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Introduction to Entrepreneurship Unlocking the Secrets of Wealth Creation April 16, 2011

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A. General Concepts

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The ENTREPRENEUR

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Our common understanding <ul><li>The boss </li></ul><ul><li>The business owner </li></ul><ul><li>The risk taker </li></ul><ul><li>One who starts a small business </li></ul><ul><li>The resourceful guy? </li></ul>

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No single definition

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French word origin Entependre – an undertaker

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<ul><li>Walt Disney’s definition </li></ul><ul><li>“… .to do things and make things which will give pleasure to people in new and amazing ways. ….It is magic ! </li></ul>For this course: *From the lecture given by Larry Farrel at SBMA, August 7, 2002 and at UAP, October 30, 2009.

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Walt Disney and entrepreneurship Simply amazing! Magical

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Entrepreneurship involves: <ul><li>MAGIC – soft issues </li></ul><ul><li>LOGIC – hard issues </li></ul>

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<ul><li>“ It is making the world forever new . It is taking aggressive actions.” </li></ul>According to George Gilder – from “The Spirit of the Enterprise”* According to Joseph Schumpeter -* <ul><li>“ It is destroying the old order and creating new ones.” </li></ul>*From “Business as a Calling” by Michael Novak

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It is about: <ul><li>NEW: </li></ul><ul><ul><li>Business ideas </li></ul></ul><ul><ul><li>Products </li></ul></ul><ul><ul><li>Processes </li></ul></ul><ul><li>ENTREPRENEURSHIP </li></ul><ul><ul><li>A MINDSET </li></ul></ul><ul><ul><li>About a forever innovating mindset </li></ul></ul>

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THE THREE MASTERIES FOR AN ENTREPRENEUR: <ul><li>Mastery of Self </li></ul><ul><li>Mastery of Opportunity </li></ul><ul><li>Mastery of the Enterprise </li></ul>

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Mastery of Self Mastery of Organization Enterprise Corporate Entrepreneurial Leadership Corporate Leadership

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Aspects of Self-Mastery

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Traits of an Entrepreneur - D’s and F’s Is it better to drop out? Is it better to get F as a grade?

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<ul><li>Dream </li></ul><ul><li>Determined </li></ul><ul><li>Details </li></ul><ul><li>Dollar (Peso, in our case) </li></ul><ul><li>Decision </li></ul><ul><li>Doer </li></ul><ul><li>Distribute </li></ul><ul><li>Destiny </li></ul><ul><li>Devotion </li></ul><ul><li>Dedication </li></ul>D’s

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<ul><li>Founder </li></ul><ul><li>Faith </li></ul><ul><li>Focused </li></ul><ul><li>Frugal </li></ul><ul><li>Fast </li></ul><ul><li>Fun </li></ul><ul><li>Flexible </li></ul><ul><li>Flat </li></ul><ul><li>Forever Improving </li></ul>F’s

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Anatomy of the Entrepreneur The Entrepreneurial Mind Frame The Entrepreneurial Gut Game The Entrepreneurial Heart Flame

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Anatomy of the Entrepreneur WISDOM HEART GUTS <ul><li>What lies behind us, what lies before us, is nothing compared to what lies within us. </li></ul>HANDS

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Self Analysis: <ul><li>Gifted minds </li></ul><ul><li>Steely Guts </li></ul><ul><ul><li>Ability to intuit </li></ul></ul><ul><ul><li>Courage </li></ul></ul><ul><li>Patriotic Hearts </li></ul><ul><li>Hands that truly care </li></ul>Do I possess all of the above?

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The Entrepreneur’s Brain Let us do a brain surgery …

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“ I have 4 brains: left cerebral, left limbic, right limbic, Right cerebral.”

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The HBDI developed by Hermann yielded a brain dominance profile Logical Factual Critical Technical Analytical Quantitative Interpersonal Kinesthetic Emotional Spiritual Sensory Feeling A B D C

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<ul><li>Arithmetic </li></ul><ul><li>Algebra </li></ul><ul><li>Calculus </li></ul><ul><li>Logic </li></ul><ul><li>Science </li></ul><ul><li>Technology </li></ul><ul><li>Finance </li></ul><ul><li>Programming </li></ul><ul><li>Accounting </li></ul><ul><li>Technical </li></ul><ul><li>Management </li></ul><ul><li>Production </li></ul><ul><li>Arts </li></ul><ul><li>Geometry </li></ul><ul><li>Design </li></ul><ul><li>Poetry </li></ul><ul><li>Architecture </li></ul><ul><li>Marketing </li></ul><ul><li>Social Sciences </li></ul><ul><li>Psychology </li></ul><ul><li>Dance </li></ul><ul><li>Drama </li></ul><ul><li>High-Skilled Sports </li></ul><ul><li>People-Management </li></ul>A B C D PREFERRED SUBJECTS

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<ul><li>Lawyers </li></ul><ul><li>Engineers </li></ul><ul><li>Computer Systems Analysts </li></ul><ul><li>Financial Analysts </li></ul><ul><li>Technicians </li></ul><ul><li>Physicians </li></ul><ul><li>Statisticians </li></ul><ul><li>Bureaucrats </li></ul><ul><li>Administrators </li></ul><ul><li>Bookkeepers </li></ul><ul><li>Entrepreneurs </li></ul><ul><li>Explorers </li></ul><ul><li>Artists </li></ul><ul><li>Playwrights </li></ul><ul><li>Scientists in R&D </li></ul><ul><li>Advertising </li></ul><ul><li>Guidance Counselors </li></ul><ul><li>Public Relations </li></ul><ul><li>Nurses </li></ul><ul><li>Social Workers </li></ul><ul><li>Entertainers </li></ul><ul><li>HRD </li></ul>A B C D <ul><li>Composers </li></ul><ul><li>Jazz Musicians </li></ul><ul><li>Planners-Programmers </li></ul><ul><li>Elementary Teachers </li></ul><ul><li>Policemen </li></ul><ul><li>Cashiers </li></ul><ul><li>Production Supervisors </li></ul><ul><li>Maintenance People </li></ul><ul><li>Classical Musicians </li></ul><ul><li>Salesmen </li></ul><ul><li>Priests </li></ul>PREFERRED PROFESSIONS

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CEO’s male or female Cerebral Right mode Left mode Limbic

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Entrepreneurs Cerebral Right mode Left mode Limbic

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B. Forms of Entrepreneurship <ul><li>Social Entrepreneurship </li></ul><ul><li>Business Entrepreneurship </li></ul><ul><li>Techno Entrepreneurship </li></ul>

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1. Social Entrepreneurship

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1. Social Business Mix NGO (non-profit) NGO (for-profit) Social Enterprise Social Business Business Enterprise CSR Profit Maximization Business (PMB) Business Enterprise

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Social Entrepreneurship <ul><li>“ Any creative and innovative solution applied to solve social problems” (Mohammad Yunus, 2007) </li></ul><ul><ul><li>It involves social mission </li></ul></ul><ul><ul><li>Profit and/or entrepreneurial processes </li></ul></ul>

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Banker to the poor

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Social Entrepreneurship <ul><li>“ Search for approaches to move poor people out of poverty beyond welfare-based safety nets.” </li></ul><ul><ul><li>No more charities </li></ul></ul><ul><ul><li>Sustainability </li></ul></ul><ul><ul><li>Profits for non profits </li></ul></ul>

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Social Entrepreneurship <ul><li>CSR – corporate social responsibility </li></ul><ul><li>CSV – corporate shared value </li></ul><ul><ul><li>Human Nature </li></ul></ul>

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Social Business <ul><li>The triple bottom line </li></ul><ul><ul><li>PEOPLE </li></ul></ul><ul><ul><li>PROFIT </li></ul></ul><ul><ul><li>PLANET </li></ul></ul><ul><li>BOP – Bottom of the Pyramid </li></ul>

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BOP – Bottom of Pyramid A-B 9% C 20% D-E 31% F 40% Living on less than $2 per day Above poverty threshold Living on less than $1 per day

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<ul><li>Mother Teresa did what no other person has done before – to take care of the poor, destitute and lepers </li></ul>

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<ul><li>Lance Armstrong </li></ul><ul><li>7 times Tour de France champion </li></ul><ul><li>His real victory is with the LAF where he helps hundreds of cancer victims </li></ul>

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<ul><li>Sir Edmund Hillary was first to conquer Mt. Everest </li></ul>

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<ul><li>Sir Edmund Hillary came back to Nepal and helped the Sherpas improve their living conditions. </li></ul>

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Mohammad Yunus <ul><li>Taught Developmental Economics at the University of Chitagoong in Bangladesh. </li></ul><ul><li>Economics, right at the outskirt of the University, poverty was everywhere. </li></ul><ul><li>He found out that all that was needed by the poor was a loan of 27 chakas. That’s how the Grameen Bank started. </li></ul>

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Why are they entrepreneurs ? <ul><li>They had little or no resources at all but they survived and achieved what they wanted in life </li></ul>

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2. Business Entrepreneurship Business for profit

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Business Entrepreneurship <ul><li>It’s about the study of systems, structure, and staffing to make a large corporation stay competitive, innovative, and profitable on a sustainable basis. </li></ul>

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The business cycle according to Larry Farrel – int’l expert on entrepreneurship Survival / Failure Decline Growth Start ENTREPRENEURIAL MANAGERIAL

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No longer excellent!... <ul><li>In 1983, there was the book In Search of Excellence by Tom Peters and Waterman. It sold 6 million copies. Then... </li></ul><ul><li>Something went wrong... </li></ul>

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<ul><li>33% of the “Excellent” Companies vanished </li></ul><ul><li>Too big to fail companies </li></ul><ul><li>Where are they now?: </li></ul><ul><li>Washington Mutual </li></ul><ul><li>Bear Stearns </li></ul><ul><li>Pacific Bank </li></ul><ul><li>Banco Filipino </li></ul>

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Vanishing giants Dinosaurs of the corporate world

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ENTREPRENEURIAL COMPANIES <ul><li>Keeping the Sense of Mission alive as you grow </li></ul><ul><li>Re-instilling customer/product vision in every employee </li></ul><ul><li>Fostering high-speed innovation </li></ul><ul><li>Making self-inspired behavior the organization standard </li></ul>

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BUSINESS ENTREPRENEURSHIP Entrepreneur (Self) Resources Opportunity IDEA REALITY TIME

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Differentiation Growth Strategic direction

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Three Competencies of the Complete Entrepreneur ORIGINATOR OPERATOR ORGANIZER innovator inspirer implementor

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Compelling Reasons Why We Need Entrepreneurs <ul><li>90% of the world’s jobs are created by entrepreneurs </li></ul><ul><li>Source of new products and innovation </li></ul><ul><li>In the third-world countries, the entrepreneurs keep the sagging economies alive </li></ul><ul><li>It’s the entrepreneurs – not the central bank – that keep the economy moving </li></ul><ul><li>Finally... </li></ul>

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...in the Philippines <ul><li>It’s not GMA nor the government that was responsible for sheltering the Philippines against bad times. </li></ul><ul><li>GUESS WHO?! </li></ul>

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<ul><li>In the GEM report of 2006-2007, RP is No. 2 in the world for entrepreneurial activity. </li></ul><ul><li>Peru is No. 1 </li></ul>

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RP is a HOTBED OF ENTREPRENEURSHIP! <ul><li>4 out of 10 adult Filipinos are into business </li></ul><ul><li>Highest in Northern Luzon – 54% </li></ul><ul><li>Lowest in Metro Manila – 30% </li></ul><ul><li>In the early stages, it is highest in Mindanao, at 73% </li></ul>

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Entrepreneurship in the Philippines: Issues from a Global Perspective

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Other trivia: <ul><li>Battle of the sexes: </li></ul><ul><ul><li>51% of all businesses are started by women </li></ul></ul><ul><ul><li>55% of all businesses are run by men </li></ul></ul><ul><ul><li>Of the nascent businesses, 60% are run by women </li></ul></ul>

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Entrepreneurial “ION” (Process) Ambit ION Pass ION + Sea of Opportunity Inspirat ION (idea) Perspirat ION (past jobs) RecreatI ON (hobbies) Frustrat ION (what pisses you off) Idea Fruit ION Enterprise Creat ION =

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Is Entrepreneurship easy? <ul><li>We choose to go to the moon in this decade and do all the other things to get there, not because they are easy but because they are hard , because that goal will serve to measure the best of our energies and skills, because that challenge is one we are willing to accept and we are unwilling to postpone, and which we intend to win and others too. </li></ul>-- JFK, 1962

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So you want to be a billionaire Put your name here: __________________________________ THE NEXT MILLIONAIRE / WINNER