Enterpreneurship

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Entrepreneurship has many definitions: “one who undertakes innovations, finance and business acumen in an effort to transform innovations into economic goods”, “one who organizes, manages, and assumes the risks of a business or enterprise” but the godfather of entrepreneurship studies at HBS Professor Howard H. Stevenson coined: “Entrepreneurship is the pursuit of opportunity beyond resources controlled”.

This definition brings the true experiences of any entrepreneur.

It’s a pursuit of opportunity which needs to be perceived in the short window of existence of opportunity.In this period, considerable amount of time and energy needs to be devoted such that there is quantitative result in order to attract necessary resources. Delayed results from the actions performed may seize the opportunity and also the consumption of cash balances available for the opportunity allocated. The opportunity that may be available can be either of the following: 1.

Creating a new product or business model 2. Creating a better or cheaper version of the existing product or business modelThough, many profit improvement opportunities are not novel–and thus are not entrepreneurial–for example, raising a product’s price or, once a firm has a scalable sales strategy, hiring more reps, etc.

Essay Entrepreneurship

But given an opportunity is available, it can be classified as two types: 1.

Entry Opportunity 2.

Entrepreneurial Opportunity Entry Opportunity implies the existence of a market. But some entrepreneurial opportunity and thus initiatives create fundamentally new markets.

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For these, there’s no market to enter until the entrepreneur acts.Also, the Entry Opportunity is more applicable for large organizations with ample resources rather as compared to Entrepreneurship Opportunities. Thus, the more that the firm/individual entering a new market lacks relevant resources, the more entrepreneurial the entry would be. Thus a real entrepreneur may encash mostly the entrepreneur opportunity rather than entry opportunity. At a new venture’s start, the entrepreneur control their own human, social, and financial capital. Many entrepreneurs bootstrap – they keep expenditures to a bare minimum while investing only their own time and as necessary, their personal funds.In some cases, this is adequate to bring a new venture to the point where it becomes self-sustaining from internally generated cash flow. But, with most high-potential ventures founders must generate more resources than they control personally. The venture eventually will require production facilities, distribution channels, working capital, and so forth. Because they are pursuing an entrepreneur opportunity while lacking access to required resources, entrepreneurs face considerable risk, which comes in four main types: 1.Demand risk – It relates to prospective customers’ willingness to adopt the solution envisioned by the entrepreneur. 2. Technology risk – This relates when engineering or scientific breakthroughs are required to bring to the solution. 3. Execution risk – This relates to the entrepreneur’s ability to attract future stakeholders who can implement the venture’s plans. 4. Financing risk – It relates to whether external capital will be available on reasonable terms. The entrepreneur’s task is to manage this uncertainty. 5. Self-belief risk – It relates to the risk of losing self-determination, will and confidence with self.Thus, there can be a challenging situation for the entrepreneur to minimize risk without the necessary resources. This is also called Catch-22 position. For example, outside capital may be required to develop and market a product and thereby demonstrate that technical and market risks are limited. On the other hand, it can be difficult to persuade resource owners to commit to a venture when risk is still high. It is important to point out that many ideas fail in this vicious circle as the risk is high with lack or unavailability of counter measures to minimize/eliminate them.Not all entrepreneurship initiatives end up in a smile with desired results. Many a times, these initiative gets fail due to various factors. As it is said, the success is combination of various positives but just one negative can result in a failure. The learnings from the failure may be grouped as following: •Quality time with family and friends may get reduced to minimal with absolutely no focus •The desire and dreams for the material world may not come true as the personal cash flow may be tight. •Sometimes it’s not desired to have all the ‘good to have’ features in the service/product.The focus must be on “must have”. •Always be ready to start from zero with the same humbleness and dignity. •Business related decisions may be taken quickly with belief and logic with whatever information available at that point of time. As with any task, there wouldn’t be all smooth ride. There can be difficulties and hurdles that may get faced during the start-ups. Some of them are listed below: 1. Market Problems – A major reason why companies fail, is that they run into the problem of their being little or no market for the product that they have built.Here are some common symptoms: a. There is not a compelling enough value proposition, or compelling event, to cause the buyer to actually commit to purchasing. b. The market timing is wrong. You could be ahead of your market by a few years, and they are not ready for your particular solution at this stage. c. The market size of people that have pain, and have funds is simply not large enough. 2. Business Model failure – the most common causes of failure in the startup world is that entrepreneurs are too optimistic about how easy it will be to acquire customers.They assume that because they will build an interesting web site, product, or service, that customers will beat a path to their door. That may happen with the first few customers, but after that, it rapidly becomes an expensive task to attract and win customers, and in many cases the cost of acquiring the customer is actually higher than the lifetime value of that customer 3. Poor Management Team – An incredibly common problem that causes startups to fail is a weak management team. Weak management teams make mistakes in multiple areas: a.They are often weak on strategy, building a product that no-one wants to buy as they failed to do enough work to validate the ideas before and during development. This can carry through to poorly think through go-to-market strategies. b. They are usually poor at execution, which leads to issues with the product not getting built correctly or on time, and the go-to market execution will be poorly implemented. c. They will build weak teams below them. So the rest of the company will end up as weak, and poor execution will be rampant. 4.Running Out of Cash – A second major reason that startups fail is because they ran out of cash. A key job of the CEO is to understand how much cash is left and whether that will carry the company to a milestone that can lead to a successful financing, or to cash flow positive. What frequently goes wrong, and leads to a company running out of cash, and unable to raise more, is that management failed to achieve the next milestone before cash ran out. Many times it is still possible to raise cash, but the valuation will be significantly lower. . Product Problems – Another reason that companies fail is because they fail to develop a product that meets the market need. This can either be due to simple execution. Or it can be a far more strategic problem, which is a failure to achieve Product/Market fit. The typical personality traits of an entrepreneur may be the following (not limited to): •Passion – Self-Belief and Determination on the vision defined •Persistence – Focused and keeping patience and ability to keep working towards the goal and be optimistic. The ability to work with a team yet follow their own instincts •The creation of a “success culture” •Have business sense and knowledge •Take pride in doing any task that would make the vision converted to reality •Adopting correct approach / strategy in evaluating, defining and implementing business approach including resources needed. •Able to manage and handle finances •Customer centric approach •Art of negotiations