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					    FM20731 – Executive Leadership


Introduction to Entrepreneurship

      Week 1 – October 5, 2004


                                     1
Let’s see your schedules!




                            2
Why are you here?

What do you want to do?




                          3
                Instructor
• Instructor: Max Minkoff
• Teaching style: Interactive!
• How to contact me:
  max@dancingbearmail.com
• Website: http://www.planetminkoff.com
• Other availability: Immediately after class



                                                4
               Why am I here?
• Education
  – MS IE/ Human Factors: Virtual Reality
  – MBA in 2001
• Entrepreneur
  – Started first business in college
  – Joined VR Consumer Products startup
     • Went “public” in 1995
     • Ceased operations in 1997
  – Joined 3D ID Software startup
     • Company was sold
  – Cookie startup (with Kirk), 2002-2004
                                            5
              Course Content
• Teaching Strategies
  – Interactive Class Discussion
  – PowerPoint w/printed notes
  – Team exercises
• Textbook:
  – Entrepreneurship
     • Lambing, Peggy and Kuehl, Charles




                                           6
  What is an Entrepreneur?


   ENTREPRENEURSHIP

Insane perseverance in the face
        of total rejection.




                                  7
  What Is An Entrepreneur?


       ENTREPRENEUR

  A vision-driven individual who
assumes significant personal and
financial risk to start or expand a
             business.



                                      8
  What Is An Entrepreneur?


     ENTREPRENEURSHIP
 The pursuit of opportunity through
innovation, creativity and hard work
         without regard for
 the resources currently controlled.



                                       9
               Entrepreneurship
• Entrepreneurship: a way of thinking,
  reasoning, and acting that is:
  – opportunity obsessed
  – holistic in approach
  – and leadership balanced

  (This definition of entrepreneurship has evolved over the past two
  decades from research at Babson College and the Harvard Business
  School and has recently been enhanced by Stephen Spinelli, Jr., and
  John H. Muller, Jr., Term Chair at Babson College.)


                                                                        10
  Entrepreneurs: Born or Made?
• Is there inborn talent required?

• Assume that the answer is YES:
  –   then we can identify the main characteristics
  –   if we have them, fine - no others need to apply!
  –   we could start spotting talent in kindergarten
  –   we could "stream" these people
  –   we could discourage people without these talents
                                                         11
  Entrepreneurs: Born or Made?
• Assume the answer is NO:
  –   then schools could teach anyone
  –   would be a "profession" like law or medicine
  –   companies could establish "nurseries" for them
  –   government "incubators" would be successes


• The real answer lies somewhere in-between
  – Talent and education is the way


                                                       12
       Who is an Entrepreneur?
Situational more than personality


         Flexibility                           Ability

                              Age
                          Distribution
                               for
                       Starting Company




          20     25     30      35        40   45

                          Age

                                                         13
      Who is an Entrepreneur?
Manager’s Opportunities
                    Future Goals
                Change       Status Quo


                              Satisfied
   Possible   Entrepreneur
                              manager


 Perceived
 Capability
               Frustrated      Classic
   Blocked      manager      bureaucrat


                                          14
Burch's Entrep. Personality Traits
1.A desire to achieve
    Conquer problems, create successful venture
2.Hard work
    Their workload is very hard to match
3.Nurturing quality
4.Acceptance of responsibility
    Morally, legally and mentally accountable
5.Reward orientation
    Want be rewarded for their efforts
                                                   15
Burch's Entrep. Personality Traits
 6.Optimism
     Anything is possible
 7.Orientation to excellence
     Pride in something first class
 8.Organization
     They are wholly "take charge" people
 9.Profit orientation
     Profit primarily a gauge of performance

                                                16
               Failure? So what!
• Failure seen differently in America & Europe.
  – In Europe it is a major set-back
  – U.S. expected (required even!)
  – Canada - in between but tending to U.S.
• ―Our‖ System:
  –   Many entrepreneurs had been "blue collar"
  –   Many come from families of entrepreneurs
  –   Many are immigrants or their children
  –   But, there are no "rules" that ensure success
• Universally, entrepreneurs shake off failure!       17
   Failure as ―Learning Process‖
• Ignore it, then start again
   – Some find it easy to blame someone else
• In public, always optimistic
   – Especially with funders
   – Agonise over what went wrong in private
• Willingness to disregard the rules
   – Start from first principles.
• Ability to "bend, not break" rules of life

                                               18
     Classic Entrepreneurship:
            The Startup
• Raw startup company—an innovative idea
  that develops into a high growth company
• Qualities of a startup company
  – Strong leadership from the main entrepreneur
  – Complementary talents and outstanding teamwork of
    team members
  – Skill and ingenuity to find and control resources
  – Financial backing to chase opportunity


                                                        19
       Desirable and Acquirable
       Attitudes and Behaviors
•   Commitment and determination
•   Leadership
•   Opportunity obsession
•   Tolerance of
    – Risk
    – Ambiguity
    – Uncertainty
• Creativity, self-reliance, and adaptability
• Motivation to excel                           20
   The Entrepreneurial Process
• It is opportunity/market driven
• It is driven by a lead entrepreneur
  and an entrepreneurial team
• It is resource parsimonious and creative
• It depends on the fit and balance among
  these
• It is integrated and holistic


                                             21
The Timmons Model of the
 Entrepreneurial Process
                      Communication

    Opportunity                         Resources
       (2)                                 (4)
                      Business Plan
  Ambiguity           Fits and gaps           Exogenous forces

Creativity                Team              Leadership
                           (3)
        Uncertainty                   Capital markets



                         Founder
                           (1)                                   22
Enlightened Serendipity

 •   Being in the right place
 •   At the right time,
 •   Recognizing it, and
 •   Acting upon it,
 •   APPROPRIATELY and
 •   PASSIONATELY!!!

                                23
Course Evaluation & Technology
• Grading
  –   40%: Class Participation (including attendance)
  –   10%: Weekly Quizzes on Reading
  –   20%: Midterm Exam
  –   30%: Project

• Technology Needed:
  – Word Processing
  – Spreadsheet
  – Graphics and PowerPoint
                                                        24
             Attendance Policy
•   Two absences = one full grade drop
•   A third absence = an additional grade drop
•   Four absences = Failure
•   NOTE:
    – There are NO excused absences.
    – 2 lates and/or early departures = 1 absence.
       I WILL FAIL YOU IF I HAVE TO!
                                                     25
            Cellphone Policy
• OK if it rings
  – I don’t expect you to remember to turn it off
• BUT!
  – Don’t answer your phone in class!
  – Don’t step into the hall to talk
• Also
  – No text messaging



                                                    26
                  Next Class
• Homework
  – Read Chapter 11: Buying an Existing Business
  – Read Chapter 12: Franchises & Other
    Alternatives
• October 12
  –   Recognizing Opportunities
  –   Buy an Existing Businesses
  –   Open a Franchise
  –   Other Alternatives
  –   Quiz on Chapters 11 & 12!
                                                   27

				
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