INNOVATION, STARTUP &

ENTREPRENEURSHIP
Entrepreneurship: Concept and
Definitions
❑ An Economist defines an entrepreneur as one who brings resources,
labour, material and other assets in to combinations that make their value
greater than before and also one who introduces changes, innovations and
a new order.
❑ A Psychologist defines an entrepreneur as a person who is typically driven
by a psychological force, which create a desire to obtain or attain
something.
❑ As per sociologist a person whose actions would determine social status &
contribute to societal dev.
❑ As per Management expert a person who has a vision and generates
action plan to achieve it.

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Entrepreneurship: Concept and
Definitions
❑ Entrepreneurship is the act of being an entrepreneur.
❑ French word ‘Entrependre’ and German word ‘uternehmen’ both referring
to individuals who undertakes an ‘endeavor’.
❑ Hence, anyone who exhibits the characteristics of self-development,
creativity, self-decision making and risk taking.
❑ According to oxford dictionary Entrepreneur is ‘one who organizes and
manages enterprise involving high risk’. But researches indicates that
entrepreneurs need not necessarily be high risk takers, however, they
reduce risk and increase likelihood of success.

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CONCEPT OF ENTREPRENEURSHIP
 CONCEPT OF ENTREPRENEURSHIP
ENTREPRENEUR is a person
who:
❑ Develops and owns his own enterprise.
❑ Is a moderate risk taker and works
under uncertainty for achieving the goal.
❑ Is innovative.
CONCEPT OF ENTREPRENEURSHIP

ENTREPRENEUR is a person who:

❑Is a persuader of deviant pursuits.
❑Reflects a strong urge to be independent.
❑Persistently tries to do something better.
CONCEPT OF ENTREPRENEURSHIP
ENTREPRENEUR is a person
who:
❑Is dissatisfied with routine activities.
❑Is prepared to withstand the hard life.
❑Is determined, but patient.
❑Is oriented towards the future.
CONCEPT OF ENTREPRENEURSHIP
ENTREPRENEUR is a person who:
❑Exhibits a sense of leadership.
❑Exhibits a sense of competitiveness.
❑Takes personal responsibility.
❑Tends to persist in the face of adversity
Characteristics of Entrepreneur
🞂 Need for achievement
🞂 Desire for independence or autonomy
🞂 Innovative ideas
🞂 Risk-taking
🞂 Self-confidence
🞂 Future oriented & optimistic
🞂 Energetic activity
🞂 Organizing capacity
🞂 Decision making
🞂 Persistence
🞂 Perseverance
🞂 Ability to find and explore opportunities
🞂 Confronting uncertainty
🞂 Communication skills
🞂 Ability to mobilize resources
🞂 Business planning
🞂 Interpersonal skills
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WHY WE NEED
ENTREPRENEURSHIP
⮚Balanced regional development

⮚Provides innovation

⮚Increases national production/output

⮚Export promotion/Import Substitution

⮚Inflow of foreign capital

WHY WE NEED
ENTREPRENEURSHIP
⮚Capital formation

⮚Increased profits

⮚Dispersal of economic power

⮚Mobilization of local resources

⮚Employment opportunities
 DISTINCTION BETWEEN AN ENTREPRENEUR AND A MANAGER

Point for Entrepreneur Manager

Distinction
Goal An entrepreneur starts a venture But the main aim of a manager is
Management by setting up a new enterprise for to render his service in an
his personal gratification Enterprise already set up by
someone.
Status Entrepreneur is the owner of A manager is the servant in the
Enterprise. Enterprise.
Risk An entrepreneur bears all risks A manager being a servant does
and uncertainty involved in the not bear any risk involved in the
Enterprise. Enterprise
Rewards Entrepreneur for his risk bearing A manager receives salary as
role he receives profits. It is not reward for service rendered which
only uncertain and irregular but is fixed and regular can never be
can at times be negative negative
Innovation As an innovator he is called as A manager executes the plans of
change agent who introduces the entrepreneur. Thus a
goods and services to meet manager translates ideas into
changing needs of the customer. practice
Factors affecting Entrepreneurial
growth
2. SOCIAL FACTORS
A society that is rational in decision making would be favorable for decision making.
Education, research and training is given less importance in less developed countries
therefore there is very little vertical mobility of labor.
3. CULTURAL FACTORS
Religious, social and cultural factors also influence the individual taking up an
entrepreneurial career, in some countries there is religious and cultural belief that high
profit is unethical. This type of belief inhibits growth of entrepreneurship.
4. PERSONALITY FACTORS
In less developed countries the entrepreneur is looked upon with suspicion. Public
opinion in the less developed nations sees in the entrepreneur only a profit maker and
exploited.

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Factors affecting Entrepreneurial
growth
5. MOTIVATING FACTORS
Motivation is the act of stimulating someone or oneself to get a desired course of action,
to push the right button to get the desired results. Some of these are:
1.Education background
2.Occupational experience
3.Family background
4.Desire to work independently in manufacturing line
5.Assistance from financial institution
6.Availability of technology
7.Other factors

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Traits/qualities of an entrepreneur
John Hornday of Bobson College has developed a composite list of
entrepreneurial traits:
1. Self Confidence and optimism
2. Positive response to challenges
3. Ability to take calculated risk
4. Flexibility and ability to adapt
5. Knowledge of markets
6. Ability to get along with others better
7. Independent mindedness
8. Versatile knowledge
9. Energy and efficiency
10. Creativity, need to achieve
11. Dynamic leadership
12. Response to suggestions

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Traits/qualities of an entrepreneur
John Hornday of Bobson College has developed a composite list of
entrepreneurial traits:
13. Take initiatives
14. Resourceful and persevering
15. Perceptive and foresight
16. Response to criticism

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Entrepreneurial opportunity search &
identification
🞂 Opportunity identification is central to entrepreneurship and
involves:
◦ The creative pursuit of ideas
◦ The innovation process
🞂 The first step for any entrepreneur is the identification of a
“good idea.”
◦ The search for good ideas is never easy.
◦ Opportunity recognition can lead to both personal and societal wealth.

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Entrepreneurial opportunity search &
identification
🞂 How entrepreneurs do what they do:
◦ Creative thinking + systematic analysis = success
◦ Seek out unique opportunities to fill needs and wants
◦ Turn problems into opportunities
◦ Recognize that problems are to solutions what demand is to supply
Ideas are not the same as opportunities
Ideas Opportunities
Last for ever are perishable
Are free require work

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Entrepreneurial opportunity search &
identification
What is an opportunity??
🞂 An idea that is timely, attractive, durable anchored in a
product or service that creates or adds value for its buyer and
user.
⦿ An opportunity is a favorable set of circumstances that creates
the need for a new product, service, or business idea.
⦿ An idea, as we defined it, is “Something imagined or pictured
in the mind”. The difference is that an idea may or may not
represent an opportunity.

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Entrepreneurial opportunity search &
identification
🞂 An opportunity as four essential qualities

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Entrepreneurial opportunity search &
identification
🞂 Window of Opportunity
⦿ The term “window of opportunity” is a metaphor describing
the time period in which a firm can realistically enter a new
market.
⦿ Once the market for a new product is established, its window
of opportunity opens, and new entrants flow in.
⦿ At some point, the market matures, and the window of
opportunity (for new entrants) closes.

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Entrepreneurial opportunity search &
identification
🞂 Three Ways to Identify An Opportunity:
🞂 1. Observing Trends
⦿ The first approach to identifying opportunities is to observe
trends and study how they create opportunities for
entrepreneurs to pursue.
⦿ There are two ways that entrepreneurs can get a handle on
changing environmental trends:
⦿ They can carefully study and observe them.
⦿ They can purchase customized forecasts and market analyses
from independent research firms.

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Entrepreneurial opportunity search &
identification
🞂 Environmental Trends Suggesting Business or Product
Opportunity Gaps:

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Entrepreneurial opportunity search &
identification
🞂 Economic Forces
⦿ Economic forces affect consumers’ level of disposable income.
⦿ When studying how economic forces affect opportunities, it is important to
evaluate who has money to spend and who is trying to cut costs.
⦿ An increase in the number of women in the workforce and their related
increase in disposable income is largely responsible for the number of
boutique clothing stores targeting professional women that have
opened in the past several years.
⦿ Many large firms are trying to cut costs. Entrepreneurs have taken
advantage of this trend by starting firms that help other firms control
costs.

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Entrepreneurial opportunity search &
identification
🞂 Social Forces
⦿ Changes in social trends provide openings for new businesses on an
ongoing basis.
⦿ The continual proliferation of fast-food restaurants, for example, isn’t
happening because people love fast food. It is happening because people
are busy, and have disposable income.
⦿ Similarly, the Sony Walkman was developed not because consumers
wanted smaller radios but because people wanted to listen to music while
on the go.

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Entrepreneurial opportunity search &
identification
🞂 Technological Advances
⦿ Given the rapid pace of technological change, it is vital that entrepreneurs
keep on top of how new technologies affect current and future business
opportunities.
⦿ Entire industries have emerged as the result of technological advances.
⦿ Examples include the computer industry, the Internet, biotechnology,
and digital photography.
⦿ Once a new technology is created, new businesses form to take the
technology to a higher level.
⦿ For example, RealNetworks was started to add audio capability to the
Internet.

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Entrepreneurial opportunity search &
identification
🞂 Political and Regulatory Changes
⦿ Political and regulatory changes provide the basis for new business
opportunities.
⦿ For example, laws that protect the environment have created
opportunities for entrepreneurs to start firms that help other firms
comply with environmental laws and regulations.
⦿ Similarly, many entrepreneurial firms have been started to help
companies comply with the Sarbanes-Oxley Act of 2002. The act
requires certain companies to keep all their records, including e-
mail messages and electronic documents, for at least five years.

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Entrepreneurial opportunity search &
identification
2. Solving a problem

These problems can be

Sometimes identifying
pinpointed through
opportunities simply
Observing trends and
involves noticing a problem
through more simple means,
and finding a way to
such as intuition,
solve it.
serendipity, or chance.

For example, Symantec

Some business ideas are
Corp. created Norton
Clearly initiated to solve a
Antivirus software to guard
problem.
Computers against viruses.

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Entrepreneurial opportunity search &
identification
3. Finding gaps in the market place
⦿ A third approach to identifying opportunities is to find a gap in the
marketplace.
⦿ A gap in the marketplace is often created when a product or service is
needed by a specific group of people but doesn’t represent a large enough
market to be of interest to mainstream retailers or manufacturers.
⦿ This is the reason that small clothing boutiques and specialty shops
exist.
⦿ The small boutiques, which often sell designer clothes or clothing for
hard-to-fit people, are willing to carry merchandise that doesn’t sell in
large enough quantities for Wal-Mart, GAP, or JC Penney to carry.

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Criteria to select a product

🞂 Undertaking a business venture is a big investment requiring

adequate planning. Just as investment opportunities are many
and diverse, products or services options for an entrepreneur
are uncountable. However, the selection of required product
or service is the first step towards success.
🞂 product is anything that can be offered to a marketer
for acquisition, use or consumption.
🞂 products provide the business with the most important and
visible contact with buyers i.e. consumers. Products to the
consumers represent psychological symbols of personal
attributes, goal and social patterns

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Criteria to select a product

🞂 In selecting product for a business venture, the following factors must be

taken into consideration:
🞂 Supply-gap: The size of the unsatisfied market demand which
constitute a source of business opportunity will dictate, to a great extent
the need to select a particular product. The product with the highest
chances of success as reflected in its demand will be selected. In essence,
there must be existing obvious demand for the selected product.
🞂 Fund: The size of the funds that can be mobilized is another important
factor. Adequate fund is needed to develop, produce, promote, sell and
distribute the product selected.

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Criteria to select a product

🞂 Availability of and Access to Raw Materials: Different

products require different raw materials. The source quality and quantity
of the raw materials needed are factors to be seriously considered, Are the
raw materials available in sufficient quantities? Where are the sources of
raw materials located? Are they accessible? Could they be sources locally
or imported? Satisfactory answers should be provided to these and many
other relevant questions.
🞂 Technical Implications: The production process for the product
needs to be considered. There is need to know the technical implications
of the selected product on the existing production line, available
technology and even the labour force. The choice of a particular product
may require either acquisition of the machineries or refurbishing of the old
ones. The product itself must be technically satisfactory and acceptable to
the user.

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Criteria to select a product

🞂 Profitability/Marketability: Most often, the product

that has the highest profit potential is often selected.
However, a product may be selected on the basis of its ability
to utilize idle capacity or complement the sale of the existing
products. The product must be marketable.
🞂 Availability of Qualified Personnel: Qualified
personnel to handle the production and marketing of the
product must he available. The cost of producing the product
must be kept to the minimum by reducing wastages. This is
achievable through competent hands.

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Criteria to select a product

🞂 Government Policies: This is quite often an

uncontrollable factor. The focuses of government policies can
significantly influence the selection of product. For instance, a
package of incentives from government for a product
with 100% local input contents can change the direction of
the business’s R & D and hence the product selected.
🞂 Government objectives: The contributions of the
product to the realization of the company’s short and long
range objectives must be considered before selection. For
instance, the company goal maybe the achievement of sale
growth, sales stability or enhancement of the company’s
social value.
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Closing Thoughts
“I have not failed. I have
just found 10,000 ways
that won’t work.” Thomas
Edison