Transcript Entrepreneurship I

Entrepreneurship I
Class #2
Ideas and Opportunities
Entrepreneurial achievement is
driven by people who search for
and shape superior opportunities
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Joseph Schumpeter regards the dynamic
process of new firms replacing or changing
existing firms:
“gales of creative destruction.”
This, he defines, is the essential feature of
capitalism. Entrepreneurial companies are the
true life blood of a region, pumping renewed
energy and vigor into the economy.
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Entrepreneurship buzz
• Brontosaurus capitalism
• Intrapreneurship
• Youth
• Get rich quick
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What’s Important
Founders
Resources
Opportunity recognition
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What You Need
Unfair advantage
Ability to sell
Commitment
Implementation
Earn the right to exist everyday
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Luck and Smarts
• Business is timing/high tech is timing
• Importance of marketing
– Research, analysis, strategy
– Selling $1 for $.50 is easy
– Selling $1 for $1.10 is not
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What ideas form the basis
of a good business?
Problem
Passion
Pain
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Ideas and opportunities
More money than good ideas
Strategic money
market,
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market, market
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Points of interest
• Life cycle of businesses
• Changing strategy and culture
• Team building
• Long term value vs. short term profits
• Balancing risk and reward
• Lifestyle businesses vs. growth
businesses
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Why businesses fail
• 1 out of 3 succeed
• The bigger you are, the faster you grow,
the better your chances of survival
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Opportunities
• Start with the opportunity
– Not money
– Not strategy
• Market demand
• Market structure and size
• Margin analysis
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Sources of inspiration
Start Up by Jerry Kaplan
Inc Magazine
Fast Company
Upside
NY Times
Wall Street Journal
Red Herring
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Business Week
High Stakes No Prisoners
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Start
Ups
Small
Businesses
Growth
Oriented
Gazelles
IPO
> $1 M
20% growth for last 4
years
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gments
Hot Se
Hi tech
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Hi tech
• Spending was $760B in 2001.
• $280 B spent on IT hardware = 17% more than U.S. new
motor vehicle purchases, 49% more than new home
spending, and 168% more than commercial and industrial
construction
• Average wage in high tech sectors is $17K greater than
wages in traditional sectors ($49K vs. $32K in 2002).
• Growth in spending increased 10-13% annually from
1992-2000. (Goldman Sachs).
• Goldman Sachs survey results predict growth in spending
under 5% for 2002-2003, with a quarter of corporate
respondents predicting decrease in spending.
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High tech
• High tech jobs have accounted for 2025% of real wage and salary growth
• For the past 3 years, high tech sectors
have contributed 27% of growth in GDP
• Pa is ranked 8th in both total tech
employment and and # of tech firms
• PA = 2nd largest biopharmaceutical
state and 5th in biotech
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Tech transfer growth
• 383% increase in gross licensing
revenue from 1991-1999
• 1991 licensing income - $123 mm
• 1999 licensing income – 594 mm
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Tech transfer CMU
• CMU made $5.9mm in 1999
• 5 startups, 23 licenses
• 104 invention disclosures, 21 patents
filed
• Total of 119 active licenses and options
through ‘99
• 9 FTEs in the office
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Tech transfer Pitt
• Pitt generated $.6 mm in 1999
• 3 startups, 16 licenses
• 48 patents filed, 107 invention
disclosures
• Total of 57 active licenses and options
through ’99
• 9 FTEs in the office
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New generation entrepreneurs
• Low capitalization
• New services or products or old
positioned in brand new way
• Different perspective on risk
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Blinding glimpse of the
obvious
Thorton Wilder
Mission
• Organization’s purpose
• What it wants to accomplish in the
marketplace
• Defines the business in terms of
satisfying customers’ needs
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Mission statements
• Realistic
• Specific
• Distinctive competencies
• Motivating
• Driven by a vision
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Example
The mission of XYZ is to serve the natural gas, oil and
water industries through the manufacture and
distribution of state of the art pipeline products in an
atmosphere reflective of the highest professional and
ethical standards.
Our firm commitment to excellence, integrity and
innovation is designed to ensure superior product
value and unequalled service to our customer base
while providing enhanced growth opportunities for
our associates and maximum value for our
shareholders.
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Mission statements should
• Be clear AND concise
• Tell WHAT you do and WHO you do it
for
• Indicate the core VALUES of the
organization
• DIFFERENTIATE you from the
competition
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