Chapter 1 - The Nature and Importance of Entrepreneurs

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Chapter

The Nature and Importance of Entrepreneurs

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Development of Entrepreneurship  Earliest Period- Marco Polo  Middle Ages- Theater,

Architectural

Works  17th Century- Mississippi Company  18th Century- Edison & Whitney  19th & 20th Centuries  Organize/Operate  Innovation

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Environmental Factors Affecting Organizations Hypercompetition Changing

Technology Short Product Life Cycles New Markets Changing

Employee Drives/Motives Focus on Sales/Profits Available Capital

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Economies Controlled

Market-Oriented UNITED STATES

Market Conditions

CUBA

Innovation Orientation

Investment Community

Entrepreneurship Culture

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Market Conditions Large Market Easy

To Form Company Positive Tax Structure Positive Media Coverage Code of Business/Contract Law Strong Gov’t Agencies- No Corruption Standard-Setting Associations Individual Investment Mentality 1-6

Principles for  Successful New Venture 1) 2) 3) 4) 5) 6) 7)

Define Market Durable Products18 Month Customer  Payback Market Growth = 3050% in 5 Years Patent Protection No Product Substitutions Available Products Variants No Strong Competition Present

8) Quick Market Dominance 9) Gross Margin 30-50% 10)Staged Financing 11)ROI = 10X in 5 Years (25-30%/Year) 12)Positive Cash Flow in 18 Months 13)Strong Management in Industry 1-7

Infrastructure Needed for Innovation Long-Term Thinking Investment Community  Banks  Venture Capitalists  Informal/Informed Private

Investors (Angels) 1-8

Entrepreneurship Culture More

New Ventures Than Anywhere In The World

Concentrated

Areas 1-9

Successful Entrepreneur  Initiates Creation Process Devotes Time/Effort Assumes

Risk Receives Rewards • Independence • Satisfaction • Money 1-10

Entrepreneurial Decision Present Lifestyle Catalyst New Enterprise Desirable Possible 1-11

Drivers of New Venture Formation Desirability Influences  Culture/Subculture  Family/Peers  Teachers

Possibility Factors  Government  Background  Marketing  Role Models  Finances

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Types of Startups Lifestyle Foundation High Potential Gazelles 1-13

Entrepreneur & Economic Development  Product-Evolution Process  Iterative Synthesis  Innovation 

Technological

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Breakthrough

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Government

 Technology Transfer   Intrapreneurship vs. Entrepreneurship 1-14

Product Evolution Need Recognition

Initiate Innovation

Industrial

Development

Press To Invent 1-15

Careers/Education  Life Space  Work/Occupation  Individual/Personal  Nonwork/family

 Skills Required  Technical  Business Management  Personal 1-16

Skills Required of Entrepreneur  Technical

Business Management

Personal

Writing

Planning

Inner Control

Oral Communication

Decision Making

Risk Taking

Monitoring The Environment

Human Relations

Innovative

Use Technology

Marketing (Selling)

Change-Oriented Visionary 1-17

Ethics & Social Responsibility Ethics- Behavior/Morals in

Business Value System  Peer Pressure  Social Norms  Competitors  Individual vs. Community 1-18

Future  Entrepreneurial Education  Government- Promotion  Society’s Support  Corporate Intrapreneurship 1-19

Entrepreneurial Universities  Activities 

Seminars



Consulting

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Research

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Case Development

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Technology Development & Transfer 

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Joint Ventures &

 Structures      

Business Assistance Centers Incubators Innovation Centers Industrial Parks Enterprise Development Centers Venture Capital Exchanges

 Inputs     

Guest Lectures Board of Advisors/Trustees Internships Student Projects Source of Funds

Strategic Alliances 1-20