Entrepreneurship and Small
Dr. Rahul Pratap Singh Kaurav
Asst. Professor (Marketing)
Prestige Institute of Management, Gwalior
Entrepreneurs—Challenging the Unknown
• Recognize opportunities where
others see chaos or confusion
• Are aggressive catalysts for
change within the marketplace
• Challenge the unknown and
continuously create the future
Small Business Owners: A Distinction
• Small Businesses Owners
• Manage their businesses by expecting stable
sales, profits, and growth
• Focus their efforts on innovation, profitability
and sustainable growth
Entrepreneurship: A Mindset
• Entrepreneurship is more than the mere creation of
• Seeking opportunities
• Taking risks beyond security
• Having the tenacity to push an idea through to reality
• Entrepreneurship is an integrated concept that
permeates an individual’s business in an innovative
The Evolution of Entrepreneurship
• Entrepreneur is derived from the French
entreprendre, meaning “to undertake.”
• First coined by Richard Cantillon (1755)
• The entrepreneur is one who undertakes to organize,
manage, and assume the risks of a business.
• Although no single definition of entrepreneur exists and no
one profile can represent today’s entrepreneur, research is
providing an increasingly sharper focus on the subject.
In Malaysia, the
used to mean
A Summary Description
• Entrepreneurship (Robert C. Ronstadt)
• The dynamic process of creating incremental wealth.
• This wealth is created by individuals who assume
major risks in terms of equity, time, and/or career
commitment of providing value for a product or
• The product or service itself may or may not be new or
unique but the entrepreneur must somehow infuse
value by securing and allocating the necessary skills
An Integrated Definition
• A dynamic process of vision, change, and creation.
• Requires an application of energy and passion towards the creation
and implementation of new ideas and creative solutions.
• Essential ingredients include:
• The willingness to take calculated risks—in terms of time, equity, or
• The ability to formulate an effective venture team; the creative skill
to marshal needed resources.
• The fundamental skills of building a solid business plan.
• The vision to recognize opportunity where others see chaos,
contradiction, and confusion.
The Myths of Entrepreneurship
• Myth 1: Entrepreneurs Are Doers, Not Thinkers
• Myth 2: Entrepreneurs Are Born, Not Made
• Myth 3: Entrepreneurs Are Always Inventors
• Myth 4: Entrepreneurs Are Academic and Social Misfits
• Myth 5: Entrepreneurs Must Fit the “Profile”
• Myth 6: All Entrepreneurs Need Is Money
• Myth 7: All Entrepreneurs Need Is Luck
• Myth 8: Ignorance Is Bliss For Entrepreneurs
• Myth 9: Entrepreneurs Seek Success But Experience high Failure Rates
• Myth 10: Entrepreneurs Are Extreme Risk Takers (Gamblers)
Macro View: External Locus of Control
• The Environmental School of Thought
• Considers the external factors that affect a potential
• The Financial/Capital School of Thought
• Based on the capital-seeking process—the search for seed and
• The Displacement School of Thought
• Alienation drives entrepreneurial pursuits
• Political displacement (laws, policies, and regulations)
• Cultural displacement (preclusion of social groups)
• Economic displacement (economic variations)
Micro View: Internal Locus of Control (cont’d)
• The Entrepreneurial Trait School of Thought
• Focuses on identifying traits common to successful
• Achievement, creativity, determination, and technical knowledge
• The Venture Opportunity School of Thought
• Focuses on the opportunity aspect of venture development—
the search for idea sources, the development of concepts,
and the implementation of venture opportunities.
• Corridor principle: New pathways or opportunities will arise that
lead entrepreneurs in different directions.
Micro View… (cont’d)
• The Strategic Formulation School of Thought
• Emphasizes the planning process in successful venture
• Ronstadt’s View
• Strategic formulation is a leveraging of unique elements:
• Unique Markets—mountain gap strategies
• Unique People—great chef strategies
• Unique Products—better widget strategies
• Unique Resources—water well strategies
• A process of innovation and new-venture creation through four
major dimensions—individual, organizational, environmental,
process—that is aided by collaborative networks in
government, education, and institutions.
• A catalyst for economic change who uses purposeful searching,
careful planning, and sound judgment when carrying out the
• Entrepreneurial Management
• The discipline of entrepreneurial management:
• Entrepreneurship is based upon the same principles.
• It matters not who or what that the entrepreneur is—an
existing large institution or an individual, for-profit business
or a public-service organization, a governmental or non-
• The rules are much the same: things that work and those
that don’t are much the same, and so are innovations and
where to look for them.
Opinion on Entrepreneur
Person bearing risks of profits (loss) in a fixed price
contract with Govt.
Person bearing risks is different from one supplying
1797: Beaudeau Person bearing risk, planning, supervising, organising and
1803: Jean Baptiste
Separate profile of entrepreneur from profits of capital.
An entrepreneur is an innovator and develops untried
Opinion on Entrepreneur
1964: Peter Drucker Entrepreneur maximizes opportunities through systematic
1975: Albert Sharpero Entrepreneur takes initiatives, organizes some socio-
economic mechanism, and accepts risk of failure.
1980: Karl Vesper Entrepreneur seen differently by economist, psychologist,
businesspersons, and politicians.
1985: Robert Hisrich Entrepreneurship is the process of creating something
different with value by devoting the necessary time and
effort, assuming the social risks and receiving the results-
rewards of monetary and personal satisfaction.
Entrepreneurship in India
• Pre-independence period
• Post-independence period
Shiv Narayan Birla 1863
Nusserwanji Tata 1868
Ramdutt Goenka 1863
Gaganbhai Mafatlal 1905
Karamchand Thapar 1922
Jamnalal Bajaj 1932
Gujarmal Modi 1939
KC Mahindra 1956
Dhirubhai Ambani 1958
Nemnath Jain ****
Importance and Contribution of Entrepreneur
• Develop new markets
• Discover new sources of material
• Mobilize capital resources
• New technologies,
• New industries, and
• New product.
• Create employment
Advantages of being entrepreneur
• Your are your own boss and have control over your future.
• Feel of decision maker not follower.
• Opportunities to fully utilize your talents, skills, knowledge, and
• Financial rewards (profit).
• Job security (own employment).
• Self-satisfaction, personal achievement, and recognition.
Disadvantages of being entrepreneur
• Chance of business failure.
• Time-consuming (need more hours).
• Not secured and stable income
• Pressure to succeed.
• Financial risk and stress.
• Responsibilities and sacrifices.
Characteristics of successful entrepreneur
• An especially skillful person.
• An innovator,
• Providing completeness to the
factor of production,
• Decision-making person,
• A man of creative personality,
• A basic-plan maker,
• Dynamic leader,
• Creator of wealth,
• Self-confident and ambitious,
• “Innovation is the means by which the entrepreneur either creates
new wealth-producing resources or endows existing resources with
enhanced potential for creating wealth”
• - Peter F. Drucker
• Process of doing something new.
Process of Innovation
Transformation of creative ideas into useful application
• Some new creations, which did not have any existence before.
• Creation of new product,
• Formula etc.
Invention Development of new ideas Results in new knowledge creation
The conversion of an idea or
resources into real life application
Results in new product, process or
• Any form of any thing which has not been seen or thought
Opportunity through change
• The potential for change, improvement or advantage arising from
our action in the circumstances may defined as opportunity.
• Here are few types of opportunity:
• gap in the market
• a mismatch between supply and demand
• a future possibility which can be recognised or created
• a more effective or efficient business process, system or model
• a new or existing technology or approach which has not yet been applied
• a commodity or experience people would desire or find useful if they knew
What are the Lessons?
1.Who sells the largest number of cameras in India?
2. Who has the biggest revenue from music business
3. Who gained the most when business of British
Airways was affected due to the 2008 recession?
Answers to the Lessons?
Ans 1: Samsung (whose main line of business is NOT
cameras but cell phones)
Ans 2: Airtel (which is not in music business)- by
selling caller tunes makes more money than HMV
Ans 3: videoconferencing and telepresence services
of HP and Cisco.
What are the Lessons?
• Nokia missed the Smartphone bus. Apple's I phone
and Google's Android are making life difficult for
• But Google is not a mobile company
• Nokia is a global behemoth, with 35% of the
world’s handset market.
What are the Lessons?
• Products have vanished from the market in the
past 20 years:
• Black & white TVs
• Fountain pens
• Type writers
• Alarm Clocks
• Audio cassettes
• And many others…
What are the Lessons?
• Lessons by the Managerial economist:
• Today's competitor is obvious. Tomorrow's is not-
Think beyond conventional framework; think
beyond the obvious
• Need to identify competition (present)
• Need to foresee competition (Future)
• Need to beat competition (Strategies)