Entrepreneurship

Lecture 1: What is Entrepreneurship?

AITI Kenya 2007

Hotmail

MIT-Africa Internet Technology Initiative

2007

How did it start?

Sabeer Bhatia and Jack Smith, fellow

employees at Apple Noticed the Internet was getting big Colleagues from Stanford had recently started Yahoo

MIT-Africa Internet Technology Initiative

2007

Inspiration

Companys firewall prevents them from

dialing to personal email accounts Were exchanging information via floppies and handwritten notes Realized they could make email available through web browser

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2007

Funding

Went to several Venture Capatalists

until found one Had to carefully disclose their idea else risk certain imitation Finally got $300,000

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2007

Growth

100,000 subscribers in first 3 months 7 million by 1st year anniversary Sold to Microsoft for $300 million 20
months after beginning

MIT-Africa Internet Technology Initiative

2007

Keys to Success

Great attention to careful engineering

(both were hardware designers) Offered free advertising to build clientele A solid business plan from the beginning importance of communicating ideas well Great public relations (@hotmail.com attached to every email)
MIT-Africa Internet Technology Initiative

2007

Entrepreneurship
Entrepreneurship

Resources

Opportunity

YOU
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2007

Who is an entrepreneur?

A person who:
- Creates and manages change by the recognition of opportunities (needs, wants, problems, and challenges) Thinks outside the box Develops resources to take advantage of the opportunity Are entrepreneurs born? Can entrepreneurship be taught?

Entrepreneur vs. employee

MIT-Africa Internet Technology Initiative

2007

Why Entrepreneurship?

Do you see the cons?

Risky Time consuming Unsecure Stressful

Do you see the pros?

Death of the psychological contract Greater control over your own life Fun You get the full benefit of your work Patriotic duty!
MIT-Africa Internet Technology Initiative

2007

Importance of Entrepreneurship

Entrepreneurship is essential for the

economic development of every country Create new jobs and wealth Through innovations processes and products improve important Consumers vs. producers
- Producer: a person or organization generating or bringing forth material - Consumer: a person or organization taking in or making use of what is produced
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2007

Consumers and Producers

Consuming requires money, producing creates wealth

- Are you a net consumer or producer? - What about Africa?
In 2001, Africa exported $114.3B and imported $124.8B worth of goods Currently, Africa contributes about 5% to the worlds goods and services but has 67% of worlds debt

- If we think about countries/large institutions, does consumer (spending more than she can afford) or producer (financing the spending of the consumer) have more power?
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2007

Restoring Balance

Can reduce consumption

-

Africa has only limited possibilities to do this Can increase production Africa has unlimited potential because Africa as a continent has vast unexploited resources Producing more both what is needed in Africa and what can be exported important The ones who do not need to worry about survival, can focus on the bigger picture This is where entrepreneurship comes into picture!

MIT-Africa Internet Technology Initiative

2007

Business Plan

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2007

What is a Business Plan

A means of communicating your vision

to the outside world to help you attract talent and money to your enterprise

The quality of a business plan is

measured by its ability to hire employees, gain contracts from potential customers and negotiate monetary investment from an investor whos interest is solely to make profit
MIT-Africa Internet Technology Initiative

2007

Qualities of a good Business Plan

Well thought-out and can be visualized Articulates the strengths and the vision
of your business Clearly outline the risks associated Present clear evidence of the viability of the venture Should compel action and get investors excited
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2007

Business Plan Components pg.1/2

I. Cover Sheet II. Table of Contents III. Executive Summary IV. Context V. Profile of Business VI. Profile of Market
Continued..

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2007

Business Plan Components pg.2/2

VII.Anticipated Challenges/Planned
Responses VIII.Marketing Plan IX. Financial Projections X. Implementation Schedule XI. Statement of Resource Needs XII.Appendix

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2007

Order we will follow

1. Management Team 2. Product/Service Description 3. Market Analysis 4. Marketing Strategies 5. Financial Information 6. Objectives 7. Executive Summary
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2007

Management Team

What are the backgrounds of the

management team and directors? What does each team member bring to the business? What are the teams previous successes in new ventures? How does the management team form a cohesive unit which can work efficiently together?
MIT-Africa Internet Technology Initiative

2007

Product/Service Description

Describe your product in as much detail

as you can. If possible, have a prototype of your product or service Show how the product/service would be used by the consumer Explain the requirements for producing your product
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2007

Market Analysis

How did your company identify the opportunity? What is the market size in Shillings ? What resources does the company have that allows it to fulfill the needs? How will you enter the market? How will you expand? Where do you see the company in the future? What value does your company create? Who is your competition and what edge do you have?
MIT-Africa Internet Technology Initiative

2007

Marketing Strategy

Describe the customers demographics How will the customer realize value

from your product or service? How does the company intend to reach the customer and keep her/him? How will the company safeguard the customer from the competition? How does the company intend to keep customers and enter new markets?
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2007

Financial Information

In this part you show a budget for your

business Explain how much you intend to raise to get started What are your projected expenses and revenues In what period do you expect to be profitable and show a return to your investors?
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2007

Objectives

What do you hope to accomplish 1 year

from now? 2 years? 5? Do you just want to make money? Are you out to make yourself known? How do you see your product or service making an impact?

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2007

Executive Summary

Describe your business and how its different from the other businesses An overview of the team and relevant skills/experiences they bring to the biz Define the customer and how you business will reach her/him Who are your potential competitors? How much money do you need to raise and how much profit should investors expect?

MIT-Africa Internet Technology Initiative

2007