7 myths of entrepreneurship


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A presentation given at the KU Leuven on myths of entrepreneurship.

Being an entrepreneur and succeeding as an entrepreneur starts with getting the facts right.

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7 myths of entrepreneurship

  1. 1. The 7 Myths ofentrepreneurship 1
  2. 2. What is an Entrepreneur …• French economist, J.B. Say (1767-1832), Entrepreneurs “shift economic resources out of an area of lower productivity into one of higher productivity and greater yield.”• Schumpeter (1950), an entrepreneur is a person who is willing and able to convert a new idea or invention into a successful innovation. “creative destruction”• Cassady (2008), someone who has the courage, drive and talent to get something new started … Bryan Cassady 08 2 www.leuvenresearch.be
  3. 3. Why is it important ?• Critically important to society• Can be personally rewarding and lots of fun …• One of the best ways to build wealth – Imagine a small business • built over 3 years • generating a profit of 100K per year • 40% taxes  60 K net • Sold at 10 X earnings  € 600 K – Versus a well paid job, earning 100 K / year Question: How many years do you need to work ? Bryan Cassady 08 3 www.leuvenresearch.be
  4. 4. The Answer: 33 Years… Gross Salary 100,000 Taxes 45% Net 55,000.00 € Savings % 33% Savings/Year 18,150.00 € Years 33.05785124 Net 600,000.00 € 4
  5. 5. Paradigms = models, patternsthe basic way of perceiving, thinking valuingA dominant paradigm is seldom if ever statedexplicitly;it exists unquestioned… transferred throughculture and unspoken business practicesWilliam Harmon-An incomplete guide to the future 5
  6. 6. A warm up exercise 1000 40 90 % of business 1000 executives agree 30 1000 20 1000 10 5,000 6
  7. 7. The Entrepreneurship paradigm• It is all about big ideas• There are born Entrepreneurs• You gotta be first• It is all about money• Do something you love and the money will follow• Real entrepreneurs are risk takers• I can’t do it Special people with big ideas, first in, taking huge risks and making tons of money Bryan Cassady 08 7 www.leuvenresearch.be
  8. 8. These are comfortable,logical business ideas andwhat we have been taught….But, they are not the wholestory 8
  9. 9. It is all about big ideas 1 Usually it is small ideas with proven markets that work better 9
  10. 10. 90% of new business ventures fail• Approximately 10% fail due to the product• Approximately 80% fail for lack of a market Great X ? Hot product OK X ? OK Product Poor X X ? Product Poor OK Great Marketing Marketing Marketing Bryan Cassady 08 10 www.leuvenresearch.be
  11. 11. The Facts (USA)• Business start-ups last year: 590,000• Venture Capital funding: 3,000• Companies expected to go public: 300That is 1 in 2,000 like we think about it..But 1/3 home businesses work… Bryan Cassady 08 11 www.leuvenresearch.be
  12. 12. There are born Entrepreneurs 2 Anyone can be a successful entrepreneur 12
  13. 13. A non-scientific study• A Belgian belief – It in their genes, families of entrepreneurs• Belgian students – 5% have run their own business• American students – 60% have run their own business Bryan Cassady 08 13 www.leuvenresearch.be
  14. 14. 2 people calling homeTwo shoe salesmen... find themselves in backward part of Africa.The first salesman wires back to the head office.... there is noprospect of sales.. Natives do not wear shoes.The second wires "No one wears shoes here. We can dominatethe market. Send all available stock 14
  15. 15. You gotta be first 3 Fast seconds win just as often 15
  16. 16. PRODUCT INNOVATOR FOLLOWER WINNERAspirin Bayer many companies LeaderBreakfast Cereal Kelloggs Quaker LeaderDiet Cola R.C. Cola Coca Cola FollowerDiscount retailing K-Mart Walmart FollowerDisposable Diapers Chux Pampers FollowerFiber Optic Cable Corning many companies LeaderFloat glass Pilkington Corning LeaderInstant Cameras Polaroid Kodak LeaderJet Airliners De Havilland Boeing (707) FollowerLight Bulbs General Electric Sylvania LeaderMicrowave Oven Raytheon Samsung FollowerMP3 music players Diamond Sony (&others) FollowerOffice P.C. Xerox IBM FollowerPDA Psion, Apple Palm FollowerPlain Paper Copiers Xerox Canon Not clearPocket Calculator Bowmar Texas Instruments FollowerSoft Drinks Coca Cola Pepsi LeaderVideo Games Players Atari Nintendo/ / Sony FollowersWeb browser Netscape Microsoft FollowerX-Ray Scanner EMI General Electric Follower 16
  17. 17. A classic example of a fast secondWho needed a new search engine in1998. No oneWho is the leader now. Google 17
  18. 18. It is all about money 4 Successful entrepreneurs: do it cause they want to 18
  19. 19. Why do people start a new business ? Bad news: Average Salary 39 K Bryan Cassady 08 19 www.leuvenresearch.be
  20. 20. Do something you love and the 5money will followDon’t be silly. Do something you love and people will pay for… 20
  21. 21. What you are What are youGood at Made to doMagic What will people pay for 21
  22. 22. Real entrepreneurs are risk takers 6 Successful entrepreneurs are risk removers 22
  23. 23. A personal opinion…• I think there are 2 types of entrepreneurs – Risk takers (they like the macho bit) – Risk reducers (they like getting house odds)• A successful entrepreneur will build a strategy that increases odds of success from – 10% – to 20% – to 50% Bryan Cassady 08 23 www.leuvenresearch.be
  24. 24. What is the real risk ???• An MBA vs. an MBA in life• 2 years doing an MBA = a good investment• 2 years doing a business start-up – A chance of real success – You can learn more than doing an MBA Sideline: the millionaire next door The sons and daughters of entrepreneurs… doctors, lawyers, Businesspeople… but significantly less financially successful Bryan Cassady 08 24 www.leuvenresearch.be
  25. 25. I can’t do it 7 You probably can … 25
  26. 26. 26
  27. 27. 27
  28. 28. Video Link : http://youtu.be/cL9Wu2kWwSY 28
  29. 29. Conclusions• There is no guarantee that Entrepreneurship will bring you great riches• But the ride can be a lot of fun• Sometimes it’s fun not to know what’s going to happen Bryan Cassady 08 29 www.leuvenresearch.be