Essentials of Entrepreneurship – Damian den Ouden (Stuvia: daimsv)
Lecture 1: 11-11-19
All entrepreneurs have in common: immense self-belief
If you don’t understand the business, don’t get in the business. Thing you can do is get knowledge
about the business
Richard Cantillon’s view on entrepreneurship
Economic system consists of three types of agents:
1. Landowners (capitalists, financially independent)
2. Entrepreneurs (arbitragers) → involves uncertainty which cannot be insured
3. Hirelings (wage workers)
➔ Entrepreneur is central economic actor
➔ He excluded landowners and laborers from economic uncertainty
Jean-Baptiste Say’s view on entrepreneurship
Industries are set in motion by three operations:
1. Theoretical knowledge construction
2. The application of knowledge → entrepreneur
3. Execution
➔ Entrepreneur: coordinator, modern leader, and manager. Successful ones need qualities and
experiences
Alfred Marshall’s view on entrepreneurship
Entrepreneurs drive production and distribution process; coordinate supply and demand on market
and capital and labor within firm
Entrepreneur task: supply of commodities and at same time provision of innovations and progress
1. General ability depends on family background, education, and innate ability
2. Specialized abilities
3. A natural leader of men
Joseph Schumpeter’s view on entrepreneurship
- Innovation as endogenous (=from inside) process
- Innovation and technological change of nation comes from entrepreneurs/wild spirits
- Entrepreneur is prime mover of economic system
- Entrepreneur creates new equilibriums (creative destruction)
Frank Knight’s view on entrepreneurship
Distinguish between uncertainty and risk: entrepreneurs held responsible for economic progress.
- Risky: enough information to anticipate outcomes
- Uncertain: not enough information to anticipate outcomes
Essence of entrepreneur’s position is his responsibility for direction and control whenever
uncertainty is involved
Entrepreneurial ability: high degree of self-confidence, power to judge personal qualities as
compared to those of other individuals, leadership
Israel Kirzner’s view on entrepreneurship
- Entrepreneurs are persons in economy who’re alert to discover & exploit profit opportunities
- Entrepreneur requires no special ability or personality to carry out his function
- Entrepreneurship requires special type of knowledge: knowing where to look for knowledge
> alertness
Venture: undertaking involving uncertainty as to the outcome, especially a risky or dangerous one
,Defining an entrepreneur
- Greater self-efficacy
- More internal locus (=place) of control
- Greater tolerance for ambiguity
- Higher need for achievement
- Difference in perception & optimism
- Weighing expected value > the costs
- Prior knowledge and transferability of prior knowledge
Lecture 2: 18-11-19
If you give something away for free, make sure you’ll let them know intrinsic value of specific thing
Things for business ideas to keep in mind:
1. Are you going to make a salary?
2. Are you able to offset all the costs you make next to the salary?
Get your idea out and find out if there’s a market - people want it or not:
- Build mock-website or Facebook page to find out how many people are interested
- Folders and flyers: would you like more information about this new technology?
- Make minimum viable product and check if people want it
Problem-solution fit
- Start with customer; they don’t know they have problem
- Target early adopters: be aware of their pain and are actively searching for a solution
- Problem: what are you solving and what are the existing alternatives already?
, Effectuation
Four principles:
1. Affordable loss (not expected return)
2. Strategic alliances (not competitive analysis)
3. Exploitation of contingencies (not of preexisting knowledge)
4. Controlling an unpredictable future (not predicting an uncertain one)
Bird in the hand saying: take look at means and take look at what results will come from that
Lecture 3: 25-11-19
INREDA: artificial pancreas for people suffering from diabetes
ioniqa: transforming types and colors of PET waste into valuable resources for new PET
hiber: IoT – connecting devices anywhere on earth easily and affordably
Kipling’s six honest serving-men: what, where, when, how, why, who
Entrepreneurship
- Generates benefits to broader society. E.g. creating new jobs, intensifying competition,
introducing innovation, increasing productivity
- Not necessarily: different types of entrepreneurship & innovation
➔ Top 10 countries most entrepreneurial are in Africa. Not really companies there so they
make their own companies
Entrepreneurship paradox (Stam)
Many countries with high incidence of entrepreneurship; often limited (visible) contribution to gross
domestic product
NL: increase entrepreneurship; predominantly self-employment (ZZP)
- Generally small, replicative and non-scalable; rarely source of employment except for
founders
- Not growth-oriented, innovative entrepreneurship; limited potential for sustainable growth
solutions
Lecture 1: 11-11-19
All entrepreneurs have in common: immense self-belief
If you don’t understand the business, don’t get in the business. Thing you can do is get knowledge
about the business
Richard Cantillon’s view on entrepreneurship
Economic system consists of three types of agents:
1. Landowners (capitalists, financially independent)
2. Entrepreneurs (arbitragers) → involves uncertainty which cannot be insured
3. Hirelings (wage workers)
➔ Entrepreneur is central economic actor
➔ He excluded landowners and laborers from economic uncertainty
Jean-Baptiste Say’s view on entrepreneurship
Industries are set in motion by three operations:
1. Theoretical knowledge construction
2. The application of knowledge → entrepreneur
3. Execution
➔ Entrepreneur: coordinator, modern leader, and manager. Successful ones need qualities and
experiences
Alfred Marshall’s view on entrepreneurship
Entrepreneurs drive production and distribution process; coordinate supply and demand on market
and capital and labor within firm
Entrepreneur task: supply of commodities and at same time provision of innovations and progress
1. General ability depends on family background, education, and innate ability
2. Specialized abilities
3. A natural leader of men
Joseph Schumpeter’s view on entrepreneurship
- Innovation as endogenous (=from inside) process
- Innovation and technological change of nation comes from entrepreneurs/wild spirits
- Entrepreneur is prime mover of economic system
- Entrepreneur creates new equilibriums (creative destruction)
Frank Knight’s view on entrepreneurship
Distinguish between uncertainty and risk: entrepreneurs held responsible for economic progress.
- Risky: enough information to anticipate outcomes
- Uncertain: not enough information to anticipate outcomes
Essence of entrepreneur’s position is his responsibility for direction and control whenever
uncertainty is involved
Entrepreneurial ability: high degree of self-confidence, power to judge personal qualities as
compared to those of other individuals, leadership
Israel Kirzner’s view on entrepreneurship
- Entrepreneurs are persons in economy who’re alert to discover & exploit profit opportunities
- Entrepreneur requires no special ability or personality to carry out his function
- Entrepreneurship requires special type of knowledge: knowing where to look for knowledge
> alertness
Venture: undertaking involving uncertainty as to the outcome, especially a risky or dangerous one
,Defining an entrepreneur
- Greater self-efficacy
- More internal locus (=place) of control
- Greater tolerance for ambiguity
- Higher need for achievement
- Difference in perception & optimism
- Weighing expected value > the costs
- Prior knowledge and transferability of prior knowledge
Lecture 2: 18-11-19
If you give something away for free, make sure you’ll let them know intrinsic value of specific thing
Things for business ideas to keep in mind:
1. Are you going to make a salary?
2. Are you able to offset all the costs you make next to the salary?
Get your idea out and find out if there’s a market - people want it or not:
- Build mock-website or Facebook page to find out how many people are interested
- Folders and flyers: would you like more information about this new technology?
- Make minimum viable product and check if people want it
Problem-solution fit
- Start with customer; they don’t know they have problem
- Target early adopters: be aware of their pain and are actively searching for a solution
- Problem: what are you solving and what are the existing alternatives already?
, Effectuation
Four principles:
1. Affordable loss (not expected return)
2. Strategic alliances (not competitive analysis)
3. Exploitation of contingencies (not of preexisting knowledge)
4. Controlling an unpredictable future (not predicting an uncertain one)
Bird in the hand saying: take look at means and take look at what results will come from that
Lecture 3: 25-11-19
INREDA: artificial pancreas for people suffering from diabetes
ioniqa: transforming types and colors of PET waste into valuable resources for new PET
hiber: IoT – connecting devices anywhere on earth easily and affordably
Kipling’s six honest serving-men: what, where, when, how, why, who
Entrepreneurship
- Generates benefits to broader society. E.g. creating new jobs, intensifying competition,
introducing innovation, increasing productivity
- Not necessarily: different types of entrepreneurship & innovation
➔ Top 10 countries most entrepreneurial are in Africa. Not really companies there so they
make their own companies
Entrepreneurship paradox (Stam)
Many countries with high incidence of entrepreneurship; often limited (visible) contribution to gross
domestic product
NL: increase entrepreneurship; predominantly self-employment (ZZP)
- Generally small, replicative and non-scalable; rarely source of employment except for
founders
- Not growth-oriented, innovative entrepreneurship; limited potential for sustainable growth
solutions
