UF ENT 3003 Exam 1

True/False Successful Entrepreneurs are lucky

False. Hard work leads to luck

True/False Entrepreneurship starts with a good or service

False. All about identifying and exploiting opportunities

True/False Most Entrepreneuerial ventures fail

Somewhat true and false. Learn from failure

True/False Entrepreneurs need a lot of money to succeed

Mostly false. Average start up is $25,000

True/False Entrepreneurs are all about making money

False. Large factor but only one of many factors

True/False Entrepreneurs should strive to serve as many customers as possible

False. Have to target a market

True/False Entrepreneurship is a one-time, chance event

False. Not an event, is a process

True/False Entrepreneurship is about running small businesses

False. Not all businesses are entrepreneurial

True/False Entrepreneurs are born, not made

False. Can be taught

True/False Entrepreneurs take wild risks

False. Some risks have to be taken but still have to be careful

True/False Entrepreneurship is an either/or concept

False. It is a continuous variable and spectrum.

True/False Entrepreneurship empowers people

Mostly true. Empowers one to work for them self and "escape the machine"

True/False Entrepreneurship is about individuals

Somewhat true. Venture usually starts individually but needs many people to stay alive.

Liability of Newness

The newer the firm, the more likely it is to fail.

80/20 Rule

80% of firm's income comes from 20% of its customers

Self-Employment in the US

Declining since 1980. US Self Employment is lower than most other OECD countries.

Now more business failures than business starts.

Facts on Ent. in the US

-More likely to start a business in an "unattractive" industry. (Construction and not tech)

-More likely to start a business when they earn little money, unemployed, or change jobs often.

-Avg start up earns $100,000 in revenue a year

-Typical ent earns less and works more than someone who has a "traditional" job

Key demographic trends in Entrepreneurs

Females, dec

Veterans, dec

Latinos, inc significantly

Immigrants, inc 3 fold

Older People (55-64), inc

College Grads, inc

Contingent Workers

42.6 million --- independent contractors, self employed, day laborers, on-call workers, temporary workers, part-time workers`

Entrepreneurship

the PROCESS of creating value by bringing together a unique combination of resource to exploit an opportunity

Process of Entrepreneurship

Open Condoms Release Man Eggs

1. Opportunity Identification

2. Concept development

3. Resource acquisition

4. Management and Growth

5. Exit

Opportunity Development

Ent finds a market with an unmet need (opportunity)

Concept Development

Ent uses innovation to develop a concept that solves the unmet need

Invention

new process, product, or service.

Innovation

application of an invention in the marketplace or in the "real world"

Concept

application of an innovation to take advantage of a particular opportunity and meet unmet needs

Resource Acquisition

Ent gathers the resources necessary for success.

Resources

things the firm has that help it set itself apart from competitors

Management and Growth

steps ent takes to keep the venture up and running

Management

day-to-day operation of the business

Growth

identifying new opportunities or developing innovations that meet customer needs in a new and better way

Competencies

things that a firm does well

Entrepreneur competencies

focus, adaptability, self-efficacy, tenacity, creativity

Exit

last step of the ent process. Eventually founder has to give up company or dies

Sources of Opportunity

Changes in Laws or rules

Demographic changes

New Customers

Underserved Markets

Social trends

Previous entrepreneurial action

Factors of a BAD opportunity

Lack of need in market

Difficult to reach customers

Customer loyalty to elsewhere

High switching costs

Low barriers to entry and high levels of competition

4 Types of Opportunity

Perennial

Occasional

Multiple Cause

Multiple Effect

Perennial Opportunities

unmet needs that always exist (shelter, water)

Occasional Opportunities

come about once in a while. (Colorado weed legalization)

Multiple cause opportunities

come about due to a confluence of multiple trends (long lives, medicare, senior citizen dating service)

Multiple effect opportunities

lead to changing customer preferences (Global warming. Inc enviro awareness & more warm weather clohing)

Trends of Opportunity

Economic trends

Social trends

Technological trends

Political/regulatory trends

Customer reviews

SBIR Website

3 Parts of Alertness

Seeking Information

Identifying Patterns

Evaluating Profitability

Selective attention

process and react to certain stimuli but ignore others

IKEA Effect

Furniture that is assembled by someone is valued higher than if it was already together

5 Discovery Skills

All Quasars Observe Experimental Networks

Associating

Questioning

Observing

Experimenting

Networking

5 Whys

Sakichi Toyoda developed way to find root cause in 5 questions "Why" 5 times

Kaleidoscopic Thinking

thinking about a problem from every possible angle in order to generate ideas, make connections, and discern patterns