exam 1 Entrepreneurship

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Competition on price only

family experiences are an often overlooked source of skills for a new business

Family Does your family history include new business ventures?

Growth mindset

I can learn anything I want to, when I'm frusturated I persevere, I want to challenge myself, if you succeed I'm inspired

fixed mindset

I'm either good at it or I'm not, when I'm frustrated I give up, I don't like to be challenged, if you succeed I feel threatened

dead end

usually have yes/no or one word answers. and don't give your customer a chance to tell you anything meaningful

needs are

verb

concept statement- offering:

what you are offering to a particular customer segment, the value generated fro those customers, and how you will reach and communicate with them

in each job, individuals build skills that they take with them when they start a business

work experience In what businesses have you worked?

Pinnacle of Entrepreneurship (second industrial revolution 1865-1920)

small business innovations (telephone-Alexander Graham Bell; light bulb- Thomas Edison; first automatic dishwasher- Josephine Cochrane)

birth of knowledge economy

small businesses rose to fill the void of declining large businesses - production and manufacturing began to switching direction of a predominantly service and knowledge based economy

people typically associated _____ and ______ together

small, entrepreneurial businesses

entrepreneur will need to spend considerable time at what

the business for it to be successful

types of questions to avoid

too soon, leading, dead end, poor listeners, sales pitch, insulting

rise of Institutional America

- Great Depression was hard on small businesses - shift from small entrepreneurs to large companies- science-based innovation- by 1950s, big corporations took over American culture - but still innovations in technology, transportation, entertainment, and consumer electronics

*** WHAT IS AN ENTREPRENEURIAL IDEA

- generates value through unique, novel or variation on an existing theme" products, services, or processes not previously exploited - value requires a market populated with enough people willing to buy your product or service or implement the innovative process - an invention becomes an innovation only if it reaches the market

experience, history, culture, and family values

- help individuals interpret the world - place boundaries on what a decision maker will consider as he or she makes decisions - establish what people consider to be both possible and practical - referred to as individuals bounded rationality - often leading to pioneers unrestricted by the past

truths about entrepreneurship

- not reserved for startups - do not have a special set of personality traits - is a method that can be taught and requires practice - not extreme risk takers but be aware of your risk tolerance - collaborate more than they compete - act more than they plan - Is life skill

Entrepreneurship-center stage entrepreneurial firms

- self funded or closely funded - oriented around positive cash flow - structured to harness the skills of the founders - designed in the image of the founder - oriented toward the personal goals of the founders - may consist of zero employees or as few alone and not more than 100

entrepreneurship-main stage/ venture capital start-ups

- well funded by venture capital or angel investment - formed with a harvest plan in place - organized to grow quickly and are heavily laden with debt - have a developed organizational structure - hire an experienced president to grow the firm - tend to develop operations in multiple locations - inherently risky operations - employ a relatively large number of people

questions the potential entrepreneur should ask include

- what hobbies or activities do you pursue on an active perhaps family basis and over your lifetime? - what excites you about these hobbies or activities? - what products and services did you use?

4 fundamental questions

- where do I compete - what unique value do I bring - what resources/ capabilities do I have - how do I sustain value

The US government considers any business with fewer than ______ employees to be a small business

500

an entrepreneurial nation (first industrial revolution 1776-1865)

US constitution as launching pad for creative and innovation

concept statement- customer value proposition

a statement that describes exactly what products or services your business offers and sells to customers; involves deep understanding of what customer really wants or needs, not just how customer does things now

criteria for good opportunities

address the needs rooted in the insights, appeal to as many potential customers as possible

conduct

advertising, pricing behavior, research and development, plant investment, legal tactics, collusion, merger and contracts

managerial theory that suggests individuals act to maximize their own benefit ex. the individual who owns the business will always act to maximize the value of the business - the interest of the owner and that of the business are aligned

agency theory

too soon

asks a stranger for commitment or personal information before its appropriate in the conversation

sales pitch

asks your customer if they're interested in a product or service. you should eb learning about them, not pitching or selling

strong insights

connected to data, need leaves room for many types of solutions, explains why the need matters

defining your customers: entrepreneurs should

define a narrow group of individuals whose they believe will be their most likely customers - be diligent in the effort to be as accurate as possible - focus on its core customer - maintain a strategic distance from its competitors

(industry) entrepreneurs should

define their industry broadly enough to include all potential competitors, but not so broad as to be overwhelming - be clear about the practical level of actual competition - what is a resonable geographic customer draw for a new business

weak insights

disconnected from the data, the need is really a solution, why is not specific enough

greatest contributed to entrepreneurial success

doing something that he or she enjoys

opporutnies that use education, formal or informal, are another source of entrepreneurial ideas

education - what courses did you particularly enjoy?

small businesses may or may not be _________

entrepreneurial

specific areas for skill identification include

hobbies, education, work experience, family history

skills are _______ to the individual

idiosyncratic

someone may have a great business idea but...

if he or she lacks passion, they will not succeed

challenges for customers

lack of time, money, skills, access

emergence of the self-made man (colonial America before 1776)

land of opportunity

leading

makes assumptions about your customer that may be false .this can drag your own biases into the conversation

entrepreneurship is a

method, not a process - ill defined, unstructured, and complex - not linear and predictable - needs a body of skills to deal with creativity, uncertainty, unpredictability, and failure

resonating focus

move from focus on the product and focus on competition... focus on customer!

solutions are

nouns

structure

number of buyers and sellers; barriers to entry, product differentiation, vertical integration, diversification

insulting

offends your customer so much that they end their conversation with you

building approach

opportunities do not exist independent of entrepresenurs, but instead are a product of the mind

finding approach

opportunities exist independent of entrepreneurs and are waiting to be found

the mindset

play, create, experiment, empathize, reflect

focus on PRODUCT DIFFERENTIATION

price is given and competition on some other basis

performance

price, production efficiency, allocative (economic) efficiency, equity, product quality technical progress, profits

poor listener

shows that you clearly didn't listen to your customers earlier responses