exam 1 Entrepreneurship
minimize on COST
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