Chapter 1: Practicing Entrepreneurship

Entrepreneurship

A way of thinking, acting, and being that combines the ability to find or create new opportunities with the courage to act on them.

True

Our lives change due to the work of entrepreneurs, regardless of current economic conditions.

The Truths About Entrepreneurship

Truth 1

Entrepreneurship is not reserved for startups.

Truth 2

Entrepreneurs do not have a special set of personality traits.

Truth 3

Entrepreneurship can be taught (it's a method that requires practice).

Truth 4

Entrepreneurs are not extreme risk takers.

Truth 5

Entrepreneurs collaborate more than they compete.

Truth 6

Entrepreneurs act more than they plan.

Truth 7

Entrepreneurship is a life skill.

Startup

a temporary organization in search of a scalable business model.

Effectuation theory

an entrepreneurial approach to taking quick action using resources you have available to get early traction on new ideas.

One of the 7 truths of entrepreneurship is ______.

entrepreneurship is a life skill

Corporate entrepreneurship (also known as intrapreneurship)

a process of creating new products, ventures, processes, or renewal within large organizations.

Entrepreneurs inside

employees who think and act entrepreneurially within different types of organizations.

franchise

a type of license purchased by an individual (franchisee) from an existing business (franchisor) that allows the franchisee to trade under the name of that business.

Royalties

a share of the income of a business paid by a franchisee to the franchisor.

calculated as a percentage of monthly sales revenue.

Social entrepreneurship

the process of sourcing innovative solutions to social and environmental problems.

Benefit corporation (or B Corp)

a form of organization certified by the nonprofit B Lab that ensures strict standards of social and environmental performance, accountability, and transparency are met.

Family enterprise

a business that is owned and managed by multiple family members, typically for more than one generation.

Family business survival rate

approximately 70% of family businesses fail or are sold before the second generation reaches a position to take over.

Serial entrepreneurs (habitual entrepreneurs)

people who start several businesses, either simultaneously or consecutively.

PRO of owning a franchise

It offers a ready-made business system.

Method

Systematic way of approaching a task.

Entrepreneurship is more of a method than a process.

The Method starts with the mindset.

Process

A series of steps taken to achieve a particular end.

Entrepreneurship is...

NON-LINEAR AND UNPREDICTABLE

Startup facts

-Statistics show that more than 50% of startups fail after 5 years of business.

- Lack of entrepreneurship education and not developing the ability to work through the messiness, accept ambiguity, and take action even when you are not really sure what to do.

The Entrepreneurship Process: An Outdated View

Step 1

Think of a product or service to sell

Step 2

Do market research

Step 3

Get some financial projections

Step 4

Find a partner/team

Step 5

Write a business plan

Step 6

Get financing

Step 7

Find space, build a prototype, hire people

Step 8

Bring your product/service to market

Step 9

Manage the business

Step 10

Plan an exit

Entrepreneurship as a Method

-a set of practices

-phases on learning

-iterative

-creative

-action focus

-investment for learning

-collaborative

Entrepreneurship as a Process

-known inputs and predicted outputs

-steps to complete

-linear

-predictive

-planning focus

-expected return

-competitive

Why don't the same processes that help large corporations succeed work as well for entrepreneurial ventures?

Following steps in a process relies on past history to predict the future of the business and new ventures don't have any history to draw from.

Managerial thinking

- Big planning, wait until you get what you need, expected return, linear, optimization, avoid failure at all costs, competitive, knowable, plan to act.

- Works best in times of certainty and when there is access to information and data on which to base decisions.

- Straightforward approach to problems and opportunities

Entrepreneurial thinking

- Small actions, start with what you have, acceptable loss, iterative, experimentation, embrace and leverage failure, collaborative, unknowable, act to learn.

We think more like entrepreneurs at a young age.

True

The Entrepreneurship Method

Two approaches used : prediction and creation.

1. Identify your desired impact on the world.

2. Start with the means at hand.

3. Describe the idea today.

4. Calculate affordable loss.

5. Take small action.

6. Network and enroll others in your journey.

7. Build on what you learn.

8. Reflect and be honest with yourself.

Money, reputation, and time are all components of which concept?

Affordable loss

The entrepreneurship method allows entrepreneurs to avoid uncertainty.

False.

Uncertainty is common among entrepreneurs.

The entrepreneurship method emphasizes smart action and moving quickly. This provides entrepreneurs with ______.

a way to fail sooner and more productively.

It helps them gather better information faster. This higher-quality information can immediately be incorporated into their next venture.

Research has shown that

People who spend a lot of time simply repeating the same action on a regular basis reach a plateau of capability regardless of how many hours they have put in.

All about HOW you practice.

Deliberate practice

Carrying out carefully focused efforts to improve current performance.

• Requires high levels of focus, attention, and concentration.

• Strengthens performance by identifying weaknesses and improving on them.

• Must be consistent and be maintained for long periods of time.

• Must be repeated to produce lasting results.

• Requires continuous feedback on outcomes.

• Involves setting goals beforehand.

• Involves self-observation and self-reflection after practice sessions are completed.

Improved Brain Performance

When certain brain cells sense a lot of focused repeated activity, chemicals are produced to create myelin—a fatty, white tissue that increases the speed and strength of neural impulses

Expert entrepreneurs who have consistently used deliberate practice over a number of years

have a higher sense of intuition, which enables them to make decisions more speedily and accurately based on knowledge and experience.

Which of the following is part of deliberate practice?

-Identify weaknesses and improve on them.

-Setting goals beforehand, consistency, and continuous feedback are all part of deliberate practice.

Entrepreneurship in Action

Role models are very important because, by learning from others, you can develop empathy for entrepreneurs around the world who may be doing the same as you someday.

If an entrepreneurial employee is not certain about future conflicts between her side job and her company, what is her most logical first step?

Disclose the basic information to a human resources representative.

SUCCESS

ACTION AND PRACTICE

Predictive logic

- Older and more traditional view

- Used in situations of certainty

Creation logic

- been developed through recent advances in the field

- used when the future is unpredictable.

Inbound marketing

bringing potential customers to your business by creating online content that addresses their needs, in order to build trust and brand awareness.

Outbound marketing

promoting your product or service through traditional activities such as advertising, trade shows, and cold calling.

GYAN-I Case Study

Validate your reason and motivation. If you are doing it for the right reasons, you shall be able to take on anything that comes your way.

"Knowledgeable One" in Hindi.

Daniels Fund dedicated to scholarships ethics education and grants in Colorado, Utah, New Mexico,

Wyoming.

Saurabh Gupta - Founder of Gyan-I

Gupta saw that IT services for nonprofit organizations that did not have the infrastructure or money to support a full-time IT staff.

Gyan-I Inc. provides technology consulting and managed IT services primarily for nonprofit and small- business organizations.

Three services the company does:

1. Initial risk assessment and give a report on the risk businesses are likely to face and consult on how to overcome the risk.

2. Extend offerings by hand-holding the company and providing the necessary support to protect the companies from risk, analyze their security, and train employees on an ongoing basis.

3. Fast responses to cyber breaches.

Bootstrapping

starting a business with very limited resources without outside investment.

A social entrepreneurship is mainly meant to ______.

solve social problems

The way to manage the chaos and craziness of a new business is known as entrepreneurship______.

method

When calculating affordable loss, ______.

think about what you are willing to lose

Large corporations have corporate entrepreneurs to ______.

enhance competitive position