Entrepreneurship

A. What is ENT about ?

ENT is the transformation of new ideas into business opportunities

Finding ideas and taking care of the process => developing.

Entrepreneurial process => evaluate the risks, how to make it works.

It’s an activity, explore the economic potential of the idea.

Creation of new ventures and engaging in entrepreneurial activities.

Investing money in trying to develop an alternative to plastic and nd promising applications

Investing time and money in trying to develop a transport service platform to see whether it could
be an alternative to cabs

It’s about behavior engaging entrepreneurship supported by companies or within existing

organizations ( corporate incubator). Which leads sometimes to the creation of new organizations.

Sometimes it’s necessary to create some space, to organize to creating your company, to keep
developing.

A mechanism for exploring the economic value of new ideas... through entrepreneurial
activities ... that may lead to / require the creation of a new venture but not necessarily.

Sometimes big companies want more entrepreneurship so it’s not always new ventures.
Corporate garage, incubator => entrepreneurial program for the most entrepreneurial employees
to develop their ideas.

ENT typically implies novelty and uncertainty

ENT entails uncertainty regarding:

-the potential (i.e economic value) of the idea being developed. Data to evaluate the potential of
the idea => could be high cost to evaluate and make research. A lot of things to check. =
entrepreneurship.
-the ability to acquire the necessary resources to concretize the idea.
-the ability to execute the idea with success

B. A topic on agenda

Lack of entrepreneurs. Hypothesis => less growth in Europe because less entrepreneurs than the
US.
Ex: Microsoft. Successful and have created a lot of jobs.
=> public policies in Europe/ China to promote entrepreneurship.
Numerous actors aim to stimulating entrepreneurship. Many organizations they lobby to help
entrepreneurship. They try to promote entrepreneurial mindset, school…

C. The e ects of entrepreneurship

➢ Productivity: Force the established companies to be more e cient, more aware about new
entrances in the market.
➢ Innovation
➢Competition: lower prices. More innovations more e ciency, lower prices
➢Job creation: the net job creation at the end => taking account the jobs that have been
destroyed. With e ciency you could need less people for the same amount of work. So positive
impact on net job creation often depends on a small number of high growth ventures.
➢Economic growth
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 More than half of new rms fail to reach 5 years. The rst ve years = super di cult:
- Bad idea
- Lack of knowledge on the market
- Economic conjoncture
Lot of reasons, many factors. Hard to explain.

D – ENT as a very variegated phenomenon

Entrepreneurship is very diverse. Di erent types of ventures. Di erent types of motivations.

Necessity-driven entrepreneurship: start a company by necessity because you have no other job.

Opportunity-driven entrepreneurship: start a company because of a good idea. Develop the idea
to see the potential.

Poor countries tend to have a lot of entrepreneurship. Rich countries have much less
entrepreneurs. Explains that their are di erent types of entrepreneurs. In poor countries => a lot of
necessity-driven entrepreneurs.

E – Do entrepreneurs have speci c personal dispositions?

A lot of entrepreneurs are accidental entrepreneurs.

Need for achievement =No, entrepreneurs don’t di er of the rest of the population.

Optimism = Not very signi cant, but people who start several companies tend to be more
optimistic.

Taste for risk = yes

Need for autonomy = yes

Illusion of control = it’s not signi cant.

Beyond personality traits

▪Identi cation of a psychological pro le has been inconclusive to explain engagement in ENT

▪... Because ‘more is often needed’ to engage in ENT

- dentifying valuable business ideas
- Desirability of ENT / low opportunity cost:
- Perception that one can succeed (self-e cacy).....
▪ Personality is only one antecedent to the decision to engage in ENT
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 Macro level: The environnement is very important. In some countries institutions favor
entrepreneurship. Entrepreneur ecosystem very important. Incubator, training, policy,
infrastructures, programs. In some countries market institutions are failing. It’s much more di cult
to succeed. Macro level institutions matter a lot => shaping the decision to become an
entrepreneur.

Meso level: social networks have a huge in uence in entrepreneurship, if you know
entrepreneurship you are much more likely to become an entrepreneur. Role models.

Micro level : your own situation, highly educated, a lot of knowledge you are more likely to
become an entrepreneur. Personal circumstances.

2 – From idea to opportunity

De nitions

➢It always starts with an idea...

o “A thought or suggestion as to a possible course of action” (dictionary / Oxford)

➢... But is it a Business Opportunity?

◦ An idea that can be transformed into a viable business
◦ An aspect of the environment that represents a potentiality for pro t making
◦ «Situations in which new goods or services can be introduced and sold at greater than the cost
of their production» (Shane & Venkataraman, 2000, p.220)

A – Idea opportunity

Easy park : good business idea ?, Good opportunity ?

Yes No or to be checked

- Need is clear, solve a problem. +++ - trust issue => could be xed with insurance
- Tricky management
- Easy to copy => strategy to secure the idea ?
Easy park has an exclusive agreement.
- Scalability => question about the ressources,
where do they park cars, space.

Enter barrier super low, easy to copy.

No need a lot of quali cation, easy to implement. This good idea can turn into a bad opportunity if
you are not able to prevent those issues.

Exclusive agreement with the airport => only luck

An other aspect is that : other entrepreneurs can copy the idea. But sometimes => established
organisations could copy the idea and get an advantage because they have more ressources
make it much more pro table. Sometimes an idea can be an opportunity for established company
but not for a starter.

Exemple: Post-it. A good idea for an established company but not for a starter. Because the
company already have all in place. For a stater it requires much more e orts. Collect data, study
the market, manufacture facilities, supplying…

Sometimes as a starter it’s interesting to established a partnership with the company.

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Window of opportunity: people are not ready to use the solution you have. A good idea but
sometimes people are not ready to use the product.

Exemple virtual reality but in the 1990’s. Was a great idea on the paper. Your are immersed in the
game. But it was to early, the quality of the game wasn’t really good. It didn’t work.

50% of ideas fail to become business opportunities => Many factors that explain:
- bad idea
- Bad entrepreneur, maybe an entrepreneur with more experience would have succeed. As a rst
time entrepreneur you can incubate.
- Issues with the team, co-founders. Disagreements, con icts. Stop the company.
- Execution is very important. Sometimes entrepreneurs tend to like and dislike certain activities.
Don’t like the execution part. You have to found a team that works on creativity and the
execution part.
- Window opportunity: if it’s not open you will fail even if it’s a good idea. For exemple: Tesla,
electric cars launched in the 80’s would have failed.

Video => TED talk. => Timing is the most important factor. For exemple airbnb came out when
people needed extra money because of the crisis.

Wrap-up

-A good business idea can fail to be a business opportunity

-There are many elements that should be considered when evaluating if a good idea is also a
business opportunity

-An idea can be a good opportunity for someone and a bad one for someone else
◦ Do you have unique resources or competences to be good at exploiting this opportunity? Do
you have advantages in the execution? Depends on what you own.

-You may have a good idea but the market is not ready for it (window of opportunity). Mindset not
ready or infrastructures not there.
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 Di erent forms of business opportunities:

New product or service iPhone - opportunity to make pro t in an

existing market by selling at monopoly price

New way of organizing Online shopping. Decreases the cost of distributing,

manage. Prices more competitive.

Exemple => DELL

New market : Existing things but for a new type

of customers.

New raw material: Using a certain material can

improve the product or allow to sell it at a higher
price.

New method of production 3D printer

New business model: Could be a new way of Uber, Airbnb. They didn’t invent a new service. They
getting review from the customer, new way of change the activity, taxi / uber. At the beginning
producing… unprofessional driver, already know the price of the
service => decrease the price.

3. The sources of business ideas

- Copy or medication of idea from earlier job

- Accidental discovery
- Search for business ideas
- Pure technology push

=> Personal experiences

Start from solution:

=> existing solution et try to make an opportunity
=> creating a solution

A. Starting with a problem/need

- Solving a problem / a need you have

- Addressing known problems / needs
◦ Known customer problems
◦ Emerging needs in relation to trends
◦ Social and environmental problems
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 Solving a problem you have

Example:
- Go Pro => trip in Australia sur ng, wanted to record videos but cameras were not made for this
type of activity => solve the problem
- The three-wheeled « baby jogger », the creator was struggling to run on the beach with his
baby => solve the problem and found that there was a need for this product =>
commercialisation.
- Swibrace: replace the plaster cast for broken leg for exemple with a new product much more
adjustable to patient. You can remove it for the shower for example. 3D printer.
- Go-tryke: creator had an accident, very sporty and was frustrated.
- Bub-up: rinding a cycle under the rain. => situations of daily life.

Addressing known problems / needs

- Customer problems => The Oahu boot: adapted shoes, easier to put them on your feet. =>
problem = put your ski shoes on.
- Emerging needs in relation to trends: needs for new product/ service for people staying at
home. For example for people that have Alzheimer, GPS senior tracker, they take it with them
outside, allows to follow their location.
Another example => outdoor o ce, internet access, private space in the house or outside in the
garden.
- social and environmental problems: Tesla => environnemental problem, we need cars that
pollute less.
Vision spring: In India a lot of people don’t have access to glasses. Creates problems, low
education, accidents, low productivity… company that make glasses for a very low price.

B. Starting with a solution

Starting from speci c resources or capabilities you have or master and nd a problem / need they
can be applied to:
◦ A technology you have developed or you master ◦ ... and search for applications
◦ Skills and competences you possess
◦ ... and nd a need to ll / a problem to address with them

A solution you master :

=> nding (new applications to a technology: for example: Found a new product that could
replace petroleum. Company helps client to replace petroleum in their industry.

=> Finding new applications to your competences: 2 teachers create a service which o ers
private lessons. => speci c competences, skills.

Starting from an existing solution and modify it:

=> Business model innovation: Uber

=> Import and adapt a solution that works elsewhere: Zalando; it’s a copy of Zappos. Yogurt
factory => frozen factory well known it USA but not in France and students took the idea.

> even if it already exists it could work.

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