FFE, Vrije Universiteit
Lecture 1:
“Entrepreneurship is the process of creating value by bringing together a unique
combination of resources to exploit and opportunity”
“The solarly examination of how, by whom, and with what effects opportunities to create
future goods and services are discovered, evaluated, and exploited”
Trends promoting Entrepreneurship
- Technological changes
o New technologies have reduced the costs associated with creating and
managing startups
- Economic changes
o More dynamic labor market increases the importance of skill upgrading and
reduces opportunity costs to become self-employed
- Institutional changes
o The ecosystem that is needed to support entrepreneurs has improved (e.g.
incubators & accelerators, venture capital)
- Social changes
o Entrepreneurships now often viewed as a desirable career choice
Unique challenges
- Liability of newness
o Lack of established track-record makes resources acquisition challenging
- Resource scarcity
o Entrepreneurs often lack the resources needed to exploit a perceived
opportunity
- Extreme uncertainty
o Creating something new requires entrepreneurs to engage in trial-and-error
learning
Key questions to ask yourself in entrepreneurship
• What are the sources of new opportunities and how can one evaluate the potential
of new business ideas?
• How do entrepreneurs acquire the resources and legitimacy they need to succeed?
• How can entrepreneurs develop and optimize new business models?
• Why are some entrepreneurs more successful than others in creating and managing
high-growth ventures?
• How to determine when to step down as founder CEO and what are the key success
factors in such succession events?
Quiz answers
à People who become entrepreneurs generally share similar psychological profiles such a
being leaders, risk-takers, or adventurous. FALSE
à Most entrepreneurs are under 40 years of age. FALSE
à Among entrepreneurs, people with strong networking skills outnumber “lone wolfs”.
FALSE
à College-educated people are less likely to become entrepreneurs. FALSE
,FFE, Vrije Universiteit
à The desire to make money is the most common reason why people become
entrepreneurs. FALSE
à Working for someone else decreases the chances that a person will become an
entrepreneur. FALSE
à Most entrepreneurs work in technology, software, and other high growth sectors rather
than mature industries. FALSE
à Females are more likely than males to become entrepreneurs. FALSE
à The most popular source of funding for entrepreneurs is venture capital. FALSE
Nicolaou et al. (2008)
Key findings
- 37-48% of the tendency to be an entrepreneur is explained by genetic factors
- The tendency to identify new business opportunities is in your genes
- Self-employment income is heritable, which means that genetics affect not only the
tendency to engage in entrepreneurship but also the ability to perform it
- The tendency to have personality traits such as extroversion, openness, etc., has a
genetic component. So, your genes could affect your tendency to be an
entrepreneur by influencing the type of personality you develop
Triggers freeing people to become entrepreneurs
Golden handcuffs = financial resources (Severance payment from layoff gives you a capital to start your
business)
Motivations for becoming self-employed (Dahiqvist & Davidsson, 2000)
- To realize my idea
- Unemployment or risk thereof
- To work independently
- To make money
- To meet an observed market need
- Other
Audia & Rider (2001)
Key findings
- Founders often come from pre-existing organizations in similar industries
- Founders often locate their firms in the same region as the prior employers
, FFE, Vrije Universiteit
Why are there differences between ethnic groups?
1. Cultural propensity – some ‘cultures’ favor self-employment more than others
2. Some ethnic groups have greater ‘resources’ available (e.g. sweat equity, finance for
starting a business, social support)
3. Discriminations
- Discrimination in waged sector pushes individuals towards self-employment
- Difficulties in gaining credit may also hamper immigrants in becoming entrepreneurs
Lecture 2: Evaluating new venture opportunities
What is a feasibility study?
à Preliminary evaluation of a business idea
- Conduct a feasibility study to determine whether your idea is an attractive business
opportunity
- Not a full-fledged business plan; GO vs NO-GO
- Supported by evidence (interviews, secondary data, etc.)
à Conduct it early
- Evaluate ideas before much resources are wasted
- Usually plan A doesn’t work! So get feedback fast to refine your ideas and develop a
plan B
Components of a feasibility study
à Product/service feasibility
- Can the product be built? Does it solve an important problem?
à Industry/market feasibility
- Is there a real customer who wants this? Are the industry and target market
attractive?
à Organizational feasibility
- What are the required resources? How can they be obtained?
à Financial feasibility
- What are the funding needs? What is the risk/return?
The need for data: building a research pack
à Essentially, your idea is a hypothesis
- A belief that a certain customer need exists, which you need to test by collecting
data
à Sources of data include:
- Concept testing and prototyping
- Administering a buying intentions survey
- Observe customers
- Collecting secondary data from reports and Internet
- Talking to different people: competitors, suppliers, industry experts, bankers,
lawyers, etc.
Lecture 1:
“Entrepreneurship is the process of creating value by bringing together a unique
combination of resources to exploit and opportunity”
“The solarly examination of how, by whom, and with what effects opportunities to create
future goods and services are discovered, evaluated, and exploited”
Trends promoting Entrepreneurship
- Technological changes
o New technologies have reduced the costs associated with creating and
managing startups
- Economic changes
o More dynamic labor market increases the importance of skill upgrading and
reduces opportunity costs to become self-employed
- Institutional changes
o The ecosystem that is needed to support entrepreneurs has improved (e.g.
incubators & accelerators, venture capital)
- Social changes
o Entrepreneurships now often viewed as a desirable career choice
Unique challenges
- Liability of newness
o Lack of established track-record makes resources acquisition challenging
- Resource scarcity
o Entrepreneurs often lack the resources needed to exploit a perceived
opportunity
- Extreme uncertainty
o Creating something new requires entrepreneurs to engage in trial-and-error
learning
Key questions to ask yourself in entrepreneurship
• What are the sources of new opportunities and how can one evaluate the potential
of new business ideas?
• How do entrepreneurs acquire the resources and legitimacy they need to succeed?
• How can entrepreneurs develop and optimize new business models?
• Why are some entrepreneurs more successful than others in creating and managing
high-growth ventures?
• How to determine when to step down as founder CEO and what are the key success
factors in such succession events?
Quiz answers
à People who become entrepreneurs generally share similar psychological profiles such a
being leaders, risk-takers, or adventurous. FALSE
à Most entrepreneurs are under 40 years of age. FALSE
à Among entrepreneurs, people with strong networking skills outnumber “lone wolfs”.
FALSE
à College-educated people are less likely to become entrepreneurs. FALSE
,FFE, Vrije Universiteit
à The desire to make money is the most common reason why people become
entrepreneurs. FALSE
à Working for someone else decreases the chances that a person will become an
entrepreneur. FALSE
à Most entrepreneurs work in technology, software, and other high growth sectors rather
than mature industries. FALSE
à Females are more likely than males to become entrepreneurs. FALSE
à The most popular source of funding for entrepreneurs is venture capital. FALSE
Nicolaou et al. (2008)
Key findings
- 37-48% of the tendency to be an entrepreneur is explained by genetic factors
- The tendency to identify new business opportunities is in your genes
- Self-employment income is heritable, which means that genetics affect not only the
tendency to engage in entrepreneurship but also the ability to perform it
- The tendency to have personality traits such as extroversion, openness, etc., has a
genetic component. So, your genes could affect your tendency to be an
entrepreneur by influencing the type of personality you develop
Triggers freeing people to become entrepreneurs
Golden handcuffs = financial resources (Severance payment from layoff gives you a capital to start your
business)
Motivations for becoming self-employed (Dahiqvist & Davidsson, 2000)
- To realize my idea
- Unemployment or risk thereof
- To work independently
- To make money
- To meet an observed market need
- Other
Audia & Rider (2001)
Key findings
- Founders often come from pre-existing organizations in similar industries
- Founders often locate their firms in the same region as the prior employers
, FFE, Vrije Universiteit
Why are there differences between ethnic groups?
1. Cultural propensity – some ‘cultures’ favor self-employment more than others
2. Some ethnic groups have greater ‘resources’ available (e.g. sweat equity, finance for
starting a business, social support)
3. Discriminations
- Discrimination in waged sector pushes individuals towards self-employment
- Difficulties in gaining credit may also hamper immigrants in becoming entrepreneurs
Lecture 2: Evaluating new venture opportunities
What is a feasibility study?
à Preliminary evaluation of a business idea
- Conduct a feasibility study to determine whether your idea is an attractive business
opportunity
- Not a full-fledged business plan; GO vs NO-GO
- Supported by evidence (interviews, secondary data, etc.)
à Conduct it early
- Evaluate ideas before much resources are wasted
- Usually plan A doesn’t work! So get feedback fast to refine your ideas and develop a
plan B
Components of a feasibility study
à Product/service feasibility
- Can the product be built? Does it solve an important problem?
à Industry/market feasibility
- Is there a real customer who wants this? Are the industry and target market
attractive?
à Organizational feasibility
- What are the required resources? How can they be obtained?
à Financial feasibility
- What are the funding needs? What is the risk/return?
The need for data: building a research pack
à Essentially, your idea is a hypothesis
- A belief that a certain customer need exists, which you need to test by collecting
data
à Sources of data include:
- Concept testing and prototyping
- Administering a buying intentions survey
- Observe customers
- Collecting secondary data from reports and Internet
- Talking to different people: competitors, suppliers, industry experts, bankers,
lawyers, etc.
