TECHNOLOGY BASED ENTREPRENEURSHIP

(Topic 3: Project, Finance and Safety Management)

Report Presented By:

Prasun Das 001411201005
Sunirmal Bhakat 001411201006
Aditya Kumar 001411201007
Sayan Dasgupta 001411201008
 WHAT IS ENTREPRENEURSHIP?

Entrepreneurship is the process of designing, launching and running a

new business, which is more often than not, initially a small business, offering a
product, process or service for sale or hire. The people who create these
businesses are called entrepreneurs. Entrepreneurship has been described as
the "capacity and willingness to develop, organize and manage a business
venture along with any of its risks in order to make a profit. While definitions of
entrepreneurship typically focus on the launching and running of businesses, due
to the high risks involved in launching a start-up, a significant proportion of
businesses have to close, due to "lack of funding, bad business decisions, an
economic crisis, lack of market demand or a combination of all of these". In the
2000s, the definition of "entrepreneurship" expanded to explain how and why some
individuals (or teams) identify opportunities, evaluate them as viable and then decide to
exploit them, whereas others do not and, in turn, how entrepreneurs use these opportunities
to develop new products or services, launch new firms or even new industries and
create wealth.

Structure needed for a new Entrepreneurship

HISTORICAL USAGE
Entrepreneur , is a loanword from French. First used in 1723, today the term implies
qualities of leadership, initiative, and innovation in new venture design. Economist Robert
Reich has called team-building, leadership, and management ability essential qualities for
the entrepreneur. Historically the study of entrepreneurship reaches back to the work in the
late 17th and early 18th centuries of Richard Cantillon, which was foundational to classical
economics.
In the 20th century, entrepreneurship was studied by Joseph Schumpeter in the 1930s and
other Austrian economists such as Carl Menger, Ludwig von Mises and Friedrich von
Hayek. The term "entrepreneurship" was coined around the 1920s, while the loan from
French of the word entrepreneur dates to the 1850s. According to Schumpeter, an
entrepreneur is willing and able to convert a new idea or invention into a successful
innovation. Entrepreneurship employs what Schumpeter called "the gale of creative
destruction" to replace in whole or in part inferior offerings across markets and industries,
simultaneously creating new products and new business models. Thus, creative destruction
is largely responsible for long-term economic growth. The idea that entrepreneurship leads
to economic growth is an interpretation of the residual in endogenous growth theory and as
such continues to be debated in academic economics.

Mil Jellinek-Mercedes (18531918), at the steering wheel of his Phoenix Double-Phaeton, was
a European entrepreneur who helped design the first modern car.

ENTREPRENEUR
An entrepreneur has been defined as, "a person who starts, organizes and manages any
enterprise, especially a business, usually with considerable initiative and risk; running
a small business with all the risk and reward of any given business process". Entrepreneurs
tend to be good at perceiving new business opportunities and they often exhibit
positive biases in their perception (i.e., a bias towards finding new possibilities and seeing
unmet market needs) and a pro-risk-taking attitude that makes them more likely to exploit
the opportunity. An entrepreneur may be in control of a commercial undertaking, directing
the factors of production the human, financial and material resources that are required
to exploit a business opportunity. Entrepreneurs act as managers and oversee the launch
and growth of an enterprise. Entrepreneurship is the process by which either an individual
or a team identifies a business opportunity and acquires and deploys the necessary
resources required for its exploitation.
The exploitation of entrepreneurial opportunities may include:

developing a business plan

hiring the human resources
acquiring financial and material resources
providing leadership
being responsible for both the venture's success or failure
risk aversion

Relationship between small business and entrepreneurship

The term "entrepreneur" is often conflated with the term "small business" or used
interchangeably with this term. While most entrepreneurial ventures start out as a small
business, not all small businesses are entrepreneurial in the strict sense of the term. Many
small businesses are sole proprietor operations consisting solely of the owner, or they have
a small number of employees, and many of these small businesses offer an existing
product, process or service, and they do not aim at growth. In contrast, entrepreneurial
ventures offer an innovative product, process or service, and the entrepreneur typically aims
to scale up the company by adding employees, seeking international sales, and so on, a
process which is financed by venture capital and angel investments. Successful
entrepreneurs have the ability to lead a business in a positive direction by proper planning,
to adapt to changing environments and understand their own strengths and weakness.
Ethnic entrepreneurship
The term "ethnic entrepreneurship" refers to self-employed, business owners who belong to
racial or ethnic minority groups in the United States and Europe. A long tradition of
academic research explores the experiences and strategies of ethnic entrepreneurs as they
strive to integrate economically into mainstream US or European society. Classic cases
include Jewish merchants and tradespeople in large U.S. cities in the 19th and early 20th
centuries as well as Chinese and Japanese small business owners (restaurants, farmers,
shop clerks) on the West Coast.
In the 2010s, ethnic entrepreneurship has been studied in the case of Cuban business
owners in Miami, Indian motel owners of the U.S. and Chinese business owners
in Chinatowns across the United States. While entrepreneurship offers these groups many
opportunities for economic advancement, self-employment, and business ownership in the
United States remain unevenly distributed along racial/ethnic lines. Despite numerous
success stories of Asian entrepreneurs, a recent statistical analysis of U.S. census data
shows that whites are more likely than Asians, African-Americans, and Latinos to be self-
employed in high prestige, lucrative industries.
Institutional entrepreneur
The USA-born British economist Edith Penrose has highlighted the collective nature of
entrepreneurship. She mentions that in modern organizations, human resources need to be
combined in order to better capture and create business opportunities.The sociologist Paul
DiMaggio (1988:14) has expanded this view to say that "new institutions arise when
organized actors with sufficient resources [institutional entrepreneurs] see in them an
opportunity to realize interests that they value highly".The notion has been widely applied.
Uncertainty perception and risk-taking:
Theorists Frank Knight and Peter Drucker defined entrepreneurship in terms of risk-taking.
The entrepreneur is willing to put his or her career and financial security on the line and take
risks in the name of an idea, spending time as well as capital on an uncertain venture.
However, entrepreneurs often do not believe that they have taken an enormous amount of
risks because they do not perceive the level of uncertainty to be as high as other people do.
Knight classified three types of uncertainty:

Risk, which is measurable statistically (such as the probability of drawing a red color
ball from a jar containing 5 red balls and 5 white balls)
Ambiguity, which is hard to measure statistically (such as the probability of drawing a
red ball from a jar containing 5 red balls but an unknown number of white balls)
True uncertainty or Knightian uncertainty, which is impossible to estimate or predict
statistically (such as the probability of drawing a red ball from a jar whose contents are
entirely unknown).

Strategies
Strategies that entrepreneurs may use include:

Innovation of new products, services or processes

Continuous process improvement (CPI)
Exploration
Use of technology
Use of business intelligence
Use of economical strategies
Development of future products and services
Optimized talent management

TECHNOLOGICAL ENTREPRENEURSHIP

What is technology entrepreneurship? What is the difference between

an idea and a business opportunity?
Technology entrepreneurship is a style of business leadership based on the process of
identifying high-potential, technology-intensive business opportunities, gathering
resources such as talent and cash, and managing rapid growth using principled, real-
time decision-making skills. An attractive business opportunity consists of a great value
proposition, technically feasible products, strong intellectual property, a sustainable
competitive advantage, a large potential market, and a proven business model. It can
be based on either a revolutionary breakthrough in technology or an evolutionary
advancement; and it can target an existing market or create an entirely new one. This
entrepreneurial process is relevant for both independent startups and within established
corporations. Disruptive technologies are particularly interesting as examined in
Christensens Innovators Dilemma.
How does context (e.g., economic and political climate) play a role in
technology entrepreneurship?
All kinds of external forces impact entrepreneurship and reinforce the need to
understand the entrepreneurial process. For instance, economic cycles can fluctuate
dramatically, fostering periods of extreme optimism as well as those of deep concern
and fear. And in some industries, political and government influences are the primary
market drivers (e.g., biotechnology). A ventures location also plays a role, as attitudes
toward entrepreneurship are different everywhere. Places like Silicon Valley, for
example, offer infrastructure, networks, and talent in an environment that accepts failure
in the pursuit of innovation.

What is market positioning? Why are partnership strategies

important?
Positioning forces a highgrowth entrepreneur to clarify what the product or service is,
who are the customers, what benefit it delivers, and how it differs from the competition.
Successful positioning requires understanding the technology adoption life cycle made
famous in Crossing the Chasm by Moore and the nurturing of true value-added
partnerships. Great entrepreneurs use every asset (e.g., vision and intellectual property)
to create mutually beneficial social networks.

What is the purpose of the business plan?

A business plan details a ventures compelling value for a growing market of customers
and outlines its mission and purpose. It also introduces the ventures team, its
technological solution, and its economic or business model. It is necessary for both
external use (e.g., raising venture capital, gaining customers, and creating partnerships)
and internal use (e.g., tracking against objectives and milestones). It provides a
compass for negotiating the unforeseeable challenges ahead, rather than a definitive
roadmap to success.

Why is cash flow so vital?

High-tech entrepreneurship is a journey of incremental and rapid growth. Cash is a
critical resource for reaching each funding milestone, which is defined by the reduction
of some particular set of risks. Great startups always spend their cash wisely on the
current white hot risk. It gives stability and strategic flexibility to a venture as
opportunities and problems arise. Cash facilitates the recruitment of an A+ team and the
frugal ramp-up of operations.
What are the different sources of capital for technology ventures?
What are the essentials of the venture finance process from both the
investor and founders perspectives?
Sources available include traditional venture capital, angel investors, corporations,
incubators, bank loans, personal funds, and even bootstrapping when necessary.
Entrepreneurs should choose a source of funding that best fits their needs at each
particular stage of the venture (e.g., startup versus expansion). Not all money has the
same intrinsic value. For example, professionally managed venture capital contributes
both strategic counseling and a network of contacts in addition to cash. Another key
point is that valuation and subsequent dilution are not the only important issues.
Understanding the venture finance process requires fully appreciating such concepts as
multi-stage financing, valuation criteria, risk reduction, employee stock pools, deal
structure and terms, corporate governance and control, and the role of liquidity events
for stakeholders such as IPOs and M&A transactions. The IPO is foremost a financing
event (albeit one with special characteristics) and certainly not the final destination for a
startup.

Why is technology entrepreneurship a team sport? How can reward

systems and company culture inspire innovation?
Successful innovation is a function of both creativity and teamwork. Developing an
outstanding team requires setting a coherent and compelling vision, hiring and retaining
people better than oneself, using proper recognition and compensation strategies (e.g.,
cash, stock options, and other rewards), enabling proper autonomy and delegation, and
creating a culture where success is recognized and failure is allowed. Sound leadership
is essential including experienced advisors and board members.

Why are appropriate sales and business development skills so

valuable?
The ability to gain the support of many different types of stakeholders (e.g., revenue
and endorsements from real customers) is important for building momentum. Basic
negotiation, influence and persuasion skills are critical. Successful entrepreneurs build
lasting personal relationships based upon trust.

What is the role of ethics in technology entrepreneurship?

Entrepreneurship is not all about personal financial gain. It concerns crafting a lifelong
plan to make a positive impact on society. Character does matter. Failure is OK;
unethical behavior is not. True wealth requires the creation of enduring value, which
requires integrity and ethics. Entrepreneurship and business are not just contact sports
subject to their own arcane rules, but an integral part of life that reflect the values of
each participant. A culture of dependability and professional trust starts with the
founding teams initial behaviors.
 Impact of Entrepreneurship

SMEs = Small & Medium sized Enterprises

Small Business <100 employees (<$5Million)

Medium Business 100-499 employees ($5-50Million)

Large Business >500 employees (>$50Million)

Over 1.3 million Canadians are Self Employed

Of the over 900,000 employer businesses, only about 4,000 had more than 500
employees

Small businesses drive the economy:

99% of all businesses in Canada

50% of total private sector employment

42% of total private sector GDP

SMEs

85% of new job creation

Invest more in R&D

Diffuse technology more rapidly

Develop more products and services

Produce more than half of new innovations

But only account for 10% of Exports.

Indian Entrepreneur

Ola Cabs was founded on 3 December 2010 by Bhavish Aggarwal, indian

Entrepreneur. Ola is an Indian online transportation network company. Ola provides
different types of service, ranging from economic to luxury travel. The cabs are reserved
through a mobile app and the service accepts both cash and cashless payments with
Ola money.
Success Rate of Ola Cabs:

The company has expanded to a network of more than 600,000 vehicles across
110 cities.

It claims to clock an average of more than 150,000 bookings per day and
commands 60% of the market share in India.

November 2014 Ola also started on-demand auto rickshaw service on its mobile
app in Bangalore, Pune and now available in 73 cities.

Ola was valued at $US5 billion as of September 2015 and Taxi-hailing app Ola
has raised USD1.1 billion in a new round of funding in october 2017 led by
China's Tencent Holdings and existing investor Japan's SoftBank Group.

Besides there are so many examples of Successful technical Entrepreneurship like:

Facebook Digg Flipcart

Twitter Pownce Amazon
Skype Tesla Motors Zomato
 Challenges

1. Team experience and depth risk. Here Im talking about both the experience and
track record of the founders in starting a business, as well as their experience and
knowledge of the business domain. Like most professionals, when I get a business
plan, I flip first to the founders section to see if it is a balanced team who has been
there and done that.

2. Market and opportunity risk. There is always less risk with a well-defined problem
in a large and growing market. All the people in China is a large and growing
market, but all the people with cancer is much more well-defined. Its hard to make
money in a shrinking market, or with a solution that is nice to have versus painfully
needed.

3. Competitive risk. Think seriously about the number and clout of your competitors.
Having none is a red flag (may mean no market), but having more than a couple of
large ones may mean this is a crowded space. Even in an open space, you need
intellectual property, like patents, to keep potential competitors from overrunning
you.

4. Financial risk. Very few businesses can be started without money. You as the
founder will be expected to put your own skin in the game. The business plan
should be realistic about how much cash will be required to break-even, and how
big the return will be for investors in the first five-year timeframe.

5. Market entry strategy risk. The selection of an inappropriate pricing, marketing, or

distribution strategy is a large potential risk. For example, many new social websites
proclaim that they will offer a free service, and live on ad revenues (not likely in the
first year without a huge marketing investment).

6. Political and economic risk. Sometimes founders are just in the wrong place at
the wrong time. Recessions are a tough time to sell luxury goods. Under-developed
countries may have a strong need for your product, but are often unstable and
dangerous. Four specifics include tax rates, tariffs, expropriation of assets, and
repatriation of profits.

7. Technology risk. New technologies, especially those characterized as paradigm

shifts or disruptive may have long and costly acceptance cycles, or may run into
unpredictable performance or manufacturing problems. Medical technologies have
costly legal testing requirements, approval processes, and insurance validation.
8. Businesses with high attrition rate risk. Certain business sectors have historical
high failure rates and are routinely avoided by investors and many founders. These
include food service, retail, consulting, work at home, and telemarketing. On the
Internet, I would add new social networking sites, and new matchmaking sites.

9. Operational risk. Some businesses require huge support or administrative

infrastructures. For example, vehicle fuel improvements require service stations and
maintenance shops nationwide, before they are viable. Even small operations can
have breakdowns of specialized equipment and complex support processes.

10. Environmental risk. A nuclear reactor built on an earthquake fault line is a huge
risk. Evaluate your business and location for sensitivity to floods, hurricanes, and
catastrophic pollution problems, like the oil spill in the Gulf of Mexico.

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Riitta Katila, Eric L. Chen,, and Henning Piezunka (7 June 2012). "All the right
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Chakraborty, Sayan (23 June 2016). "Ola revenue rises eight-fold to Rs874
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