DIRECTV, even though we frequently use those firms’
services.
Figure 1.2 Types of Start-Up Firms
 Changing Demographics
of Entrepreneurs (1 of 5)
• Women Entrepreneurs
– While men are more likely to start businesses than
women, the number of women-owned businesses is
increasing.
– According to a study commissioned by American Express
OPEN, as of 2016, there were 11.3 million women-owned
businesses in the United States.
– Over the past nine years, the number of women-owned
businesses has grown at a rate five times faster than the
national average.
 Changing Demographics
of Entrepreneurs (2 of 5)
• Minority Entrepreneurs
– There has been a substantial increase in minority
entrepreneurs in the United States.
– According to recent estimates, there are eight million
minority-owned firms in the United States—a 38 percent
increase since 2007.
– An important factor facilitating the growth of minority
entrepreneurs is the number of organizations that promote
and provide assistance.
• Examples include the Latin Business Association, the
Black Business Association, and The National Center for
American Indian Enterprise Development.
 Changing Demographics
of Entrepreneurs (3 of 5)
• Senior Entrepreneurs
– The numbers of seniors starting businesses is substantial
and growing.
– The percentage of individuals age 62 and older starting a
business increased from 4.2 percent in 1988 to 5.4
percent in 2015.
– Many people in the 60 and older age range have
substantial business experience, financial resources, and
excellent vigor and health.
• This makes them excellent candidates to start
businesses in many industries.
 Changing Demographics
of Entrepreneurs (4 of 5)
• Millennial Entrepreneurs
– A desire to pursue an entrepreneurial career is high
among millennials.
– Despite this desire, in 2013 only 3.6 percent of all
businesses in the United States were owned by someone
under the age of 30.
– A 2016 study by EY and EIG found that the biggest
obstacles preventing millennials from starting businesses
are lack of finances, lack of desire, fear of failure, and
lack of knowledge of the business start-up process.
 Changing Demographics
of Entrepreneurs (5 of 5)
• Millennial Entrepreneurs (continued)
– There are many factors at work to encourage millennials
to consider entrepreneurship as a career.
– More than 2,300 colleges and universities in the United
States offer at lease one course in entrepreneurship.
– A number of organizations have been established to
encourage college students to consider becoming
entrepreneurs.
• These include 3-Day Startup, Dorm Room Fund, CEO
(Collegiate Entrepreneurs’ Organization), Startup
Weekend, and VentureWell.
Economic Impact of Entrepreneurial Firms
• Innovation
– Is the process of creating something new, which is central to
the entrepreneurial process.
– Small innovative firms are 16 times more productive than
larger innovative firms in terms of patents per employee.
• Job Creation
– Small businesses create a substantial number of net new
jobs in the United States.
– Firms with 500 or fewer employees created two million of
the roughly three million private sector jobs in 2014.
 Entrepreneurial Firms’ Impact on Society
and Larger Firms
• Impact on Society
– The innovations of entrepreneurial firms have a dramatic
impact on society.
– Think of all the new products and services that make our
lives easier, enhance our productivity at work, improve our
health, and entertain us.
• Impact on Larger Firms
– Many entrepreneurial firms have built their entire business
models around producing products and services that help
larger firms become more efficient and effective.
 The Entrepreneurial Process

The Entrepreneurial Process Consists of Four Steps

Step 1: Deciding to become an entrepreneur.
Step 2: Developing successful business ideas.
Step 3: Moving from an idea to an entrepreneurial firm.
Step 4: Managing and growing the entrepreneurial firm.
Steps in the Entrepreneurial Process (1 of 2)

Step 1 Step 2
Developing Successful Business Ideas
Steps in the Entrepreneurial Process (2 of 2)
Step 3 Step 4