Pathways to Enterprise Creation © 2010 South-Western, a part of Cengage Learning All rights reserved.

Enterprisers can start businesses in many different ways Enterprisers can start businesses in many different ways. Pursuing opportunities involves a wide range of new venture strategies, situations, and behaviors. We all have different interests, skills, knowledge, and abilities. It is important to discover our strengths and to use them to choose the most appropriate route to entrepreneurship. The use of a typology to describe new venture pathways focuses attention on the differences among enterprisers rather than on the supposed differences between enterprisers and “others.” KEY CONCEPTS © 2010 South-Western, a part of Cengage Learning. All rights reserved.

(cont’d) We can group similar businesses into eight -archetypes, each of which suggests different start-up strategies and behaviors that enterprisers can apply to their start-up situations. The eight pathways to enterprise creation are: Type 1—Escaping to Something New Type 2—Putting the Deal Together Type 3—Using Prior Skills & Contacts (Professionals) Type 4—Purchasing a Firm Type 5—Leveraging Expertise Type 6—Aggressive Service Type 7—Pursuing the Unique Idea Type 8—Methodical Organizing KEY CONCEPTS © 2010 South-Western, a part of Cengage Learning. All rights reserved.

In addition to describing the archetype profiles, it is helpful to analyze them using 19 factors that cover environment, business, person, and start-up process. These archetypes can serve as broad guides for getting into business. However, your own start-up pathway is likely to be a blend of several of the eight archetypes. KEY CONCEPTS © 2010 South-Western, a part of Cengage Learning. All rights reserved.

What Kind of Enterprise Are You Starting? Archetype A model or prototype from which similar things can be made. Questions that Business Archetype Answers: What kinds of individuals are likely to start this kind of enterprise? What does this kind of enterprise look like and how does it compete? In what kind of industry and environment does this enterprise compete? What does the enterpriser do to start this kind of enterprise? © 2010 South-Western, a part of Cengage Learning. All rights reserved.

Eight Archetypes for New Business Ventures exhibit 9.1 Eight Archetypes for New Business Ventures Source: William B. Gartner, Terence R. Mitchell, and Karl H. Vesper, “A Taxonomy of New Business Ventures,” Journal of Business Venturing, May 1989, pp. 169–186. © 2010 South-Western, a part of Cengage Learning. All rights reserved.

19 Questions for Business Archetypes exhibit 9.2 19 Questions for Business Archetypes Individual Level 1. Did the enterpriser’s previous work experiences provide opportunities for advancement? (great to none) 2. Are the enterpriser’s previous work experiences similar to the work required in the new enterprise? (similar to unrelated) 3. What was the enterpriser’s interest in starting a business? (always interested to never interested) 4. Did the enterpriser see much chance that the new venture would fail? (0% to 95% chance of failure) Enterprise Level 5. Did the enterprise have any partners when it was started? (yes or no) 6. When did the enterprise begin to offer its products/services compared to its competitors? (First to after all of the others) 7. What is the quality of the enterprise’s goods/services compared to its competitors? (lower to higher) 8. How similar are the enterprise’s goods/services compared to its competitors? (different to same) 9. How flexible is the enterprise to adapting its goods/services compared to its competitors? (much lower to much higher) Source: William B. Gartner, Terence R. Mitchell, and Karl H. Vesper, “A Taxonomy of New Business Ventures,” Journal of Business Venturing, May 1989, pp. 173–174. © 2010 South-Western, a part of Cengage Learning. All rights reserved.

19 Questions for Business Archetypes (cont’d) exhibit 9.2 19 Questions for Business Archetypes (cont’d) Environmental Level 10. How complex are the technology and skills required to manufacture products or deliver services in this industry? (simple to complex) 11. How important are contacts with suppliers in this industry? (important to not important) 12. Do customers need a lot of expertise to purchase goods/services in the enterprise’s industry? (high to none) Startup Process How much time did the enterpriser spend (a lot to none) on the following: 13. Convincing customers to buy the enterprise’s products/services? 14. Seeking advice from lawyers, consultants, bankers and friends? 15. Seeking resources (loans, equity, suppliers, etc.) to start the enterprise? 16. Advertising, issuing press releases, sending out brochures? 17. Manufacturing the product or providing the service? 18. Was the enterprise purchased or is it a franchise? (yes or no) 19. At the beginning of the startup process, how much time did the enterpriser devote to starting the new enterprise? (full time to part time) Source: William B. Gartner, Terence R. Mitchell, and Karl H. Vesper, “A Taxonomy of New Business Ventures,” Journal of Business Venturing, May 1989, pp. 173–174. © 2010 South-Western, a part of Cengage Learning. All rights reserved.

Profiles of New Business Ventures exhibit 9.3 Profiles of New Business Ventures NS, not a significant differentiating variable for this gestalt. Source: William B. Gartner, Terence R. Mitchell, and Karl H. Vesper, “A Taxonomy of New Business Ventures,” Journal of Business Venturing, May 1989, pp. 176–177. © 2010 South-Western, a part of Cengage Learning. All rights reserved.

Profiles of New Business Ventures (cont’d) exhibit 9.3 Profiles of New Business Ventures (cont’d) NS, not a significant differentiating variable for this gestalt. Source: William B. Gartner, Terence R. Mitchell, and Karl H. Vesper, “A Taxonomy of New Business Ventures,” Journal of Business Venturing, May 1989, pp. 176–177. © 2010 South-Western, a part of Cengage Learning. All rights reserved.

Choosing a Path exhibit 9.4 Type Name 1 Escaping to Something New 2 Putting the Deal Together 3 Using Prior Skills & Contacts 4 Purchasing a Firm 5 Leveraging Expertise 6 Aggressive Service Enterprise 7 Pursuing the Unique Idea 8 Methodical Organizing © 2010 South-Western, a part of Cengage Learning. All rights reserved.