1-1 Chapter 1 Introduction to Entrepreneurship Bruce R. Barringer R. Duane Ireland

Case Study: Clickagents and Bluelithium Gurbaksh Chahal One of the youngest - most successful internet entrepreneurs 1998, 16 years old - dropped out of Accel Middle College to start his first venture ClickAgents - one of the first performance-based advertising networks Two years later, on 1 st November 2000, ValueClick announced - to buy - a USD 40 million. Three year non-compete – 18 years old. 1-2

launched his 2nd company “BlueLithium”, an online advertising network. Set up an office in San Jose, California and got investment from Walden Venture Capital and 3i. 120 employees 1-3

Under his leadership, BlueLithium was named one of the top 100 private companies in America three years in a row. Serving 100 million+ unique users and reached more than 60% of US internet users. On 4 th September Yahoo! announced that it had agreed to buy BlueLithium for USD 300 million in cash. 1-4

1. WHAT IS ENTREPRENERUSHIP? Origin: French words entre – “between” prendre – “to take” Entrepreneur is one who creates a new business in the face of risk and uncertainty for the purpose of achieving profit and growth by identifying significant opportunities and assembling necessary resources to capitalize on them. (Scarborough p. 21)

2. WHAT ARE THE BENEFITS OF BEING AN ENTREPRENEUR? Opportunity to create your own destiny

Opportunity to make a difference

Opportunity to reach your full potential

Opportunity to reap impressive profits

Opportunity to contribute to society and be recognized for your efforts

Opportunity to do what you enjoy and have fun at it (Scarborough, Pg. 25)

3. KEY CHARACHTERISTICS OF SUCCESSFUL ENTREPRENEURS Passion for the business Love Excited Fun

Product/Customer focus Add values Emotional intelligence Wants, needs and preferences

Tenacity despite failure Setback Persistent Back-up plan

Execution Intelligence Transform the idea into a reality Balanced by putting theories into practices Do it until you get it

4. WHY PASSION IS IMPORTANT The ability to learn and repeat A willingness to work hard for an extended period of time Ability to overcome setbacks and “no’s” The ability to listen feedback on the limitations of your organisation and yourself Perseverance and persistence when things get tough (Barringer/Ireland, Pg. 36)

5. POTENTIAL DISADVANTAGES OF BEING AN ENTREPRENEUR Uncertainty of income Risk of losing your entire investment Long hours and hard work Lower quality of life until the business gets established High levels of stress Complete responsibility Discouragement – ‘Man Jadda wa Jada’ (Scarborough, Pg. 28)

6. COMMON MISCONCEPTIONS ABOUT ENTREPRENEURS Entrepreneurs are born, not made Can be trained Entrepreneurs are gamblers Risk can be calculated Entrepreneurs are motivated primarily by money Passion (Barringer/Ireland, Pg. 41)

Not enough financing Low capital You can’t start businesses during a recession (Krispy Kreme, CNN) problems create opportunities To make profits, you need to make something sales If you fail, you can never try again A lot of other opportunities Students (or moms or some other group) don’t have the skills to start a business Start with an easy business Katz/Green, Pg. 10)

7. HOW TO AVOID THE PITFALLS? Know your business in depth Experts with proven track record in a specific field Develop a solid business plan Research, marketing strategies, financial plan Manage financial resources Budget, spend it wisely

Understand financial statements Income statement, cashflow, balance sheet Learn to manage people effectively Integrity, interpersonal, personality Set your business apart from the competition Blue ocean, niches, green ocean Maintain a positive attitude First impression, ‘akhlaq’ (Scarborough, Pg. 43)

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