1. Introduction to Entrepreneurship,
Chapter 1
The Revolutionary Impact of Entrepreneurship
And
Successful Entrepreneur

2. E-mail Address: ms.rosli@uum.edu.my
ROSLI BIN MOHD SAAD
Program Keusahawanan,
COB, UUM.
Telephone No :
Address:

3. Chapter Objectives
To examine the historical development of entrepreneurship
To explore and debunk the myths of entrepreneurship
To define and explore the major schools of entrepreneurial thought
To explain the process approaches to the study of entrepreneurship
To set forth a comprehensive definition of entrepreneurship
To examine the Entrepreneurial Revolution taking place today
To illustrate today’s entrepreneurial environment

4. Entrepreneurs—Challenging the Unknown
Recognize opportunities where others see chaos or confusion
Are aggressive catalysts for change within the marketplace
Challenge the unknown and continuously create the future

5. Entrepreneurs versus Small Business Owners: A Distinction
Small Businesses Owners
Manage their businesses by expecting stable sales, profits, and growth
Entrepreneurs
Focus their efforts on innovation, profitability and sustainable growth

6. The Evolution of Entrepreneurship
Entrepreneur is derived from the French entreprendre, meaning “to undertake.”
The entrepreneur is one who undertakes to organize, manage, and assume the risks of a business.
Although no single definition of entrepreneur exists and no one profile can represent today’s entrepreneur, research is providing an increasingly sharper focus on the subject.

7. EVOLUSI KEUSAHAWANAN

8. Entrepreneurship: A Mindset
Entrepreneurship is more than the mere creation of business:
Seeking opportunities
Taking risks beyond security
Having the tenacity to push an idea through to reality
Entrepreneurship is an integrated concept that permeates an individual’s business in an innovative manner.

9. A Summary Description of Entrepreneurship
Entrepreneurship (Robert C. Ronstadt)
The dynamic process of creating incremental wealth.
This wealth is created by individuals who assume major risks in terms of equity, time, and/or career commitment of providing value for a product or service.
The product or service itself may or may not be new or unique but the entrepreneur must somehow infuse value by securing and allocating the necessary skills and resources.

10. An Integrated Definition
Entrepreneurship
A dynamic process of vision, change, and creation.
Requires an application of energy and passion towards the creation and implementation of new ideas and creative solutions.
Essential ingredients include:
The willingness to take calculated risks—in terms of time, equity, or career.
The ability to formulate an effective venture team; the creative skill to marshal needed resources.
The fundamental skills of building a solid business plan.
The vision to recognize opportunity where others see chaos, contradiction, and confusion.

11. Entrepreneurship
Entrepreneurship is important: engine of economic growth, creates wealth, generates innovations & job opportunities, increases income & living standard of the society etc.
Entrepreneurship is the main source of rezeki – “9/10 of the ‘rezeki’ comes from the business activities” – Muhammad SAW.

12. Entrepreneurship
Knowing its importance, developing entrepreneurship becomes a priority to every government through out the world.
Great number of support programs are created. (Loan & financing schemes, consultation, tax incentives, provision of affordable premises & good infra, R&D for commercialization, biz info centres, incubators, training & education, trade fairs & promotions local and abroad etc.

13. Support Programs
Malaysia - arrays of support schemes & programs were initiated & implemented. At least 15 ministries & more than 60 government agencies were promoting & providing assistance to potential or existing entrepreneurs (M.Khairuddin,’07)

14. Becoming an entrepreneur?
Despite the promotions & supports, not many wanted entrepreneurship to be their career of choice.
Even among educated citizens, the rate of entrepreneurship is low. Studies: only 1.2% of graduates started up their own businesses & now many are still unemployed.

15. Why not? Not Willing to Take Risk Financial risk
Career risk—loss of employment security
Family & social risk—competing commitments of work & family
Psychic risk—psychological & mental impact of failure on the well-being of entrepreneurs
Physical risk – become sick, too much of hard work

16. Other Major Barriers limited access of finance
regulations & bureaucracy, delay in obtaining licenses, permits, approvals, taxes & compliance costs associated with government legislation
lack of biz idea/market awareness

17. Other Major Barriers Lack of information Lack of skills & experience
Lack of support networks, absence of business contacts & mentoring impede biz start-ups, especially to the small, new & inexperienced firms
Fear of intense competition

18. Other Major Barriers
Entrepreneurship & self-employment are not always valued traits to every culture or society (Harding, Cowling & Ream, 2003); (Likanen & Mira, 2004).
Negative attitudes to entrepreneurship, culture of pessimism & parents not supportive of entrepreneurship are significant barriers to start-ups

19. Other Major Barriers Lack of motivation & confidence
Perceiving starting up a biz as involving too much ‘hassle’, ‘stress’ & ‘hard work’
Fear of debt & failure
Future uncertainty, too risky!

20. KEUSAHAWANAN PERSPEKTIF ISLAM
-Agama yang menyokong pembangunan keusahawanan dikalangan umatnya;
*Islam mengajar manusia membentuk budaya keusahawanan dengan cara hidup dan cara kerja yang diterima oleh Allah
*Islam ialah agama yang menggalakkan aktiviti keusahawanan dengan menggariskan etika keusahawanan, menjanjikan ganjaran di dunia dan akhirat

21. PERKARA PENTING BAHAWA ISLAM MENYARANKAN KEUSAHAWANAN
1. Allah telah menghalalkan jualbeli dan
mengharamkan riba (B2:275)
2. Sembilan daripada sepuluh bahagian rezeki adalah
dari perniagaan
 3. Tidak ada dosa mencari kurnia / rezeki hasil
perniagaan dari tuhanmu (B2:198)
4. Keusahawanan merupakan jihad fisabilillah  
5. Keusahawanan dijadikan sebagai satu ibadah

22. The Myths of Entrepreneurship
Myth 1: Entrepreneurs Are Doers, Not Thinkers
Myth 2: Entrepreneurs Are Born, Not Made
Myth 3: Entrepreneurs Are Always Inventors
Myth 4: Entrepreneurs Are Academic and Social Misfits
Myth 5: Entrepreneurs Must Fit the “Profile”
Myth 6: All Entrepreneurs Need Is Money
Myth 7: All Entrepreneurs Need Is Luck
Myth 8: Ignorance Is Bliss For Entrepreneurs
Myth 9: Entrepreneurs Seek Success But Experience High Failure Rates
Myth 10: Entrepreneurs Are Extreme Risk Takers (Gamblers)

23. Figure 1.1 Entrepreneurial Schools-of-Thought Approach

24. Macro View: External Locus of Control
The Environmental School of Thought
Considers the external factors that affect a potential entrepreneur’s lifestyle.
The Financial/Capital School of Thought
Based on the capital-seeking process—the search for seed and growth capital.
The Displacement School of Thought
Alienation drives entrepreneurial pursuits
Political displacement (laws, policies, and regulations)
Cultural displacement (preclusion of social groups)
Economic displacement (economic variations)

25. Micro View: Internal Locus of Control (cont’d)
The Entrepreneurial Trait School of Thought
Focuses on identifying traits common to successful entrepreneurs.
Achievement, creativity, determination, and technical knowledge
The Venture Opportunity School of Thought
Focuses on the opportunity aspect of venture development—the search for idea sources, the development of concepts, and the implementation of venture opportunities.
Corridor principle: New pathways or opportunities will arise that lead entrepreneurs in different directions.

26. Table 1.2 Definitions And Criteria Of One Approach To The Micro View
Entrepreneurial Model
Definition
Measures
Questions
“Great Person”
“Extraordinary Achievers”
Personal principles
Personal histories Experiences
What principles do you have?
What are your achievements?
Psychological Characteristics
Founder
Control over the means of production
Locus of control Tolerance of ambiguity
Need for achievement
What are your values?
Classical
People who make innovations bearing risk and uncertainty
“Creative destruction”
Decision making
Ability to see opportunities
Creativity
What are the opportunities?
What is your vision?
How do you respond?
Management
Creating value through the recognition of business opportunity, the management of risk taking through the communicative and management skills to mobilize . . .
Expertise
Technical knowledge
Technical plans
What are your plans?
What are your capabilities?
What are your credentials?
Leadership
“Social architect”
Promotion and protection of values
Attitudes, styles
Management of people
How do you manage people?
Intrapreneurship
Those who pull together to promote innovation
How do you change and adapt?
Source: Adapted from J. Barton Cunningham and Joe Lischeron, “Defining Entrepreneurship,” Journal of Small Business Management (January 1991): 56.

27. Micro View… (cont’d) The Strategic Formulation School of Thought
Emphasizes the planning process in successful venture development.
Ronstadt’s View
Strategic formulation is a leveraging of unique elements:
Unique Markets—mountain gap strategies
Unique People—great chef strategies
Unique Products—better widget strategies
Unique Resources—water well strategies

28. Our Entrepreneurial Economy— The Environment for Entrepreneurship
Entrepreneurship is the symbol of business tenacity and achievement.
Entrepreneurs are the pioneers of today’s business successes.
Two perspectives on entrepreneurship:
Statistical: numbers that emphasize the importance of entrepreneurs to the economy.
Academic: trends in entrepreneurial research and education.

29. Predominance of New Ventures in the Economy
Entrepreneurial Activity: Growth in Small Businesses
New business incorporations average 600,000 per year over the past decade.
There are over 25 million small businesses; the number continues to grow 2% annually.
One of every 150 adults participates in the founding of a new firm each year.
Approximately 600,000 to 800,000 are added each year.

30. Effects of Entrepreneurship
The Global Entrepreneurship Monitor (GEM)
Provides an annual assessment of the entrepreneurial environment of 42 countries.
Latest GEM study: the U.S. outranks the rest of the world in important entrepreneurial support.
Entrepreneurs lead to growth by:
Entering and expanding existing markets.
Creating entirely new markets by offering innovative products.
Increasing diversity and fostering minority participation in the economy.

31. Level of Entrepreneurship Development
1) Entrepreneurship Cultural Development Level (Tahap pembangunan budaya keusahawanan)
2) Start-up Level (Tahap memula perniagaan)
3) Survival Level (Tahap penakatan)
Growth Level (Tahap pertumbuhan dan pengembangan)

32. Figure : Level of Entrepreneurship Development
Tahap
Masa
Dewasa
Pekerjaan
Kolej dan
Universiti
Sekolah Menengah Remaja
Sekolah Rendah
Pra Sekolah Kanak-Kanak
Taman Asuhan Kanak-Kanak
Pertumbuhan dan
Pengembangan (growth)
Penakatan (Survival)
  Memula Perniagaan ( Start-up)
Budaya
Keusahawanan
(Cultural development)

33. Entrepreneurship development
Entrepreneurship can be developed:
Education
Training
Experience

34. Business Idea

35. Business Environment

36. Business Start-Up
Things to be considered before start-up your business.
Self-ability
Capital and financial needs
Strategic location
Legal and Government Rules
Raw material and equipment supply
Competitors

37. PERUSAHAAN KECIL DAN SEDERHANA
PERUSAHAAN KECIL DAN SEDERHANA (PKS)
PKS DI MALAYSIA BOLEH DITEMPATKAN DALAM TIGA KATEGORI, IAITU: MIKRO, KECIL, ATAU SEDERHANA.
KETIGA-TIGA KUMPULAN INI DITETAPKAN BERASASKAN KEPADA:
JUMLAH PEKERJA SESEBUAH PERNIAGAAN; ATAUPUN
JUMLAH HASIL JUALAN SESEBUAH PERNIAGAAN DALAM TEMPOH SETAHUN.

38. Berasaskan jumlah pekerja sepenuh masa :
I. Jumlah Pekerja
Berasaskan jumlah pekerja sepenuh masa :
PERTANIAN ASAS
PERKILANGAN
(TERMASUK ASAS TANI) DAN
PERKHIDMATAN BERKAITAN
SEKTOR
PERKHIDMATAN
(TERMASUK ICT*)
MIKRO
KURANG
DARIPADA 5
ORANG
PEKERJA
KURANG DARIPADA 5 ORANG
ORANG PEKERJA
KECIL
ANTARA 5
HINGGA 19
ANTARA 5 HINGGA 50 PEKERJA
ANTARA 5 HINGGA
19 PEKERJA
SEDERHANA
ANTARA 20
HINGGA 50
ANTARA 51 HINGGA 150 PEKERJA

39. II. Jumlah Jualan Tahunan Berasaskan jumlah jualan tahunan :
PERTANIAN ASAS
PERKILANGAN
(TERMASUK ASAS TANI) DAN
PERKHIDMATAN BERKAITAN
SEKTOR
PERKHIDMATAN
(TERMASUK ICT*)
MIKRO
KURANG
DARIPADA
RM200,000
KURANG DARIPADA RM250,000
KECIL
ANTARA
HINGGA
RM1 JUTA
ANTARA RM250,000 HINGGA
KURANG DARIPADA RM10 JUTA
ANTARA RM200,000
HINGGA KURANG
SEDERHANA
ANTARA RM1
JUTA HINGGA
RM5 JUTA
ANTARA RM10 JUTA HINGGA
RM25 JUTA
ANTARA RM1 JUTA
HINGGA RM5 JUTA

40. WHY NEW VENTURE FAILS (research by Bruno, Leidecker and Harder. 1987
WHY NEW VENTURE FAILS (research by Bruno, Leidecker and Harder Why firms fail?, Business Horizons)
3 major categories of causes for failure:
product/market problems
Financial difficulties
Managerial problems

41. Product / market problems
Product Market Orientation
Poor timing – premature entry into market place
Product design problems
Inappropriate distribution strategy
Over reliance on one customer

42. Financial difficulties
Initial undercapitalization –
Assuming debt too early – too soon and too
large
Venture capital relationship problem –
Differing goals, vision and motivations-

43. Managerial Problems
hiring and firing based on nepotism rather than qualifications
poor relationship with parent companies and venture capitalists
founders who focused on their weaknesses rather than their strength
incompetent support

44. Ingredients For A Successful New Business (The Nine Fs)
Founders Every startup company must have a first class entrepreneurs
Focused Entrepreneurial companies focus on niche markets. They specialize.
Fast They make decisions quickly and implement them swiftly.
Flexible They keep an open mind. They respond to change.
Forever Innovating - They are tireless innovators.
Flat Entrepreneurial organizations have as few layers of
management as possible.
Frugal By keeping overhead low and productivity high,
entrepreneurial organizations keep cost down.
Friendly Entrepreneurial companies are friendly to their customers,
suppliers and workers.
Fun It’s fun to be associated with an entrepreneurial company.
Sumber: William D. Bygrave (1997)

45. Perniagaan mungkin gagal. Tetapi…. Usahawan tidak pernah gagal.
Bagi Usahawan,
Perniagaan mungkin gagal.
Tetapi….
Usahawan tidak pernah gagal.

46. Entrepreneurial
Characteristics

48. Entrepreneurial Characteristics (Timmons and Spinelli)
Commitment and determination
Tenacious, decisive, and persistent in problem solving
Leadership
Self-starters and team builders who focus on honesty in their business relationships
Opportunity obsession
Aware of market and customer needs
Tolerance of risk, ambiguity, and uncertainty
Risk takers, risk minimizers, and uncertainty tolerators
Creativity, self-reliance, and adaptability
Open-minded, flexible, uncomfortable with the status quo, and quick learners
Motivation to excel
Goal oriented and aware of their weaknesses and strengths

49. CIRI USAHAWAN BERJAYA ABAD KE-21
Dapat melihat dan mengambil peluang
Mempunyai maklumat
Kreatif
Inovatif
Mempunyai visi
Berfikiran bebas
Berdaya maju
optimistik

50. CIRI USAHAWAN BERJAYA ABAD KE-21
Mengambil risiko yang diperhitungkan
Sifat kepimpinan
Sumber: Soo Ji Min (1999)

51. Ciri-ciri Usahawan Berjaya
Berdasarkan kajian Mc Clelland (1995), Koa (1991), Scar & Zimmerer (1999) dan lain2….
Kreatif dan Inovatif
Kerajinan, keazaman dan ketabahan
Berinisiatif
Mengambil Risiko yg diperhitungkan
Bertanggungjawab
Kejujuran dan Menepati Janji
Motivasi Untuk Kejayaan & Berkembang Maju
Berorientasikan peluang
Berorientasikan Matlamat & Wawasan
Berorientasikan Masa Depan

52. Ciri-ciri Usahawan Berjaya
Sambungan
Kebolehan Menyelesaikan Masalah
Menitikberatkan Mutu Kerja yang Tinggi
Lokus Kawalan Dalam
Keupayaan Mengurus
Mementingkan pencapaian daripada wang
Berkeyakinan Diri dan Optimistik
Sanggup Belajar drpd Kesilapan
Tahap Tenaga yang Tinggi
Menggunakan strategi2 Pengaruh

53. THE MOST IMPORTANT CHARACTERISTICS OF SUCCESSFUL ENTREPRENEURS (10 DS)
Dream
Entrepreneurs have a vision of what the future could be like for them and their business. And , more important, they have the ability to implement their dreams.
Decisiveness
They don’t procrastinate. They make decisions swiftly. Their swiftness is a key factor in their success.

54. Doers
Once they decide on a course of action, they implement it as quickly as possible.
Determination
They implement their ventures with total commitment. They seldom give up, even when confronted by obstacles that seem insurmountable.

55. Dedication
They are totally dedicated to their business, sometimes at considerable cost to their relationships with their friends and families. They work tirelessly. Twelve hour days, and seven day work weeks are not uncommon when an entrepreneur is striving to get a business off the ground.
Devotions
Entrepreneurs love what they do. It is that love that sustains them when the going gets tough. And it is love of their product or `service that makes them so effective at selling it.

56. Details
It is said that the devils resides in the details. That is never more true than in starting and growing a business. The entrepreneur must be on top of the critical details.
Destiny
They want to be in charge of their own destiny rather than dependent on an employer

57. Entrepreneurs in the United States
Reasons for the exceptional entrepreneurial activity in the U.S. include:
A national culture that supports risk taking and seeking opportunities.
Americans’ alertness to unexploited economic opportunity and a low fear of failure.
U.S. leadership in entrepreneurship education at both the undergraduate and graduate level.
A high percentage of individuals with professional, technological or business degrees who are likely to become entrepreneurs.

58. The Age of Gazelles A “Gazelle” Gazelles as leaders in innovation:
A business establishment with at least 20% sales growth in each year for five years, starting with a base of at least $100,000 in annual sales.
Gazelles as leaders in innovation:
Produce twice as many product innovations per employee as do larger firms.
Have been responsible for 55% of the innovations in 362 different industries and 95% of all radical innovations.
Obtain more patents per sales dollar than do larger firms.

59. Table 1.3 Mythology Associated with Gazelles
Gazelles are the goal of all entrepreneurs.
Gazelles receive venture capital.
Gazelles were never mice.
Gazelles are high-tech.
Gazelles are global.
Source: NFIB Small Business Policy Guide (Washington, D.C., November 2000), 31.

60. Survival of Gazelles How many gazelles survive?
The simple answer is “none.” Sooner or later, all companies wither and die.
The Common Myth of Failure:
85% of all firms fail in the first year—in actuality, about half of all start-ups last between 5 and 7 years.

61. Entrepreneurial Firms’ Impact
Entrepreneurial components of the U.S. Economy:
Large firms have increased profitability by returning to their “core competencies through restructuring and downsizing.
New entrepreneurial companies have been blossoming in new technologies and new markets.
Thousands of smaller firms established by women, minorities, and immigrants have strengthened the economy.

62. Entrepreneurial Firms’ Impact Cont’d)
Entrepreneurial firms make two indispensable contributions to an economy:
They are an integral part of the renewal process that pervades and defines market economies.
They are the essential mechanism by which millions enter the economic and social mainstream of society.

63. 21st Century Trends in Entrepreneurship Research
Venture Financing
Social Entrepreneurship
Corporate Entrepreneurship
Trends in Entrepreneurship Research
Entrepreneurial Cognition
Global Entrepreneurial Movement
Family Businesses
Women and Minority Entrepreneurs
Entrepreneurial Education

64. 21st Century Trends in Entrepreneurship Research
Major Research Themes:
Venture Financing: venture capital and angel capital financing and other financing techniques strengthened in the 1990s.
Corporate Entrepreneurship and the need for entrepreneurial cultures has drawn increased attention.
Social Entrepreneurship has unprecedented strength within the new generation of entrepreneurs.
Entrepreneurial Cognition is providing new insights into the psychological aspects of the entrepreneurial process.
Women and Minority Entrepreneurs appear to face obstacles and difficulties different from those that other entrepreneurs face.
The Global Entrepreneurial Movement is increasing.

65. 21st Century Trends… (cont’d)
Major Research Themes (cont’d):
Family Businesses have become a stronger focus of research.
Entrepreneurial Education has become one of the hottest topics in business and engineering schools throughout the world.

66. Key Concepts Entrepreneurship Entrepreneur
A process of innovation and new-venture creation through four major dimensions—individual, organizational, environmental, process—that is aided by collaborative networks in government, education, and institutions.
Entrepreneur
A catalyst for economic change who uses purposeful searching, careful planning, and sound judgment when carrying out the entrepreneurial process.

67. Key Concepts Entrepreneurial Management
The discipline of entrepreneurial management:
Entrepreneurship is based upon the same principles.
It matters not who or what that the entrepreneur is—an existing large institution or an individual, for-profit business or a public-service organization, a governmental or non-governmental institution.
The rules are much the same: things that work and those that don’t are much the same, and so are innovations and where to look for them.