1. 1 Andy Guo Why Study Entrepreneurship?

2. 2 Andy Guo Why Study Entrepreneurship? l Knowledge of process of starting a business l Basic principles applicable to any business environment l Entrepreneurs drive the economy, contributing significantly to the well-being of society in general l The entrepreneurial process and entrepreneurial management is becoming increasingly relevant to the way business is done today l Profound shift from “managerial” to “entrepreneurial” economy l Huge value creation in a short period of time l Entrepreneurs shape society

3. 3 Andy Guo Economic Impact of Entrepreneurial Firms l Innovation  The process of creating something new, which is central to the entrepreneurial process.  Small entrepreneurial firms are responsible for 55% of all innovations in the U.S. l Job creation  In the past two decades, economic activity has moved in the direction of smaller entrepreneurial firms, which may be due to their unique ability to innovate and focus on specialized tasks.

4. 4 Andy Guo Economic Impact of Entrepreneurial Firms l Globalization  Today, over 97% of all U.S. exporters are small businesses with fewer than 500 employees.  Export markets are vital to the U.S. economy and provide outlets for the sale of U.S. produced products and services.

5. 5 Andy Guo Entrepreneurial Firms’ Impact on Society and Larger Firms l Impact on society  The innovations of entrepreneurial firms have a dramatic impact on society.  Think of all the new products and services that make our lives easier, enhance our productivity at work, improve our health, and entertain us in new ways. l Impact on larger firms  Many entrepreneurial firms have built their entire business models around producing products and services that help larger firms become more efficient and effective.

6. 6 Andy Guo Why Become an Entrepreneur? There are three primary reasons that people become entrepreneurs and start their own firms Desire to be their own boss Financial rewards Desire to pursue their own ideas

7. 7 Andy Guo Four Distinguishing Characteristics of the Entrepreneurs' Environment l Great uncertainty  Entrepreneurs face a tremendous range of uncertainty surrounding technological breakthroughs, potential demand, speed of acceptance, competitive response, availability of human and financial capital, etc. l Rapid growth  Annual revenue growth rates of 30%-60% are typical. This requires the entrepreneur to deal with such issues as attracting sufficient people, assuring adequate supply and distribution of the product or service, and developing enough infrastructure to prevent the venture from spinning out of control. l Radical change  Entrepreneurs are creators of fundamental and radical change. The source of this change may be in product or process technology, or in distribution, or in the basic business model and type of organization, or by changing the structure of an industry or creating new industries and markets. l Limited resources  Because of the tremendous uncertainty, investors typically will only commit limited resources to a venture, preferring to invest in smaller, successive rounds of financing as events suggest an increasing probability of success.

8. 8 Andy Guo Course Objectives l The course will help you to understand how entrepreneurs think about and approach the challenge of new venture creation. l The course will familiarize you with the broad range of settings in which entrepreneurs operate. l The course will familiarize you with the major sources of capital available to entrepreneurs and the expectations of those investors. l The course will identify the major managerial issues entrepreneurs face when growing their businesses. l The course will cause you to look introspectively at whether and how you want entrepreneurship to play a role in your career.

9. 9 Andy Guo l Entrepreneurship is a learnable pattern of managerial behavior appropriate to many contexts l While we tend to think entrepreneurship = start-up, it can be practiced in any setting, and is critical in most new activities It is not a single “ personality type ” or “ style ” Course Perspectives

10. 10 Andy Guo Course Structure l What is an entrepreneurial manager? l Fundamentals for the entrepreneurial manager l Risk and reward l Managing the growing venture l Corporate entrepreneurship