Entrepreneurial Mind—Comprehensive Study Notes

Introduction to the Entrepreneurial Mind

  • Entrepreneurship = state of mind & lifestyle, not merely the firm’s size, sector, or success.

  • Key quotation (Gilles & Modejar, 2006): “Entrepreneurship is a state of mind… It is to do what one loves to do.”

  • Emphasis: mindset → passion, purpose, continuous action.

Evolution of Entrepreneurship (Chronological Overview)

  • Earliest Period (Marco Polo era)

    • Active world trade; “merchant-adventurer” carried goods for a capitalist.

    • Profit-sharing scheme: capitalist kept 75\%; merchant received 25\%.

    • Roles:
      • Capitalist = passive risk bearer, supplied goods & capital.
      • Merchant-adventurer = active operator, assumed physical & emotional risk.

  • Middle Ages

    • Entrepreneurs controlled production & had authority over large construction (churches, public buildings).

  • 17th Century

    • Fixed-price contracts appeared; entrepreneurs fully responsible for gains & losses.

  • 18th Century / Industrial Revolution

    • Clear separation of capital owner (entrepreneur) vs. capital seeker (manager/producer).

    • Key inventors: Thomas Edison & Eli Whitney = capital users → entrepreneurs through innovation.

  • 19th & Early 20th Centuries

    • Entrepreneurs often distinct from managers; focused on organizing enterprises for personal gain.

    • Example: Andrew Carnegie transitioned from poverty to leading American Steel, symbolizing industrial entrepreneurship.

  • Middle 20th Century

    • Function shifted to “creative destruction” (Schumpeterian): recreate/revolutionize production via innovation.

  • 21st Century

    • Entrepreneurs hailed as heroes of the free-enterprise market; generate diverse products/services & willingly embrace risk.

Earliest Period vs. Now (Foundational Shifts)

  • Earliest Period: cleverness foundation, brand-first priority, global scope.

  • Now: technology foundation, business-building priority, increasingly local focus (“go local”).

Common Myths of Entrepreneurship

  1. Entrepreneurs are doers, not thinkers.

  2. Entrepreneurs are born, not made.

  3. All they need is money.

  4. Only the rich can start businesses.

  5. Entrepreneurs are extreme risk-takers.

  6. Success is mostly luck.

  7. Must fit a single personality profile.

  8. It’s “just a job” – passion unnecessary.
    (Reality: each myth is false; mindset, education, strategy, calculated risk, and persistence drive success.)

Core Definitions

  • Word origin: “entreprendre” (French) = “to undertake.”

  • Entrepreneurs = innovative opportunity seekers creating value (new products or better processes).

  • Ordinary businessperson → goal = profit via buying/selling; entrepreneur → goal = opportunity creation & innovation.

  • Entrepreneurship (Aduana, 2016): art of practicing correct management to operate a self-owned, wealth-creating enterprise delivering valuable goods/services.

Why Study Entrepreneurship?

  • Creates opportunity.

  • Ensures social justice (inclusive growth, equitable wealth distribution).

  • Instills confidence & self-efficacy.

  • Stimulates economic activity & GDP.

  • Teaches risk assessment, failure resilience, perseverance.

  • Spurs creativity, invention, and innovation.

  • Constitutional mandate (1987 Philippine Constitution, Article XII §1): private enterprise supports equitable income, sustained production, higher quality of life.

  • Personal benefits: more creativity, autonomy, life control.

Five Salient Features of Entrepreneurship

  1. Art of Correct Practice
    • Dynamic, evolving like art; creativity + iterative learning.

  2. Wealth-Creating Venture
    • Beyond profit → enhances entrepreneur’s economic, social, moral, psychological wellbeing.

  3. Providing Value to Customers
    • Needs/wants satisfaction; repeat purchase & referrals as proof.

  4. Opening & Managing Self-Owned Business
    • Contrasts with intrapreneurship (employee-led innovation inside a firm).

  5. Risk-Taking Venture
    • Entrepreneurs analyze, face, and manage risk for venture survival.

Contributions of Entrepreneurship (Aduana 2016)

  • Guidelines for wealth creation.

  • Improves financial & social life of the entrepreneur.

  • Expands creativity; sparks happiness & productivity.

  • Generates community employment.

  • Creates new market demand & raises tax revenue.

  • Accelerates movement of production factors.

  • Builds harmonious, loving communities & constructive competition.

  • Identifies international niches; hastens economic recovery post-crisis.

  • Facilitates money flow; improves national credit/economic ratings.

Lesson 2: Key Concepts—Entrepreneurship vs. Intrapreneurship

Learning Objectives:

  • Define entrepreneurship-related terms.

  • Compare/contrast entrepreneurship & intrapreneurship.

Exercise Idea: “Bubble Thoughts” – students jot words/phrases that come to mind for each term.

Entrepreneurship (Process)

  • Starting & running own business.

  • Identifying marketplace opportunities & mobilizing resources.

  • Creating “something different & better” with value through creativity, innovation, risk-taking, progressive imagination.

Entrepreneur (Person)

Key abilities:

  1. Perceive opportunity.

  2. Commercialize it (innovation).

  3. Sustain pursuit.

  4. Use systematic methods.

  5. Accept risk/failure.

  • Creates jobs; visionary; turns “nothing” into “something.”

Three Disciplinary Perspectives

  • Economist: combines resources to raise value; introduces innovations.

  • Psychologist: driven by internal need to achieve, experiment, escape authority.

  • Capitalist/Philosopher: creates wealth for others, reduces waste, generates desired employment.

General Principle: all entrepreneurs are businesspersons, but not all businesspersons are entrepreneurs; success is gender-neutral.

Entrepreneurs vs. Intrapreneurs (Comparison)

  • Shared traits: confidence, creativity, enthusiasm, vision.

  • Key distinctions:
    • Position: entrepreneur = owner/founder; intrapreneur = employee with innovation mandate.
    • Approach: entrepreneur intuitive; intrapreneur restorative (improving existing systems).
    • Resources: entrepreneur uses own; intrapreneur uses company’s.
    • Capital: self-raised vs. company-financed.
    • Enterprise: new establishment vs. existing organization.
    • Dependency: independent vs. dependent.
    • Risk: borne personally vs. borne by company.
    • Objective: market leadership vs. organizational renewal.

Definition & Role of Intrapreneur

  • “Entrepreneur within boundaries of an organization.”

  • Authority to initiate creativity/innovation in products, services, processes.

  • Pursues change, tolerates failure, exploits opportunities benefiting the whole firm.

  • Organization supplies resources; job is challenging → rewarded/recognized accordingly.

Ethical, Philosophical & Practical Implications

  • Ethical: equitable wealth distribution, social justice, communal harmony.

  • Philosophical: autonomy, self-realization, creative expression.

  • Practical: economic growth, job creation, tax revenue, competitive markets, resilience during downturns.

Numerical / Statistical References & Formulas

  • Historical profit split: capitalist 75\%, merchant 25\%.

  • Years/Centuries: 13^{th}-14^{th} (Marco Polo), 17^{th}, 18^{th}, 19^{th}-20^{th}, 21^{st}.

  • Constitution reference: Philippine 1987 Article XII §1 emphasizes private enterprise’s economic role.

Real-World Examples & Case Studies

  • Marco Polo: prototype merchant-adventurer.

  • Thomas Edison: inventor-entrepreneur; monetized electricity & communication innovations.

  • Eli Whitney: cotton gin → productivity leap.

  • Andrew Carnegie: steel empire; philanthropy after wealth accumulation.

Connections to Foundational Principles

  • Schumpeter’s “creative destruction” → Middle 20th Century function.

  • Maslow’s self-actualization → psychological motive of entrepreneurs.

  • Adam Smith’s “invisible hand” → entrepreneurs allocate resources efficiently.

Study Tips

  • Relate historical evolution to socio-economic context (e.g., industrial revolution technologies).

  • Debunk myths by matching them with real facts & examples.

  • Distinguish entrepreneur vs. intrapreneur using mnemonic “O-I-R” (Ownership, Independence, Risk).

  • Recall five salient features with acronym “A-W-V-S-R” (Art, Wealth, Value, Self-owned, Risk).

  • Apply constitutional mandate to assess policy questions on MSME support.

Potential Exam Prompts

  • Explain how the 1987 Philippine Constitution supports entrepreneurship.

  • Describe the five salient features and give current examples of each.

  • Compare profit & risk allocation in Marco Polo’s era to modern venture capital deals.

  • Differentiate entrepreneur & intrapreneur in terms of resource dependence and risk allocation.

  • Discuss two myths of entrepreneurship and refute them with evidence.