1. 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

2. 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

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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

12. 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

13. 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

14. 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

15. 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

16. 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

17. 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

18. 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

19. 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

20. 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

21. 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

22. 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

23. 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