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Entrepreneurship: Making the Possible Real. The Basic Nature of Entrepreneurship. A Formal Definition. As a field, it seeks to understand how opportunities to create something new (products, services, markets, organizing, etc.) Arise , are discovered or created by specific persons
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Entrepreneurship: Making the Possible Real The Basic Nature of Entrepreneurship
A Formal Definition • As a field, it seeks to understand how opportunities to create something new (products, services, markets, organizing, etc.) • Arise, are discovered or created by specific persons • Who then develop them in various ways to create value—economic or social
Is it Only New Venture Creation? • No, although new venture creation is central • My definition: “It occurs whenever, however, wherever individuals apply their creativity, ingenuity, energy, talent, etc. to the development of something new, useful, and better that creates value”(Social or Financial)
Is this Entrepreneurship? • Why? • Why not?
How About This? Turning a taxicab into a “floating” library?
Woman opens professional cuddling shop – gets 10,000 customers in first week • Is this new, different, not being developed now? • Then, it is entrepreneurship! • Not necessarily High Tech! • And not necessarily a new company
Entrepreneurship....? • Some would say “yes” • Others would say “no” • What do you think?
Is Tesla Really Successful? Is His Car REALLY New and Better? Markets Tell US!
So What Makes the Field of Entrepreneurship Unique? • It focuses on the origins of new companies—how/why they get started • And how they develop during their early years • What happens if they succeed, and grow? • They gradually become “regular” organizations, that are studied by all other fields of management
Can a Dentist Be An Entrepreneur? • What do you think? • How? • The Airport Dentist!
Are Franchise Holders Entrepreneurs? Do they do anything new? Do they anything different—and better? Do they use their own creativity, ingenuity, etc. to create something new? What do you think?
What about small business owners? • Someone who opens a bakery selling cupcakes • Someone who opens a craft shop • What if it is new and then becomes a chain—like Jimmy’s Egg? • Are they entrepreneurs? • Franchisors—who think up the idea—yes! • Franchisees—No—nothing new • If they do precisely what others have done, no.
A Formal Definition • As a field, it seeks to understand how opportunities to create something new (products, services, markets, organizing, etc.) • Arise, are discovered or created by specific persons • Who then develop them in various ways to create value—economic or social
My own definition: • Entrepreneurship is the arena in which human creativity, ingenuity, energy, and skills meet • And together, create something new, useful, and better than what exists • And—thatcreates economic or social value
Who is the Greatest Entrepreneur of All Time? What Do You think?
Entrepreneurship: A Field With a “Split Personality” • One Side: We don’t currently know why some entrepreneurs succeed and others don’t • The Other side: We already know because entrepreneurs can tell us • Another split: (1) we must be practical—give you the skills, knowledge you need to become an entrepreneurs • But (2): As part of the university, we must also add to knowledge • So which do we do? Both!!!
Are Entrepreneurs Shy About Telling Us Why They Think They Have Succeeded? Or Books by other persons—who tell you “how to get rich” by starting your own business
Is This a Valid Source of Knowledge? • Common sense says “Yes”—But is it really true? • But can we believer what entrepreneuers say/believe? • Can people report accurately on their own experiences, motives, actions or why they succeded? • Can we/they really do this? Maybe—probably not! • Try this: • How did you decide on your current career—really? • Why do you like some people you meet but dislike others—quickly! • Is your memory perfect? Do you forget names? Information you need during an exam? • Do we remember what we want to remember, but forget the rest?
Evidence is Overwhelming: We Aren’t Really very good at answering such questions. • People cannot: • Report accurately on what influenced their behavior— • On what happened to them in the past • On how much change they have personally experienced • Try going to a High School reunion sometime! • On how various experiences will make them feel in the future • On why they do what they do—we don’t know!
If this is true, can entrepreneurs tell us where their ideas came from? Why they succeeded? • They can try and do their best to help, but… • And if they can’t, how else can we find out? • And of course, they all give different answers to: ‘How to succeed’
“Always seek negative feedback, even though it can be mentally painful”
Larry Page: Invention is not enough. Tesla invented the electric power we use, but he struggled to get it out to people. You have to combine both things: invention and innovation focus, plus the company that can commercialize things and get them to people.
A Few More Ideas About the Foundations of Success…. "I never perfected an invention that I did not think about in terms of the service it might give others... I find out what the world needs, then I proceed to invent." - Thomas Edison "The important thing is not being afraid to take a chance. Remember, the greatest failure is to not try. Once you find something you love to do, be the best at doing it." - Debbi Fields, founder of Mrs. Fields Cookies
And Still More • “I do not think there is any other quality so essential to success of any kind as the quality of perseverance. It overcomes almost everything, even nature.” –John D. Rockefeller. • “The secret of business is to know something that nobody else knows.”--Aristotle Onasis. • So who do we believe? All? None? Some? • That’s the problem!
Another Approach:Data-based Evidence • Example: Medicine—germ theory • Biology: DNA and the Genetic Code; CRISPR • Geology: Plate-tectonics • For example: Help would-be entrepreneurs do a better job of finding good opportunities, developing them, etc.
Before Geology Accepted Plate Tectonics: Dinosaurs in Antarctica?
A Coincidence? And then—plate tectonics provided the answers—and this theory was supported by data
Basic Conclusion: If really want to help, we should also seek objective, systematic information • So, let’s listen to successful entrepreneurs • AND: gather objective information too • For instance: why do some people recognize opportunities for a new business and others don/t? • Why do some entrepreneurs persuade others to help them with money, etc., while others don’t? • What skills do entrepreneurs need to be successful—for instance, to obtain financial support, win customers, etc. • What do entrepreneurs learn from their experience?
But Of Course….Equally Important We will also examine the “practical side” How to: • Start a corporation • Obtain intellectual property protection • Form a strong founding team • Obtain financing • Stay out of trouble with the government! • Etc., etc.
But—one more point: Correlation or Causation? • Just because two variables are related does not mean one causes the other • Men’s hair and wealth….! “Hair causes people to get rich?”“Wealth causes men to grow more hair?” What’s the truth??? • Another example: the younger a country’s population, the more entrepreneurs it has • Why? Youth causes entrepreneurship? • Or: many young people, labor market tight, so…start your own company; Or young people are more willing to take risks, or… • So watch out for this trap—it can be very costly.
