1. Define entrepreneurship. Explain in detail the four major component parts of the definition presented in class.

Entrepreneurship- The process by which individuals pursue opportunities without regard to resources they currently control. - Art of turning an idea into a business - Process of creating value by bringing together a unique package of resources to exploit an opportunity Four major component parts- Process o Identify an opportunity o Develop a business concept o Assess the necessary resources o Acquire the needed resources o Implement o Manage and harvest - Creating value o Bringing new products and services to market o Worth, importance or utility - Unique combinations o Something new to bring to market - Opportunity o Favorable set of circumstances that creates a need for a new product, service or business 2. Consider the model presented in class linking five key components that come together when the entrepreneurial process occurs: the entrepreneur, the environment, the business concept, resources, and the organizational context. How is such a model useful to the entrepreneur, or to someone trying to understand the phenomenon of entrepreneurship? How might it be useful to LIZ STEWART? - All 5 components are crucial to the entrepreneurship process. The environment would be useful to the entrepreneur because economic, social, and political factors influence his or hers success. New York State had recently put a ban on the use of pesticides on pieces of lands that were located within a few miles of a watershed. This political change allowed LIZ STEWART to capitalize on the market. - Liz Stewart had to create organizational structure in order for the sheep to eat properly. This movable fence was easy to assemble and disassemble and had a small battery charge to make sure that the sheep did not get away. - Liz Stewart used sheep as a resource. Business Concept: - Lizs idea was to create a new business called Sheep Power and take care of at least part of this mowing work for these companies. She would move her flock of sheep around over the different areas and allow - The flock to carefully graze the land. Entrepreneur: - Liz was a smart girl. She had top grades from most of her courses at the Whitman School of Management and was hoping to graduate next year. She had not yet lined up a job for after graduation - She was passionate about the environment and was not as interested as some of her classmates about moving down to New York City after graduation to start to join the rat race in the pursuit of a huge paycheck. Growing up in the country had given her a strong work ethic, and she was

more motivated by doing something she really loved than materialistic goals 3. Opportunity lies at the core of entrepreneurship---openness to opportunity, opportunity recognition, pursuit of opportunity. Explain exactly what an opportunity is? Provide an example. How do the opportunity and the business concept differ? Discuss the major sources of opportunity. What are some key ways in which one finds opportunity? What are some reasons something would not be a good opportunity? Using LIZ STEWART as an illustration, distinguish sources of opportunity from sources of business concepts. Evaluate the LIZ STEWART opportunity using the criteria provided in class. Be sure to tie in the lecture material and the insights from Chapter 2 of your text. - Opportunity- a favorable set of circumstances that creates a need for a new product, service or business. Can be an opportunity cap that an entrepreneur seeks to fill. Or it can be someone who searches for a recognizes an opportunity - Example of opportunity- Tablets- people wanted something more portable but still had the capabilities of a larger PC - Opportunity and business concept differentiation- Major sources of opportunity- opportunity gap, window of opportunity - Qualities of an opportunity- attractive, durable, timely, and anchored in a product, service or business that creates or adds value for its buyer or end user - Ways to identify an opportunity- observing trends, economic forces- when incomes are high, people are more willing to buy products and services that enhance their lives, social forces, understanding of the impact of social forces on trends and how they affect new product, service and business ideas is a fundamental piece of the opportunity recognition puzzle, technological advances- advances in technology frequently dovetail with economic and social changes to create opportunities, political action and regulatory changes, recognize problems and find ways to solve them, find gaps in the marketplace - Reasons something would not be a good opportunity- if the window of opportunity is closed (the time period in which a firm can realistically enter a new market), if its merely a different version of something available, cant be just something that the entrepreneur wants to sell-has to be a product or service that people need and are willing to buy - An Opportunity is a favorable set of circumstances that creates a need for a new product. Liz Stewart was lucky enough that New York - State had recently put a ban on the use of pesticides on pieces of lands that were located within a few miles of a watershed. Because of the ban Lizs idea for using sheep instead of manual labor/pesticides was now feasible. Lizs had a solid business concept with the idea of using the eating habits of sheep for waste removal but it was because of this law that she was given an opportunity. Liz recognized the opportunity gap and her business concept filled it. She had a small window of opportunity after the law was passed because soon after there would be a lot of entrepreneurs trying to capitalize on the ban. 4. Traits, skills, cognitive styles, values----what makes someone into an entrepreneur? What criteria would you use in labeling a person as an entrepreneur? Are entrepreneurs born? Can you teach someone to be an entrepreneur? Apply the traits and characteristics associated with entrepreneurship to RICH SETTEMBRE. Describe the different types of entrepreneurs, and the need for a fit between type of entrepreneur and types of venture. Which type of entrepreneur is closest to your own self-concept? What implications might this have for your future endeavors? - Traits: someone who has opportunity recognition (the process of perceiving the possibility of a profitable new business or a new product or service), prior experience- experience in an industry

helps entrepreneurs recognize business opportunities, cognitive factors, social networks, creativity, prepared - Skills: ability to learn, adaptability, social skills and networking, guerilla skills, managerial skills - Cognitive process- an innate skill, some believe entrepreneurs have a sixth sense that allows them to see opportunities that others miss, being alert to opportunities, alertness, however, is a learned skill and people who have more knowledge of an area tend to be more alert to opportunities in that area than others - Types of entrepreneurs: personal achievers, super salespersons, real managers, expert idea generators - Personal achiever: classic entrepreneur, high need for achievement, need for performance feedback, desire to plan and set goals, strong individual initiative, strong personal commitment, internal locus of control, work should be guided by personal goals not those of others, fighter, underdog, maverick - Real manager- corporate leader or able to grew venture significantly, desire to compete, determined, trend-setter, desire for power, positive attitude to authority - The super sales person- capacity to understand and to empathize, desire to help others, belief that social processes are important, strong positive relationships with others, belief that the sales force is crucial, background=fewer years of education, more business experience, especially selling experience - Expert idea generator- Expertise + Creativity=innovator, scientific curiosity, ambitious, inventor, desire to avoid taking risks, love of ideas, curious, open-minded, new product development is crucial component, intelligence as competitive advantage, thinking is central to entrepreneurial approach Rich: - Expert idea generator- Rich used these technical skills to build the very first Blaster out of scrap pieces of material in his house. For instance, the shaft of the first Blaster was an extra pool skimmer that he had lying around - Social Skills and Networking- Rich began discussing with potential distributors, such as Parish Maintenance Supplies and Erie Materials, who had seven branches across New York State. - Ability to Learn- Rich used this initial customer feedback and was able to create more professional-looking tools with the help of a local Company. 5. We have centered our discussion of entrepreneurship on the entrepreneurial process. The entire course is organized around this process. Why is it so useful to approach entrepreneurship as a process? Identify the major stages in the entrepreneurial process, and three issues that need to be addressed at each stage. Is this a linear process? In which stage does one have to be the most entrepreneurial? How could an understanding of the process lead one to develop a more effective method for identifying a business opportunity (including a business with more potential)? - Important to approach entrepreneurship as a process because there are steps that need to be taken to ensure that the idea can become a viable business Entrepreneurial Process1) Deciding to become an entrepreneur a. Triggering event prompts one to want to be own boss- lifestyle issues? b. Passion for business c. Enough money to start own venture 2) Developing successful business ideas a. Feasibility analysis b. Writing a business plan c. Industry and competitor analysis

3) Moving from an idea to an entrepreneurial firm a. Preparing the proper ethical and legal foundation b. Assessing a new ventures financial strength and viability c. Getting financing or funding 4) Managing and growing the entrepreneurial firm a. Unique marketing issues b. Strategies for firm growth c. Franchising - The process is not linear because each step in the process has sub-categories and multiple parts - The last stage is the most entrepreneurial because one has to consistently come up with ways to continue to grow the business - Understanding of the model can lead one to develop a more effective method for identifying a business opportunity because you need more than just a good idea to create a successful business. It has to have legs- by understanding the model, one can see if the opportunity is real (especially in stage 2) 6. Consider the following statement: Entrepreneurship is a philosophy of life. It applies to everyone. Explain this statement and what it means to live an entrepreneurial life, or to approach all facets of life from an entrepreneurial perspective. In particular, what does this mean if I am a student finishing my undergraduate degree at Syracuse University? Entrepreneurship is a philosophy of life. It applies to everyone. o Living an entrepreneurial life: Drawing together multi-disciplinary perspectives Discovering new opportunities, as well as understanding existing ones and being able to use them to your advantage Reinventing and recreating old ideas Way of thinking & acting that transcends career, social, and business ideas Entrepreneurs dont predict the future they know how to work with people that bring it into existence. o As a student finishing an undergrad degree at Syracuse University: Able to use your personal skills to your benefit Understand that passion is a key factor of successful entrepreneurs Become inspired to look at things differently -- can help you excel in whichever career path you choose Understand that failures are part of the process. It motivates you to work harder and persevere through the setbacks Learn effectual reasoning starting without concrete goals and constantly improvising and reacting to contingencies creatively 7. What is risk? Identify the major categories of risk in an entrepreneurial venture. Conceptually, how do you estimate the total amount of risk in a venture? Explain the difference between sinking the boat and missing the boat risk. How are the two related to one another? Apply these various risk concepts to KAZOO. Then, explain calculated risk taking, and identify five ways in which Diana Nelson can mitigate, manage, or share the risk in her venture. - Risk is expected vs. actual outcomes; risk=magnitude of loss x probability of loss - Examples of risk- competitor price cutting, unforeseen industry trends, sales projections not achieved, operating costs exceed estimates, development or production schedules not met, mgmt lack of experiences, lack of additional funding, unforeseen political, economic, social or technological developments

- Areas of risk- financial, market, technical, regulatory, safety/environmental, career, family - Sinking the boat- Making a bold move that fails - Missing the boat- Waiting too long to pursue a profitable venture - Dianna Nelson did not miss or sink the boat because she had a profitable venture and pursued it at a perfect time. She took a risk by revamping Kazoo because of the lack of additional funding she had. She cashed out her retirement accounts, put $25,000 on credit cards, borrowed money from her father, and set up a $5000,000 SBA-guaranteed bank loan just to buy the toy store. She took a risk buying foreign products because she had no idea if the products would trend in America. - Calculated-risk taking is finding ways to mitigate risks by alternating probabilities. It is the interaction between sinking the boat and missing the boat. Dianna Nelson could have mitigated her risk by finding potential investors; board of advisors, contracts with vendors; nest egg, keep corporate job while starting new business 8. In Chapter 1 and briefly in Chapter 2, Barringer and Ireland discuss how entrepreneurs think, or their cognitive processes. Is there such a thing as entrepreneurial thinking? In what ways do entrepreneurs think differently? If they think differently, then differently from whom? Are we talking about entrepreneurial thinking versus traditional managerial thinking? Apply your concept of entrepreneurial thinking to RICH SETTEMBRE as he created his venture, and to yourself. - Example: Steve Jobs, ability to persuade and motivate others imaginations, Jobs continues to inspire employees as they develop innovative product after innovative product - Want to be own boss to achieve an important personal or professional goal; feel inhibited by traditional jobs; pursue own ideas; pursue financial rewards - Passion for the business- stems for the entrepreneurs belief that the business will positively influence peoples lives - Product/customer focus- firm needs good products with capability to satisfy customers - Tenacity despite failure- high failure rate, needs tenacity because it shows a potential customer the degree of commitment - Execution intelligence- ability to fashion a solid idea into a viable business is a key characteristic of successful entrepreneurs - Cognitive process- an innate skill, some believe entrepreneurs have a sixth sense that allows them to see opportunities that others miss, being alert to opportunities, alertness, however, is a learned skill and people who have more knowledge of an area tend to be more alert to opportunities in that area than others - Passion for the business- stems for the entrepreneurs belief that the business will positively influence peoples lives Rich: - Richs new design for his products lead to a flat blade instead of a scoop, and a change in the angle of the shovel lower toward the ground and making the shaft longer. The end result was that the user essentially was pushing or pulling the snow, making shoveling 22% more labor efficient. -Product/customer focus 9. Consider the reading in your packet on environments for entrepreneurship. Also consider our discussion of the Global Entrepreneurship Monitor research project. To what extent do you agree that entrepreneurship is largely an environmentally-driven phenomenon? Tie in to your answer the key traits associated with entrepreneurship and where these traits come from. Using the three-component model from the class presentation (environmental factors, environmental change, and personal factors), explain the key forces in the environment that lead to more entrepreneurial behavior? What are

the forces that work against or discourage entrepreneurship? Apply your answer to the city and state that you call home (or city and region if you are from abroad). To what extent do you believe that entrepreneurship is an environmentally-driven phenomenon? Key Traits associated with entrepreneurship: o Passion, persistence, flexibility, education, focus Three Component Model: 1. Factors in the environment political and economic systems of the country (free-market or planned economy, democratic government vs. totalitarian regimes, etc.) 2. Changes in the environment Costs and rules can either encourage or deter potential entrepreneurs (ex. Application fees, administrative tasks) Taxation and laws Laws: reporting financial importance per year, limiting personal liability for entrepreneurs, protection for intellectual property) Taxation: losing substantial portion of their products to the government Logistical Systems: basic parts of society that help it function effectively, help entrepreneurs to understand their marketplace (ex. Electricity, Internet, access to roads) Access to capital: Need money to be able to start their firms and pay expenses 3. Personal Factors - characteristics and how it will impact their role as the entrepreneur (Level of education, entrepreneurial training, role models, etc.) Forces that lead to a more entrepreneurial behavior? o Opportunity based individuals that want to exploit a specific opportunity o Necessity-based started due to a lack of other employment opportunities Forces that work against or discourage entrepreneurship? o Countries that are more hierarchal major distinction between white collar and blue collar occupations, difference in salaries between social classes, lack of communication *Depends on your environment/location 10. Explain the three key investment models that can be used by the entrepreneur to conceptualize his/her venture. Which model best applies to the KAZOO case? Pick cases or examples to which the other two models would best apply. If you were the entrepreneur behind the Kazoo venture, discuss the various ways in which returns could be extracted from the venture. How would you rank order these ways of extracting returns if you were running the business Investment models:

Income model: entrepreneur invests to the point that the business is able to generate ongoing ands stable income (ex. Car dealership) Growth model: finds significant initial investment and substantial reinvestment in an attempt to grow the value of the firm (eventually generates a major capital gain for investors) Speculative model: entrepreneurs time frame is shorter and the objective is to demonstrate venture potential before selling out (ex. High tech companies driven by innovative idea)- Lee

Kazoo (specialty toy store): Growth model Kazoo strengths- strong vendor relationships, unique merchandise, excellent guest experience (level of intimacy in the store)..but should expand as an online business model & further improve in-store experience for customers 11. Saras Sarasvathy describes causal and effectual reasoning. Describe each in a paragraph. Which is typical of entrepreneurs? Explain. This is where you have a predetermined goal, a given set of means, and you work to identify the most optimal, efficient, and financially feasible way of reaching the set goal. The effectual approach is the method of the entrepreneur, and it is when you have a particular set of means, and out of that comes the goal. This happens with the day- to- day feedback you receive from employees, partners and the marketplace.

- The Causal approach is one that you commonly find in books.

12. How is an entrepreneurial venture different from a small business? Entrepreneurship engages extensive innovation usually more than small businesses would o New organization, new products, new markets, new production methods Entrepreneurship venture usually generates more wealth whereas a small business produces steady, but lower income o Although a small business could generate a lot of money over a lifetime, entrepreneurs generate more money faster and in shorter periods of time An entrepreneur takes more risks and hopes to hit the ground running immediately and a small business owner generally starts at a slower pace, with success built over time Underlying dimensions of entrepreneurship Innovativeness, risk taking, proactiveness Entrepreneurial Intensity (EI) how entrepreneurship fluctuates Ex. Graph of frequency vs. innovativeness; or risk taking and productiveness Entrepreneurial venture will be further out on the graph with higher levels of innovativeness small businesses will be the opposite on the lower end of the graph(low levels of innovativeness) with incremental & gradual frequency Cases: o Kazoo low frequency, innovativeness level is between low and high because it was not her original concept o Rich frequency was moderate, high innovativeness o Galliger moderate, low level of innovativeness (Gumcart was designed by Gumbusters); frequency would be low as well (his projected target market is

small) Yes, EI is related to a companys performance. Depending on how innovative the entrepreneurs idea is and how well it is executed through the business model can sway how successful the company will be.
13. What are the four basic ways that one can get into business (competitive entry wedge)? How does a competitive entry wedge relate to ones business concept? What is KEN GALLINGERS competitive entry wedge? Identify an alternative entry wedge one might use to get into a business such as STEVE & BARRYS? Four Basic Ways that one can get into business (competitive entry wedges) 1. True Innovation new product or service 2. Parallel Competition introduces competitive duplications to existing product or services; you are satisfying an existing market better than it is right now rather than targeting a new market 3. Acquire an existing firm 4. Franchising geographic expansion under a license agreement, enables the franchise system to saturate markets. How does a competitive entry wedge relate to ones business concept? True Innovation: The business concept is already at an advantage because the product/service has never been tackled before; you have the lead in the market Parallel Competition: you are able to enter the market because you are more efficient, more effective, and your value proposition is higher (you are outperforming already existing businesses in your market) *Entry wedge determines how successful you will be in the market Galligers competitive entry wedge: Parallel Competition - there are already gum cleaning methods out in the market (power washing uses too much water; other methods use harmful chemicals) but Gumcart Dry Steam Cleaner is different because it uses little water and contains no dangerous chemicals Galliger is outperforming other businesses because the service/product is eco-friendly Discuss an alternative entry wedge one might use to get into a business such as Steve & Barrys: Steve & Barrys wasnt true innovation they thought they were able to compete based on branding (as a low price competitor) as opposed to creating a more unique branding; they increased their prices after many clothing stores released discounted apparel, Steve & Barrys revenues declined o Instead: parallel competition 15. Barringer & Ireland, in Chapter 9, talk about building entrepreneurial teams. In your opinion, is entrepreneurship more about individuals or teams? Discuss the importance of both, and provide a strong argument for the one you think is most critical. - Building an entrepreneurial team doesnt come together all at once - Built as firm can afford additional personnel - - New business often fails- liability of newness- when the people who start them arent able to adjust quickly enough to their new roles and because the firm lacks a track record with outside buyers and suppliers - - Assembling a talented and experienced new venture team is one path to overcome these limitations - - A well conceived business plan cannot get off the ground unless a firm has the leaders and personnel to carry it out

- Advisory boards can provide counsel and advice - Necessary that everyone in the group has a common vision for the new venture and that everyones role us clearly spelled out - If a team is heterogeneous they are likely to have different points of view about technology, hiring decisions, competitive tactics and other important activities. These different points of view generate debate and constructive conflict among the founders, reducing the likelihood that decisions will be made in haste or without the airing of alternative points of view Negative- founding team can be too big, causing communication problems and an increased potential for conflict More members= more professional contacts

17. Discuss a framework for a) identifying the entrepreneurs resource needs and b) developing methods for acquiring the necessary resources. Apply both to the venture in the KAZOO case. Does Diana Nelson clearly lay out and justify the ventures resource needs or how to acquire them? - Kazoo: not to carry the same resources as big chains such as Wal-Mart and Toys R US. - Developing methods for acquiring the necessary resources: - Kazoo: To do this, Nelson had to make strong relationships with the vendors. She invited many of Kazoos vendors to demo their products right at the store.