Entrepreneurship I Class #2 Ideas and Opportunities

9/6/012 Entrepreneurial achievement is driven by people who search for and shape superior opportunities

9/6/013 Joseph Schumpeter regards the dynamic process of new firms replacing or changing existing firms: “gales of creative destruction.” This, he defines, is the essential feature of capitalism. Entrepreneurial companies are the true life blood of a region, pumping renewed energy and vigor into the economy.

9/6/014 Entrepreneurship buzz Brontosaurus capitalism Intrapreneurship Youth Get rich quick

9/6/015 What’s Important Founders Opportunity recognition Resources

9/6/016 What You Need Unfair advantage Ability to sell Earn the right to exist everyday Implementation Commitment

9/6/017 Luck and Smarts Business is timing/high tech is timing Importance of marketing –Research, analysis, strategy –Selling $1 for $.50 is easy –Selling $1 for $1.10 is not

9/6/018 What ideas form the basis of a good business? Pain Passion Problem

9/6/019 Ideas and opportunities market, market, market More money than good ideas Strategic money

9/6/0110 Points of interest Life cycle of businesses Changing strategy and culture Team building Long term value vs. short term profits Balancing risk and reward Lifestyle businesses vs. growth businesses

9/6/0111 Why businesses fail 1 out of 3 succeed The bigger you are, the faster you grow, the better your chances of survival

9/6/0112 Opportunities Start with the opportunity –Not money –Not strategy Market demand Market structure and size Margin analysis

9/6/0113 Sources of inspiration Inc Magazine Red Herring Upside Wall Street Journal Start Up by Jerry Kaplan Fast Company Business Week High Stakes No Prisoners NY Times

9/6/0114

9/6/0115 Hot S e g m ents Hi tech

9/6/0116 Hi tech Spending was $760B in $280 B spent on IT hardware = 17% more than U.S. new motor vehicle purchases, 49% more than new home spending, and 168% more than commercial and industrial construction Average wage in high tech sectors is $17K greater than wages in traditional sectors ($49K vs. $32K in 2002). Growth in spending increased 10-13% annually from (Goldman Sachs). Goldman Sachs survey results predict growth in spending under 5% for , with a quarter of corporate respondents predicting decrease in spending.

9/6/0117 High tech High tech jobs have accounted for % of real wage and salary growth For the past 3 years, high tech sectors have contributed 27% of growth in GDP Pa is ranked 8th in both total tech employment and and # of tech firms PA = 2nd largest biopharmaceutical state and 5th in biotech

9/6/0118 Tech transfer growth 383% increase in gross licensing revenue from licensing income - $123 mm 1999 licensing income – 594 mm

9/6/0119 Tech transfer CMU CMU made $5.9mm in startups, 23 licenses 104 invention disclosures, 21 patents filed Total of 119 active licenses and options through ‘99 9 FTEs in the office

9/6/0120 Tech transfer Pitt Pitt generated $.6 mm in startups, 16 licenses 48 patents filed, 107 invention disclosures Total of 57 active licenses and options through ’99 9 FTEs in the office

9/6/0121 New generation entrepreneurs Low capitalization New services or products or old positioned in brand new way Different perspective on risk

Blinding glimpse of the obvious Thorton Wilder

9/6/0123 Mission Organization’s purpose What it wants to accomplish in the marketplace Defines the business in terms of satisfying customers’ needs

9/6/0124 Mission statements Realistic Specific Distinctive competencies Motivating Driven by a vision

9/6/0125 Example The mission of XYZ is to serve the natural gas, oil and water industries through the manufacture and distribution of state of the art pipeline products in an atmosphere reflective of the highest professional and ethical standards. Our firm commitment to excellence, integrity and innovation is designed to ensure superior product value and unequalled service to our customer base while providing enhanced growth opportunities for our associates and maximum value for our shareholders.

9/6/0126 Mission statements should Be clear AND concise Tell WHAT you do and WHO you do it for Indicate the core VALUES of the organization DIFFERENTIATE you from the competition