1. 2 - 1 Copyright © 2009 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin

2. 2 - 2 Chapter 2 The Entrepreneurial Mind: Crafting a Personal Entrepreneurial Strategy

3. 2 - 3 Achieving Entrepreneurial Greatness Three core principles of Marion Labs and the Kauffman Foundation: 1.Treat others as you would want to be treated 2.Share the wealth that is created with all those who have contributed to it at all levels 3.Give back to the community

4. 2 - 4 Leadership and Human Behavior A single psychological model of entrepreneurship has been supported by research But, behavioral scientists, venture capitalists, investors, and entrepreneurs agree the venture will depend a great deal upon the talent and behavior of the lead entrepreneur and his or her team Myths still exist about entrepreneurs and entrepreneurship

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7. 2 - 7 Converging on the Entrepreneurial Mind Desirable and Acquirable Attitudes, Habits and Behaviors Six Dominant Themes 1.Commitment and Determination 2.Leadership 3.Opportunity Obsession 4.Tolerance of Risk, Ambiguity and Uncertainty 5.Creativity, Self-Reliance, and Adaptability 6.Motivation to Excel

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10. 2 - 10 Three Important Aspects of Courage 1.Moral strength and principles 2.Being a fearless experimenter 3.A lack of fear of failing at the experiment and most undertakings and a lack of fear of conflict that may arise.

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14. 2 - 14 The Entrepreneurial Mind in Action Successful entrepreneurs have a wide range of personality types Research has considered genetics, family, education, career experience, etc., but no psychological model of entrepreneurship has been supported. Acquired skills are more important that specific inherent traits

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16. 2 - 16 The Concept of Apprenticeship Shaping and Managing an Apprenticeship Windows of Apprenticeship The Concept of Apprenticeship: Acquiring the 50,000 Chunks Role Models Myths and Realities What Can Be Learned?

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20. 2 - 20 A Word of Caution Leadership and achievement, the heart of the entrepreneur, are not measured by IQ tests, SATs, or GMAT scores and include: Leadership skills Interpersonal skills Team building and team playing Creativity and ingenuity Motivation Learning skills (versus knowledge) Persistence and determination Values, ethics, honesty and integrity Goal-setting orientation Self-discipline Frugality Resourcefulness Resiliency and capacity to handle adversity Ability to seek, listen, and use feedback Reliability Dependability Sense of humor

21. 2 - 21 Exercises The “Crafting a Personal Entrepreneurship Strategy” exercise addresses the apprenticeship issue further. The “Personal Entrepreneurial Strategy” exercise is an inventory of one’s entrepreneurial abilities.

22. 2 - 22 Crafting a Personal Entrepreneurial Strategy A Conceptual Scheme for Self Assessment Crafting an Entrepreneurial Strategy Profiling the Past Profiling the Present Getting Constructive Feedback Putting it all Together Thinking Ahead

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25. 2 - 25 Personal Entrepreneurial Strategy Gather data both from yourself (past and present profiles) Gather data from others (constructive feedback) Evaluate the data you have Think ahead Craft your personal entrepreneurial strategy Estimated time to complete this important planning and goal setting exercise is 90 minutes to three hours

26. 2 - 26 Reasons for Planning Planning helps the entrepreneur with the following: Managing the risks and uncertainties of the future Working smarter rather than harder Developing and updating a keener strategy by testing the sensibility of his or her ideas and approaches with others

27. 2 - 27 Reasons for Planning Planning helps the entrepreneur with the following: Motivating Achieving “results orientation” Managing and coping with what is by nature a stressful role

28. 2 - 28 Self Assessment Generate data through observation of his or her thoughts and actions and by getting feedback from others for the purposes of the following: Becoming aware of blind spots Reinforcing or changing existing perceptions of both strengths and weaknesses Study the data generated

29. 2 - 29 Self Assessment Develop insights Establish apprenticeship goals to gain any learning, experience, and so forth Determine goals and opportunities to be seized

30. 2 - 30 Constructive Feedback Solicit feedback from those who know you well and who can be trusted Seek specific comments in particularly important areas and probe for detail if the feedback is unclear Recognize that feedback is most helpful if it is neither all positive nor all negative

31. 2 - 31 Constructive Feedback Ask for feedback in writing for contemplation and so feedback from various sources can be pulled together Be honest and straightforward with yourself and with others Avoid game playing or hidden agendas; avoid defensiveness over negative comments Listen carefully to what is being said and think about it; avoid answering, debating, or rationalizing

32. 2 - 32 Constructive Feedback Assess whether all important information has been considered and you have been realistic in your inferences and conclusions Request help in identifying common threads or patterns, possible implications of self-assessment data and certain weaknesses, and other relevant information that is missing Seek additional feedback from others to verify feedback and to supplement data Reach final conclusions at a later time

33. 2 - 33 Effective Goal Setting Establishment of goals that are specific and concrete, measurable, related to time, realistic, and attainable Establishment of priorities, including the identification of conflicts and trade-offs and how these can be resolved Identification of potential problems and obstacles that could prevent goals from being attained

34. 2 - 34 Effective Goal Setting Specification of action steps that are to be performed to accomplish the goal Indication of how results will be measured Establishment of milestones for reviewing progress and tying these to specific dates on the calendar

35. 2 - 35 Effective Goal Setting Identification of risk involved in meeting the goals Identification of help and other resources that may be needed to obtain goals Periodic review of progress and revision of goals

36. 2 - 36 Copyright © 2009 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin

37. 2 - 37 Part Two The Opportunity

38. 2 - 38 The Opportunity Screen and Choose opportunities with great care Venture capital investors fund no more than 1 or 2 percent of the ventures they review Good opportunities have risks and problems The perfect deal has yet to be seen Take steps to eliminate problems early during opportunity screening

39. 2 - 39 Chapter 3 The Entrepreneurial Process

40. 2 - 40 Entrepreneurship Defined Entrepreneurship—a way of thinking, reasoning, and acting that is opportunity obsessed, holistic in approach, and leadership balanced for the purpose of value creation and capture. (This definition of entrepreneurship has evolved over the past three decades from research by Jeffry A. Timmons at Babson College and the Harvard Business School and has recently been enhanced by Stephen Spinelli, Jr. former Vice Provost for Entrepreneurship and Global Management at Babson College, and current President of Philadelphia University).

41. 2 - 41 Entrepreneurship Results Value: Creation Enhancement Realization Renewal For: Owners Stakeholders All Participants

42. 2 - 42 Entrepreneurial Requirements Willingness to take risks Personal Financial Calculated Shift the odds of success Balancing risks with rewards

43. 2 - 43 Entrepreneurship is NOT just “Start-Ups Only” It includes companies and organizations All types At all stages Can occur and fail to occur In old and new firms Small and large firms Fast and slow growing firms Private, not-for-profit, and public sectors All geographic points All stages of a nation’s development

44. 2 - 44 Classic Entrepreneurship: The Startup Raw startup company—an innovative idea that develops into a high growth company Qualities of a startup company Strong leadership from the main entrepreneur Complementary talents and outstanding teamwork of team members Skill and ingenuity to find and control resources Financial backing to chase opportunity

45. 2 - 45 Beyond Startups Giant firms of the past (IBM, Digital Equipment Corporation, Sears, AT&T) once thought to be invincible, have been reduced in size and scope by waves of entrepreneurial ventures. Large companies face shrinking payroll while new ventures add jobs. New entrepreneurial rivals are changing the pace of “business as usual.”

46. 2 - 46 “People Want to be Led!” “People don’t want to be managed. They want to be led.”— Ewing M. Kauffman Characteristics of giant firms Hierarchical in structure Leadership as managing and administering from the top down Rewards for “the largest” (assets, budgets, etc.)

47. 2 - 47 The Fall of the Giants Slow to change archaic strategy (average 6 years) Slow to change outdated culture (average 10 to 30 years) Slow to recognize and incorporate: entrepreneurship, entrepreneurial leadership, and entrepreneurial reasoning

48. 2 - 48 Signs of Hope for Corporations Launching experiments and strategies to recapture the lost entrepreneurial spirit Working to instill the culture and practices of “entrepreneurial reasoning” Applying entrepreneurial thinking to invent their futures

49. 2 - 49 Metaphors for Entrepreneurship Improvisational Quick Clever Creative Resourceful Inventive Complex – compare to music (jazz or symphony conductor), sports (golf), chess

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51. 2 - 51 Paradoxes of Entrepreneurship (1 of 3) An opportunity with no or very low potential can be an enormously big opportunity. To make money you have to first lose money. To create and build wealth, one must relinquish wealth. To succeed, one first has to experience failure.

52. 2 - 52 Paradoxes of Entrepreneurship (2 of 3) Entrepreneurship requires considerable thought, preparation, and planning, yet is basically an unplannable event. For creativity and innovativeness to prosper, rigor and discipline must accompany the process. Entrepreneurship requires a bias toward action and a sense of urgency, but also demands patience and perseverance.

53. 2 - 53 Paradoxes of Entrepreneurship (3 of 3) The greater the organization, orderliness, discipline, and control, the less you will control your ultimate destiny. Adhering to management best practice (especially staying close to the customer that created industry leaders in the 1980s), became a seed of self- destruction and loss of leadership to upstart competitors. To realize the long-term equity value, you have to forgo the temptations of short-term profitability.

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55. 2 - 55 Think Big for Higher Potential Ventures Don’t think too small Smaller often means higher failure odds Getting the odds in your favor Entrepreneurship should not be a job substitute Odds for survival, growth, and a higher level of success, changes when the ventures reaches a size of 10-30 people with $2-$3 million in revenues

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62. 2 - 62 The Entrepreneurial Team An entrepreneurial leader Learns and teaches—faster, better Deals with adversity, is resilient Exhibits integrity, dependability, honesty Builds entrepreneurial culture and organization

63. 2 - 63 The Entrepreneurial Team Quality of the Team Relevant experience and track record Motivation to excel Commitment, determination, and persistence Tolerance of risk, ambiguity, and uncertainty Creativity

64. 2 - 64 The Entrepreneurial Team Quality of the Team Team focus of control Adaptability Opportunity obsession Leadership Communication

65. 2 - 65 Sustainability as a Base Achieving economic, environmental and social goals Without compromising the same opportunity for future generations Driven by many factors By understanding these factors, the entrepreneur builds a firmer base girding the venture for the long term

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