ENT4000 - 09/11/07

What is driving entrepeneurship in Pakistan?
 - Liberalization
 - Finance
 - Secular
 - Positive perception of economy?
 - Open communication/access to other cultures

What is stunting?
 - Inflation
 - Political (instability?)
 - Cultural - fundamentalist, attitudes about money - generation gap in attitudes
 - Income gap


(this stuff is continued from last week)

Entrepreneurs Versus Inventors
Inventor: Creates something for the first time; highly driven and motivated by his or her own work and personal ideas.
Differentiating characteristics of an inventor:

• Education.
• Level of experience.
• Problem-solving skills.
  
• Level of self-confidence.
• Willingness to take risks. - Inventor generally will not take market risk
  
• Ability to tolerate ambiguity and uncertainty.
• View of monetary benefits in measuring success.

 - Inventor not always best person to take ideas into marketplace - "Technology Transfer" from lab to marketplace (i.e. Gatorade)

Types of Start-Ups
Lifestyle firm

• Privately held; usually achieves only modest growth. - started to support lifestyle (not going to be very big)

Foundation company

• Created from research and development.
• Lays the foundation for a new business area.

High-potential venture

• Receives the greatest investment interest and publicity.
• Starts out like a foundation company, but attains rapid growth.
• Also called gazelles, is integral to the economic development of an area. - fast to change direction and grow
• Venture capitalist favorite - i.e. "10x companies"
  

Risk and the Entrepreneur…
Study: 10 entrepreneurs were each given $1,000 and sent to Las Vegas for 24 hours to study how they managed their “investment”…
What happened????
 - entrepreneurs understand and respect risk, and try to minimize and deal with risk; not risk junkies
 - 9/10 came back with the $1000 (last bought a nice dinner and came back with $800)

Entrepreneurial Risk Factors

• Structural uncertainty - uncharted territory for market and producer (i.e. email, "manufactured homes")
  
• Strategic uncertainty - invading others' territory, competitive reaction is unknown
  
• Resource uncertainty - have enough money? intellectual capital?, etc
  
• Customer uncertainty - will customers like what we're doing?
  

Entrepreneurship: The Person

The “Type E” Personality
Common Traits of Entrepreneurs:

• Aggressively pursues goals; pushes self and others
• Seeks autonomy, independence and freedom from boundaries - allergic to Dilbert syndrome - but not actually "free" (i.e. sometimes longer workdays)
  
• Sends consistent messages; very focused
  
• Acts quickly, often without deliberating - gut instinct/shooting from the hip, "fire, ready, aim"
  
• Keeps distance and maintains objectivity
• Pursues simple, practical solutions - cobble together different/creative solutions
  
• Willing to take risks; comfortable with uncertainty
• Exhibits clear opinions and values; has high expectations
• Impatient; “just do it” mentality
• Positive, upbeat, optimistic; communicates confidence

Rewards of Being an Entrepreneurs
 - Financial reward
 - Freedom in schedule, being your own boss, creative control
 - Self-fulfilling, exciting, challenging
 - Legacy (i.e. 1st level immigrants) to pass to later generations, and prestige ("Oh, you're the guy who started... dah.")

Challenges of Being an Entrepreneur
 - Financial losses, f-f-f-f-f-f-f-failure
 - Selling the idea (**********)
 - Work/life balance
 - Tough decisions, number of decisions
 - Teamwork/delegation of roles and people

How Entrepreneurs Think
Entrepreneurs in particular situations may think differently when faced with a different task or decision environment.
Given the nature of their decision-making environment, entrepreneurs need to sometimes:

• Effectuate. - deal with cards dealt
• Be cognitively adaptable.
• Learn from failure.