Introduction to Entrepreneurship

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 Introduction to Entrepreneurship

The GEM 2022-2023 report mentions that total rates of

entrepreneurship activity in the U.S. hit all-time highs
in 2022, with rates surging 18% for women and 20%
for men, indicating a significant increase in
entrepreneurial activity. Young entrepreneurs were
highlighted as a driving force behind this surge. This
data can imply that the percentage of Americans
starting or managing new businesses in 2023 may be
higher than the 9.6% reported in 2007.
 Increased Interest in Entrepreneurship
• Books
• Amazon.com lists over 45,000 books dealing with
entrepreneurship and 118,000 focused on small business.

• College Courses
• In 1985, there were about 250 entrepreneurship courses
offered across all colleges in the United States.
• In 2023, nearly 300 schools reported data on their
entrepreneurship offerings to The Princeton Review for their
annual rankings of undergraduate and graduate
entrepreneurship programs​
• Today, more than 5,000 entrepreneurship courses are
offered in two-year and four-year colleges and universities in
the United States.
 What is Entrepreneurship?
• Academic Definition (Stevenson & Jarillo)
• Entrepreneurship is the process by which individuals pursue
opportunities without regard to resources they currently
control.
• Venture Capitalist (Fred Wilson)
• Entrepreneurship is the art of turning an idea into a
business.
• Explanation of What Entrepreneurs Do
• Entrepreneurs assemble and then integrate all the
resources needed –the money, the people, the business
model, the strategy—needed to transform an invention or an
idea into a viable business. 1-
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 Aspect Entrepreneurship Business
The process of creating and
managing a new venture, often with An organization or entity engaged in
a focus on innovation, risk-taking, commercial, industrial, or professional
Definition and creativity. activities.
Emphasizes innovation, creativity, Involves managing established operations,
Focus and finding new opportunities. products, and services.

Involves taking calculated risks, as

entrepreneurs often invest personal Involves managing existing risks and
Risk-taking resources into new ventures. maintaining stability.

Entrepreneurs typically own and Ownership can be held by individuals,

control the venture, taking significant partners, shareholders, or stakeholders,
Ownership personal and financial stakes. depending on the business structure.
Entrepreneurship often involves
developing new products, services, or Businesses may innovate within their
business models to meet market existing products or services but might not
Innovation needs. focus solely on continuous innovation.
Entrepreneurship aims to create
something new, disrupt existing Businesses aim to provide goods or services,
markets, and bring novel ideas to generate revenue, and achieve specific
 Historical Perspective of Entrepreneurship
• During ancient times and the Middle Ages,
entrepreneurship was often associated with craftsmen,
traders, and merchants. These individuals engaged in
various economic activities such as farming,
handicrafts, and trade, playing a fundamental role in
local economies.
• 18th century the first theory of entrepreneur was
developed by Richard Cantillon- RISK-TAKER.
• 19th and early 20th entrepreneur was viewed from an
economic perspective.
• 20th and 21st century -inventor
Why Become an Entrepreneur?

The three primary reasons that people become

entrepreneurs and start their own firms

Desire to be their own boss

Desire to pursue their

own ideas

Financial rewards

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Characteristics of Successful Entrepreneurs

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 Characteristics of Successful Entrepreneurs
• Passion for the Business
• The number one characteristic shared by successful entrepreneurs is a
passion for the business.
• This passion typically stems from the entrepreneur’s belief that the
business will positively influence people’s lives.
• John Wood, who founded Room to Read –NAPAL
• Leaving Microsoft to change the World

• Product/Customer Focus
• A second defining characteristic of successful entrepreneurs is a
product/customer focus.
• An entrepreneur’s keen focus on products and customers typically stems
from the fact that most entrepreneurs are, at heart, craftspeople.
• Steven Jobs, the cofounder 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.
 Characteristics of Successful Entrepreneurs
• Tenacity Despite Failure
• Because entrepreneurs are typically trying something new,
the failure rate is naturally high.
• A defining characteristic of successful entrepreneurs’ is their
ability to persevere through setbacks and failures.
• Execution Intelligence
• The ability to fashion a solid business idea into a viable
business is a key characteristic of successful entrepreneurs.
• An ancient Chinese saying warns, “To open a business is very
easy; to keep it open is very difficult.”
• Jeff Bezos, the founder of Amazon.com once said, “Ideas are
easy. It’s execution that’s hard.
 Pakistani Entrepreneur Spotlight:
Monis Rahman
• Founder and CEO of Rozee.pk, Pakistan's largest
employment website.
• Innovation: Leveraged the internet revolution to transform
traditional job search into an online service.
• Challenges: Overcoming market skepticism and building
trust in online job listings.
• Contributions: Significantly reduced unemployment and
influenced the human resource practices in Pakistan.
 Common Myths About Entrepreneurs
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• Myth 1: Entrepreneurs Are Born Not Made

• This myth is based on the mistaken belief that some
people are genetically predisposed to be entrepreneurs.
• The consensus of many studies is that no one is “born”
to be an entrepreneur; everyone has the potential to
become one.
• Whether someone does or doesn’t become an
entrepreneur, is a function of the environment, life
experiences, and personal choices.
 Common Myths About Entrepreneurs
Although no one is “born” to be an entrepreneur, there are common traits and
characteristics of successful entrepreneurs

• Achievement motivated • Optimistic disposition

• Alert to opportunities • Persuasive
• Creative • Promoter
• Decisive • Resource assembler
• Energetic • Self-confident
• Has a strong work ethic • Self-starter
• Is a moderate risk taker • Tenacious
• Is a networker • Tolerant of ambiguity
• Lengthy attention span • Visionary
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 Common Myths About Entrepreneurs

• Myth 2: Entrepreneurs Are Gamblers

• Most entrepreneurs are moderate risk-takers.
• The idea that entrepreneurs are gamblers originates from two
sources:
• Entrepreneurs typically have less structured jobs, and so they face a
more uncertain set of possibilities than people in traditional jobs.
• Many entrepreneurs have a strong need to achieve and set challenging
goals, a behavior that is often equated with risk-taking.
 Common Myths About Entrepreneurs

• Myth 3: Entrepreneurs Are Motivated Primarily by

Money.
• While it is naïve to think that entrepreneurs don’t seek
financial rewards, money is rarely the reason
entrepreneurs start new firms.
• In fact, some entrepreneurs warn that the pursuit of money
can be distracting.
 Common Myths About Entrepreneurs

• Myth 4: Entrepreneurs Should Be Young and

Energetic.
• The most active age for business ownership is 35 to 45
years old.
• While it is important to be energetic, investors often
cite the strength of the entrepreneur as their most
important criteria in making investment decisions.
• What makes an entrepreneur “strong” in the eyes of an
investor is experience, maturity, a solid reputation, and a track
record of success.
• These criteria favor older rather than younger entrepreneurs.
 Common Myths About Entrepreneurs

• Myth 5: Entrepreneurs Love the Spotlight

• Entrepreneurs, like any other group of individuals, have
diverse personalities. Some may enjoy public speaking,
networking, and promoting their ventures, while others
prefer a more introverted or private approach to business.
Economic Impact of Entrepreneurial Firms

• Innovation
• Is the process of creating something new, which is central
to the entrepreneurial process.
• Small firms are twice as innovative per employee as large
firms.
• Job Creation
• In the past many decades, economic activity has moved in
the direction of smaller entrepreneurial firms, which may
be due to their unique ability to innovate and focus on
specialized tasks.
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• Lifestyle Firms: Lifestyle firms are businesses that are
established with the primary purpose of sustaining a
particular lifestyle for the entrepreneur. These businesses
are typically tailored to the owner's preferences and desires.
The emphasis is on maintaining a work-life balance and a
specific quality of life, which could include factors such as
flexible working hours, the ability to travel, or pursuing
personal interests. Lifestyle entrepreneurs prioritize personal
fulfillment and often choose businesses that align with their
passions or hobbies
• Entrepreneurial Firms: Entrepreneurial firms, often simply
referred to as startups or high-growth startups, are businesses
initiated by entrepreneurs with the intention of achieving
rapid growth, scale, and potentially significant financial
returns. Entrepreneurial firms are characterized by
innovation, high-risk tolerance, and a focus on capturing
market opportunities. These firms are driven by the
ambition to disrupt existing markets, introduce innovative
products or services, and achieve substantial market share.
 Types of start-up Firms

• Salary Substitute Firms: Salary substitute firms are

businesses that are started by entrepreneurs primarily to
replace a traditional job and provide a steady income or
salary for the founder. These entrepreneurs often create
small businesses that generate income comparable to or
exceeding what they could earn in a salaried position. The
main goal of these businesses is to provide a stable
income for the owner rather than rapid growth or
scalability.
Entrepreneurial Firms’ Impact on Society and
Larger Firms

• Impact on Society
• The innovations of entrepreneurial firms have a dramatic impact
on 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 in new ways.
• Impact on Larger Firms
• Many entrepreneurial firms have built their entire business models
around producing products and services that help larger firms
become more efficient and effective.