ENT Week 2.pptn bb b,,,,,,,,,,,,,,,,,,,,

2re

1. Hisrich
Peters
Shepherd
Chapter 1
The Nature and
Importance of
Entrepreneurs

2. 1-2
Types of Start-ups
1.Lifestyle-firm: A small venture that supports the
owners and usually have little opportunities to
grow and expand
A lifestyle firm is privately held and achieve modest
growth due to the nature of the business, the objectives
of the entrepreneur, and the limited money devoted to
research and development.
This type of firm can grow in 15-20 years and can
employ 3-30 employees and have annual revenues of
about Rs.2 million

3. 1-3
Types of Start-ups
2.Foundation company: A type of company formed
from research and development that usually does
not go public.
The foundation is created from research and
development and lays the foundation for a new business.
This type of startup rarely goes public, it usually draw
the interest of private investors only, not the venture-
capital community.
This firm can grow in 5-10 years from 30-400 employees
and reaching maximum to Rs.20 million in yearly
revenues.

4. 1-4
Types of Start-ups
3.High-potential venture (These firms are also called
gazelles): A venture that has high growth
potential and therefore receives great investor
interest and are integral to the economic
development of an area.
High-potential venture is the one that receives the
greatest investment interest and publicity. While the
company may start out like a foundation company, its
growth is far more rapid.
After 5-10 years the company could employ around 500
employees with Rs.2 Billion in revenues.

5. 1-5
Defining a New Innovation (Product or
Service)
Newness can be:
In the consumer concept.
A change in the package or container.
Slight changes or modifications in the appearance of
the product. (Industrial market)
Companies also add products to their product
line that are already marketed by other
companies; products are new to the
manufacturer but not the consumer.
Defining Innovation

6. 1-6
Innovation
Types of Innovation
Breakthrough
Breakthrough – New products with some technological
change e.g. Virtual 3D Glasses, telephone, alkaline
batteries
Fewest number of innovations.
Establishes the platform on which future innovations in
an area are developed.
Should be protected by patents, trademarks, and
copyrights.

7. 1-7
Technological
Technological – New products with significant
technological advancement e.g. Nokia 3310 to Nokia
Lumia or cassettes to CD’s
Occurs more frequently; not at the same level of
breakthrough inventions.
Offers advancements in the product/market area.
Needs to be protected by patents, trademarks, and
copyrights.
Innovation (cont.)

8. 1-8
Ordinary
Ordinary - New products with little change e.g. Smart
Phone series IPhone 11, 12 & 13
Occurs most frequently.
Extends a technological innovation into a better
product or service or one that has a different market
appeal.
Usually come from market analysis and pull strategy,
not push strategy.
Innovation (cont.)

9. 1-9
Role of Entrepreneurship in
Economic Development
The role of entrepreneurship in economic
development involves more than just increasing per
capital output and income; it involves initiating and
constituting change in the structure of business and
society. This change is accompanied by growth and
increased output, which allows more wealth to be
divided within the various participants.
Innovation is depicted as a key to economic
development, not only in developing new products
(or services) for the market but also in stimulating
investment interest in the new ventures being
created.

10. 1-10
Role of Entrepreneurship in
Economic Development
Product-evolution process - Process through which
innovation is developed and commercialized through
entrepreneurial activities (see Figure 1.1).
Iterative synthesis - The intersection of knowledge
and social need that starts the product
development process (III)
Iterative synthesis often fails to evolve into a
marketable innovation and is where the
entrepreneur needs to concentrate his/her efforts
such as:-
Expertise in this area
Matching the technology with the appropriate market and
making the needed adjustments

11. 1-11
Figure 1.1 - Product Evolution
I.Recognition of social needs
II.Initiation of technological innovation
III.Iterative synthesis leading to invention
IV.Development phase
V.Industrial phase

12. 1-12
Role of Entrepreneurship in
Economic Development
Regardless of innovation level of uniqueness or
technology, each innovation evolves into and
develops towards commercialization through one of
three mechanisms.
Entrepreneurship:
Government as an innovator: a government active in
commercializing technology e.g. JF-17 (Dubai Air Show-
2016)
Intrapreneurship: Entrepreneurship within an existing
organisation. In the present era of hyper-competition, the
need for new products and the intrapreneruial spirit have
become so great that more and more companies are
developing an intrapreneruial environment, often in the
form of strategic business unit (SBU’s).