Getting Started

Chapter 1
What is

The Entrepreneurial Process

Entrepreneurship?

The
Entrepreneurial
Mindset
Spider-web
Model
Networks

The 5 Stage
Entrepreneurial
Process

Patterns of Entrepreneurship Management

4th Edition, Chapter 1
Copyright 2013 Jack M. Kaplan & Anthony C. Warren

Presentation Outline

What is Entrepreneurship
Definition
What is
Examples
Entrepreneurship?
Entrepreneurial Characteristics
The
Why?
Entrepreneurial
Mindset
The Choices
Types
Spider-web
Model
Common Characteristics
Organizational Fragility
Networks
The Importance of Networks
The 5 Stage
Entrepreneurial The Initial Stages
Chapter 1

Process

Copyright 2013 Jack M. Kaplan & Anthony C. Warren

What is Entrepreneurship?
Chapter 1
What is

Entrepreneurship?

The
Entrepreneurial
Mindset
Spider-web
Model
Networks

The 5 Stage
Entrepreneurial
Process

Root of the Word

From the French word entreprendre, which
refers to individuals who undertook the risk
of a new enterprise

Todays Meaning
The process of planning, organizing,
operating, and assuming the risk of a business
venture
Copyright 2013 Jack M. Kaplan & Anthony C. Warren

What is Entrepreneurship?
Chapter 1
What is

Entrepreneurship?

The
Entrepreneurial
Mindset
Spider-web
Model
Networks

The 5 Stage
Entrepreneurial
Process

Todays Meaning cont.

More than just the creation of a business; it
also includes the generation and
implementation of an idea.
It is about being a dynamic thinker and
operator which includes effective
communication to all of your stakeholders
It is not about being a maverick;
entrepreneurs must think tactically and
strategically, and operate in a similar fashion
Copyright 2013 Jack M. Kaplan & Anthony C. Warren

Quick Facts
Chapter 1
What is

Entrepreneurship?

The
Entrepreneurial
Mindset
Spider-web
Model
Networks

Annual creation of 600,000 to 800,000 new

companies
More employees work for entrepreneurial
ventures than any other sector in the economy
No sector of the U.S., and world, economy
has been as vital, dynamic, and creative as
entrepreneurship
Think:

The 5 Stage
Entrepreneurial
Process
Copyright 2013 Jack M. Kaplan & Anthony C. Warren

The Ups and Downs ....

Chapter 1
What is

Entrepreneurship is usually a Roller-Coaster Ride

Entrepreneurship?

The
Entrepreneurial
Mindset
Spider-web
Model
Networks

The 5 Stage
Entrepreneurial
Process

From R. J. Saldich

Copyright 2013 Jack M. Kaplan & Anthony C. Warren

Some Reasons to Become an

Entrepreneur
Chapter 1
What is

Entrepreneurs learn to think differently.

Triggers to start your own venture:

Independence and Freedom from the restrictions and

bureaucracy of corporate life
Being able to do your own thing
The
Entrepreneurial Plateauing in current job
Mindset
Opportunity for sustained growth and mobility
Spider-web
Flexibility
Model
Financial reward
Networks
Loss of Current Employment

Entrepreneurship?

The 5 Stage Looking back, the day that I got fired was the best day of my life successful
entrepreneur.
Entrepreneurial
Process
Copyright 2012 Jack M. Kaplan & Anthony C. Warren

Types of Entrepreneurs
Chapter 1
What is

Entrepreneurship?

The
Entrepreneurial
Mindset
Spider-web
Model
Networks

The 5 Stage
Entrepreneurial
Process

The Choice
As the economy has shifted to place a premium on
portable skills and knowledge, as well as effective
networks, entrepreneurship has become a viable
career alternative.
Entrepreneurs are classed into several categories:
Serial EntrepreneurSomeone who starts, grows,
and sells several businesses over the course of their
career.

Copyright 2013 Jack M. Kaplan & Anthony C. Warren

Types of Entrepreneurs
Chapter 1

Types of Entrepreneurs 2

What is

Entrepreneurship?

The
Entrepreneurial
Mindset
Spider-web
Model

Aspiring EntrepreneursDream of starting a

business; they hope for the chance to be their own
bosses, but have not yet made the leap from their
current employment into the uncertainty of a startup.
Research indicates that, at any given time, 7 million
adults are trying to start businesses in the U.S.

Networks

The 5 Stage
Entrepreneurial
Process
Copyright 2013 Jack M. Kaplan & Anthony C. Warren

Types of Entrepreneurs
Chapter 1

Types of Entrepreneurs 3

What is

Entrepreneurship?

The
Entrepreneurial
Mindset
Spider-web
Model
Networks

Lifestyle EntrepreneursHave developed an

enterprise that fits their individual circumstances and
style of life. Intention is to earn income for
themselves and their families. Sometimes referred to
as small businesses or mom-and-pop shops. 13
million Americans (25 million if you count parttimers) run their own business from home.

The 5 Stage
Entrepreneurial
Process
Copyright 2013 Jack M. Kaplan & Anthony C. Warren

Types of Entrepreneurs
Chapter 1

Types of Entrepreneurs 4

What is

Entrepreneurship?

The
Entrepreneurial
Mindset
Spider-web
Model

Growth EntrepreneursHave both the desire and

ability to grow as fast and as large as possible. Their
firms are the most dynamic job generators in the U.S.
economy. There are over 300,000 entrepreneurial
companies with more than 50 employees that are
growing at a rate of 20 percent per year.

Networks

The 5 Stage
Entrepreneurial
Process
Copyright 2013 Jack M. Kaplan & Anthony C. Warren

Types of Entrepreneurs
Chapter 1
What is

Entrepreneurship?

The
Entrepreneurial
Mindset
Spider-web
Model
Networks

The 5 Stage
Entrepreneurial
Process

Ask Yourself What Type am I

One of the major mistakes aspiring entrepreneurs make when
starting out is NOT to closely question what they want to be
when they grow up.
Each type of entrepreneur is a control and lifestyle choice
with many advantages and disadvantages that must be
considered
Decide early on what is most important to you control,
wealth, lifestyle..

Copyright 2013 Jack M. Kaplan & Anthony C. Warren

Entrepreneurial Traits
Chapter 1
What is

Entrepreneurship?

The
Entrepreneurial
Mindset
Spider-web
Model
Networks

The 5 Stage
Entrepreneurial
Process

Common Characteristics of Entrepreneurs:

Passionately seek new opportunities and are always
looking for the chance to profit from change and
disruption in the way business is done
Pursue opportunities with tremendous discipline
Pursue only the very best opportunities, and avoid
exhausting themselves and their organizations by
chasing after every option
Focus on executionspecifically, adaptive execution
Engage the energies of everyone in their domain
Lead by example, network, and communicate well

Copyright 2013 Jack M. Kaplan & Anthony C. Warren

Entrepreneurial Traits
Chapter 1
What is

Entrepreneurs are Comfortable in Paradoxical

Situations. They Learn to Balance:

Entrepreneurship?

The
Entrepreneurial
Mindset
Spider-web
Model
Networks

The 5 Stage
Entrepreneurial
Process

Ambiguity vs. Planning

Creativity vs. Discipline
Urgency vs. Patience
Flexibility vs. Organizational Structure
Responsiveness vs. Systematic Processes
Risk Taking vs. Controlled Risk
Short Term Actions vs. Long Term Goals

Copyright 2013 Jack M. Kaplan & Anthony C. Warren

The Spider-Web Model

Chapter 1
What is

Entrepreneurship?

The
Entrepreneurial
Mindset
Spider-web
Model
Networks

The 5 Stage
Entrepreneurial
Process

Managing a Start-up is analogous to building and

maintaining a fragile Spider-web which is under
continuous attack.
Unlike a large company with specialists for different
functions, entrepreneurs must learn on-the-job and
fulfill many roles simultaneously, many for which they
have no experience or training.
Copyright 2013 Jack M. Kaplan & Anthony C. Warren

Near-Neighbor Networks
Chapter 1
What is

Entrepreneurship?

The
Entrepreneurial
Mindset
Spider-web
Model
Networks

The 5 Stage
Entrepreneurial
Process

The Interstate Network is an example in which each node has a

similar characteristicit is connected more or less equally with its
neighbors.
Such networks offer little value to entrepreneurs.
Copyright 2013 Jack M. Kaplan & Anthony C. Warren

Scale-Free Networks
Chapter 1
What is

Entrepreneurship?

The
Entrepreneurial
Mindset
Spider-web
Model
Networks

The 5 Stage
Entrepreneurial
Process

The Airline Network is an example in which certain nodes

have a highly concentrated set of connections.
Entrepreneurs identify and network with highly connected
people, or key influencers and build network power into their
business models.
Copyright 2013 Jack M. Kaplan & Anthony C. Warren

The Internet(work)
Chapter 1
What is

Entrepreneurship?

The
Entrepreneurial
Mindset
Spider-web
Model
Internet map courtesy of A. Barabasi

Networks

The 5 Stage
Entrepreneurial
Process

The Internet is an example of a Scale-free network.

Entrepreneurs exploit its unique characteristics for finding
resources, tackling problems and creating efficient market entry
strategies.

Copyright 2013 Jack M. Kaplan & Anthony C. Warren

Getting Started - Stage 1

Chapter 1
What is

Entrepreneurship?

The
Entrepreneurial
Mindset
Spider-web
Model
Networks

Stage 1: Conducting Opportunity Analysis

Innovate and create the vision

Conduct market analysis and research
Evaluate the competition
Research pricing and sales strategies

The 5 Stage
Entrepreneurial
Process
Copyright 2013 Jack M. Kaplan & Anthony C. Warren

Getting Started Stage 2

Chapter 1
What is

Stage 2: Developing the Plan and Setting up

the Company

Entrepreneurship?

The
Entrepreneurial
Mindset
Spider-web
Model

Set goals and objectives

Start writing the plan
Investigate new processes and technologies
Determine pricing, market, and distribution channels

Networks

The 5 Stage
Entrepreneurial
Process
Copyright 2013 Jack M. Kaplan & Anthony C. Warren

Getting Started Stage 3

Chapter 1
What is

Stage 3: Acquiring Financial Partners and

Sources of Funding

Entrepreneurship?

The
Entrepreneurial
Mindset
Spider-web
Model

Innovate and create the vision

Conduct market analysis and research
Evaluate the competition
Research pricing and sales strategies

Networks

The 5 Stage
Entrepreneurial
Process
Copyright 2013 Jack M. Kaplan & Anthony C. Warren

Getting Started Stage 4

Chapter 1
What is

Stage 4: Determining the Resources Required

and Implementing the Plan

Entrepreneurship?

The
Entrepreneurial
Mindset
Spider-web
Model
Networks

Determine value of licenses, patents, and copyrights

Prepare the organization for growth
Develop a business model to maximize value
retention and sustainability
Manage the finances

The 5 Stage
Entrepreneurial
Process
Copyright 2013 Jack M. Kaplan & Anthony C. Warren

And Possibly Stage 5

Chapter 1

Stage 5: Scaling and Harvesting the Venture

What is

Entrepreneurship?

The
Entrepreneurial
Mindset
Spider-web
Model
Networks

Prepare a full business plan

Discuss options and alternatives
Sell or merge
Go public
Form a strategic alliance

Communicate the opportunity

The 5 Stage
Entrepreneurial
Process
Copyright 2013 Jack M. Kaplan & Anthony C. Warren