Week 1 : Introduction

Course Description 1

Course Learning Objectives 1

Recommended Background 2

1.1 Process of Entrepreneurship 2

Question 1. What are the essentials of entrepreneurship? What is an entrepreneur and
how does an entrepreneur operate? 2
Question 2. What is entrepreneurship? 3
Question 3. What are the 4 pillars of entrepreneurship? 5
Question 4. Please describe the process of entrepreneurship. 9

1.2 Risk and Uncertainty 13

Question 5. Please describe the relationship between creativity and innovation. 13
Question 6. Please present the 3 types of uncertainty. 15
Question 7. Are opportunities created or identified? How are opportunities evaluated? 17

Reading: Module 1 Lecture Slides 22

Review 22

Quiz 22

Course Description
Success in business can be greatly enhanced with an understanding of key entrepreneurial
characteristics and competencies solutions. This interactive course provides potential
entrepreneurs with the knowledge of succeeding in an entrepreneurial opportunity. Topics
include: how creativity, opportunity and feasibility are best evaluated; business strategies for
new businesses; importance of a business plan; achieving success in a new business. At the
end of the course students will have the skills and confidence to evaluate starting a
business, in addition to becoming more enterprising in how they approach their roles should
they decide to work in organizations.

Course Learning Objectives

Learn about the many faces of and contexts for entrepreneurship
Learn about the entrepreneurial process and how to manage it
Learn about what it takes to be an entrepreneur and your own potential to be one
Learn to recognize opportunities to generate and assess your own business idea
Explain the business planning process
Apply entrepreneurial approaches, concepts and methods to your own business idea
Learn about the operational issues in developing new business ventures
Course Format
There are four modules in this course. Each module has a corresponding quiz. You are
allowed one try for each quiz every eight hours and you need to achieve an 80% or higher
on all quizzes in order to pass the class. You may take the quizzes as many times as you
like.

Recommended Background
This course will appeal to a wide range of audiences. There are no course prerequisites; no
previous business experience is necessary.

1.1 Process of Entrepreneurship

Question 1. What are the essentials of entrepreneurship? What

is an entrepreneur and how does an entrepreneur operate?

The academic world still does not have a, a a common definition for the entrepreneur.
Academics fight over that all the time. Even entrepreneurship. What is entrepreneurship? Is
it just starting a business, starting a company? Or is there a difference between
entrepreneurial and enterprising?
Entrepreneurs don't just have to start businesses, we've also gotta grow them and keep
them running. So entrepreneurship really, in my opinion, is at the very heart of business. And
an entrepreneur has to be a very well-rounded business person. So that's the journey I
wanna take you on through this course. A lot of times, entrepreneurs, especially in the
beginning, don't think of themselves as business people. They think of themselves as
someone with an idea. And maybe that's where you are. Maybe you've got an idea, or an
inkling of an idea, or you think you might be able to find an idea, all right? And so you're in
this course and you wanna see how you can take this idea and transform it into a company,
how you can be an entrepreneur, someone who has, operates and runs their own company,
okay?
Definition of entrepreneur, I'm gonna stay away from, but I really do like this quote by Ludwig
von Mises, who talks about some of the characteristics that an entrepreneur is gonna have.
And specifically, in the realm of how they view the world. A lot of times, people think us
entrepreneurs are crazy and we see things different than everybody else. I like what von
Mises said about the fact that entrepreneurs, we don't see a different past. We don't see a
different present. We don't live in la-la land, as we say, right? We see the past like other
people see the past. I see the present as anybody sees the present. But sometimes, in fact,
maybe often, I view the future in a different way. Why is that? Why would I have a different
view of the future? Why would you have a different view of the future in respect to the
business or the idea or the project or the product that, that you're currently working around
with in your head? Why do you think the, the future can be different than those around you?
We're gonna look about, at that a little bit in the next section.

Question 2. What is entrepreneurship?

What I do wanna bring out is, entrepreneurship is a process.

It is a process and where that process starts is really anybody's guess.

And I have been in entrepreneurship enough in my life and I've been in enough
entrepreneurial processes and scenarios to see people enter at every, at every point of
entrance in that process. I've seen people that simply had an entrepreneurial culture
because they came from a family of entrepreneurials, right? I've seen people not from an
entrepreneurial culture just starts to engage in entrepreneurial behavior, doing the things that
entrepreneurs do. And this is interesting that I talk about behavior, right, because a lot of the
thought on what makes an entrepreneur an entrepreneur has to do with what they call
entrepreneurial awareness, or the cognition of an entrepreneur. This is very debatable as to
whether entrepreneurs think so incredibly different than other successful managers. But
what we do know is, entrepreneurs do different things. So it's behavior that we really wanna
get into. You know, entrepreneurial behavior by definition begets innovation, right? And
that's why famous entrepreneurs continue to innovate and do more and more innovative
things. Cuz that's part of the process. Innovation by definition creates competitive
advantage.

Competitive advantage gives superior performance which can be harvested or reinvested

into the entrepreneurial process, right back into that entrepreneurial culture. So
entrepreneurship, whatever it is, is definitely a process.
Entrepreneurship is also a management paradigm. It's a way of being managerial. And we
can express it in several different ways. In fact, in what we call, what we frequently call the
four pillars of entrepreneurship, the four types of entrepreneurial ventures. Now, regardless
of the pillar or the type of venture that you engage in, the paradigm is very similar. It, it, the
paradigm still goes through its, the same steps. The significance of those steps or the details
of those steps can be different, okay?

Question 3. What are the 4 pillars of entrepreneurship?

Now the four pillars of entrepreneurship, the way that we tend to see them today.

There's what we call the Independent Venture, and this is what most people think about
when they think about entrepreneurship. This is the lone entrepreneur, right? This is Steve
Jobs going off to start Apple. This is this is Michael Dell in his college dorm room you know,
starting Dell Computers, the independent venture, right? What we often called the self-made
man. Now at some point in your entrepreneurial venture, you're probably gonna get to a
point where you hate to hear that phrase because you're really in the, in the grind of it.
You're going through what we all have to go through, okay? And you'll think about these
self-made men. Myth number one of entrepreneurship. There is no such thing as a
self-made man.

We all get help. We've all had help, right? Once they succeed, sometimes they say, hey, this
person helped me. Sometimes they hide it and try to say they're a self-made man. There is
no self-made man.
7:10
There, that's why you're here today, okay? You're getting help, you're, you're, you're getting
knowledge, you're getting input, you're getting some advice, right? No self-made men, no
self-made women. There are independent ventures, people who take it upon themselves to
start a business, the first pillar of entrepreneurship.

Then there's Corporate Ventures. Now there's a silly little phrase in English that a lot of
people use to describe corporate entrepreneurship. I'm not gonna use it here. Although we
don't have a solid definition for entrepreneur or entrepreneurship yet in academia, I take
entrepreneurs and entrepreneurship very sim, very seriously. And the word means
something. So rather than cut it up and make it cute and funny, I'm just gonna say, corporate
entrepreneurship. This is people in businesses, in existing businesses that want to or that
see new ways that that company or that business can create value. And so they create new
businesses within businesses, right, being entrepreneurial within a corporation. This is
entrepreneurship.
8:17
The next one is Family Ventures, people that come from family businesses. And again,
these have issues all their own. And it's very interesting what we can consider a family
venture, and there is no consensus on that either, right? What is a Family Venture? And in
some, in the most liberal sense, a Family Venture is, it is, is any corporation or any, any
business entity in which the family, the founding family, still exerts sufficient control, all right?
Call that as, as you may. And so many, what we might call Corporate Ventures, are also
Family Ventures, okay?
There's also the Social Ventures, and this is becoming more and more popular these days.
Social entrepreneurship. This is not necessarily not for profit. There's Social Ventures out
there that are for-profit organizations, but they're still socially minded, okay? The number one
goal of that venture is not necessarily to make money, but to achieve something in society.
So Social Ventures, which many times of course, are not for profit, okay? Now, the four
pillars of entrepreneurship.

Question 4. Please describe the process of entrepreneurship.

There is a process of entrepreneurship that runs across all four of those pillars, regardless of
which one you're engaging in.
The first thing you need to do is, you need to recognize an opportunity. Find, recognize,
create, however you wanna call it, there needs to be the opportunity.
9:45
Once that opportunity is identified, there's a planning process, a valuation, evaluation,
business planning processing.
Which, once completed, if it's favorable, there's what we call Resource Marshalling, getting
together the necessary resources, funds, people, equipment, the things needed.
And then Managing Growth and Change. All four of these steps are intricate to being
entrepreneurial.
10:13
Now depending which pillar you're in, these steps might manifest themselves differently. The
best example I give of that is [COUGH], let's look at Resource Marshalling. So you got an
idea, you got your business plan together and you're gonna go get, you need to go get the
money. For example, you wanna get an investor. Well this is an independent venture. You
wanna start a company, so you go to a bank and give them your business plan. The bank
looks at it, they say no. Go to bank number two, they say no. Number three, they say no.
You go to 99 banks and you get 99 nos.
10:47
You go to bank 100 and the guy looks at it and says, yeah I'll give you the money. You've
got your business, right? [COUGH] For an individual venture, 99 nos mean nothing if you get
one yes. One yes, you've got your business.
11:03
Now, what if it's a corporate venture right? You work for a business and you think, hey, you
know what? We could make a lot of money if we did this. And you put together a little
business plan for it. And you take it to your boss and you say, hey, I think we should do this.
And he looks at it and he says, hey, that's a great idea. Gives it to his boss and says, wow, I
think that's a great idea. Gives it to his boss and says, man, I think we should do this. 99
bosses. It's a big organization. 99 bosses, all the way up. The CEO looks at it and says, no, I
don't wanna do that. 99 yeses mean nothing if you encounter one no, right? Same process,
same thing going on here, but a different nature, depending on which pillar you're in, right?
And therefore, it's important as we go into entrepreneurship that we understand the nature of
our pillar, right? The nature of the kind of entrepreneurship we're engaging in, so that we can
operate in each of these four steps effectively.

1.2 Risk and Uncertainty

0:04
You probably know two different types of people. You know kinds, the kind of people who
are always saying, you know these guys should do this over here. You know what would be
a great idea is if they changed this like this or if. If they came up with that product or service
and you know other people who maybe are as vocal, maybe less vocal, but the difference is,
these people are always engaged in something, they're always actually doing something, not
just talking about it, right? This would be more entrepreneurial, right?

Question 5. Please describe the relationship between creativity

and innovation.
I always say creativity is not entrepreneurial. We have no use for creativity in business. What
I have use for in business is innovation.
0:46
Creativity is just an idea, it's a thought. Innovation is the application of creativity.
0:54
This is what we need in business. This is what defines an entrepreneur, right? Is innovation,
acting on creativity. So why do entrepreneurs act on their creative ideas, where other people
don't?
1:10

This is, takes us back to, to, the very basis of entrepreneurship, any time you bring up
entrepreneurship in a group, someone is going to bring up the word risk. Oh yeah,
entrepreneurs those risk seekers. I am too risk adverse to be an entrepreneur. I am not risky
enough to be an entrepreneur. I'm an entrepreneur, I've always been an entrepreneur.
1:32
I don't view myself as being ultra risky, all right? I don't think of myself as a very risky person.
So, what's this thing about risk in the entrepreneur?
1:42
I want to talk about risk and uncertainty. Risk is really another way of expressing what's
known as uncertainty, things that we're not certain about.
1:55
We're not certain about the future, and why are we not certain about the future? We're
certain because, well, the future's the future. No man knows the the future. But we can have
a better understanding of the future than other people, depending on our level of knowledge
and education. You see, the only way that I can possibly know what the weather might be
like tomorrow is by watching the weatherman on TV. Cuz I don't have enough knowledge
about weather and weather patterns to, to take me any further than that. But the man on TV
who might actually just be an actor [LAUGH] is at least getting his information from well
informed people who study meteorology, who study weather, who study weather patterns.
And on top of that, they have access to satellites and satellite info that can show you. Things
that are coming. In fact, on my iPhone now, I have access to satellite info, and that actually
reduces my uncertainty, Right? It has removed ignorance and reduced uncertainty. Although
I may not be able to tell you what the weather will be like next week, right, I can tell you in
the next few hours cuz maybe I can see the, the weather system moving in. On, on, on, on
the satellite.
3:08
Now, as that system approaches and I say oh, it's gonna rain in an hour, an hour from now,
it doesn't rain. What happened? I look back at the satellite, and oh, oh, the, the, the weather
pattern that was coming shifted. It went somewhere else. I didn't know it was going to shift. I
didn't know enough about it. I could only see what my satellite was telling me. But if I had
had more knowledge of what was going on, like the weatherman might, like the weather
department might, they may have said no this is going to be blocked by this mountain range,
or we've got some air coming down from here. And, they would have less uncertainty about
the future.

Right, so I want, I want to really drive that home with you because uncertainty is a product of
ignorance.
3:55

Question 6. Please present the 3 types of uncertainty.

So in entrepreneurship, we deal with uncertainty, and in the context of entrepreneurship, we

deal with three types of uncertainty.
We do, deal with what we call state uncertainty, effect uncertainty, and response uncertainty.
Okay? State uncertainty. State uncertainty is basically we are uncertain about the state of
things at a future time. Right? Simply the way things are going to be. We're uncertain about
that. There's effect uncertainty. We are uncertain about the, the effect that our actions or
unknown actions might produce.
4:33
And there's response uncertainty. We're also uncertain about response of the market. Or
other forces, but, but primarily usually of the market in response to whatever action we
perform, right? So how are things gonna be?
4:52
How are things going to be affected by what we do and
4:57
what is the response to our actions gonna be? These are basically the three main
uncertainties.
5:03
Now these uncertainties manifest themselves as ignorance and doubt.
5:09
Okay. So we are ignorant of certain things and doubtful of certain things because we are
simply uncertain about the future.

Question 7. Are opportunities created or identified? How are

opportunities evaluated?

So the first thing an entrepreneur needs is an opportunity. Are opportunities identified? Are
they created? It's an argument we're not going to get into. What we do know is we need an
opportunity.
5:28
And once we get an opportunity,
5:30
we as entrepreneurs have to evaluate that opportunity in a meaningful way.

Opportunity of evaluation is a two step process. There is the personal evaluation.

5:42
Of the opportunity. And then there's the more formal evaluation which is the feasibility study.
Now the first part, personal evaluation, that's also a two step process. You see as we go
through life, us entrepreneurs, we identify an opportunity or create an opportunity. We see
that there's a potential opportunity there. And the first thing we do is we start thinking about
it, we probably do a little research, whether actual physical research or even just cognitive
research. As we process the possibility of this, of this opportunity, we start looking at what
information we have, what connections we can possibly make or what connections exist.
That make this opportunity profitable, okay?
Now, it's important to understand that the personal evaluation and the feasibility study are
not mutually exclusive. Sometimes very early on in the personal evaluation stage we might
sit down at a computer, open up Excel, throw in some numbers, start playing around. Hey, I
wonder if you could make money off of this.
6:47
As we do this, we actually reduce we reduce uncertainties, right? We reduce state
uncertainties, affect uncertainties, response uncertainties. We probably never eliminate
them, but we do reduce them. As we reduce these uncertainties, we reduce. Our ignorance.
7:08

As our ignorance is reduced, we start to see an opportunity.

7:14
This is what we call a third person opportunity. We start to realize that there's money in that
opportunity, or there's a value in that opportunity for someone, maybe not me. Maybe I'm the
last person on earth who wants to engage in that opportunity, right? But I recognize, you
know what, there is value there for someone and I've evaluated thousands of these
opportunities in my time. And I know there's value there I'm just not interested, not my cup of
tea, not the kind of venture I want to engage in.
7:46
Right? We reduce uncertainties, we reduce ignorance. And we reveal a third person
opportunity.
7:54
Then once that opportunity is revealed we start to think about it more personally. We'll, could
I do that? Would I wanna do that?
8:01
And we start again, reducing. State uncertainty, effect uncertainty, response uncertainty, in
terms of us and our actions and our lives.
8:13
And at some point we might realize, yeah, I want to do that. Yes, I can do that. Maybe at first
we think, man, there's an opportunity there, but I could never do it.
8:23
But as we consider it more, as we maybe get online and educate ourselves more, or take a,
a career readiness course, we realize, you know, I can do that.
You see, we've just elevated the third person opportunity into a first pah, person opportunity.
This is no longer just a good business idea. This is a good business idea for me. I now have
a first person opportunity. An opportunity for me that I can take and start to work with. What
I've done is I've reduced ignorance. To have a third person opportunity and then reduce
doubt to get a first person opportunity.
9:01
So you've got your first person opportunity, what are you going to do now? Well now you've
got to take that second step into the formal evaluation process or the feasibility study.

Feasibility study. Is really going to involve looking at the numbers, getting the numbers,
getting them all together, and you might think, wait a second, that's where this all ends. The
doubt reenters. I don't do numbers. I don't do accounting. You can do numbers. You can do
accounting. We've got Excel to help us and that's what we're gonna look at in the next
section. We're gonna look at entrepreneurial finance. How do we entrepreneurs who may or
may not come from a financial background, how do we evaluate this business in terms of
proper financial technique and terms of the numbers? We're gonna get on to that in the next
module, and I look forward to seeing you then.
Reading: Module 1 Lecture Slides
https://d396qusza40orc.cloudfront.net/thinkact/Entrepreneurship_module1_part1.pdf
https://d396qusza40orc.cloudfront.net/thinkact/Entrepreneurship_module1_part2.pdf

Review

Quiz
1. The four pillars of entrepreneurship include (select 4):
a. Independent Ventures
b. Partnership Ventures
c. Corporate Ventures
d. Non-Profit Ventures
e. Charitable Ventures
f. Social Ventures
g. Family Ventures
2. Entrepreneurs engage in the following two types of opportunity evaluation (select 2):
a. Personal Evaluation
b. Business Evaluation
c. Risk Evaluation
d. Feasibility Study
e. Market Study
3. As we overcome ___________________, we begin to understand that an opportunity
exists for someone (3rd person).
a. Uncertainty
b. Ignorance
c. Fear
d. Doubt
4. As we overcome ______________________, we begin to understand that an opportunity
exists for ourselves (1st person).
a. Uncertainty
b. Ignorance
c. Fear
d. Doubt