Getting Started The Entrepreneurial Process Chapter 1 What is Entrepreneurship? The Entrepreneurial Mindset Spider-web Model Networks The 5 Stage Entrepreneurial Process Patterns of Entrepreneurship Management 4th Edition, Chapter 1 Copyright 2013 Jack M. Kaplan & Anthony C. Warren

What is Entrepreneurship? The Entrepreneurial Mindset Presentation Outline What is Entrepreneurship Definition Examples Entrepreneurial Characteristics Why? The Choices Types Common Characteristics Organizational Fragility The Importance of Networks The Initial Stages Chapter 1 What is Entrepreneurship? The Entrepreneurial Mindset Spider-web Model Networks The 5 Stage Entrepreneurial Process Copyright 2013 Jack M. Kaplan & Anthony C. Warren

What is Entrepreneurship? Root of the Word From the French word entreprendre, which refers to individuals who “undertook” the risk of a new enterprise Today’s Meaning The process of planning, organizing, operating, and assuming the risk of a business venture Chapter 1 What is Entrepreneurship? The Entrepreneurial Mindset Spider-web Model Networks The 5 Stage Entrepreneurial Process Copyright 2013 Jack M. Kaplan & Anthony C. Warren

What is Entrepreneurship? Today’s Meaning cont. More than just the creation of a business; it also includes the generation and implementation of an idea. It is about being a dynamic thinker and operator which includes effective communication to all of your stakeholders It is not about being a maverick; entrepreneurs must think tactically and strategically, and operate in a similar fashion Chapter 1 What is Entrepreneurship? The Entrepreneurial Mindset Spider-web Model Networks The 5 Stage Entrepreneurial Process Copyright 2013 Jack M. Kaplan & Anthony C. Warren

What is Entrepreneurship? The Entrepreneurial Mindset Quick Facts Annual creation of 600,000 to 800,000 new companies More employees work for entrepreneurial ventures than any other sector in the economy No sector of the U.S., and world, economy has been as vital, dynamic, and creative as entrepreneurship Think: Chapter 1 What is Entrepreneurship? The Entrepreneurial Mindset Spider-web Model Networks The 5 Stage Entrepreneurial Process Copyright 2013 Jack M. Kaplan & Anthony C. Warren

What is Entrepreneurship? The Entrepreneurial Mindset The Ups and Downs .... Chapter 1 Entrepreneurship is usually a Roller-Coaster Ride What is Entrepreneurship? The Entrepreneurial Mindset Spider-web Model Networks The 5 Stage Entrepreneurial Process From R. J. Saldich Copyright 2013 Jack M. Kaplan & Anthony C. Warren

Some Reasons to Become an Entrepreneur Entrepreneurs learn to think differently. Triggers to start your own venture: Independence and Freedom from the restrictions and bureaucracy of corporate life Being able to “do your own thing” Plateauing in current job Opportunity for sustained growth and mobility Flexibility Financial reward Loss of Current Employment “Looking back, the day that I got fired was the best day of my life” ……successful entrepreneur. Chapter 1 What is Entrepreneurship? The Entrepreneurial Mindset Spider-web Model Networks The 5 Stage Entrepreneurial Process Copyright 2012 Jack M. Kaplan & Anthony C. Warren

Types of Entrepreneurs The Choice As the economy has shifted to place a premium on portable skills and knowledge, as well as effective networks, entrepreneurship has become a viable career alternative. Entrepreneurs are classed into several categories: Serial Entrepreneur—Someone who starts, grows, and sells several businesses over the course of their career. Chapter 1 What is Entrepreneurship? The Entrepreneurial Mindset Spider-web Model Networks The 5 Stage Entrepreneurial Process Copyright 2013 Jack M. Kaplan & Anthony C. Warren

Types of Entrepreneurs Aspiring Entrepreneurs—Dream of starting a business; they hope for the chance to be their own bosses, but have not yet made the leap from their current employment into the uncertainty of a startup. Research indicates that, at any given time, 7 million adults are trying to start businesses in the U.S. Chapter 1 What is Entrepreneurship? The Entrepreneurial Mindset Spider-web Model Networks The 5 Stage Entrepreneurial Process Copyright 2013 Jack M. Kaplan & Anthony C. Warren

Types of Entrepreneurs Lifestyle Entrepreneurs—Have developed an enterprise that fits their individual circumstances and style of life. Intention is to earn income for themselves and their families. Sometimes referred to as “small businesses” or “mom-and-pop shops”. 13 million Americans (25 million if you count part-timers) run their own business from home. Chapter 1 What is Entrepreneurship? The Entrepreneurial Mindset Spider-web Model Networks The 5 Stage Entrepreneurial Process Copyright 2013 Jack M. Kaplan & Anthony C. Warren

Types of Entrepreneurs Growth Entrepreneurs—Have both the desire and ability to grow as fast and as large as possible. Their firms are the most dynamic job generators in the U.S. economy. There are over 300,000 entrepreneurial companies with more than 50 employees that are growing at a rate of 20 percent per year. Chapter 1 What is Entrepreneurship? The Entrepreneurial Mindset Spider-web Model Networks The 5 Stage Entrepreneurial Process Copyright 2013 Jack M. Kaplan & Anthony C. Warren

Types of Entrepreneurs Ask Yourself “What Type am I” One of the major mistakes aspiring entrepreneurs make when starting out is NOT to closely question what they want to be when “they grow up”. Each type of entrepreneur is a control and lifestyle choice with many advantages and disadvantages that must be considered Decide early on what is most important to you – control, wealth, lifestyle….. Chapter 1 What is Entrepreneurship? The Entrepreneurial Mindset Spider-web Model Networks The 5 Stage Entrepreneurial Process Copyright 2013 Jack M. Kaplan & Anthony C. Warren

Entrepreneurial Traits Common Characteristics of Entrepreneurs: Passionately seek new opportunities and are always looking for the chance to profit from change and disruption in the way business is done Pursue opportunities with tremendous discipline Pursue only the very best opportunities, and avoid exhausting themselves and their organizations by chasing after every option Focus on execution—specifically, adaptive execution Engage the energies of everyone in their domain Lead by example, network, and communicate well Chapter 1 What is Entrepreneurship? The Entrepreneurial Mindset Spider-web Model Networks The 5 Stage Entrepreneurial Process Copyright 2013 Jack M. Kaplan & Anthony C. Warren

Entrepreneurial Traits Chapter 1 Entrepreneurs are Comfortable in Paradoxical Situations. They Learn to Balance: What is Entrepreneurship? The Entrepreneurial Mindset Ambiguity vs. Planning Creativity vs. Discipline Urgency vs. Patience Flexibility vs. Organizational Structure Responsiveness vs. Systematic Processes Risk Taking vs. Controlled Risk Short Term Actions vs. Long Term Goals Spider-web Model Networks The 5 Stage Entrepreneurial Process Copyright 2013 Jack M. Kaplan & Anthony C. Warren

What is Entrepreneurship? The Entrepreneurial Mindset The Spider-Web Model Chapter 1 What is Entrepreneurship? The Entrepreneurial Mindset Managing a Start-up is analogous to building and maintaining a fragile Spider-web which is under continuous attack. Unlike a large company with specialists for different functions, entrepreneurs must learn “on-the-job” and fulfill many roles simultaneously, many for which they have no experience or training. Spider-web Model Networks The 5 Stage Entrepreneurial Process Copyright 2013 Jack M. Kaplan & Anthony C. Warren

Near-Neighbor Networks Chapter 1 What is Entrepreneurship? The Entrepreneurial Mindset Spider-web Model Networks The Interstate Network is an example in which each node has a similar characteristic…it is connected more or less equally with its neighbors. Such networks offer little value to entrepreneurs. The 5 Stage Entrepreneurial Process Copyright 2013 Jack M. Kaplan & Anthony C. Warren

What is Entrepreneurship? The Entrepreneurial Mindset Scale-Free Networks Chapter 1 What is Entrepreneurship? The Entrepreneurial Mindset Spider-web Model The Airline Network is an example in which certain nodes have a highly concentrated set of connections. Entrepreneurs identify and network with highly connected people, or key influencers and build network power into their business models. Networks The 5 Stage Entrepreneurial Process Copyright 2013 Jack M. Kaplan & Anthony C. Warren

What is Entrepreneurship? The Entrepreneurial Mindset The Internet(work) Chapter 1 What is Entrepreneurship? The Entrepreneurial Mindset Spider-web Model Internet map courtesy of A. Barabasi Networks The Internet is an example of a “Scale-free” network. Entrepreneurs exploit its unique characteristics for finding resources, tackling problems and creating efficient market entry strategies. The 5 Stage Entrepreneurial Process Copyright 2013 Jack M. Kaplan & Anthony C. Warren

Getting Started - Stage 1 Chapter 1 Stage 1: Conducting Opportunity Analysis Innovate and create the vision Conduct market analysis and research Evaluate the competition Research pricing and sales strategies What is Entrepreneurship? The Entrepreneurial Mindset Spider-web Model Networks The 5 Stage Entrepreneurial Process Copyright 2013 Jack M. Kaplan & Anthony C. Warren

Getting Started – Stage 2 Stage 2: Developing the Plan and Setting up the Company Set goals and objectives Start writing the plan Investigate new processes and technologies Determine pricing, market, and distribution channels Chapter 1 What is Entrepreneurship? The Entrepreneurial Mindset Spider-web Model Networks The 5 Stage Entrepreneurial Process Copyright 2013 Jack M. Kaplan & Anthony C. Warren

Getting Started – Stage 3 Stage 3: Acquiring Financial Partners and Sources of Funding Innovate and create the vision Conduct market analysis and research Evaluate the competition Research pricing and sales strategies Chapter 1 What is Entrepreneurship? The Entrepreneurial Mindset Spider-web Model Networks The 5 Stage Entrepreneurial Process Copyright 2013 Jack M. Kaplan & Anthony C. Warren

Getting Started – Stage 4 Stage 4: Determining the Resources Required and Implementing the Plan Determine value of licenses, patents, and copyrights Prepare the organization for growth Develop a business model to maximize value retention and sustainability Manage the finances Chapter 1 What is Entrepreneurship? The Entrepreneurial Mindset Spider-web Model Networks The 5 Stage Entrepreneurial Process Copyright 2013 Jack M. Kaplan & Anthony C. Warren

What is Entrepreneurship? The Entrepreneurial Mindset And Possibly – Stage 5 Stage 5: Scaling and Harvesting the Venture Prepare a full business plan Discuss options and alternatives Sell or merge Go public Form a strategic alliance Communicate the opportunity Chapter 1 What is Entrepreneurship? The Entrepreneurial Mindset Spider-web Model Networks The 5 Stage Entrepreneurial Process Copyright 2013 Jack M. Kaplan & Anthony C. Warren