Behind some of the most innovative products we use, and know of today, is a smart entrepreneur. Similarly, some of the most mainstream products and services we use today were once breakthrough startups, imagined as possibilities by an entrepreneurial mind. Entrepreneurship is often seen as a source of new ideas, goods and services that create change disruption and innovation. An entrepreneur is someone who identifies problems and produces solutions to fix these problems. In other words, they recognise opportunities and take risks to set up new ventures.
By studying entrepreneurship, we will learn about the underlying concepts, common challenges, success and failure. We will also learn from the entrepreneurial qualities and approaches, and reflect on how we might be able to apply some of these in our own lives.
Welcome to Topic 1: Why Entrepreneurship? In this topic, you will learn about:
- Introduction to entrepreneurship
- The importance of entrepreneurship
- Some examples of entrepreneurs and their ventures.
These relate to the Subject Learning Outcomes:
- Discuss the importance of entrepreneurship as a driver of growth and how it varies from "business as usual".
- Explain the fundamental role of entrepreneurs as change agents.
Welcome to your pre-seminar learning tasks for this week. Please ensure you complete these prior to attending your scheduled seminar with your lecturer. Click on each of the following headings to read more about what is required for each of your pre-seminar learning tasks.
Introduce yourself in Topic 1: Forum activity 1.
You can also navigate to the forum by clicking on 'ENT100 Subject Forum' in the navigation bar for this subject.
Read through the topic content and complete the learning tasks within it.
Introduction to entrepreneurship
Entrepreneurship is being recognised increasingly as a catalyst to change and growth within national economies and markets. Especially during significant global events such as the COVID-19 pandemic, what entrepreneurship means for society is highlighted.
Entrepreneurship is the practice of starting new organisations, the process of innovating and commercialising this innovation as part of a new venture. It is a risky process of combining innovation, management, and capital (money) to set up an organisation in the pursuit of financial or social gains. By extension, an entrepreneur is an individual who undertakes entrepreneurship.
According to Barringer and Ireland (2006), innovation involves the creation of something new or unexpected and is essential to entrepreneurial activity.
A startup is a new business or venture by an individual group of people or an established business. Frederick et al. (2018) differentiate between the following two (2) types of entrepreneurs:
- Business entrepreneurs work in a competitive marketplace. They are primarily profit-driven, and their ventures aim to grow and claim market share in the business world.
- Social entrepreneurs seek innovative ways to solve problems that have not been solved by society via governments or businesses. Often their concerns are aligned with social justice, conservation and equality.
Social entrepreneurs are driven by a purpose and seek to find innovative solutions to social or environmental problems not being addressed by the market or governments. Business and social enterprise both aim for innovative solutions and growth. While terms such as ‘small business owner’ and ‘entrepreneur' are sometimes used interchangeably, these are not necessarily the same. We can differentiate the two. Small business owners may prefer a more stable approach to business and not seek expansion or growth once an opportunity has been captured. An entrepreneur, on the other hand, is more aggressive in their approach to risk-taking and aims to exploit innovative startup opportunities and create new markets.
There are vast differences in entrepreneurial activity, the type of ventures created, as well as the entrepreneurs behind the startups. However, a recurring concept within all forms of entrepreneurship is an interdisciplinary approach.
When we look at entrepreneurial ventures and the way in which they are unique, we can identify various strategic strategies (Swanson 2017). These include:
- Great chef strategies are built around unique people. The term refers to a strategy that builds the business around great and unique people with specialised talents or skills.
- Mountain gap strategies refer to opportunities that are identified in creating unique markets. This is where gaps in the marketplace are identified and leveraged.
- Better widget strategies are built around unique products. These relate to innovations that leverage unique products and thereby open up existing markets or create new ones.
- Water well strategies relate to unique resources. These relate to the ability to make use of or combine in a new and unique manner, special resources. For example, land capital labour and raw materials that aren’t used by any competitors in the market already.
The importance of entrepreneurship
The following short video provides an example of an entrepreneurial venture in response to a perceived opportunity. Watch ‘Entrepreneurship - the Entrepreneur’ as part of a general introduction into what entrepreneurship is.
Learning Task 1: Uncertain times
Entrepreneurship is often a direct result of uncertain times. Read Gaskell, A 2021 ‘Entrepreneurship suffers when well-paid jobs are plentiful.’
Reflect on how the current climate makes entrepreneurship even more topical in your reflective journal. You can access the reflective journal by clicking on ‘Journal’ in the navigation bar for this subject.
Entrepreneurs see opportunities and act creatively and innovatively to take advantage of them. In doing so, they accept and attempt to manage the risk that this course of action will fail. The Global Entrepreneurship Monitor 2020/2021 Report highlights the role entrepreneurs have played during the coronavirus pandemic in response to lockdowns, changes in policy and regulation and fragmented supply chains. Whilst the global pandemic decreased the number of businesses or startups in the entrepreneurial sector by roughly 25%; on a positive note, over 50% of respondents identified that the pandemic had led to new opportunities (Global Entrepreneurship Monitor 2021).
Issues of sustainability, efficiency and environmental responsibility are topical concerns that drive entrepreneurial solutions.
Like many developed countries, about two-thirds of Australian employment is created by small businesses, many of which have been established by entrepreneurs, or are in the startup phase (Frederick et al. 2018).
Many authors refer to an ‘entrepreneurial revolution’ – a worldwide trend that links entrepreneurship to economic performance, the creation of job growth and innovation within a country, an industry, or a region. It is thought that this revolution will continue to grow in importance, especially as we look at some of the challenges that we face in today’s world.
Entrepreneurship drives national development
As an example of entrepreneurship being used as a catalyst for change read Yoon, S 2021, ‘The three pillars of China’s booming start-up ecosystem’.
When countries want to encourage entrepreneurship to drive innovation within the local market, the following Entrepreneurial Framework Conditions model (Global Entrepreneurship Monitor 2021) sets out some of the factors that need to be considered:
| Entrepreneurship framework Conditions (EFCs) | How this contributes to the creation of a favourable entrepreneurial environment. |
|---|---|
| Access to entrepreneurial finance | Sufficient funds are available to new startups, from informal investment and bank loans to government grants and venture capital. |
| Government policy: Support and relevance | Government policies promote entrepreneurship and support those starting a new business venture. |
| Government policy: Taxes and bureaucracy | Business taxes and fees are affordable for the new enterprise. Rules and regulations are easy to manage, without undue burden on the new business. |
| Government entrepreneurship programs | Quality support programs are available to the new entrepreneur at local, regional and national levels. |
| Entrepreneurial education at school | Schools are introducing ideas of entrepreneurship and instilling students with entrepreneurial values such as enquiry, opportunity recognition and creativity. |
| Entrepreneurial education post-school | Colleges, universities and business schools offer effective courses in entrepreneurial subjects, alongside practical training in how to start a business. |
| Research and development transfer | Research findings, including from universities and research centres, can readily be translated into commercial ventures. |
| Commercial and professional infrastructure | There are sufficient affordable professional services such as lawyers and accountants to support the new venture, within a framework of property rights. |
| Ease of entry: Market dynamics | There are free, open and growing markets where no large businesses control entry or prices. |
| Ease of entry: Market burden and regulations | Regulations facilitate, rather than restrict, entry. |
| Physical infrastructure | Physical infrastructure (such as roads), Internet access and speed, the cost and availability of physical spaces, is adequate and accessible to entrepreneurs. |
| Social and cultural norms | National culture encourages and celebrates entrepreneurship, including through the provision of role models and mentors, as well as social support for risk-taking. |
Examples of entrepreneurs and their ventures
Examples of entrepreneurial ventures lie at the root of many large organisations that are established in the world today. There are also new startups coming out all the time.
We will look at various examples of different entrepreneurs as well as their ventures. Take the time to absorb these, looking into their areas of success, any pitfalls they came across or indeed avoided in an effort to continuously refine your own skills and approach to entrepreneurship. Across all industries and fields, we can find concepts that amaze and inspire us.
Learning Task 2: Get to know an entrepreneur
Before reading the following examples, research two (2) entrepreneurs in different fields or industries, ideally with quite different ventures. Post your ideas in your reflective journal.
Let us look at some examples of entrepreneurs and their journeys.
Tapi Tapioca, Brazilian street food
Following a legislative change in 2014, the Brazilian food truck scene really took off as the new regulation allowed food trucks to operate in the largest cities. While most trucks sell conventional fast food, Marianna Ferolla launched Tapi Tapioca as a 100% Brazilian food offering. Tapioca is the cassava root starch native to Brazil and has long been used as a staple food. Tapi Tapioca serves tapioca stuffed pancakes.
In 2016, the Tapi team opened their first store and since then have opened several other venues. The venture has since then expanded internationally.
TOMS, a social shoe brand
Blake Mycoskie launched TOMS as a social, for-purpose brand of shoes. It started in 2006 as a simple but stylish brand of shoes with the concept that the organisation would donate a pair to someone in need for every pair sold. This idea as a one-for-one model was a new social entrepreneurial concept. Not only has TOMS developed as an easy to recognise, fashionable brand, the company has also donated 60 million pairs of shoes and assisted 400,000 people with eye surgery and provided safe drinking water across six different countries (Foundr 2019).
Airbnb
When Brian Chesky and Joe Gebbia first started with the idea behind Airbnb in 2007, they needed money to pay the next month of rent. They hosted the first guest in their apartment, and with that, Airbnb was launched. The concept of hosted accommodation and utilising existing (unused) residential real estate took off. Airbnb has become the largest provider of accommodation globally in less than 10 years.
Learning task 3: Freakonomics
Watch the Freakonomics documentary (start watching from 4:25), which explores how our everyday behaviour can be explained by science and economics. From baby names to sumo wrestling to crime rates and financial incentives for students to achieve better academic results, this documentary teaches you to look differently at the world.
Developing the ability to observe, analyse and develop new opportunities across various focus areas are key skills for an entrepreneur.
Note down your thoughts in your reflective journal and be prepared to share your reflections in the seminar. Here are some prompts to help you with your reflections:
- What were you surprised about? Why?
- Do you have any entrepreneurial ideas in response to the documentary? You may have observed a pain point (something that could be improved on). Or something may have sparked you to think that “if X was developed that would make things much easier/efficient/better”.
- How do you think you could develop this way of thinking (observing/analysing/prototyping) for yourself?
Learning Task 4: Why are entrepreneurs important?
Do your own research and prepare a short post in response to the following question:
Why are entrepreneurs important today?
Post your response to Topic 1: Forum activity 2.
Knowledge check
Complete the following task.
Key takeouts
Congratulations, we made it to the end of the topic! Some key takeouts from Topic 1:
- Entrepreneurship is being recognised increasingly as a catalyst to change and growth within national economies and markets.
- Business entrepreneurs work in a competitive marketplace. They are primarily profit-driven, and their ventures aim to grow and claim market share in the business world.
- Social entrepreneurs are driven by a purpose and seek to find innovative solutions to social or environmental problems not being addressed by the market or governments.
- When we look at entrepreneurial ventures and the way in which they are unique we can identify various strategic strategies. These are developed around unique people, markets, products and resources.
Welcome to your seminar for this topic. Your lecturer will start a video stream during your scheduled class time. You can access your scheduled class by clicking on ‘Live Sessions’ found within your navigation bar and locating the relevant day/class or by clicking on the following link and then clicking 'Join' to enter the class.
Click here to access your seminar.
The following learning task will be completed during the seminar with your lecturer. Should you be unable to attend, you will be able to watch the recording, which can be found via the following link or by navigating to the class through ‘Live Sessions’ via your navigation bar.
Click here to access the recording. (Please note: this will be available shortly after the live session has ended.)
In-seminar learning task
The in-seminar learning task identified below will be completed during the scheduled seminar. Your lecturer will guide you through this task. Click on the following heading to read more about the requirements for your in-seminar learning task.
Be ready to share the findings and examples you researched as part of your pre-seminar learning tasks during the seminar.
Welcome to your post-seminar learning tasks for this week. Please ensure you complete these after attending your scheduled seminar with your lecturer. Your lecturer will advise you if any of these are to be completed during your consultation session. Click on each of the following headings to read more about the requirements for each of your post-seminar learning tasks.
Reflect on your learnings from this topic and contact your lecturer if you have any questions.
Read through the case study readings and the assessment requirements, taking notes and asking your lecturer any questions about the requirements.
Each week you will have a consultation session, which will be facilitated by your lecturer. You can join in and work with your peers on activities relating to this subject. These session times and activities will be communicated to you by your lecturer each week. Your lecturer will start a video stream during your scheduled class time. You can access your scheduled class by clicking on ‘Live Sessions’ found within your navigation bar and locating the relevant day/class or by clicking on the following link and then clicking 'Join' to enter the class.
Click here to access your consultation session.
Should you be unable to attend, you will be able to watch the recording, which can be found via the following link or by navigating to the class through ‘Live Sessions’ via your navigation bar.
Click here to access the recording. (Please note: this will be available shortly after the live session has ended.)
The following additional resources can be used to extend your understanding of this topic:
References
- Barringer, BR & Ireland, RD 2006, Entrepreneurship: Successfully launching new ventures, Pearson Prentice Hall.
- Chan, N 2019, How TOMS founder Blake Mycoskie Blazed a Trail for social entrepreneurs, https://foundr.com/articles/podcast/blake-mycoskie-toms-shoes
- Frederick, H, O’Connor, A & Kuratko, DF 2018, Entrepreneurship 5th ed., Cengage.
- Global Entrepreneurship Monitor 2021, 2020/2021 Global Report, Global Entrepreneurship Monitor, https://www.gemconsortium.org/report/gem-20202021-global-report
- Lonely Planet 2019, 10 of the world's coolest food trucks, https://www.lonelyplanet.com/articles/worlds-coolest-food-trucks
- Shrestha, A 2017, 7 Lessons on Entrepreneurship I Learned From ‘the Airbnb Story’, https://medium.com/thrive-global/7-lessons-on-entrepreneurship-i-learned-from-the-airbnb-story-cf207d700776
- Swanson, LA 2017, Entrepreneurship and Innovation Toolkit, Openpress, https://open.umn.edu/opentextbooks/textbooks/entrepreneurship-and-innovation-toolkit
