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Startnowhow 20.10.16 Entrepreneurship as a Profession

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by Dr. Joachim Behrendt

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Startnowhow 20.10.16 Entrepreneurship as a Profession

  1. 1. INTRODUCTION StartNowHow • Open seminar series for active and prospective entrepreneurs • 10 sessions on monthly basis until June 2017 • Covers relevant theoretical and practical aspects of entrepreneurship • Based on lecture „entrepreneurship“ @Bogazici University • Based on experiences of entrepreneurs, investors, mentors, and strategic partners • Each session with guest speaker (entrepreneurs, investors, mentors, etc.) • Language: English / Turkish • Thursdays 17.15h – 19.30h • Next session: Thu 17.November 2016 • Topic: „Financial Planning for Startups“ • Early registration for each session required (eventbrite), limited capacity! • Priority for regular participants Startnowhow – Seminar 111.10.2016 2
  2. 2. INTRODUCTION StartNowHow - Literature • Bowers, Brent, 8 Patterns of Highly Effective Entrepreneurs, Doubleday, New York, NY 2008 • Bygrave, William D. / Zacharaiks, Andrew, The Portable MBA in Entrepreneurship, 4th ed., Wiley, Hoboken, NJ 2010 • Drucker, Peter F., Innovation and Entrepreneurship, 1st ed. 1985, reprinted 2010, Elsevier, Kiddlington, 2010 • Harper, Stephen C., Extraordinary Entrepreneurship: The Professional’s Guide to Starting an Exceptional Enterprise, Wiley, Hoboken, NJ 2005 • Hirshberg, Meg Cadoux, For Better or for Work, All Inc., New York, NY 2012 • Hisrich, Robert D. / Peters, Michael P. / Shepherd, Dean A., Entrepreneurship, 9th ed., McGraw-Hill, New York, NY 2012 • Kuratko, Donald F., Entrepreneurship: Theory, Process, Practice, 8th ed., South-Western, Mason, OH 2009 • Leach, J. Chris / Melicher, Ronald W., Entrepreneurial Finance, International Edition, 4th ed., South- Western, Hampshire 2012 • Osterwalder, Alexander / Pigneur, Yves, Business Model Generation, Wiley, Hoboken, NJ 2010 • Ries, Eric, The Lean Startup, Crown Business, New York, NY 2011 • Smith, Janet Kiholm / Smith, Richard L. / Bliss, Richard T.,Entrepreneurial Finance – Strategy, Valuation, and Deal Structure, Standford University Press, Stanford, CA 2011 • Stokes, David / Wilson, Nick, Small Business Management and Entrepreneurship, 6th ed., South-Western, Hampshire 2010 • Taleb, Nassim Nicholas, The Black Swan – The Impact of the Highly Improbable, revised ed., Penguin, London 2010 • Timmons, Jeffry A. / Spinelli, Stephen, New Venture Creation – Entrepreneurship for the 21st Century, 9th ed., McGraw-Hill, New York, NY 2011 Startnowhow – Seminar 111.10.2016 3
  3. 3. INTRODUCTION StartNowHow - Seminar Topics (preliminary) 1. Thu 22.09.16: The entrepreneurial ecosystem in Turkey 2. Thu 20.10.16: Entrepreneurship as a profession 3. Thu 17.11.16: Financial planning for startups 4. Thu 15.12.16: Opportunity recognition and evaluation 5. Thu 12.01.17: Planning, developing and testing a business model 6. Thu 09.02.17: Market and competitor research 7. Thu 09.03.17: Funding the startup – stage financing for ventures 8. Thu 06.04.17: Startup valuation 9. Thu 04.05.17: The investment process – pitching, negotiations and termsheet 10. Thu 01.06.17: Success and failure as an entrepreneur Startnowhow – Seminar 111.10.2016 4
  4. 4. ENTREPRENEURSHIPASPROFESSION The Entrepreneur – from the Entrepreneur‘s Perspective • “It went something like this: One day this guy woke up in the morning and said to himself „I‘m going to become an entrepreneur“. So he went to the best programmer in the company where he was working and whispered, „Would you like to join my company? Then, be there... My place... Ten o‘clock Saturday – and bring some bagels.“ Then he goes to the best guy in the finance department and says, „bring some coffees“. And then he goes to the best marketing guy and the best IP lawyer with the same invitation. Ten o‘clock Saturday comes around. They ask, „Hey, what is your company going to do?“ The guy replies, „Build a new computer program.“ An hour later, and the business plan is done. The finance guy says he knows where he can get some money. Then they say to their host, „So what have you done?“ What indeed? He didn‘t provide the coffee. It wasn‘t him who brought the bagels. He didn‘t even provide the idea. But he was the entrepreneur. He made it happen.“ • (from: Scott Mitchell, Founder of Core Electronics, UK; taken from Stokes / Wilson, Small Business Management and Entrepreneurship, p. 34) 11.10.2016 5Startnowhow – Seminar 2
  5. 5. ENTREPRENEURSHIPASPROFESSION Definitions: Entrepreneur • Schumpeter (1942): An entrepreneur is a person who is willing and able to convert a new idea or invention into a successful innovation  Theory of „creative destruction“ (Schumpeter, Capitalism, Socialism and Democracy, 1942) • Drucker (1985) – some quotes: • NOT: Someone who starts his own, new and small business • NOT: “Der Unternehmer” (Owner-manager) – the person who owns and runs a business • NOT: A personality trait – “in thirty years I have seen people of the most diverse personalities and temperaments” • “Everyone who can face up to decision making can learn to be an entrepreneur” • “Entrepreneurship .. is behavior rather than personality trait” • “Entrepreneurs see change as the norm and as healthy” (Drucker, Innovation and Entrepreneurship, pp.1-10) • Hisrich / Peters / Shepherd: An entrepreneur is an individual who takes initiative to bundle resources in innovative ways and is willing to bear the risk and / or uncertainty to act. (Hisrich / Peters / Shepherd, Entrepreneurship, p.6) 11.10.2016 6Startnowhow – Seminar 2
  6. 6. ENTREPRENEURSHIPASPROFESSION Characteristics of Entrepreneurs? • Endless research and ever-growing lists of „characteristics“ of entrepreneurs • Supported by textbooks / online questionnaires „to find out if you are an entrepreneur“ • Useful example (taken from Timmons / Spinelli, New Venture Creation, p.47): • Commitment and determination • Courage • Leadership • Opportunity obsession • Tolerance of risk, ambiguity, and uncertainty • Creativity, self-reliance, and adaptability • Motivation to excel • Longer example (from: Kuratko, Entrepreneurship – Theory, Process, Practice, pp.30-36) • Initial list: 11 characteristics • Followed by table with 42 characteristics • Followed by explanations about 17 characteristics, partly linked to initial 11 characteristics • ....???? 11.10.2016 7Startnowhow – Seminar 2
  7. 7. ENTREPRENEURSHIPASPROFESSION Longlist of Characteristics? 11.10.2016 8Startnowhow – Seminar 2 Taken from: Kuratko, Entrepreneurship – Theory, Process, Practice, p.31
  8. 8. ENTREPRENEURSHIPASPROFESSION A More Useful Approach 11.10.2016 9Startnowhow – Seminar 2 Source: Stokes / Wilson, Small Business Management, p. 51
  9. 9. ENTREPRENEURSHIPASPROFESSION Myths about Entrepreneurship • Myth 1: Entrepreneurs are born, not made • Myth 2: Entrepreneurship cannot be taught • Myth 3: I will be my own boss • Myth 4: Most new ventures fail • Myth 5: I can always start my own business • Myth 6: I can be an entrepreneur because I have been successful in the corporate world • (all taken from Harper, Extraordinary Entrepre- neurship, pp. I-13 – I-21) • ... And some more... • Myth 7: Entrepreneurs are doers, not thinkers • Myth 8: Entrepreneurs are always inventors • Myth 9: Entrepreneurs are academic and social misfits • Myth 10: All entrepreneurs need is money • Myth 11: All entrepreneurs need is luck • Myth 12: Entrepreneurship is unstructured and chaotic • Myth 13: Entrepreneurs are extreme risk takers ... or gamblers • (Adopted from Kuratko, Entrepreneurship – Theory, Process, Practice, pp. 5-8) 11.10.2016 10Startnowhow – Seminar 2
  10. 10. ENTREPRENEURSHIPASPROFESSION Empirical Findings Bowers, 8 Patterns of Highly Effective Entrepreneurs 1. Seizing opportunities: Entrepreneurs notice things 2. Running your own show: Entrepreneurs want to be in charge (or: Entrepreneurs have a fierce aversion to the very thought of reporting to a boss) 3. Nurture vs. nature: Is there an entrepreneurial gene? 4. Turning on a dime: Entrepreneurs are nimble 5. Tenacity: Entrepreneurs never give up 6. Delusions of grandeur: You gotta believe 7. Wait a minute: Will this work? „It is tempting to view entrepreneurs as somehow stuck in adolescence, bursting with energy and driven by grandiose dreams the way we all were once upon a time. In truth, their lofty ambitions are often accompanied by a firm pragmatism that keeps them grounded in reality.“ 8. Failing upward „... Entrepreneurs spot opportunities almost everywhere they cast their restless eyes and move quickly to seize them. And occasionally, these traits cause them to fumble. But there the paradox kicks in: The missteps and occasional fiascoes are key ingredients in the entrepreneur‘s recipe for success. Successful entrepreneurs analyze what went wrong and figure out how to leverage their mistakes to their purposes. They fail upward.“ 11.10.2016 11Startnowhow – Seminar 2
  11. 11. ENTREPRENEURSHIPASPROFESSION The Dark Side of Entrepreneurship 11.10.2016 12Startnowhow – Seminar 2 Source: Shane, Ihe Illusions of Entrepre- neurship, New Haven / London 2008 US study UK studies Source: Stokes / Wilson, Small Business Management, p. 87
  12. 12. ENTREPRENEURSHIPASPROFESSION The Dark Side of Entrepreneurship • Confrontation with risk • In its deepest sense, entrepreneurs are willing to accept risk for what they believe in • Entrepreneurs have ability to cope with ambiguity, and a consistent lack of clarity • Have a drive to put their imprint on whatever they are creating, ego is wrapped up in the enterprise • Financial risk • Career risk • Family and social risk • Psychic risk • Negative effects from the entrepreneurial ego • Overbearing need for control • Sense of distrust, paranoia • Overriding desire for success • Sometimes „uncoachable“, overestimating themselves and their abilities • ... But all these characteristics are, to a certain extent, needed to succeed as an entrepreneur  careful balancing needed • (taken from Kuratko, Entrepreneurship – Theory, Process, Practice, pp. 42-44) 11.10.2016 13Startnowhow – Seminar 2
  13. 13. ENTREPRENEURSHIPASPROFESSION The Dark Side of Entrepreneurship • Stress • Entrepreneurs are prone to stress • Continous discrepancies between (self-)expectations and realitiy / personality • Entrepreneurs are often „type A personalities“ – prone to stress • Chronic and severe sense of time urgency • Constant involvement in multiple projects subject to deadlines • Neglect of all aspects of life except work • Tendency to take on excessive responsibility, „only I am capable of taking care of it“ • Explosiveness of speech, speaking faster than most people, swearing when upset • Typical sources of entrepreneurial stress • Loneliness, inner feelings of isolation • Immersion in business • Problems with people • Need to achieve • Implications • Back problems, indigestion, insomnia, headaches • Type A behaviour related to coronary heart disease, stress is contributor to heart disease • ..... • (taken from Kuratko, Entrepreneurship – Theory, Process, Practice, pp. 39-42) 11.10.2016 14Startnowhow – Seminar 2
  14. 14. OUTLOOK StartNowHow - Outlook • Today‘s materials will be made available to participants for downloading • Next Seminar: „Financial Planning for Startups“ • Thursday, 17.11.2016, 17.15 – 19.30h • Don‘t forget to register early (eventbrite) - capacity 50 people! • Priority for participants / registrants from today‘s session • General rule: Allocation of seats according to participation Startnowhow – Seminar 211.10.2016 15
  15. 15. BIC ANGEL INVESTMENTS Dr. Joachim Behrendt Phone: +90 212 328 1939 Fax: +90 212 328 1933 www.bicangels.com http:/twitter.com/joachimbehrendt http://tr.linkedin.com/pub/joachim-behrendt/18/706/a7a Email: j.behrendt@bicangels.com

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