Entrepreneurs

hip and Digital Lecture (2)

2023-2024
World
 • Someone who earns a living by working for
someone else's business is an employee of
that business.

• There are many kinds of employees. At Ford

Motor Company, for instance, some
Employee employees build the cars, some sell the cars,
and some manage the company.

• But employees all have things in common:

o they do not own the business; they work for
others.
o They know how much money they can earn, and
that amount is limited to salary plus bonuses.
 • Some people start their own businesses
and work for themselves. They are called
entrepreneurs.

• For an entrepreneur, the sky is the limit as

Entreprene
far as earnings are concerned.
urs
• Unlike an employee, an entrepreneur owns
the profit that his or her business earns,
and may choose to reinvest it in the
company or take it as income.
 • An entrepreneur is someone who

recognizes an opportunity to start a

Entreprene
urs business that fulfills a consumer need

other people may not have noticed and

jumps on it.
 • As economist Jeffry A. Timmons

writes in the preface to his New

Venture Creation: Entrepreneurship

Entreprene
urs for the 21st Century, "A skillful

entrepreneur can shape and create an

opportunity where others see little or

nothing-or see it too early or too late."

 • Entrepreneurs start and operate
their businesses for different
Entreprene
urs reasons, but they share the
common focus of creating
sustained value for themselves.
 Most multimillion-dollar businesses
Entrepreneur
ial Wisdom started out as small, entrepreneurial
ventures.
 • If you want to be a successful
entrepreneur, start growing a thick skin
and decide right now that you intend to

Entrepreneu learn from failures and disappointments.

rial Wisdom • Do not let failures and disappointments
get you down. Most importantly, learn
from them, so that you do not make the
same mistakes again.
 • A new business usually will
Entrepreneu
rial Wisdom require time before it can turn a
profit .
 • Entrepreneurs put a great deal of

time and effort into launching their

Why Be an own businesses.

Entrepreneur?
• While establishing a business, an

entrepreneur may also pour all his

or her money into it.

 • He or she may not be able to buy

new clothes or a luxury car, go on

Why Be an vacation, or spend much time with

Entrepreneur?
family until the business becomes

profitable and starts generating

cash.
 Why Be an • If so much work and sacrifice are
Entrepreneur?
involved, why be an entrepreneur?
 • The desire to make money, alone, is

not a good enough reason to start

The Desire
one 's own business.
to Make
Money • The desire to make money may not

be enough to keep you going

through a difficult early period.

 •Starting a business is an
Benefits and opportunity and, like any
Cost of
Becoming opportunity, it should be
an Entrepreneur
evaluated by taking a careful
look at the benefits and costs.
  Independence.

Business owners do not have to

Benefits follow orders or observe working

hours set by someone else.

 Satisfaction.

Doing what you love to do, or turning

Benefits a skill, hobby, or other interest into

your own business can be highly

satisfying.
 Financial reward.

Although income potential is

Benefits generally limited for employees,

entrepreneurs are limited only by

their own imagination and tenacity.

 Self-esteem.

Knowing you created something

Benefits valuable can give you a strong sense

of accomplishment. It can help you

feel good about yourself.

 Contribution to society.

As a business owner, you decide how

you can add value to your community

Benefits and the wider world.

The issues that you care about can be

taken into account when you form

your company.
 Business failure.

Entrepreneurs risk losing not only

Costs their own money but also the

financial investments of others.

 •Obstacles.

You will run into problems that you

will have to solve by yourself. Your

Costs
family and friends may actually

discourage you, or not support your

vision.
 Loneliness.

It can be lonely and even a little scary

to be completely responsible for the

Costs
success or failure of a business.
 Financial insecurity.

 You are not guaranteed a set salary or

benefits.

 You may not always have enough money

Costs to pay yourself, particularly in the first

18 months or so of a new enterprise.

• You will have to establish and fund your

own retirement fund.

 Long hours/hard work.

• You will have to work long hours to

get your business off the ground.

•While you decide when to work, you

Costs may end up working many more

hours as an entrepreneur than you

would as an employee.
 Not everyone is cut out to be an

entrepreneur.

 Entrepreneurs have to be able to

tolerate a higher degree of risk and

Costs uncertainty than people who work

steady jobs for established employers.

 With higher risk, however, comes the

possibility of higher rewards.

 A decision-making process in
Cost/Benefit
Analysis which the benefits of taking an

action are compared to the cost.

 A decision-making process in
Cost/Benefit
Analysis which the benefits of taking an

action are compared to the cost.

Business
Model
 Business model

• Defined as a method by
which a company would
Busines like to serve the customer
needs and generate
s revenue/profit.

Models Business plan

• A Document that describes

a company business model
 Digital Business Model

• Digital business models

Busines leverage the unique qualities

s of the web and mobile

Models platform to provide

customers value and produce
profitable business results
Business Models

• One of the major characteristics of digital

business world is that it facilitates the creation of

new business models.

 • If you hope to develop a successful

business model in any area, you

Successful
Business must make sure that the model
Model
effectively addresses the eight

elements listed in the next slide.

 Value proposition
Revenue model
Market opportunity

8 Key Elements of Competitive environment

a Business Model Competitive advantage
Market strategy
Organizational Development
Management team
 A company’s value
proposition is at the
very heart of its
business model.
1. Value
Proposition A value proposition
defines how a
company’s product or
service fulfills the
needs of customers
 Why should the customer deal with
you?

Successful e-commerce value

propositions:
1. Value
Proposition Personalization/customization
Reduction of product search
Facilitation of transactions by
managing product delivery
 How will the firm earn
revenue, generate profits,
and produce a superior
return on invested capital?

2. Revenue
Model
Major types:

Advertising Subscription Sales Affiliate

revenue revenue revenue revenue
model model model model
 • Freemium strategy

The companies give away a

certain level of product or
2. Revenue
services for free, but then
Model
charge a subscription fee for
premium levels of the
product or service.
3. Market Opportunity

• The term market opportunity refers to the

company’s intended marketspace and the
overall potential financial opportunities
available to the firm in that marketspace.
3. Market Opportunity

• The market opportunity is usually divided into

smaller market niches.

• The realistic market opportunity is defined by

the revenue potential in each of the market
niches where you hope to compete.
4. Competitive Environment

• Who else occupies your intended marketspace?

Other companies selling similar products in the same
marketspace
• Influenced by:
Number and size of active competitors

Each competitor’s market share

Competitors’ profitability

Competitors’ pricing
5. Competitive Advantage

Achieved when firm:

• Produces superior product or

• Can bring product to market at lower price than
competitors

Important concepts:

• Asymmetries
• First-mover advantage
 • How do you plan to promote
your products or services to
attract your target audience?

6. Market Details how a company intends to

Strategy enter market and attract customers

Best business concepts will fail if not

properly marketed to potential
customers
 No matter how tremendous a

firm’s qualities, its marketing

strategy and execution are often

6. Market
Strategy just as important.

The best business concept, or

idea, will fail if it is not properly

marketed to potential customers

 Although many entrepreneurial ventures

are started by one visionary individual, it is

7. rare that one person alone can grow an

Organizationa idea into a multi-million-dollar company.
l
Development  In most cases, fast-growth companies—

especially e-commerce businesses—need

employees and a set of business

procedures.
 • Companies that hope to grow and

7. thrive need to have a plan for

Organizationa
l organizational development that
Development
describes how the company will

organize the work that needs to be

accomplished.
 • Typically, work is divided into

functional departments, such as

7. production, shipping, marketing,

Organizationa
customer support, and finance.
l
Development
• Jobs within these functional areas are

defined, and then recruitment begins

for specific job titles and

responsibilities.
 • Typically, in the beginning,
7. generalists who can perform
Organizationa
l
Development multiple tasks are hired. As the

company grows, recruiting

becomes more specialized.

 What kinds of experiences and
background are important for
8.
Management the company’s leaders to have?
Team Management Team Arguably,
the single most important
element of a business model is
the management team
responsible for making the
model work.
 Strong management team gives
instant credibility to outside
8.
Management investors.
Team Strong management team may
not be able to salvage a weak
business model but should be
able to change the model and
redefine the business as it
becomes necessary.
 • No one correct way

• We categorize business models

Categorizing
E-commerce according to:
Business E-commerce sector (B2C, B2B, C2C)
Models Type of e-commerce technology; i.e. m-
commerce

• Some companies use multiple

business models; e.g. eBay