MBAX 6100 Entrepreneurship

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MBAX 6100Entrepreneurship Small Business
Management

• Frank MoyesLeeds College of Business
• University of ColoradoBoulder, Colorado

• Progress depends upon unreasonable men.
• GB Shaw

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Todays Agenda

• Entrepreneurial Manager
• Case Crunch
• Entrepreneur Interview
• Tonight 600 Business Plan Competition Whitemyer
• NREL trip Feb 2nd at 200

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Entrepreneur Interview

• Choose person in an area of interest
• 3 years in business, 5 employees
• See website for assignment questionnaire
• Visit their office or facility
• Observe/talk to customers
• In depth interview get beyond the hype and
  self-promotion
• Take one hour after interview to draw conclusions

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Interview Paper

• Write a 6-page 1.5 spaced paper
• Describes the entrepreneurs background,
  motivations for starting the venture, challenges
  in growing the venture
• Evaluates the value proposition (target market,
  product/service description and unique benefit)
• Conclusion what makes the company successful
  (or not)? What are your recommendations for
  improvement?
• Discuss how the findings of the interview apply
  or are meaningful to you. What have you learned
  about your own potential to be an entrepreneur?
• Objective is to drill down into the company and
  thoroughly understand the entrepreneur and how
  s/he does business

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Entrepreneurial Manager

• Characteristics traits
• Different types of entrepreneurs
• Entrepreneurs vs. small business

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Entrepreneurial Characteristics
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• Motivated by achievement
• Innovation creativity
• Internal locus of control
• Risk-taking
• Tolerance for ambiguity
• Sense of independence
• Passion

• Traits of entrepreneurs are closest to juvenile
  delinquents.

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What Traits Should Be Avoided?
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• Invulnerability
• Being Macho
• Being Authoritarian
• Impulsivity
• Outer control
• Perfectionist
• Know it all
• Counterdepency

Timmons New Venture Creation
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What Assets are Required?
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• Network
• Supporting spouse
• Financial resources
• Optimism

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What Experience Is Required?

• Accounting
• Recruiting hiring
• Selling
• Financial projections
• Cash flow management
• Naming a product
• Choosing office decor

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Do You Have the Right Stuff?
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• Are you a self starter?
• Can you go 6 months to 2 years without getting
  paid?
• Are you willing to give up vacations, weekends
  and evenings?
• Are you a decision maker?
• Are you a people person?
• Do you handle rejection well?
• Do you think will on your feet?
• Do you like to sell?
• Do you handle crisis well?
• Would you be able to fire someone?
• Do you want total responsibility and
  accountability?

MD Csordos, 35 Business Lessons for Entrepreneurs
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Types of Entrepreneurs
0

• Personal achiever
• Super-salesperson
• Real manager
• Expert Idea Generator

JB Minor, Four Routes to Entrepreneurial Success
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Personal Achiever (classic entrepreneur)

• Need for high achievement
• Need for performance feedback
• Desire to plan and set goals
• Strong individual initiative
• Strong personal commitment
• Internal locus of control

JB Minor, Four Routes to Entrepreneurial Success
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Super-Salesperson (caters to needs of customers)

• Capacity to empathize
• Social interaction and relationships are
  important
• Need to have strong positive relationships with
  others
• Sales force is critical
• Background less education, more experience

JB Minor, Four Routes to Entrepreneurial Success
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Real Manager (grow the venture)

• Desire to be corporate leader
• Desire to compete
• Decisive
• Desire of power
• Desire to stand out in a crowd

JB Minor, Four Routes to Entrepreneurial Success
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Expert Idea Generator (expertise creativity
innovator)
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• Desire to innovate
• Love of ideas, curious
• Belief that new products are crucial
• Intelligence is the competitive advantage
• Desire to avoid taking risks

JB Minor, Four Routes to Entrepreneurial Success
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Types of Entrepreneurs
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• Personal Achiever
• Super-Salesperson
• Real Manager
• Expert Idea Generator
• Are there others?

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Different Methods Used to Build Ventures

• Independent innovators
• Pattern multipliers expand concept through
  franchise or chains
• Speculator buy and leverage, e.g. land
• Consolidator industry roll up
• Acquirers
• Arbitrageur buy low and sell high

K Vesper, New Venture Strategies
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Entrepreneurship Myths Realities
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Entrepreneurs Are Born?

• 100s of studies no entrepreneurial prototype
• Environment, family and self-development are key
• Why are some countries more entrepreneurial than
  others?
• 50,000 chunks

There is no E gene.
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Entrepreneurs are Gamblers?
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• May be the most risk adverse business people
• Take calculated risks, after careful analysis.
  Try to
• Minimize
• Share risks (OPRs)

Entrepreneurs play poker, not slot machines.
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Entrepreneurs Want to Be Their Own Boss?
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• But, you serve many masters
• Customers
• Suppliers
• Investors bankers
• Partners
• Employees and their families
• Community
• Double-edged sword. Yes you can make your own
  decisions, but there is no-one telling you what
  to do.

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Entrepreneurs Are Motivated by Money?
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• Survey of 500 male entrepreneurs
• Money 6th out of 10 reasons
• Survey of 113 female entrepreneurs
• Money 11th out of 16 reasons
• Desire to achieve, make a difference
• But, they do like money. Why?

Money is a way to keep score
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Why Start a Business?

• Money
• Job security
• Lifestyle
• Power
• Health

• Be your own boss
• Joy of Winning
• Fame
• Values Beliefs
• Get fired

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Entrepreneurs are Lone Wolves?

• Stereotype inventor working in his lab
• Must have a quality management team
• Visionary individual is the key
• Entrepreneur cant do everything
• Modify and adapt the vision
• Its fun having people around you that you like

Lone wolf cant get funding
Entrepreneurs travel in packs
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Entrepreneurship Requires Lots of Money?

• Opportunity driven, not resource driven
• Leverage resources other peoples (OPRs)
• Too much money
• Lack of discipline
• Impulse spending

Businesses do not fail for lack of money
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Entrepreneurs are Lucky
Yes!
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Just Do It
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Millions of people have an idea, but unless
they do something with it, their ideas arent
worth a damn. There are a lot of quacks and kooks
out there who claim they invented the Weed Eater,
and I dont doubt that there are some people who
genuinely thought of this idea--but what did they
do with it? Nothing. What do they deserve?
Nothing.
George C. Ballas,
inventor of Weed Eater
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Next Weeks Class

• Entry Strategy
• Read BZ-11
• Case ICEDELIGHTS
• Feb 2 at 200pm NREL visit

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Traits

• Misfits traits of entrepreneurs are closest to
  juvenile delinquents
• I have discovered that all human evil comes from
  this, mans being unable to sit still in a room.
  Blaise Pascal, philosopher and mathematician
• Progress depends upon unreasonable men. GB Shaw
• Entrepreneurs typically work half days. 12 hours
• The greatest difficulty in the world is not for
  people to accept new ideas, but to forget old
  ones. John Maynard Keynes
• If Im in control, Im probably going to slow.
  Mario Andretti
• A man who wants to lead an orchestra must turn
  his back to the crowd.