Download - Chapter 1.1 - Entrepreneurship Overview
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Entrepreneurship
Overview
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Definition
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Word Entrepreneur is derived from the
French word entreprende, which meansto undertake.
Webster dictionary explains that the termentrepreneur is applicable to one whoorganizes, manages and assumes the
risks of a business or enterprise.
This Irish economist Richard Cantillion(1680-1734) defined an entrepreneur assomeone who takes the risk of runningan enterprise by paying a certain price
for securing and using resources tomake a product and reselling theproduct for an uncertain price.
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Drivers of Change
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Democracy Web Browsing
Work-Flow Software
Open Sourcing
Outsourcing
Off-Shoring
Supply Chaining
In-Sourcing Informing
Wi-Fi, VOIP
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Entrepreneurship - Innovation
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The term innovation derivesfrom the Latin innovatio.
The central meaning ofinnovation thus relates torenewal or improvement, with
novelty being a consequenceof this improvement.
On a lower level, innovationcan be seen as a change in
the thought process for doingsomething, or the usefulapplication of inventions ordiscoveries
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Definition
Technological innovations are defined as new productsand processes and major technological modifications toproducts and processes. An innovation is consideredperformed if it is introduced to the market (productinnovation) or implemented in the production process
(process innovation). Innovation includes manyresearch, technological, organizational, financial andcommercial activities.
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Source of Innovation
Innovationbegins with the generation of new ideas.The ability to generate new and useful ideas istermed creativity.
Creativity is defined as the ability to produce work that isuseful and novel.
Novel work must be different from work that has been previouslyproduced and surprising in that this it is not simply the nextlogical step in a series of known solutions
Creativity
Ideas
Innovation
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Reasons For Growth Of Entrepreneurship
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Industry Structure
Technology Innovation Privatization
Formation of New Business Communities (Priceline, Alibaba,Snapdeal etc.)
Increasing Demand for Variety
Services Sector Govt. Incentives and Subsidies
Increasing Flow of Information
Easier Access to Resources
Entrepreneurial Education
Return on Innovation IPR Protection Entrepreneur as a Hero
High Regards for Self-Employment
Rising Dissatisfaction at Job
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Running Your Own Business Pros and
Cons
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Pros: You are the boss All profits are yours Multi-Tasking Exposure Increases Self-Confidence Satisfaction from Success, Innovation, Growth
Cons: Single Headed All success and failures are yours Dissatisfaction Work-Life Balance Failure adds to lower Self-Esteem Exiting is not an easy
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Entrepreneur - Characteristics
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Commitment andDetermination
Leadership
Opportunity Obsession
Tolerance of risk, ambiguityand uncertainty
Creativity, self-reliance andability to adapt
Motivation to excel
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Entrepreneur Skills
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Creativity and Opportunity Evaluation
Real-Time Strategy and Decision Making Comfort with change and chaos
Teamwork
Selling, Negotiation and Motivation through influence and persuasion
Oral and Written communication
Basics of start-up finance, accounting and law Attitudinal adjustments:
Comfortable with lifestyle changes Willingness to break, bend, stretch
Patience to start from the scratch
Prepared to make rivals Comfortable with confrontations
Dealing with failure
Willingness to learn
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Types of Entrepreneurs
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Early Starters individuals with little or no-work experience Experienced Associated with family businesses Mature Worked in the corporate and left their jobs at CXOs
level and starting their venture Socio-Cultural Variables
First Generation Entrepreneurs With no past business
experience Entrepreneurs from business families Minority Entrepreneurs Small ethnic groups that have
traditionally not ventured into business Women Entrepreneurs
Serial Entrepreneurs Devoted time to one venture but ultimatelylands up starting many. Once the business is established they loseinterest and think of selling and moving on
Portfolio Entrepreneur Starts and runs number of businesses
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GEM Report 2010
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GEM Methodology
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Starting with just 10 developed countries in 1999, GEMhas grown to include over 80 economies during thecourse of these 12 years. In 2010, over 175,000 peoplewere surveyed in 59 economies. These 59 economiesrepresent not only the largest sample yet, but also the
most geographically and economically diverse groupsurveyed.
The 2010 survey shows that, in the economies analyzed,some 110 million people between 18 and 64 years oldwere actively engaged in starting a business. Another
140 million were running new businesses they startedless than 3 years earlier. Taken together, some 250million were involved in what GEM defines as early-stageentrepreneurial activity.
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Age Distribution of Entrepreneurs by
Geographic region
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A. M. Murugappa Chettiar, founder of the Murugappa Group
Aditya Jha, Canadian entrepreneur, philanthropist and philosopher; Active in Canadian public affairsAnant Koppar, founder, and former president, of Kshema TechnologiesAnant Tripathi, founder, and CEO, of Maffick Consultancy Services (www.maffickcs.com)Brijmohan Lall Munjal (1923- ), founder of The Hero Group, which owns Hero MotorsCapt. G. R. Gopinath, founder of Air Deccan, vice-chairman of Kingfisher RedDhirubhai Ambani (19332002), founder of Reliance IndustriesG. Kuppuswamy Naidu, founder of Lakshmi MillsGhanshyam Das Birla (18941983), prominent member of the Birla familyJ. C. Mahindra, co-founder of the Mahindra GroupJ.R.D. Tata, founder of Air India and Chairman of the Tata Group for 52 years.
Jamsetji Tata (18391904), pioneering Indian industrialist, founder of the Tata Group of companiesK. C. Mahindra, co-founder of the Mahindra GroupKarsanbhai Patel (1945- ), founder of the Nirma GroupKasturbhai Lalbhai (18941980), textile baron, founder of Arvind MillsKiran Mazumdar-Shaw (1953- ), founder of Biocon, the first biotechnology company in IndiaN. R. Narayana Murthy (1946- ), co-founder of Infosys TechnologiesRaj Anand (1982-), founder of the Kwiqq and winner of Business Week Europe's Young Entrepreneur 2007Ramji Raghavan (1958- ), Social Entrepreneur, founder of Agastya International FoundationSabeer Bhatia (1968- ), co-founder of Hotmail
Sam Pitroda (1942- ), inventor, entrepreneur, policymakerSubhash Chandra (1950- ), chairman of the Essel Group, launched Zee TV, the first Hindi satellite television channelSuhas Gopinath (1986- ), notable for founding Globals Inc., an Information Technology (IT) company, at age 14Sunil Mittal (1957- ), chairman and managing director of Bharti EnterprisesT. V. Sundaram Iyengar (18771955), founder of the TVS GroupVenkat Rangan, Founder of Yodlee.com and Vice Chancellor of Amrita UniversityVijay Mallya (b. 1955), chairman of the United Breweries Group and Kingfisher Airlines, member of the upper house of the IndianParliament, and owner of several sports franchises and teams {Bangalore Royal Challengers}Vishal Gondal (b. 1976), founder of IndiagamesVivin Varghese Meleadan (b. 1988), co-founder of MVS Info Tech
Top Indian Entrepreneurs (Source-
Wikipedia)
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Entrepreneurial Failure
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Lack of Experienced Management Less Domain Knowledge Lesser Trained and Experienced Manpower Poor Financial Management Rapid Growth
Lack of Business Linkages Weak Marketing Efforts Lack of Information Incorrect Pricing
Lack of Control on Inventory Poor Monitoring Controls Organization Culture Short Term Outlook
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Businesses Founded Vs. Alive
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Proposed chart is from
the book Illusions ofEntrepreneurship: TheCostly Myths thatEntrepreneurs,Investors, and Policy
Makers Live By. Thedata come from aspecial tabulation by theBureau of the Censusproduced for the Office
of Advocacy of the U.S.Small BusinessAdministration.
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Failure Stastitics
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Instead, 67% of new ventures are successful after fouryears, says a study that contradicts the widely held beliefthat 90% of start-ups fail in year one.
The study of 12,185 companies found that 17% werewrongly considered failures because they had closed.Instead, owners deemed them successful, and closedthem after retiring or selling
He says many would-be entrepreneurs are scared by the
90% failure number, and that the new research couldencourage would-be entrepreneurs at a critical time.
Entrepreneurship, which leads to the small businessesthat create most new jobs, is hitting speed bumps. Theshare of all U.S. Workers who are self employed hit 50-year lows during much of last year.
Venture capitalists have cut investments in start-ups
since the technology bust and the stock market's swoon.Ventures most likely to survive begin with: v More than$50,000 in capital. Many companies fail becausefounders don't start with enough to cover expenses whilethey build revenue.
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Discussion ? Next Class
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Discussion?
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