Module 1 - Video 2 Flashcards
Entrepreneurship (Baron and Shane 2008)
As a field, seeks to understand how opportunities to create something new arise and are discovered or created by specific individuals, who then use various means to exploit or develop them, thus producing a wide range of effects – Baron and Shane 2008
Is entrepreneurship only profit oriented?
No. Can also be socially or personally motivated
What are the primary forms of entrepreneurship?
Small and medium enterprises (SMEs)
Innovation driven enterprises (IDEs)
Identify the 4 characteristics of SMEs
Focused on addressing local/regional markets
Good at providing non tradable jobs (i.e. jobs that need to be performed locally) (ex. restaurants, laundries, etc.)
Most often family businesses with little external capital
Generally, put money into company and revenue and profit responds in a linear fashion
Identify the 7 characteristics of IDEs.
Focus on innovation, profit, and growth
Address global/regional markets
Generally based on technological or business process or business model innovation
Diverse ownership/equity structures. Have to bring in external capital providers
Focus on competitive advantage with their innovation
Tradable jobs
Starts by losing money (valley of death), doesn’t respond linearly but exponentially overtime.
What is the valley of death?
The initial period of an IDE where they start by losing money (i.e. negative cashflows) before eventually climbing out of the valley and seeing profit grow exponentially
What are the secondary forms of entrepreneurship? Provide examples.
Intrapreneurship - 3M discovering post-its, discovering the like button at Facebook
Social entrepreneurship - Mohammed Unis (Microfinance)
Lifestyle entrepreneurship - using Etsy or similar platforms
To have entrepreneurship you must have _______. You need to _________ someone’s needs.
To have entrepreneurship you must have entrepreneurial opportunities (ex. new market for an existing product OR new product or service for an existing market).
You need to solve someone’s needs
How many studies have been able to find an innate set of characteristics common across all entrepreneurs?
None
Entrepreneurs are made not born! This means they have common ways of thinking and behaving. What are those common behaviours?
Effectuation
Using iterating, testing, and learning
Getting past the liability of newness
Ability to build and deploy their network around their solution
What is a general definition of effectuation? Why do entrepreneurs use it?
Entrepreneurs often have to make decisions in the absence of certainty, in a new environment (i.e. they may be making new decisions in a new market). They use effectuation to deal with new environments and be highly successful in highly uncertain situations.
Effectuation: Starts with means (who am I, what do I have, what do I know, whom do I know) and arrives at an outcome at a more inductive way from a range of possibilities.
What are the systems by which entrepreneurs use iterating, testing, and learning to get information about what’s working and what’s not?
Specifically: Startup, business model canvas, prototyping, minimum viable product
More broadly, entrepreneurs use the ABLE and design thinking frameworks to come to decisions about what’s working and what’s not
What is ABLE?
Ask/Build → Build/launch → Experiment/Evaluate → Learn/Adapt
What is design thinking?
Used widely in organizational environments
Empathize → define → ideate → prototype → test
Empathize: deep way to understand the problem and needs of individuals that you are designing a solution for
(ex. Sameer Dhar (Sensassure) lived in a seniors home to understand problems faced because he wanted to solve needs for adult diapers)
What does it mean when entrepreneurs need to be able to/are commonly able to get past the liability of newness?
It means that entrepreneurs are able to convince others about the validity and need for their solution
