9-2-08 - Entrepreneurship I - Class Notes 9/2/08 Chapter 1...

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Entrepreneurship I - Class Notes – 9/2/08 Chapter 1 – Entrepreneurial Mindset 1.) Commitment and Determination: 2.) Leadership: Opportunity – Growing industry with large margins – an idea that can be made into a business in a growing market Gross margin of about 40% A market with at least 20% growth Opportunities The lead entrepreneur will put together a team: o C.E.O o Chief technology officer o Finance manager o Chief Operating Officer o Marketing Officer 3.) Opportunity Obsession: How can I develop what I have? How can I create value for my customers One of the most important skills – The ability to identify opportunities 4.) Tolerance of Uncertainty / Ambiguity 5.) Creativity / Self Reliance 6.) Motivation to Excel We now move on to the functions of entrepreneurs General functions Focus more on functions and roles What do economists say about the role of Entrepreneurs? They help to stimulate the economy
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EACH PERSON HAS HIS OWN VIEW OF WHAT AN ENTREPRENEUR IS Frank Knight Entrepreneur undertakes uncertainty. Uncertainty - Uninsurable risk – Not predictable Differs from insurable risk For insurable risk, the probability distribution parameters (mean, variance) are known . o Example: We purchase ten boats. Only 1 comes back with 50 times the sunk cost. Partners who go together to purchase the boats share the risk . Joseph Schumpeter His view of the entrepreneur was that the entrepreneur is a “mover and a shaker” He focuses on the great figures of history Brings about “ creative destruction ” – this is a dynamic process o Developing new industries in an era of new technology. These new industries are more profitable (compared to older industries which use older technology) and essentially replace preexisting, older industries. In this sense, entrepreneurs bring to light new industries which “destroy” the old industries. This is a dynamic process. o
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9-2-08 - Entrepreneurship I - Class Notes 9/2/08 Chapter 1...

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