MBAX 6100 Entrepreneurship & Small Business Management Frank Moyes Leeds College of Business University of Colorado Boulder, Colorado “Progress depends upon unreasonable men.” GB Shaw Entrepreneurial Mind

Today’s Agenda Entrepreneurial Manager Case: Crunch Discussion of venture ideas Tech transfer Other Yours Entrepreneur Interview Traits of entrepreneurs are closest to juvenile delinquents Entrepreneurial Mind

Entrepreneurial Manager Characteristics & traits Different types of entrepreneurs Failure Entrepreneurs vs. small business Entrepreneurial Mind

Are There Entrepreneurial Characteristics? Are There Entrepreneurial Characteristics? Motivated by achievement Internal locus of control Risk-taking Tolerance for ambiguity Sense of independence Passion Motivated by achievement – money to keep score Internal locus of control – believe can change the environment (market, workplace, industry) Risk-taking – calculated assessed risk and attempts to mitigate and manage Tolerance for ambiguity – nature of the situation, not poor planning Sense of independence – self motivated, perseverance Passion – to get through the hard times Entrepreneurial Mind

Commitment “Until one is committed, there is hesitancy, the chance to draw back, always ineffectiveness. Concerning all acts of initiative and creation there is one elementary truth, the ignorance of which kills countless ideas and splendid plans: That the moment one definitely commits oneself, Providence moves too. All sorts of things occur to help one that would never other wise have occurred. A whole stream of events issue from the decision, raising in one’s favor all manner of unforeseen incidents and meetings and material assistance, which no man could have dreamed would have come his way. Whatever you can do or dream you can, begin it. Boldness has genius, power and magic in it.” Goethe’s Faust. Entrepreneurial Mind

What Skills & Knowledge Are Required? What Skills & Knowledge Are Required? Creativity Business knowledge Industry knowledge Critical thinking Relationships Networks (Allen p 29) Strong ties – close friends and family members Tend to restrict E because they to look at impact on them Weak ties – acquaintances and business contacts Unbiased with prior history with the E Who is the best place to ask for advice? “Traits of entrepreneurs are closest to juvenile delinquents.” Entrepreneurial Mind

What Assets are Required? What Assets are Required? Network Supporting spouse Financial resources Optimism Creativity Business knowledge Critical thinking Relationships Entrepreneurial Mind

What Non-Entrepreneurial Traits Should Be Avoided? What Non-Entrepreneurial Traits Should Be Avoided? Invulnerability Being Macho Being Authoritarian Impulsivity Outer control Perfectionist Know it all Counterdepency Timmons: New Venture Creation Entrepreneurial Mind

Types of Entrepreneurs Types of Entrepreneurs Personal achiever Super-salesperson Real manager Expert Idea Generator JB Minor, Four Routes to Entrepreneurial Success Entrepreneurial Mind

Personal Achiever (classic entrepreneur) Need for high achievement Need for performance feedback Desire to plan and set goals Strong individual initiative Strong personal commitment Internal locus of control JB Minor, Four Routes to Entrepreneurial Success Entrepreneurial Mind

Super-Salesperson (caters to needs of customers) Capacity to empathize Social interaction and relationships are important Need to have strong positive relationships with others Sales force is critical Background: less education, more experience JB Minor, Four Routes to Entrepreneurial Success Entrepreneurial Mind

Real Manager (grow the venture) Desire to be corporate leader Desire to compete Decisive Desire of power Desire to stand out in a crowd JB Minor, Four Routes to Entrepreneurial Success Entrepreneurial Mind

Expert Idea Generator (expertise + creativity = innovator) Expert Idea Generator (expertise + creativity = innovator) Desire to innovate Love of ideas, curious Belief that new products are crucial Intelligence is the competitive advantage Desire to avoid taking risks JB Minor, Four Routes to Entrepreneurial Success Entrepreneurial Mind

Types of Entrepreneurs Types of Entrepreneurs Personal Achiever Super-Salesperson Real Manager Expert Idea Generator Are there others? Why would each of these fail? Personal achiever – goal driven, not flexible, don’t ask for advice, won’t listen Super-salesperson – sales oriented, not cash driven, don’t understand profitability, make tough decisions Real manager - Tendency to over-manage in early stage, can he/she be creative Expert Idea Generator – becomes enamored with the technology, must be perfect Entrepreneurial Mind

Different Methods Used to Build Ventures Independent innovators Pattern multipliers – expand concept through franchise or chains Speculator – buy and leverage, e.g. land Consolidator – industry roll up Acquirers Speculators Arbitrageur – buy low and sell high K Vesper, New Venture Strategies Entrepreneurial Mind

What Is Intrapreneurship? Takes hands-on responsibility for creating innovation with in an organization “Create or develop entrepreneurship within corporate boundaries, thereby allowing an atmosphere of innovation to prosper.” Kuratko & Hodgetts, Entrepreneurship Entrepreneurial Mind

Entrepreneurs vs. Small Business? Value-creating through innovation Creates new jobs; doesn’t’ draw from existing businesses Serving underserved niches Growth oriented: sees business as regional, national or international New means to an end Disrupt the economic equilibrium; results in new ideas, new businesses and new industries. Entrepreneurial Mind

Do You Have the Right Stuff? Do You Have the Right Stuff? Are you a self starter? Can you go 6 months to 2 years without getting paid? Are you willing to give up vacations, weekends and evenings? Are you a decision maker? Are you a people person? Do you handle rejection well? Do you think will on your feet? Do you like to sell? Do you handle crisis well? Would you be able to fire someone? Do you want total responsibility and accountability? Entrepreneurial Mind MD Csordos, 35 Business Lessons for Entrepreneurs

Just Do It “Millions of people have “an idea”, but unless they do something with it, their ideas aren’t worth a damn. There are a lot of quacks and kooks out there who claim they invented the Weed Eater, and I don’t doubt that there are some people who genuinely thought of this idea--but what did they do with it? Nothing. What do they deserve? Nothing.” George C. Ballas, inventor of Weed Eater Entrepreneurial Mind

Next Week’s Class Opportunity Recognition Feasibility Plan Select team of 2-3 students Case: ICEDELIGHTS Questions to think about for next week What is the difference between an idea & an opportunity? What opportunities do you think would make a good basis for a feasibility plan? Entrepreneurial Mind

Traits Misfits: traits of entrepreneurs are closest to juvenile delinquents I have discovered that all human evil comes from this, man’s being unable to sit still in a room. Blaise Pascal, philosopher and mathematician “Progress depends upon unreasonable men.” GB Shaw Entrepreneurs typically work half days. 12 hours “The greatest difficulty in the world is not for people to accept new ideas, but to forget old ones.” John Maynard Keynes “If I’m in control, I’m probably going to slow.” Mario Andretti A man who wants to lead an orchestra must turn his back to the crowd. Entrepreneurial Mind