Week 43: Lecture Flashcards
What is venture creation, and why is it important for entrepreneurship?
Venture creation involves identifying and pursuing business opportunities that can scale up into sustainable enterprises. It focuses on developing new products, services, or business models that provide value and can grow beyond the initial startup phase.
Why do most new ventures fail?
Survival Bias: Over-focus on successful ventures and overlook the causes of failure.
Liability of Newness: New ventures often lack resources, legitimacy, and track records, making survival difficult.
What is entrepreneurial alertness?
Entrepreneurial Alertness refers to the ability to recognize and seize business opportunities in the current and future market environment. It is a key predictor of entrepreneurial intentions and success.
How can entrepreneurial intentions be measured?
Desires and Preferences: Whether someone prefers self-employment or organizational employment.
Plans and Behavioral Expectancies: The likelihood of starting a business based on perceived success and feasibility.
Why are entrepreneurial opportunities often difficult to recognize?
Entrepreneurial opportunities are hard to spot due to uncertainty in the environment and disruptions that may obscure them. Successful entrepreneurs leverage collective organizational and industry knowledge to overcome this.
What are the key steps to building a successful venture?
Identify and Solve a Problem: Find a market gap and address it.
Leverage Work Experience: Use insights gained from previous jobs or industries.
Build a Strong Team: Co-mobility and industry networks are vital.
Ensure Feasibility: Be technically and financially viable.
Identify an Addressable Market: Know your customer base and market demand.
What are spin-outs?
Spin-outs are new firms formed by employees leaving an established organization. They are more likely to succeed due to the industry-specific experience and resources gained from their parent firm.
What is knowledge stickiness?
Knowledge Stickiness refers to how difficult it is to transfer knowledge when employees move from one firm to another.
Explicit Knowledge: Easy to document (e.g., reports).
Tacit Knowledge: Personal and hard to transfer (e.g., intuition).
Firms that retain employees with sticky knowledge hold a competitive advantage.
What is employee co-mobility?
Employee Co-Mobility happens when employees move together from one company to another as a group.
This can transfer a competitive advantage to the new firm and reduce friction in starting a business due to pre-established teamwork dynamics.
What is the Venture Evaluation Matrix, and how does it assess opportunities?
The Venture Evaluation Matrix is a tool to assess new business opportunities across three dimensions:
Customer: Is there a clear need?
Company: Can the company provide a solution?
Entrepreneur: Does the entrepreneur have the necessary skills?
It evaluates value proposition, industry strength, and strategic growth potential.
What does heterogeneity mean in entrepreneurship?
Heterogeneity refers to differences in how individuals evaluate business opportunities based on their unique experiences and perceptions.
