What is Entrepreneurship?What is Entrepreneurship?

Mark T. Schenkel, Ph.D.Mark T. Schenkel, Ph.D.

AgendaAgenda

What is Entrepreneurship?What is Entrepreneurship?– Historical developmentHistorical development– DefinitionDefinition– MythsMyths– ProcessProcess– Career PathsCareer Paths

The Entrepreneurial The Entrepreneurial RevolutionRevolution

“We are in the midst of a silent revolution – a triumph of the creative and entrepreneurial spirit of humankind throughout the world.”

“I believe its impact on the 21st century will equal or exceed that of the Industrial Revolution on the 19th and 20th.”

“The death knell for brontosaurus capitalism of yesteryear.”

-- Jeffry A. Timmons (The Entrepreneurial Mind, 1989)

Development of EntrepreneurshipDevelopment of EntrepreneurshipEarliest Period- Marco PoloEarliest Period- Marco PoloMiddle Ages- Theater, Middle Ages- Theater, Architectural WorksArchitectural Works1717thth Century- Mississippi Century- Mississippi CompanyCompany1818thth Century- Edison & Century- Edison & WhitneyWhitney1919thth & 20 & 20thth Centuries Centuries– Organize/OperateOrganize/Operate– InnovationInnovation

The OpportunityThe OpportunityStatisticsStatistics– A random national sample (Gallup poll survey, 1994) of high A random national sample (Gallup poll survey, 1994) of high

school students reveals that 70% of these students say they school students reveals that 70% of these students say they want to own their own business some day (Timmons, 2004: 7) want to own their own business some day (Timmons, 2004: 7)

– Annual Annual ChronicleChronicle survey: 40% of incoming students have survey: 40% of incoming students have entrepreneurship as major goal for why they are going to entrepreneurship as major goal for why they are going to collegecollege

– Fortune 500 employment decline: 1970 (20%) – 1996 (8.5%)Fortune 500 employment decline: 1970 (20%) – 1996 (8.5%)– Small firms constitute more than 90 percent of the entire Small firms constitute more than 90 percent of the entire

business population business population

Virtually of USA’s economic growth is coming Virtually of USA’s economic growth is coming from entrepreneurial ventures of all sizes and from entrepreneurial ventures of all sizes and typestypesNot yet tainted by corporate way of lifeNot yet tainted by corporate way of lifeGood time to take risk!!!Good time to take risk!!!

EntrepreneurshipEntrepreneurshipA process, not a type of personA process, not a type of personCreating and/or building something of valueCreating and/or building something of valueIdentifying an opportunityIdentifying an opportunityPulling together the needed resources to Pulling together the needed resources to pursue the opportunitypursue the opportunityDeveloping and implementing a Business Developing and implementing a Business PlanPlanInvolves uncertainty and the acceptance of Involves uncertainty and the acceptance of riskrisk

The Nature of The Nature of Entrepreneurial RiskEntrepreneurial Risk

Failure – Failure –

““Sinking the Boat Risk”Sinking the Boat Risk”

Opportunity Cost – Opportunity Cost –

““Missing the Boat Risk”Missing the Boat Risk”

Myths aboutMyths aboutEntrepreneurshipEntrepreneurship

The Lone Cowboy Myth.The Lone Cowboy Myth.

The Experience Myth.The Experience Myth.

The I’m Only in it for the Money The I’m Only in it for the Money Myth. Myth.

The Entrepreneurs are Gamblers The Entrepreneurs are Gamblers Myth.Myth.

Myths aboutMyths aboutEntrepreneurshipEntrepreneurship

The Entrepreneurs Don’t Have to The Entrepreneurs Don’t Have to Worry about Numbers Myth.Worry about Numbers Myth.

The All You Need is Money Myth.The All You Need is Money Myth.

The I’ve Got a Secret Myth.The I’ve Got a Secret Myth.

The IPO Myth.The IPO Myth.

Other Opportunities for Learning Other Opportunities for Learning

Curb event center retail spaceCurb event center retail space

HatcheryHatchery

Practicing entrepreneurs activitiesPracticing entrepreneurs activities

Entrepreneurship clubEntrepreneurship club

InternshipsInternships

MentorsMentors

Networking!!!Networking!!!

The Entrepreneurial ProcessThe Entrepreneurial Process

Working Definition of Working Definition of EntrepreneurshipEntrepreneurship

““Entrepreneurship is a way of Entrepreneurship is a way of thinking, reasoning and acting that thinking, reasoning and acting that is opportunity obsessed, is opportunity obsessed, holistic in holistic in approachapproach [[emphasis addedemphasis added]], and , and leadership balanced” (Timmons, leadership balanced” (Timmons, 1999: 27).1999: 27).

The Entrepreneurial Process The Entrepreneurial Process (Timmons, 2000)(Timmons, 2000)

Opportunity Resources

Team

Communication

Business PlanFits and Gaps

Creativity Leadership

Capital Market ForcesUncertainty

Ambiguity Exogenous Forces

Founder

Analysis

StrategyFormulation

Eval., Review,& Feedback

Implementation

The Entrepreneurial ProcessThe Entrepreneurial Process

The Entrepreneurial ProcessThe Entrepreneurial Process

StrategyLuck

Planning

Three Part Process

Life Cycle of a Business Venture

Pre-Launch Process: Pre-Launch Process: Idea GenerationIdea Generation

Understanding the Genesis of New Understanding the Genesis of New Businesses in the EconomyBusinesses in the Economy

Sources of Ideas: Where to LookSources of Ideas: Where to Look

The Entrepreneurial ProcessThe Entrepreneurial Process

Challenge Traditional Definitions of ValueChallenge Traditional Definitions of Value

Entrepreneurship thrives on market Entrepreneurship thrives on market inefficienciesinefficiencies

Customers seek improvement in the Customers seek improvement in the following:following:– SpeedSpeed

– ConvenienceConvenience

– PersonalizationPersonalization

– PricePrice

Pre-Launch Process: Pre-Launch Process: Evaluating Ideas GenerationEvaluating Ideas Generation

Does Does the Ideathe Idea = = an Opportunityan Opportunity??– MarketMarket– MarginMargin– MissionMission

The Right Team?The Right Team?

The Necessary Resources?The Necessary Resources?

The Start-up ProcessThe Start-up Process

Filling the GapsFilling the Gaps

The Business PlanThe Business Plan– Executive SummaryExecutive Summary– Market Analysis and Marketing PlanMarket Analysis and Marketing Plan– Operating Plan and TeamOperating Plan and Team– Financial PlanFinancial Plan

Growing the BusinessGrowing the Business

CASH FLOW MANAGEMENTCASH FLOW MANAGEMENT

Building a CultureBuilding a Culture

MarketingMarketing

StaffingStaffing

Building Management & Administrative Building Management & Administrative SystemsSystems

Exit or SuccessionExit or Succession

Entrepreneurial CareersEntrepreneurial Careers

Do it now!Do it now!

Not necessarily a one shot dealNot necessarily a one shot deal

Sentry Position (in consulting firm or in Sentry Position (in consulting firm or in industry)industry)

Family or existing Small BusinessFamily or existing Small Business

Corporate TrackCorporate Track

Key Takeaway Points . . . Key Takeaway Points . . . No fully satisfactory definition of No fully satisfactory definition of entrepreneurship has been developed to date entrepreneurship has been developed to date (i.e., one that garners collective agreement (i.e., one that garners collective agreement among scholars & practitioners alike).among scholars & practitioners alike).

““Entrepreneurship” reflects creative, Entrepreneurship” reflects creative, innovative, and arbitrage oriented innovative, and arbitrage oriented behaviors.behaviors.

Is a Is a processprocess; involves planning, strategizing, ; involves planning, strategizing, and a little bit of luckand a little bit of luck..

Interconnectedness of resources and Interconnectedness of resources and opportunitiesopportunities

Key Takeaway Points . . . Key Takeaway Points . . .

Entrepreneurship can occur – and fail to occur Entrepreneurship can occur – and fail to occur – in firms that are old and new; small and – in firms that are old and new; small and large, fast and slow growing; in the private, large, fast and slow growing; in the private, not-for-profit, and public sectors; in all not-for-profit, and public sectors; in all geographic points; and in all stages of a geographic points; and in all stages of a nation’s development.nation’s development.