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EntrepreneurshipHEJ / LEJ

Center for Entrepreneurial Development IBA, Karachi

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Contents• Entrepreneurship• Entrepreneurial Requirements• Impact of Entrepreneurship• Entrepreneurship and Innovation• Entrepreneruial Process• Various Case Studies• Entrepreneurship + (PLUS)

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Entrepreneurship Defined

• Entrepreneurship—a way of thinking, reasoning, and acting that is opportunity obsessed, holistic in approach, and leadership balanced for the purpose of value creation and capture.

(This definition of entrepreneurship has evolved over the past three decades from research by Jeffry A. Timmons at Babson College and the Harvard Business School and has recently been enhanced by Stephen Spinelli, Jr. former Vice Provost for Entrepreneurship and Global Management at Babson College, and current President of Philadelphia University).

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Entrepreneurship Results

• Value:• Creation• Enhancement• Renewal

• For:• Owners• Stakeholders• All Participants

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Entrepreneurship is NOT just “Start-Ups Only”

• It includes companies and organizations• All types• At all stages

• Can occur and fail to occur• In old and new firms• Small and large firms• Fast and slow growing firms• Private, not-for-profit, and public sectors• All geographic points• All stages of a nation’s development

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Entrepreneurial Requirements

• Willingness to take risks• Personal • Financial• Calculated

• Shift the odds of success• Balancing risks with rewards

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 inclination of an individual to initiate behavior without adequate forethought as to the consequences of their actions, acting on the spur of the moment

a mindless activist, a war lover, felt driven to prove manhood by confrontation" 

believe in full equality before the law

 tend to: -believe that you don't need anything from anyone -trust no one but yourself -find it hard to feel close to anyone, even wife and children-Low Self Esteem

Impossible to damage, injure, or wound

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Entrepreneurship Flattens the World

• Significant impact on the cultural and economic landscape

• Exploding in China, India,, and the former Soviet bloc

• Adoption of the entrepreneurial mind-set is growing exponentially larger and faster

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Innovation

Small entrepreneurial firms (since WWII) are:

• Responsible for half of all innovation• Credited with 95 percent of all radical innovation• Led to the creation of major new inventions and technologies

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Philanthropy and Leadership

Successful entrepreneurs give back to the community

• Colleges and universities• New buildings, classrooms, athletic facilities, and

endowed professorships• The largest gifts and the greatest proportion of

donors to college capital campaigns• Hospitals, museums, orchestras, and schools

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Achieving Entrepreneurial Greatness

Three core principles of Marion Labs and the Kauffman Foundation:

1. Treat others as you would want to be treated

2. Share the wealth that is created with all those who have contributed to it at all levels

3. Give back to the community

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Ewing Marion Kauffman of Marion Laboratories, Inc.:

“Live what you talk, make your actions match your words. You must live what you preach and do it right and do it often. Day after day.”

“As an entrepreneur, you really need to develop a code of ethics, a code of relationships with your people, because it’s the people who come and join you. They have dreams of their own. You have your dream of the company. They must mesh somewhat.”

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Building an Entrepreneurial Society

• The poor get richer• Equal opportunities (not equal incomes) are

created• Economic mobility increases• Social mobility increases

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The Entrepreneurial Process

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• It is opportunity driven• It is driven by a lead entrepreneur and an entrepreneurial team• It is resource parsimonious and

creative• It depends on the fit & balance among

these• It is integrated and holistic• It is sustainable

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ILinc: The case study of a startup Technology Entrepreneurship

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Dilemma

Fall 1993Chance Meeting

Mark BernsteinBA EconComputer related sales Experience

Degerhan UsluelBE EEChief Designer / programmer(circuit design company)Founded USIMEK Software consulting

Join Corporate World

Pros+Established+ Less Risky+ Money+ Considered hot property

Cons- Cog of a wheel- Small part of a

large corporation

Proceed with the new venture

Cons- Very Risky- Career Prospects ?- Low earnings

initially

Pros +High returns+ Self Actualization

March 1994

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Fall 1993Chance Meeting

Idea ? Pain- NeedDistance LearningShort term retention 20% hearing, 40% hear and see, 75% hear, see and doJIT (Just in Time training)

ProductSoftware EnvironmentMultimedia + CommunicationDistributed virtual class room Will provide companies a competitive advantage

Market (9.3 million biz in US)27,000 firms employ over 500 employeesPrimary: Fortune 1000 FirmsSecondary: Other US firmsTertiary: International firms

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Chance MeetingFall 1993

Chance Meeting

Meeting with the Entrepreneurship Professor (Rice)

1. Develop a sound Biz Plan2. Strong team of advisors3. Understand Capital requirements4. Recruit Jack Wilson5. Take the course on Entrepreneurship6. Rule of thumb

• Expenses twice your estimate• Revenues will be half• It will take twice as long

Meeting with Prof WilsonPhD PhysicsExpert in MultimediaAT&T, IBM Scholar Basement

meetings

Team

Wilson (CEO)PhD PhysicsAT&T, IBM Scholar

Mark Bernstein (COO)

Degerhan Usluel (CTO)BE EE

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Basement meetingsRefinement of ideas

Final Idea

Combine Multimedia with Distance Learning

Business Plan

InvestorsBankersAdvisorsEntrepreneur himself• Understand capital

requirementsFor the teamRegulatory approvalsCommunication tool

Consists of

Executive SummaryEnvironmentManagement TeamThe ProductBudget RequiredMarketing StrategyEntry StrategyFinancial Plan RisksExit Strategy

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Evaluation of the Biz PlanStrengths• Technical Expertise

(Wilson and Usluel)• Sales Skill (Bernstein)• International reputation

and network of Wilson• Compatibility of team• Vision of the opportunity• Some start up

experience

Weaknesses• Marketing Expertise• Financial management

and fund raising experience

• Project management of commercial development

• Closing large deals with large companies

• General management of a fast growing firm in a start up mode

• Customer service in commercial mode for Fortune 1000 companies.