Unit 1 - Introduction Flashcards
Entrepreneur:
A person who sets up a business taking on financial risks in the hope of profit
Entrepreneurship mind set
Encouragement that guides human behaviour towards opportunities, innovation and value creation. It involves taking calculated risks, accepting change and uncertainty
Types of risk
- Demand
- Technological
- Financial
- Execution
Sources of innovation
- Products
- Production methods
- Markets
- Supply sources
- Forms of organization
Types of entrepreneurship
according to the company
- Lifestyle companies (Low entrepreneurship orientation)
- Controlled growth companies (medium entrepreneurship orientation)
- Aggressive Growth Company (High entrepreneurship orientation)
Types of entrepreneurship
according to the context
- Corporate entrepreneurship
- Sustainable entrepreneurship
- Social entrepreneurship
- Environmental, eco entrepreneurship or
green entrepreneurship
Types of innovation
• PRODUCTS: Product design, features (packaging, texture..)
post sales service
• BUSINESS PROCESSES: production and operations, distribution and logistics, marketing and sales, information and communications systems, direction and management…
Creative destruction
Schumpeterian creative destruction:
• Innovation destroys products, jobs and business models that become obsolete when replaced by new and better ones.
It is the engine of capitalist development
Entrepreneurial discovery - Every market is characterized by
opportunities for pure entrepreneurial profit.
Sources of opportunities
• New technologies
• Political and regulatory changes
• Social and demographic evolution
Entrepreneurial discovery - an entrepreneur is…
“An entrepreneur is someone with experience, able to stay alert, to spot opportunities, to plan in order to take advantage of those opportunities”
• Detection of imbalances by the “state of alert”
• Information, knowledge and analysis capacity
• Experience is important
Types of entrepreneurship - From a company perspective
- Lifestyle companies (Low entrepreneurship orientation)
- Controlled growth companies (medium entrepreneurship orientation)
- Aggressive Growth Company (High entrepreneurship orientation)
Lifestyle companies (Low entrepreneurship orientation)
- Strategy focused on a local market, viable business model and stable income
- Modest reinvestment to maintain competitiveness (no economies of scale)
- Does not seek to grow (stable number of employees)
- Example: Street food station
Controlled growth companies (medium entrepreneurship orientation)
- Viable business model
- Continuous reinvestment (staff, brand development, facilities…)
- Seeks stable growth (launches new products, expands geographically…)
- Example: Most companies
Aggressive Growth Company (High entrepreneurship orientation)
- Viable business model, with a clear competitive advantage (R&D, business model…)
- Ability to “scale” and dominate a global market or product category
- High needs for professional investment, with diverse shareholders
- Example: Spotify, Wallbox….
Types of entrepreneurship - From a context perspective
- Corporate entrepreneurship
- Sustainable entrepreneurship
- Social entrepreneurship
- Environmental, eco entrepreneurship or green entrepreneurship
Corporate entrepreneurship
Business actions that denote an entrepreneurial orientation.
These actions Include:
• Innovation activities
• Strategy changes (corporative and competitive), and
• Intra-entrepreneurship (employees who are entrepreneurs from their position)
Sustainable entrepreneurship
“Paradigm that seeks to ensure the well-being of future generations by creating ENVIRONMENTAL, SOCIAL and ECONOMIC value (includes social and environmental entrepreneurship)”
Simultaneously requires:
•An economically viable organization
•The generation of social benefits
•The reduction of damage to the environment
Raises goal compatibility issues (“triple bottom line”)
Social entrepreneurship
“Activities that create ECONOMIC value and SOCIAL value for people and communities (for example, by helping marginalized or disadvantaged groups)”
Double objective (social and economic) • The creation of social value prevails (it is not about CSR or cause branding that condition social objectives to financial profits ) • Requires generating income on the long term, and measurable objectives (this fact excludes many NGOs and foundations that work with public funds or donations)
Environmental, eco entrepreneurship or green entrepreneurship
Activities that create benefits for the environment and economic value (with the offer of ecological products and the development and use of green technologies)”
Double objective
• The environmental benefit prevails (it is not “ecoposturing” - green-washing), and it must be measured
• Requires generating income on the long term , and measurable objectives (excludes many NGOs and foundations)
Entrepreneurship process steps
- Value proposition
- Business model
- Business plan
Value proposition
“Description of the benefits that customers can expect from a product”
Business model
“Description of the bases on which a company creates, provides and captures value”
Business plan
“Document that presents a business opportunity, identifies the market to be served, and provides details on how the entrepreneurial organization plans to pursue it”
Stages of entrepreneurial process - Development & Validation
- Commercial: Determine if there is potential market and early adopters
- Human: Create team
- Technical: Minimum viable product (MVP) and product/market fit
- Financial: Pre seed and seed capital
BUSINESS MODEL VALIDATION
A Validated Business Model includes information based on Facts and not based in Hypotheses
Stages of entrepreneurial process - Growth & Return
- Commercial: Generation of demand
- Human: Design and formalize an organization, planning and human resources
- Technical: Improvements for minimum viable product (MVP). Define activities, budget and objectived
- Financial: Finance rounds, early stage and later stage
Business model validation
- The conventional approach to management does not work for startups due to high uncertainty
- Entrepreneuring is about testing and learning faster than competitors more than coming up with a brilliant idea
The Lean startup methodology is based in two ideas:
✔️ VALIDATED learning: “I don’t have to believe in my assumptions, but instead on what the market wants”
✔️ ITERATIVE process for product launches in order to obtain the maximum amount of information, at the shortest period of time with the least amount of resources
Iteration Cycle: Build/Measure/Learn
Repeat this process until your customer sends you a clear signal that your product fits a market need
GEM Monitor
Provides a comprehensive set of indicators on entrepreneurship in 43 economies located in four regions: • East and South Asia • Europe and North America • Latin America and the Caribbean • Middle East and Africa
