Getting Started

Chapter 1

What is
The Entrepreneurial Process
Entrepreneurship?

The
Entrepreneurial
Mindset
Spider-web
Model

Networks

The 5 Stage
Entrepreneurial
Patterns of Entrepreneurship Management
Process
4th Edition, Chapter 1

Copyright 2013 Jack M. Kaplan & Anthony C. Warren

 Presentation Outline

Chapter 1 • What is Entrepreneurship

– Definition
What is
Entrepreneurship? – Examples
The • Entrepreneurial Characteristics
Entrepreneurial – Why?
Mindset
– The Choices
Spider-web
Model – Types
Networks
– Common Characteristics
The 5 Stage
• Organizational Fragility
Entrepreneurial • The Importance of Networks
Process
• The Initial Stages
Copyright 2013 Jack M. Kaplan & Anthony C. Warren
 What is Entrepreneurship?

Chapter 1 Root of the Word

What is • From the French word entreprendre, which
Entrepreneurship?
refers to individuals who “undertook” the risk
The of a new enterprise
Entrepreneurial
Mindset
Spider-web
Model Today’s Meaning
Networks • The process of planning, organizing,
The 5 Stage
operating, and assuming the risk of a business
Entrepreneurial venture
Process

Copyright 2013 Jack M. Kaplan & Anthony C. Warren

 What is Entrepreneurship?

Chapter 1 Today’s Meaning cont.

What is • More than just the creation of a business; it
Entrepreneurship? also includes the generation and
The implementation of an idea.
Entrepreneurial
Mindset
• It is about being a dynamic thinker and
operator which includes effective
Spider-web
Model communication to all of your stakeholders
• It is not about being a maverick;
Networks
entrepreneurs must think tactically and
The 5 Stage
Entrepreneurial
strategically, and operate in a similar fashion
Process

Copyright 2013 Jack M. Kaplan & Anthony C. Warren

 Quick Facts

Chapter 1 • Annual creation of 600,000 to 800,000 new

What is
companies
Entrepreneurship?
• More employees work for entrepreneurial
The ventures than any other sector in the economy
Entrepreneurial
Mindset • No sector of the U.S., and world, economy
Spider-web has been as vital, dynamic, and creative as
Model
entrepreneurship
Networks • Think:
The 5 Stage
Entrepreneurial
Process

Copyright 2013 Jack M. Kaplan & Anthony C. Warren

 The Ups and Downs ....

Chapter 1
Entrepreneurship is usually a Roller-Coaster Ride
What is
Entrepreneurship?
Ecstasy

The It works!
New cost model Orders

Entrepreneurial
looks good!
Approvals

Mindset Customers
like it!
Have a fix
Qualification
Yes it does!
Enthusiasm

New fix works

Spider-web Yields
Model Yes it is! are low
Doesn’t work
No it
doesn’t

Networks

The 5 Stage Have Cost too high

Entrepreneurial
an idea! Not proprietary
Despair

Process Vision Time Commercialization

From R. J. Saldich

Copyright 2013 Jack M. Kaplan & Anthony C. Warren

 Some Reasons to Become an
Entrepreneur
Chapter 1 Entrepreneurs learn to think differently.
Triggers to start your own venture:
What is
Entrepreneurship? • Independence and Freedom from the restrictions and
The
bureaucracy of corporate life
Entrepreneurial • Being able to “do your own thing”
Mindset
• Plateauing in current job
Spider-web
Model • Opportunity for sustained growth and mobility
• Flexibility
Networks
• Financial reward
The 5 Stage
Entrepreneurial • Loss of Current Employment
Process “Looking back, the day that I got fired was the best day of my life”
……successful entrepreneur.
Copyright 2012 Jack M. Kaplan & Anthony C. Warren
 Types of Entrepreneurs

Chapter 1 The Choice

What is • As the economy has shifted to place a premium on
Entrepreneurship? portable skills and knowledge, as well as effective
The
networks, entrepreneurship has become a viable
Entrepreneurial career alternative.
Mindset
• Entrepreneurs are classed into several categories:
Spider-web
Model
• Serial Entrepreneur—Someone who starts, grows,
Networks and sells several businesses over the course of their
The 5 Stage career.
Entrepreneurial
Process

Copyright 2013 Jack M. Kaplan & Anthony C. Warren

 Types of Entrepreneurs

Chapter 1 Types of Entrepreneurs – 2

What is
Entrepreneurship?
• Aspiring Entrepreneurs—Dream of starting a
The business; they hope for the chance to be their own
Entrepreneurial bosses, but have not yet made the leap from their
Mindset
current employment into the uncertainty of a startup.
Spider-web
Research indicates that, at any given time, 7 million
Model
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?
• Lifestyle Entrepreneurs—Have developed an
The enterprise that fits their individual circumstances and
Entrepreneurial style of life. Intention is to earn income for
Mindset
themselves and their families. Sometimes referred to
Spider-web
as “small businesses” or “mom-and-pop shops”. 13
Model
million Americans (25 million if you count part-
Networks timers) 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?
• Growth Entrepreneurs—Have both the desire and
The ability to grow as fast and as large as possible. Their
Entrepreneurial firms are the most dynamic job generators in the U.S.
Mindset
economy. There are over 300,000 entrepreneurial
Spider-web
companies with more than 50 employees that are
Model
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 Ask Yourself “What Type am I”

What is
Entrepreneurship? • One of the major mistakes aspiring entrepreneurs
The
make when starting out is NOT to closely question
Entrepreneurial what they want to be when “they grow up”.
Mindset
Spider-web • Each type of entrepreneur is a control and lifestyle
Model
choice with many advantages and disadvantages that
Networks must be considered
The 5 Stage
Entrepreneurial
Process
• Decide early on what is most important to you –
control, wealth, lifestyle…..
Copyright 2013 Jack M. Kaplan & Anthony C. Warren
 Entrepreneurial Traits

Chapter 1 Common Characteristics of Entrepreneurs:

What is • Passionately seek new opportunities and are always
Entrepreneurship? looking for the chance to profit from change and
The
disruption in the way business is done
Entrepreneurial • Pursue opportunities with tremendous discipline
Mindset
• Pursue only the very best opportunities, and avoid
Spider-web
exhausting themselves and their organizations by
Model
chasing after every option
Networks • Focus on execution—specifically, adaptive execution
The 5 Stage • Engage the energies of everyone in their domain
Entrepreneurial
Process • Lead by example, network, and communicate well

Copyright 2013 Jack M. Kaplan & Anthony C. Warren

 Entrepreneurial Traits

Chapter 1 Entrepreneurs are Comfortable in Paradoxical

What is Situations. They Learn to Balance:
Entrepreneurship?

The Ambiguity vs. Planning

Entrepreneurial
Mindset Creativity vs. Discipline
Urgency vs. Patience
Spider-web
Model Flexibility vs. Organizational Structure
Responsiveness vs. Systematic Processes
Networks Risk Taking vs. Controlled Risk
The 5 Stage Short Term Actions vs. Long Term Goals
Entrepreneurial
Process

Copyright 2013 Jack M. Kaplan & Anthony C. Warren

 The Spider-Web Model

Chapter 1

What is
Entrepreneurship?

The
Entrepreneurial
Mindset
Spider-web
• Managing a Start-up is analogous to building and
Model maintaining a fragile Spider-web which is under
continuous attack.
Networks
• Unlike a large company with specialists for different
The 5 Stage functions, entrepreneurs must learn “on-the-job” and
Entrepreneurial
Process 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 Interstate Network is an example in which each node has a

The 5 Stage
similar characteristic…it is connected more or less equally with its
Entrepreneurial neighbors.
Process
•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
•The Airline Network is an example in which certain nodes
Networks
have a highly concentrated set of connections.

The 5 Stage •Entrepreneurs identify and network with highly connected

Entrepreneurial people, or key influencers and build network power into their
Process 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 Internet is an example of a “Scale-free” network.
The 5 Stage Entrepreneurs exploit its unique characteristics for finding
Entrepreneurial resources, tackling problems and creating efficient market entry
Process strategies.

Copyright 2013 Jack M. Kaplan & Anthony C. Warren

 Getting Started - Stage 1

Chapter 1

What is Stage 1: Conducting Opportunity Analysis

Entrepreneurship?

The
Entrepreneurial • Innovate and create the vision
Mindset • Conduct market analysis and research
Spider-web • Evaluate the competition
Model
• Research pricing and sales strategies
Networks

The 5 Stage
Entrepreneurial
Process

Copyright 2013 Jack M. Kaplan & Anthony C. Warren

 Getting Started – Stage 2

Chapter 1 Stage 2: Developing the Plan and Setting up

What is
the Company
Entrepreneurship?

The • Set goals and objectives

Entrepreneurial
Mindset • Start writing the plan
Spider-web • Investigate new processes and technologies
Model
• 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 Stage 3: Acquiring Financial Partners and

What is
Sources of Funding
Entrepreneurship?

The • Innovate and create the vision

Entrepreneurial
Mindset • Conduct market analysis and research
Spider-web • Evaluate the competition
Model
• 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 Stage 4: Determining the Resources Required

What is
and Implementing the Plan
Entrepreneurship?

The • Determine value of licenses, patents, and copyrights

Entrepreneurial
Mindset • Prepare the organization for growth
Spider-web • Develop a business model to maximize value
Model retention and sustainability
Networks • 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?
• Prepare a full business plan
The • Discuss options and alternatives
Entrepreneurial
Mindset – Sell or merge
– Go public
Spider-web
Model – Form a strategic alliance
• Communicate the opportunity
Networks

The 5 Stage
Entrepreneurial
Process

Copyright 2013 Jack M. Kaplan & Anthony C. Warren