CHAPTER 1 The Foundations of
Entrepreneurship
MAN 470 – Berk TUNCALI
Who among us is considering to start up a business?
Who has already started a
business?
An Entrepreneur
An entrepreneur is one who undertakes. He is an owner or a manager of a business enterprise who makes
money through risk and initiative.
Origins: From the French “entre”and
“prendre”[“between”“Take”[undertake] meaning a merchant who acts as a go between for parties in the trading process. Richard Cantillion(1725) first used the word to denote those who carry risk in the economy.
“A person who organises and manages a
business undertaking, assuming the risk for the sake of profit”
a person who is willing to help launch a new venture or enterprise and accept full
responsibility for the outcome.
Since then there have been many
definitions
Traits of Entrepreneurship
oppurtunisstic
risk takers (risk managers) in ambiguity
they can see risk before it comes (sense)
they can take failure and continue
action oriented
What do Entrepreneurs do?
they keep the economy running!
over 90% of businesses are small businesses
limited skills and capabilities
the centre of world economy
they are the agents of change
innovators
Name a few entrepreneurs that changed our lives;
Sergey Brin (Google)
Mark Zuckerberg (Facebook)
Steve Jobbs (Apple)
Jack Dorsey (Twitter)
Pierre Omidyar (eBay)
Elon Musk (PayPal)
Chad Hurley (Youtube) Who else???
Entrepreneurship may include;
Starting a business
Being creative and innovative in developing new products or services
Managing an existing venture in such a way that it grows rapidly
Accepting risk in the development of a venture
Key theories in Entrepreneurship
The entrepreneur as innovator (Schumpeter)
The alert entrepreneur ( Kirzner Kirzner)
The entrepreneur as risk taker (Knight)
The entrepreneur as superior manager (Marshall)
The entrepreneur has no role (neo classical
economics)
The 3 Ms
To succeed in business you need the three Ms (Vesper 1990) “Ms”
Margin to make a profit
Margin to deal with the unexpected
Margin to continue making profits when
competitors attack by reducing prices
Ingredients of an entrepreneurial management style
Sensitive to opportunities. – alertness/network building
Sensitive to margins – evaluation skills needed
Experimentation and piloting important
Sensitive to risk but prepared to manage it rather than eliminate it.
Ability to mobilise resources quickly to exploit opportunities
Ability to manage failure of a venture without threatening overall capital.
Entrepreneurial management. How does it differ?
Not formal and rigidly logical, more intuitive.
High margin opportunities cannot be logically
predicted, They arise through exploration, piloting, experimentation and luck
Formal management necessary but can be brought in when needed.
It is goals driven, not driven by the need to maximise profits.
