Lecture 2 - Entrepreneurship & the Entrepreneurial Process

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New Venture Thinking

Transcript of Lecture 2 - Entrepreneurship & the Entrepreneurial Process

  • New Venture Thinking

    Entrepreneurship &The Entrepreneurial Process

  • WHAT IS ENTREPRENEURSHIP?

    Question:

  • Invent stu?

  • Retire at 35?

  • Raise venture capital?

  • Save the world?

  • [DEF] Entrepreneurship

    Entrepreneurship is the act of exploring and expressing creative potential.

  • [DEF] Entrepreneurship

    Entrepreneurship is the act of building sustainable value systems.

  • It is a key driver of social, economic, and human development

    It is a key proponent of socio-systemic change

  • What makes an Entrepreneur?

  • Set of Tools

    Set of Genes

    ?

  • Entrepreneurship is a perspective

    cc Pierre-Olivier Guido Daniele

  • Reality is malleable

    Human beings can participate in its formation and transformation

    I have the potential to participate in this human process

    The development of potentials and transformation of malleable reality is a constant process

    Key Assumptions of the Entrepreneurial Perspective

  • THE ENTREPRENEURIAL PROCESS

    Entrepreneurship in action

  • The entrepreneurial process is a term coined by academia to describe the new venture creation that is

    associated with entrepreneurial activity.

    - Hisrich and Peters (1992)

  • Cox, Mueller, and Moss (2002)

    Entrepreneurial Process

  • Task 1: Conceive a unique idea for a business

    Task 2: Identify market opportunities for a new business

    Cox, Mueller, and Moss (2002)

    Entrepreneurial Process

  • Task 1: Conceive a unique idea for a business

    Task 2: Identify market opportunities for a new business

    Task 3: Plan a new business

    Task 4: Write a formal business plan

    Cox, Mueller, and Moss (2002)

    Entrepreneurial Process

  • Task 1: Conceive a unique idea for a business

    Task 2: Identify market opportunities for a new business

    Task 3: Plan a new business

    Task 4: Write a formal business plan

    Task 5: Raise money to start a business

    Task 6: Convince others to invest in your business

    Task 7: Convince bank to lend you money to start business

    Task 8: Convince others to work in your new business

    Cox, Mueller, and Moss (2002)

    Entrepreneurial Process

  • Entrepreneurial Process

    Task 1: Conceive a unique idea for a business

    Task 2: Identify market opportunities for a new business

    Task 3: Plan a new business

    Task 4: Write a formal business plan

    Task 5: Raise money to start a business

    Task 6: Convince others to invest in your business

    Task 7: Convince bank to lend you money to start business

    Task 8: Convince others to work in your new business

    Task 9: Manage a small business

    Task 10: Grow a successful business

    Cox, Mueller, and Moss (2002)

  • is it really this linear?cc Walkingsf

  • While Cox and Muellers framework has by many been accepted as representative of the new venture creation

    process (Kickul, Gundry et al. 2009), others critique its linear and static nature (Jouini, Paris et al. 2009) and suggest that it ignores the ongoing learning loop that takes place in the

    entrepreneurial process (Minniti and Bygrave 2001).

    - Lesevic (2009)

  • Lumpkin et al (2004) applied theory of creativity to devise an iterative model of the entrepreneurial process

    Consists of two phases: Discovery phase Formation phase

  • Discovery phase: drives insight includes preparation, incubation and

    recognition of opportunity(Csikszentmihalyi 1996)

    Formation phase: drives concretisation includes evaluation and elaboration of

    opportunity (Jouini, Paris et al. 2009)

  • Dynamic moving between two phases through double-loop learning (Argyris and Schn 1976)

    Hence: learning is essential to the entrepreneurial process

  • Learning is a constant movement it is not based on knowledge.

    - Jiddu Krishnamurti

  • Discovery-driven process

  • Discovery-driven process

  • Discovery-driven process

  • Discovery-driven process

  • Your world now

  • Your world now

  • Learning!Your world now

  • Knowledge-to-Assumption Ratio

    Shes totally in love with my

    personality

  • K-o-A Ratio Knowledge-to-Assumption ratio Entrepreneurs operate in a space of high uncertainty Where theres uncertainty there will be assumptions

    about the current and future states of reality Discovery-driven process: Test your assumptions to

    improve your knowledge and lower uncertainty!

    One of the key activities of the entrepreneurial

    process is the improvement of that ratio by: testing assumptions through action driving knowledge to action

  • WEEK 2: CONVERSATION

    - How do you feel about the concepts presented today?

    What do you take away?

    - Entrepreneurs see the world with tainted eyes. Discuss.

    - Think about a situation from an entrepreneurs life

    in which douple-loop learning could be useful. What do you make of Krishnamurtis quote?

    - How do you learn a new perspective?