Lecture 1
Lecture 1
SAMIAH AHMED
FOURTH EDITION
OBJECTIVES OF THE
COURSE
After successfully completing this course , students will be able to:
1. Define what entrepreneurship is, and the many fields in which it can be
applied.
04 05
Explain the five common myths
Identify four main characteristics
regarding entrepreneurship.
of
successful entrepreneurs.
What Is Entrepreneurship?
The word entrepreneur derives from the French words entre, meaning
“between,” and prendre, meaning “to take.”
Originally used to describe people who take on risk between buyers and
sellers , or who “undertake” a task such as starting a new venture.
1. E.g Sam Hogg-, the cofounder of GiftZip.com, exemplifies all these qualities.
However, ongoing firms can also behave entrepreneurially.
Typically, established firms with an entrepreneurial behavior are
proactive, innovative, and risk-takers.
firms fall along a conceptual continuum that ranges from highly conservative
to highly entrepreneurial.
the founder and CEO of Virgin, describes how his company operates in
an entrepreneurial manner:
typically stems from the entrepreneur’s belief that the business will positively
influence people’s lives.
Making a difference in people’s lives is also the primary motivator behind many
social enterprises, which are often started by people who set aside promising careers
to pursue a social goal.E.g John Wood founded Room to Read based on the social goal.
none of any functions makes any difference if a firm does not have good
products with the capability to satisfy customers
Steven Jobs, the founder of Apple Inc., who wrote, “The computer is the most
remarkable tool we’ve ever built . . . but the most important thing is to get them
in the hands of as many people as possible.”
Product/Customer Focus
The computers also allowed users to navigate desktops using a small, wheeled device called a mouse.
Jobs decided to use these innovations to create the Macintosh, the first user-friendly computer.
Throughout the two and one-halfyears the Macintosh team developed this new product, it maintained an
intense product/customer focus, creating a high-quality computer that is easy to learn, is fun to use, and
meets the needs of a wide audience of potential users.
Tenacity Despite
Failure
Because entrepreneurs are typically trying something new, the failure rate
associated with their efforts is naturally high.
In a similar fashion, developing a new business idea may require a certain degree
of experimentation before a success is attained. Setbacks and failures inevitably
occur during this process.
Tenacity Despite
Failure
One of the examples of sheer tenacity is Kyle Smitley who found Barley and
Birch ,aimed to provide organic clothing for children in 2009. Received a
$10,000 credit from one of the micro finance orgnizations. - 500 hand signed
letters – approached mom bloggers
Eventually her products were being sold in 30 stores. – her critical milstone
Execution Intelligence
The ability to fashion a solid idea into a viable business is a key characteristic of
successful entrepreneurs.
This myth is based on the mistaken belief that some people are genetically predisposed to be
entrepreneurs.
This evidence can be interpreted as meaning that no one is “born” to be an entrepreneur and that
everyone has the potential to become one.
Whether someone does or doesn’t is a function of environment, life experiences, and personal choices
people who personally know an entrepreneur are more than twice as likely to be involved in
starting a new firm as those with no entrepreneur acquaintance or role models.
The positive impact of knowing an entrepreneur is explained by the fact that direct observation of
other entrepreneurs reduces the ambiguity and uncertainty associated with the entrepreneurial
process.
Myth 2: Entrepreneurs are Gamblers
A second myth about entrepreneurs is that they are gamblers and take big risks. The truth
is, entrepreneurs are usually moderate risk takers.
many entrepreneurs have a strong need to achieve and often set challenging goals, a behavior
that is sometimes equated with risk taking.
Myth 3: Entrepreneurs are motivated primarily by money.
Entrepreneurial activity is fairly evenly spread out over age ranges. According to an Indexof
Entrepreneurial Activity maintained by the Kauffman Foundation,
26 percent of entrepreneurs are ages 20 to 34, 25 percent are ages 35 to 44, 25 percent are ages 45
to 54, and 23 percent are ages 55 to 64. The biggest jump, by far, from 1996 to 2010, which is the
period the Kauffman date covers, is the 55 to 64 age bracket. A total of 14 percent of entrepreneurs
were 55 to 64 years old in 1996, compared to 23 percent in 2010.
Myth 5: Entrepreneurs love the spotlight.
Indeed, some entrepreneurs are flamboyant; however, the vast majority of them do not attract
public attention. In fact, many entrepreneurs, because they are working on proprietary products or
services, avoid public notice.
Changing
demographics
Over the past 10 years, the demographic makeup of entrepreneurial firms has changed in the United States
and around the world.
women, minorities, seniors, and young people own an increasingly larger number of them.
Women entrepreneur
While men are still more likely to start businesses than women, the number of women-owned businesses
has increased massively.
The top industry for women-owned business is retail (19 percent) followed by professional, management,
and educational services (16.3 percent).
The average women-owned firm has annual sales of $60,264 and annual profits of $14,549.
Oprah Winfrey is a beloved American icon and
billionaire reportedly worth $2.6 billion as of mid-
2022.
The biggest jump has come in Latino entrepreneurs, which increased from 11 percent to 23 percent from
1996 to 2010, followed by Asian entrepreneurs, which jumped from 4 percent to 6 percent during the same
period.
The Kauffman Foundation is one group that is actively engaged in research to not only track
the growth in minority entrepreneurs and to strengthen the infrastructures and networks to enable minority
entrepreneurs to reach higher levels of financial success.
Young Entrepreneurs
the number of young people interested in entrepreneurship remains strong.
Individual ages 8 to 21, 40 % said they’d like to start their own business someday. A total of 59 percent of the 8- to 21-
year-olds said they know someone who has started his or her own business.
Economic Impact of Entrepreneurial Firms
For two reasons, entrepreneurial behavior has a strong impact on an economy’s
strength and stability.
Innovation
Job Creation
Small businesses are the creators of most new jobs in the United States, and
employ more than half of all private sector employees
Entrepreneurial Firms’ Impact on Society
The innovations of entrepreneurial firms have a dramatic impact on a 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.
Amgen, an entrepreneurial firm that helped pioneer the biotechnology industry, has
produced a number of drugs that have dramatically improved people’s lives.
Another example , could be NEUPOGEN, a drug that decreases the incidence of infection in
cancer patients who are undergoing chemotherapy treatment.
In addition to improved health care, consider smart phones, social networks, Internet
shopping, overnight package delivery, and digital photography. All these products are new
to this generation, yet it’s hard to imagine our world without them.
Entrepreneurial Firms’ Impact on Larger Firms
In addition to the impact that entrepreneurial firms have on the economy and
society, they also have a positive impact on the effectiveness of larger
firms.
Thus, many exciting new products, such as smart phones, digital cameras, and
improved prescription drugs, are not solely the result of the efforts of
larger companies with strong brand names, such as Samsung, Canon, and Johnson
& Johnson.
Entrepreneurial Firms’ Impact on Larger Firms
The evidence shows that many entrepreneurial firms have built their entire
business models around producing products and services that help larger firms
be more efficient or effective.
Speak Like, a 2008 start-up, has created an online service that provides
real-time translation services for two or more people who speak different
languages.