What is Entrepreneurship? Mark T. Schenkel, Ph.D.

Agenda What is Entrepreneurship? – Historical development – Definition – Myths – Process – Career Paths

The Entrepreneurial Revolution “We are in the midst of a silent revolution – a triumph of the creative and entrepreneurial spirit of humankind throughout the world.” “I believe its impact on the 21 st century will equal or exceed that of the Industrial Revolution on the 19 th and 20 th.” “The death knell for brontosaurus capitalism of yesteryear.” -- Jeffry A. Timmons (The Entrepreneurial Mind, 1989)

Development of Entrepreneurship Development of Entrepreneurship Earliest Period- Marco Polo Middle Ages- Theater, Architectural Works 17 th Century- Mississippi Company 18 th Century- Edison & Whitney 19 th & 20 th Centuries –Organize/Operate –Innovation

The Opportunity Statistics –A random national sample (Gallup poll survey, 1994) of high school students reveals that 70% of these students say they want to own their own business some day (Timmons, 2004: 7) –Annual Chronicle survey: 40% of incoming students have entrepreneurship as major goal for why they are going to college –Fortune 500 employment decline: 1970 (20%) – 1996 (8.5%) –Small firms constitute more than 90 percent of the entire business population Virtually of USA’s economic growth is coming from entrepreneurial ventures of all sizes and types Not yet tainted by corporate way of life Good time to take risk!!!

Entrepreneurship A process, not a type of person Creating and/or building something of value Identifying an opportunity Pulling together the needed resources to pursue the opportunity Developing and implementing a Business Plan Involves uncertainty and the acceptance of risk

The Nature of Entrepreneurial Risk Failure – “Sinking the Boat Risk” Opportunity Cost – “Missing the Boat Risk”

Myths about Entrepreneurship The Lone Cowboy Myth. The Experience Myth. The I’m Only in it for the Money Myth. The Entrepreneurs are Gamblers Myth.

Myths about Entrepreneurship The Entrepreneurs Don’t Have to Worry about Numbers Myth. The All You Need is Money Myth. The I’ve Got a Secret Myth. The IPO Myth.

Other Opportunities for Learning Curb event center retail space Hatchery Practicing entrepreneurs activities Entrepreneurship club InternshipsMentorsNetworking!!!

The Entrepreneurial Process

Working Definition of Entrepreneurship “Entrepreneurship is a way of thinking, reasoning and acting that is opportunity obsessed, holistic in approach [emphasis added], and leadership balanced” (Timmons, 1999: 27).

The Entrepreneurial Process (Timmons, 2000) OpportunityResources Team Communication Business Plan Fits and Gaps Creativity Leadership Capital Market Forces Uncertainty Ambiguity Exogenous Forces Founder

Analysis Strategy Formulation Implementation Eval., Review, & Feedback The Entrepreneurial Process

Strategy Luck Planning Three Part Process

Courage: Risk and the Dimensions of Work Life Cycle of a Business Venture

Pre-Launch Process: Idea Generation Understanding the Genesis of New Businesses in the Economy Sources of Ideas: Where to Look

The Entrepreneurial Process Challenge Traditional Definitions of Value Entrepreneurship thrives on market inefficiencies Customers seek improvement in the following: –Speed –Convenience –Personalization –Price

Pre-Launch Process: Evaluating Ideas Generation Does the Idea = an Opportunity? –Market –Margin –Mission The Right Team? The Necessary Resources?

The Start-up Process Filling the Gaps The Business Plan –Executive Summary –Market Analysis and Marketing Plan –Operating Plan and Team –Financial Plan

Growing the Business CASH FLOW MANAGEMENT Building a Culture MarketingStaffing Building Management & Administrative Systems

Exit or Succession

Entrepreneurial Careers Do it now! Not necessarily a one shot deal Sentry Position (in consulting firm or in industry) Family or existing Small Business Corporate Track

Key Takeaway Points... No fully satisfactory definition of entrepreneurship has been developed to date (i.e., one that garners collective agreement among scholars & practitioners alike). “Entrepreneurship” reflects creative, innovative, and arbitrage oriented behaviors. Is a process; involves planning, strategizing, and a little bit of luck. Interconnectedness of resources and opportunities

Key Takeaway Points...  Entrepreneurship can occur – and fail to occur – in firms that are old and new; small and large, fast and slow growing; in the private, not-for-profit, and public sectors; in all geographic points; and in all stages of a nation’s development.