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Lecture 2

ENT 3003 Lecture 2: ENT3003- Cupcake 2 Information (Modules 1 and 2)


Department
Entrepreneurship
Course Code
ENT 3003
Professor
Christopher Garrett Pryor
Lecture
2

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Module 1 (Jan. 14)
Myths & Truths No. 1:
Believing myths can skew our risk assessment.
Believing myths can make us follow the wrong paths.
Myths
o #1: Entrepreneurship is about starting and running a small business.
Entrepreneurship emphasizes the pursuit of growth.
Entrepreneurs innovate, are proactive, and take risks.
Small Business
Entrepreneurial Ventures
Stable
Unstable
Status quo-oriented
Change-oriented
Not aggressive
More aggressive
Interaction between personal and
professional activities
Clear separation between personal and
professional activities
Involvement of family members
Involvement of professionals
More informal
More formal
Present-oriented
Future-oriented
Resource driven
Opportunity driven
Concerned with personal profit
Concerned with growth and appreciation of
business value
o #2: Entrepreneurship is a discrete event that just “happens.
When does entrepreneurship occur?
There is a process… that can be learned and managed.
o #3: Entrepreneurship is about taking wild risks.
What does it mean to take a wild risk?
Are entrepreneurs really wild-eyed gamblers?
Turns out, they don’t like risks more or less than anyone else.
They ARE good at risk mitigation (def: reducing negative effects caused
by risks).
o #4: Entrepreneurs are born.
o #5: Entrepreneurship is about making a lot of money.
What motivates entrepreneurs? (problem-solving, support family, own
boss, etc.)
There are other, more important, motivators.
This is a good thing…because entrepreneurs often earn less money.
o #6: Entrepreneurship is about individuals.
Sometimes.
o #7: Entrepreneurship requires a lot of money.
Entrepreneurs are opportunity driven, not resource driven.

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“The pursuit of opportunity without regard to resources currently under
control.”
The average entrepreneur begins with about $10,000. (Not cash, but
credit card)
Often, the more money they begin with, the worse off they are.
Entrepreneurs leverage resources, they don’t necessarily own them.
o #8: Entrepreneurship is about luck.
It can be.
Thomas Jefferson: “I am a great believer in luck, and I find the harder I
work, the more of I have of it.”
o #9: Entrepreneurship begins with a new product or service.
“If you build it, they will come.”
“If you build a better mousetrap, the world will beat a path to your door.”
Tons of failed products that are both good and bad that no one wants.
o #10: Most entrepreneurial ventures fail.
Many do, many don’t.
Depends on the industry.
Besides, so what?
Failure can be good for the entrepreneur and for society. (if you learn
from mistakes)
o #11: The more customers the better.
If you make a product or service with features that anyone will buy, you
end up making a product that no one really wants.
The 80/20 rule rules!
80% of your revenue comes from 20% of your customers (100%
true).
Always target a specific niche market.
o #12: Entrepreneurship is empowering! (some is true)
Empowering from what?
Boss?
Regular Schedule?
Creating a venture takes a profound amount of work, and the returns are
not always better than working a day job.
Myths & Truths No. 2:
83.4% of self-employed by 0 number of employees.
USA consistently at the bottom of self-employment scales compared to other countries.
The United States is becoming less entrepreneurial?
o Self-employment is declining.
White entrepreneurs dropped, while latino entrepreneurs experienced a
big jump (+). (Latinos don’t have working visas, so they have to make
their own living). From 1996 to 2015
So, what’s the story?

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o ‘Self-employment’ is all around us. It’s really hard work. (would rather have a
normal job with breaks and weekends) It’s everyday, regular folks. It really is
empowering.
Bugs!:
How often do you really think about the world around you?
The beginning entrepreneur’s challenge: Open your eyes!
A Bug List is not about fostering creativity. It’s about finding problems that we can solve!
o Start with your own experience. Then look out there!
Entrepreneurs see a problem and fix it.
The Five Why’s technique…getting to the root cause. (Why does the problem exist?)
Entrepreneurship Defined:
What is Entrepreneurship?
o The activity of organizing, managing, and assuming the risks of a business
enterprise. (Miriam Webster definition)
o Entrepreneurship is the pursuit of opportunity beyond resources controlled.
(Harvard Business School) Pryor loves this definition (Act without having the
resources to pull it off)
o University of Florida definition: Entrepreneurship is the process of creating value
by bringing together a unique combination of resources to exploit an
opportunity.
What’s so great about that definition?
Nothing about starting a business, managing a business, making a
profit, or risk-taking.
Process, Creating Value, Bringing together a unique combination
of resources, and Opportunity.
Entrepreneurship Process:
User Generated Entrepreneurship
o Start -> Middle -> End
Start: Individual comes up with cool new product or service that they use
for themselves.
Middle: The individual finds a group of friends or acquantances who want
the product, too.
End: Eventually, the individual finds that there is a large group of
individuals who want to buy the product.
Effectuation
o Start -> Middle -> End
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