Introduction to Entrepreneurship Test One Ent3003 Spring 2014 Entrepreneurship a mindset or way of thinking that is focused on opportunities innovation and growth oriented Entrepreneurs recognize opportunity gather resources to execute the opportunity and drive opportunity towards completion Entry into new or already established markets and about exploitation of new or existing goods and services Entrepreneurs must have intrinsic passion Entrepreneurs start something out of the adult population Generational Trends in Entrepreneurship 1960 s Big businesses were normal and companies had little to no competition form Japan and Europe 1970 s This was the stage of macroeconomic turmoil competition within nations and was marked by a lot of revolutionary technology 1980 s Heavy inflation due to Vietnam war very little job security due to the economy s standpoint introduction of smaller businesses into the market solo entrepreneurship 1990 s Known for the high tech era of entrepreneurship the age of information internet made way for more intense competition and advertising 2000 s dot com era interest in forms other than the internet began to disappear Tool use instead of physical labor low cost competition Characteristics of an Entrepreneur for a New Venture Entry Strategy Business model Concept Start up resources Risks and rewards Founding team Location Process The Environment for an Entrepreneur Markets Customers Competition Industry opinion leaders Real estate availability Laws and regulations Investment capital Professional service Providers Labor Supply Value chain partners Important Characteristics of Outcome Economic growth Industry formation Job creation Economic Growth Technology is the leading force Comes from investment trade and interactions Technological Change When an entrepreneur identifies new customer segments that are emerging new customer needs existing needs that haven t been met or new methods of manufacturing or distribution Innovation and Invention play a huge role New Industry Formation New industries are born when technological changes produce a novel opportunity that is seized by an entrepreneur Industry Life Cycle Phases formation consolidation maturity decline period Shows the life cycle of an industry relative to GDP and the amount of firms existing and entering the industry at any given time Job Creation Entrepreneurial ventures are responsible for the introduction of firms into the industry Intrapreneur Someone who starts something within a business Company Start Up It can grow at a higher rate Persists to survive and move into maturity stage Globalization Makes people able to compete with wholesalers and retailers only fault is the competition with such high up corporations Entrepreneur Types Home Based Entrepreneur many are for hobby businesses consultation and freelance US tax system makes this easier because you can take a home deduction low overhead costs reduced risk Internet Entrepreneur All business conducted on the internet GAP uses this system for the distribution aspect low cost good way to test out strategies Serial Entrepreneur people who enjoy the start up of companies so much that they become impatient and want to focus on only starting up new companies rather than perfecting and maintaining existing ones Portfolio Entreprenuer A person who owns a minority or majority steak in several ventures Traditional Entrepreneur Starts bricks and mortar businesses Builds to a point where wealth can be harvested Ex retail manufacturing health care Non profit Entrepreneur Has to be socially responsible Focus on educational religious and charitable goals They can make a profit Corporate Venturer Usually choose a start up with minimal barriers to entry Environment is uncertain High failure risk New ideas Function Perspective the production of novel and practical ideas that are very useful and beneficial Outcome Perspective generates valuable useful goods and services Settings Certain environmental settings are conducive to creativity Creativity is key to invention Invention process is not formulaic Patterns of Creative Process Connection discovery invention application Challenges creativity takes time can be stunted by lack of confidence some people lack creativity Environment for Creativity Stimulation Minimal distractions maximized time for contemplation creative company Technological Trends Human genome project wireless technology nanotechnology Business Concept concise description of an opportunity containing four essential elements four elements customer definition Value proposition compelling story Good service distribution channel Forces of Value Chain The Internet Reduced transaction costs Disintermediation Creativity the basis for invention discovering something that previously didn t exist and innovation finding a new way to do something allows people to differentiate their businesses from competitors so customers notice them creativity as a process wright brothers created something and now it works Feasibility Analysis Helps determine whether or not a good idea is good opportunity Outsourcing the trend in which traditional jobs are being exported to other countries It helps companies streamline work by integrating domestic operations with international operations Competitive Analysis You must move up in the value chain by creating a customer experience Action Plan Stage 5 of the creative process that means to turn the idea into reality Business Associates A personal network consisting of a circle of friends associates and acquaintances is not only a rich source of innovative ideas but it also opens the mind to new ways of thinking Contacts within a personal network can help an individual connect ideas that might not have been considered because the individual was relying solely on her or his personal experiences Contacts can help refine ideas and can direct an individual to resources to assist in testing the business concept Personal networks come about not by accident but from the concerted effort of entrepreneurs to go out and meet new people on a daily basis Brain Writing alternative method to brainstorming that tries to encourage a more uniform participation within a group Like brainstorming it is designed to generate lots and lots of ideas in a short amount of time Competitive Analysis differentiates the new venture from existing ventures creates a niche in the market that other companies are not serving or has access to resources that