Entreprenuership: New Value Creation - Exam 1 TTU

· 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

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

· Types of paths for starting/running your own venture

Creating a New Venture

Acquiring an Existing Venture

-Pathways to New Ventures: Obtaining a Franchise

· Advantages of acquiring ongoing ventures

Buying an Ongoing Venture:

Less fear about successful future operation

Reduced time and effort

Purchasing at a good price?

· Pros and cons for franchising

Pros

•Training and guidance

•Systems and Technology

•Brand-name appeal

•A proven track record

•Financial assistance

Cons

•Initial franchise fees

•Royalties (% of ongoing sales)

•Franchisor's control and rules

•Potential competition from other franchisees

· Traditional view of entrepreneurship vs. current view

Traditional- Think of product, market research, projections, find partner, manage product, plan exit

Current view- Requires continuous practice with a focus on doing in order to learn. Designed for an unpredictable environment

· Types of entrepreneurship

Social Entrepreneurship - The process of sourcing innovative solutions to social and environmental problems

Family Enterprises - A business that is owned and managed by multiple family members, typically for more than one generation

Serial Entrepreneurship - Process of starting several businesses, whether simultaneously or one after another

· Entrepreneurial thinking vs. managerial thinking

Entrepreneurial: Small Actions, acceptable loss, start with what you have, Iterative, experimentation, embrace and leverage failures, collaborative, Unknowable, act to learn

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

· General types of mindsets

oFixed mindset

oGrowth mindset

· Entrepreneurial mindset

•Entrepreneurial mindset - the ability to quickly sense, take action, and get organized under uncertain conditions

· Entrepreneurial passion

•An intense positive emotion, which is usually related to entrepreneurs who are engaged in meaningful ventures, or tasks and activities, and which has the effect of motivating and stimulating entrepreneurs to overcome obstacles and remain focused on their goals

· Habits to develop as entrepreneurs

Habit #1: Self-Leadership:A process whereby people can influence and control their own behavior, actions

Habit #2: Creativity: •The capacity to produce new ideas, insights, inventions, products, or artistic objects that are considered to be unique, useful, and of value to others

Habit #3: Improvisation: •The art of spontaneously creating something without preparation

· Entrepreneurial action

Entrepreneurial Mindset --> Self-leadership Habit, Creativity Habit, Improvisation Habit --> Entreprenuerial Action

· Left-brain vs. right-brain thinking

Left Brain: Detail oriented, forms stratagies, Logic, rational, analytical, verbal, Quantatative processing, talking, writing, objective, linear, directive

Right Brain: Big picture oriented, presents possibilites, intuition, emotional, synthesizing, spacial, non-verbal processing, drawing, subjective, creative

· Value creation

•Economic - Capacity to generate profit

•Social - helps address a social need or creates social good

•Environmental - Protects or preserves the environment

· Entrepreneurial opportunities

•Problems

•Markets

•Solutions

· Strategies for idea generation

1.Analytical strategies - carefully thinking about how products can be improved or made innovative

2.Search strategies - making links based on past experiences

3.Imagination-based strategies - creating unrealistic states

4.Habit-breaking strategies - gaining a new perspective

5.Relationship-seeking strategies - making links between ideas

6.Development strategies - modifying existing ideas

7.Interpersonal strategies - involving others and brainstorming together

· Misconceptions of innovation

•Innovation is planned and predictable

•Technical specifications must be thoroughly prepared

•Innovation relies on dreams and blue-sky ideas

•Big projects (and bigger groups) will develop better innovations than smaller ones

•Technology is the driving force of innovation success

· Pathways to opportunity identification

•Find pathway - a pathway that assumes that opportunities exist independent of entrepreneurs and are waiting to be found

•Search pathway - a pathway used when entrepreneurs are not quite sure what type of venture they want to start, so they engage in an active search to discover new opportunities

•Effectuate pathway - a pathway that involves using what you have (skills, knowledge, abilities) to uncover an opportunity that uniquely fits you

•Design pathway - a pathway that can uncover high-value opportunities because the entrepreneur is focusing on unmet needs of customers, specifically latent needs

· Favorable opportunities

Favorable opportunities:

•Valuable - there is a market of customers

•Rare - offers some novelty that doesn't currently exist for customers

•Costly to imitate - create barriers to entry to other entrepreneurs

•Fit - aligns with the skills and knowledge of the entrepreneur or founding teams

· Entrepreneurship method

IDEATE Method - Identify, Discover, Enhance, Anticipate, Target, Evaluate

· Reasons to have a co-founder

•Division of responsibilities

•Faster time to launch

•Split early out-of-pocket expenses

•Strategic sounding board

•Complementary skillsets

•Mitigate risk for investors

· What to look for in a co-founder

•Possess the right skills

•Take a hands-on approach

•Use positive problem solving

•Leave ego at the door

•Share similar attitudes towards values, goals, and risk

•Care deeply

· Types of failure on the failure spectrum

-Deviance - Entrepreneur defies legal and ethical boundaries

-Inattention - Entrepreneur gets sidetracked from the core business

-Lack of ability - Entrepreneur is overextended and lacks the skillset to complete the job

-Process Inadequacy - The wrong processes are set up for the job

-Uncertainty - The entrepreneur takes unreasonable actions due to uncertainty

-Exploratory Experimentation - The entrepreneur conducts market tests to get early feedback

· Emotions and the grief recovery process

- Loss Orientation - Involves focusing on the particular loss to construct an account that explains why the loss occurred.

- Restoration Orientation - Involves both distracting oneself from thinking about the failure event and being proactive towards secondary causes of stress.

· Learning from failure

Rather than viewing negative feedback or a negative test as a "failure," view the process as intentional iteration

Intelligent failures - good failures that provide valuable new knowledge that can help a startup overcome hurdles and roadblocks

· Creating a blame-free culture

•Blame-free cultures encourage people to share, accept, learn from, and recover from failure

ØEmployees need to feel assured that they will not receive a negative reaction whey they admit mistakes

ØPeople need to feel comfortable reporting failures

· Ethical guidelines and code of conducts

Ethics

•Provides the basic rules or parameters for conducting any activity in an "acceptable" manner

•Represents a set of principles prescribing a behavioral code of what is good and right or bad and wrong

•Defines "situational" moral duty and obligations

Code of Conduct

•Code of conduct - statement of ethical practices or guidelines to which a venture adheres

•Should be done as early as possible