Welcome to Introduction to Entrepreneurship.
This unit is designed to give you a high-level overview of all
Throughout the unit, we will introduce you to concepts
• The history and evolution of entrepreneurship;
• The various types of entrepreneurship;
• Opportunity identification, and validation;
• What it takes to fund and grow new ventures;
• What it takes to be a successful entrepreneur; and
• How to exit from new ventures.
3. Introduction Continued
• In this module, we want to introduce you to the world of
– the definition of entrepreneurship;
– common myths associated with entrepreneurship;
– drivers for entrepreneurship; and
– the difference between entrepreneurship and small
4. The Definition of Entrepreneurship
• The word entrepreneurship originates from the French word, “entreprendre”, which means "to
undertake”. As you’ll see from the following though, trying to get a consistent definition for
entrepreneurship these days, isn’t that easy:
• The Merriam-Webster Dictionary presents the definition of an entrepreneur as one who
organizes, manages, and assumes the risks of a business or enterprise.
• The famous 20th century Austrian economist Joseph Schumpeter’s definition of
entrepreneurship placed an emphasis on innovation, and the creation of new products, new
production methods, new markets, and new forms of organization.
• According to the renowned French economist, J. B. Say, an entrepreneur is a person who
shifts economic resources out of an area of lower productivity into an area of higher
productivity and greater yield.
• So as you can see, the definition of entrepreneurship varies depending on who you ask. However,
what is clear, is there are definitely some key threads such as:
• resource use,
• the creation of something new,
• the presence of risk and
• the desire to create value.
5. Definition of Entrepreneurship
For our purposes in this unit, we’re going to use the definition
from Harvard Business School professor Howard Stevenson:
“Entrepreneurship is the pursuit of opportunity without regards to
resources currently controlled”
6. Key Myths in Entrepreneurship
Myth 1: Successful entrepreneurs have to be born, not made.
o Whilst many are born with the personality traits of successful
entrepreneurs, wildly successful entrepreneurs can indeed be made.
In a project by TechCrunch, researchers found that over half of the
500 successful entrepreneurs they studied, were the first in their
families to start businesses, and almost 75% of them were not
interested in entrepreneurship until after they finished university.
Myth 2: Entrepreneurs are wild gamblers
o Of course, becoming a successful entrepreneur requires taking risks.
However, successful entrepreneurs certainly aren’t wild gamblers.
Instead, they take a rational approach to risk identification,
acceptance and mitigation, to ensure that chance is taken out of the
equation as much as possible.
Myth 3: Entrepreneurs are motivated primarily by money
o Entrepreneurs do seek financial rewards yes. However, money is
very rarely the primary reason the most successful started out in a
venture. Consider this famous quote by Richard Branson
o "I don't go into ventures to make a fortune. I do it because I'm not
satisfied with the way others are doing business.”
7. Drivers for Entrepreneurship
The idea of entrepreneurship is a romantic one for many. However, some of the
most successful entrepreneurs in history have come from circumstances that were
anything but romantic.
The drivers for entrepreneurship can essentially be categorised into two categories:
- Need Entrepreneurship; and
- Opportunity Entrepreneurship
Need entrepreneurship considers those who have no option other than to go into
business for themselves. They need to become entrepreneurs to look after
themselves and families. This is often the case in many developing nations in which
employment opportunities are scarce, but also occurs in situations where
individuals lose their jobs and can’t find others, or, unsuccessfully attempt to reenter
the workforce after an extended time away.
Opportunity entrepreneurship on the other hand, considers those that chase a
dream, a passion or an opportunity. Not because they have to, but because they
8. Small Business VS Entrepreneurship
Entrepreneurship and small business is often considered to be the same thing and, in
many ways, it is. After all, they are both about creating organisations to respond to
However. There are some key differences that set the two apart:
The amount of wealth creation – While small businesses focus on simply generating an
income stream that replaces traditional employment, entrepreneurial ventures have a
strong focus on large wealth creation.
The speed of wealth creation - While a successful small business can generate several
million dollars of profit over a lifetime, entrepreneurial ventures typically aim for the same
result far more rapidly.
The risk involved - The risk of an entrepreneurial venture is often much higher, as it is this
risk that often facilitates the rapid rewards.
The innovation involved - Entrepreneurs will typically pursue substantially more
innovation than other small businesses, as a way to create unprecedented value to
support the speed and size of growth they require.