Session 1: Introduction

Entrepreneurs
ü Recognizes opportunities

ü Convert marketable ideas into products/services

ü Catalysts for change in market-place

ü Implement the ideas

ü Take risks

ü Create jobs

ü Significant force for economic development

ü Innovate
 Who are Entrepreneurs?
• ‘entreprendre’ - ‘to undertake’

• who undertakes to organise, manage and assume the risks of a business

• Entrepreneurs are social or business innovator or developer who recognises and

seizes opportunities; converts those opportunities into workable/marketable
ideas; adds value through time, effort, money or skills; assumes the risks of the
competitive marketplace to implement these ideas; and realises the rewards from
those efforts

Entrepreneurs Vs. Small Business Owners

Small Businesses Entrepreneurial Venture

• Independently owned and operated • Principal objective: Innovation, growth, and profit
• Do not engage in many new or innovative • Innovative strategic practices
practices
• More stable approaches
• Seeks rapid growth and profits
• Expect stable sales, growth (less aggressive
• Focus: Development of the firm (scalability)
approach), and profit
• Owner: Managers of small business In the context of franchising, do you believe that
• Owner is the business operating a franchise should be classified as a
• Not dominant in the field small business or an entrepreneurial venture?
 What is Entrepreneurship?
• ‘Entrepreneurship is a dynamic process of adding value to society, business and
environment. It requires energy and passion toward the creation and
implementation of new value-adding ideas and creative solutions by
recognising opportunity where others see chaos, contradiction and confusion.’

Factors influencing entrepreneurial activities

• Social and economic condition

• Assess to education
• Income level
• Societal conditions
• Culture
• Risk of failure
• Uncertainty avoidance
• Personal aspect
• Family
• Educational environment
• Work environment
Factors influencing entrepreneurial activities
• Networks
• Social network (friends and family)
• Professional network (colleagues, business associations, etc.)

• Factor market
• Access to financial resources
• Bank loan, venture capital
• Access to skilled labors and professional services
• Engineers, consultants, etc.
• Suppliers of inputs and equipment

• Regulations and policies

• Starting a business
• Filing taxes
• Resolving insolvency

PCDO Framework
• Active stakeholder
• Outside the control
• Personal
characteristics of • General economy
entrepreneurs • Taxes
• Skills • Technological
• Attitudes advancements
• Contacts • PESTEL
• Goals People Context
• Values

• Contractual relations
• Economic Deal Opportunity
• Activity requiring
benefits
investment of
• Social
resources
recognition
• Decision right
• Autonomy
 Types of Innovation by Entrepreneurs
• Simply reproduces an already existing product, service or process
Duplication • Creative replication of an existing concept

• Extends an existing product, service or process

Extension • New use or different application of an already existing product, service or process

• Combines existing concepts and factors into a new formulation

Synthesis

• Truly creates a new product, service or process, one that is novel or untried
• Wright brothers (US) – Aeroplane
Invention • Thomas Edison (US) – Light bulb

Theoretical Approaches to Entrepreneurship

Micro View**
Macro View*
Entrepreneurial trait school of thought
Environmental school of thought
Venture opportunity school of thought
Financial/capital school of thought
Strategic planning school of thought
Displacement school of thought

*broad array of external factors

** internal locus of control
 Macro View of Entrepreneurship
• Broad array of external factors that hinder/facilitate entrepreneurship
• Environmental School of Thought
• Sociocultural factors affects entrepreneurial desires
• Lifestyles, buying habits, education, religion, beliefs, values, demographics, social classes, etc.
• +ve/-ve
• Surrounding conditions and social groups, such as supportive family and peer group
• Family legacy
• Cultural Emphasis on Innovation
• Access to Funding and Investment

Macro View of Entrepreneurship

• Financial/capital school of thought
• Capital-seeking process Q. What are different venture stages?

• The search for seed and growth capital is the entire focus

Venture Stage Financial Consideration Decision

Seed capital
Start-up or Acquisition Proceed or abandon
Venture capital sources
Cash management
Maintain, increase, or reduce
Ongoing Investments
size
Financial analysis
Profit question
Sell, retire, or dissolve
Decline or succession Corporate buyout
operations
Succession question
 Macro View of Entrepreneurship
• Displacement school of thought
• Hinders a person from advancing or eliminates certain critical factors needed for that person to advance.
Therefore, the frustrated individual will follow their own motivations to succeed and become their entrepreneur

• Political displacement
• Political regime

• Cultural displacement
• Ethnic background, religion, gender, etc.

• Economic displacement
• Recession

• Depression

Micro View of Entrepreneurship

• Internal locus of control that hinder/facilitate entrepreneurship
• The potential entrepreneur has the ability, or control, to direct or adjust the outcome
• Entrepreneurial trait school of thought
• Successful people exhibit similar characteristics, if copied would lead to successful
enterprise
• Achievement, creativity, determination, and technical knowledge
• Venture opportunity school of thought
• Opportunity aspect of venture development
• Idea sources, development of concept, and implementation are important aspect
• Developing right idea at right time for right market is the key
 Micro View of Entrepreneurship
• Strategic planning school of thought
• Emphasis on planning process

• Focus on unique markets

• Market segment, in-between markets

• Focus on unique people (Chefs)

• Skills or talents

• Focus on unique products (Widgets)

• Innovation

• Focus on unique resources

Process Approaches to Entrepreneurship

• Integrative Approach
• Input and outcome of entrepreneurship process
Outputs

Environmental
opportunity Entrepreneurial Process Entrepreneurial Intensity
ü Going venture
ü Identify opportunity ü Number of events ü Value creation
Entrepreneurial ü Assess and acquire ü Degree of ü New products, services
Individuals
necessary resources entrepreneurship ü Technologies
ü Implementation ü Innovation ü Profits and/or personal
An Organizational
ü Risk taking benefits
Contexts ü Employment, asset and
ü Proactiveness
s s revenue growth
Unique Business
Concepts

Resources
 Process Approaches to Entrepreneurship

• Dynamic States Approach

• Ventures being dependent on their contextual environment for survival

• Represent network of relationships to convert opportunity into value

Myths of Entrepreneurships
• Entrepreneurs are doer, not thinkers
• Entrepreneurs tends towards "doers” - actions Why thinking is important?
• Identifying Market Opportunities
• Misperception: • Innovation and Problem-Solving
• Long-term Vision
• Quick decisions,
• Hustle, and
• Executing idea

• The Doer vs. Thinker Dichotomy

[action-oriented approach - planning, analysis, and long-term vision]

• Methodically planning is important

• Balance both doing and thinking

 Myths of Entrepreneurships
• Entrepreneurs are born, not made
• Innate talent alone drive success
• Inner Characteristics: Aggressiveness, willingness to take risks, analytical abilities, and skills

• Misperception:
• Ability to innovate and lead
• Inherent knack for business

• Nature vs. Nurture in Entrepreneurship Dichotomy

[Innate traits (risk-taking propensity, creativity, and leadership)- Acquired skills (education, experience,
and mentorship)]

• How entrepreneurs can be made?

• Education and Training
• Mentorship
• Experience
• Networking

• The model, processes, and case studies can be studied

Myths of Entrepreneurships
• Entrepreneurs are always inventors

• Inventors overlooks the broader scope of entrepreneurship

• Misperception:
• Must create a completely new product
• Entrepreneurs who don’t invent something groundbreaking aren’t as valuable

• Inventors vs. Entrepreneurs

[Focuses on creating new product/technologies vs. Market application]

• Inventors and Entrepreneur

 Myths of Entrepreneurships
• Entrepreneurs are academic and social misfits
• May excel academically
• Misperception:
• Struggle academically
• Loners or socially awkward
• Education and social skills are not important
• Entrepreneurs who don’t invent something groundbreaking aren’t as valuable

• Misfit vs. Well-rounded

[Struggling academically vs. excelling in academics and maintaining strong social networks]

• Entrepreneurs – Professional role models

Myths of Entrepreneurships
• Entrepreneurs must fit the profile
• Checklists of successful entrepreneurs, such lists are hard to validate
• Misperception:
• Specific set of personality traits
• Particular style or way of working
• Conventional Profile vs. Diverse Traits
[fit the traditional image vs. wide range of traits]

• Ratan Tata
• Visionary
• Thoughtful leadership
• Elon Musk
• Unconventional thinking
• Visionary goals
 Myths of Entrepreneurships
• All entrepreneurs need is money
• Capital to survive; fail – lack of adequate funding
• Other requirements: Managerial competency, Investment choices, Proper planning, etc.

• Misperception:
• Funding guarantees entrepreneurial success
• The more money an entrepreneur raises, the better their chances of success
• Financial backing can compensate for a lack of experience
• Money vs. Strategic Execution
[Funding Vs. Competency, Strategy]

Myths of Entrepreneurships
• All entrepreneurs need is luck
• Luck diminishes the hard work
• What seems luck is preparation, determination, desire, knowledge, and innovativeness of entrepreneurs

• Misperception:
• Entrepreneurs are simply in the right place at the right time
• Luck is the primary factor – Entrepreneurial success
• Success is more about chance than about skill, knowledge, or effort

• Luck vs. Hard Work

[Fortunate circumstances vs. Preparation, determination, strategic planning, and continuous innovation]
 Myths of Entrepreneurships
• Entrepreneurship is unstructured and chaotic
• Numerous facets in a venture, may appear disorganized
• System to work and maintain priorities

• Misperception:
• Without any formal hierarchy
• Chaos and unpredictability is important for entrepreneurs

• Chaos vs. Organized Structure

[lack of structure vs. structured processes]

Myths of Entrepreneurships
• Entrepreneurs are extreme risk takers
• Moderate or calculated risk
• Planning and preparations to minimize the risks
• Misperception:
• High stakes and uncertainty
• High-risk environments with no fallback plans

• Extreme Risk-Taking vs. Calculated Risk-Taking

[High uncertainty vs. assess risks and potential downsides while pursuing opportunities]
Entrepreneurship: Global Phenomenon
• Global Entrepreneurship Monitor

Entrepreneurship: Global Phenomenon

• Millennipreneurs
• Entrepreneurs, less than 35 years of age
• Ultrapreneurs
• Environmental and social concerns
• Serialpreneurs
• 4 or more operating companies
• Boomerpreneurs
• Entrepreneurs, 55 years or older
Entrepreneurship: Global Phenomenon
• Unicorns
• $1 billion valuation
• Rapido, Porter, Zepto, Purplle, PhysicsWallah [Forbes India]

• Decacorns
• $10 billion valuation
• Flipkart, Nykaa, Swiggy,, PhonePe [Jan, 2023, GoI Report]

Is starting a business right for you?

• Idea important
• Skills and personality traits – Required
 Common Entrepreneurship Traits

Entrepreneurial
Ideas and drive People Skills Work style Financial savvy Background
Comfortable with Family members have
Creativity Leadership Goal-oriented Experimental mind-set finance started businesses
Comfortable with Friends have started
Vision Persuasion uncertainty Look for better ways businesses
Ability to identify Worked in a small business
opportunities Influence Self-challenging Ability to close a dead or start-up

Passion Network building Solitary (being own boss) Ability to listen

Ability to excite
people by vision Rarely satisfied Driven to plan and prepare

• Comfortable with • Most likely to

• Understand problem • Make other people see • Intrinsically motivated
financial concepts become an
• See solution merit in your idea
• Breakeven analysis entrepreneur
• Investor
• Employees
• Customers