18 January

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18 January

• Small businesses and entrepreneurships

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News Story Mirror, mirror on the wall, is this
dress for me?

• Mirror designed by IconNicholson Social
  Retailing
• Enables shopping with their friends -- remotely
• mirrors intended for outside store fitting rooms
• mirror sends live video feed allowing text
  message responses
• touch screens on the three-paneled mirror
• choose matching shoes or accessories
• select a different outfit without physically
  putting the garment on
• Reuters, Jan 17 (article)

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Primary Components of a New Business

• Opportunity
• Market demand
• Market size and structure
• Margin analysis (can you make money?)
• Resources
• Team
• An A team with a B idea is better than a B
  team with an A idea

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Market size and structure

• Emerging markets
• room for new businesses
• Fragmented markets
• large number of players, none with significant
  market share
• No strong competition
• Proprietary barriers to entry
• keep large players from entering the market
• patents, trademarks, etc.
• Potential for high level of sales
• Worth the investment

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Margin analysis

• Differentiate opportunity from idea
• An idea may not be practical
• An opportunity is
• Initial goal reasonable break-even
• Longer term
• Low cost provider
• Lower capital requirement than competition
• Premium price

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What makes a company succeed?

• A unique business idea
• Outside the box thinking
• Customer focus
• Continued innovation and diversification
• Good management
• Smart partnerships

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Consider Starbucks

• Started 33 years ago as a single store
• Changed the way the world thinks about coffee
• How did they do it?
• What was their unique idea?

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And sometimes we need a break

• Look Like My Dog Contest

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Myths about Entrepreneurs

• Entrepreneurs are born, not made
• may be born with a flair for innovation, energy
• work experience, know-how, contacts, business
  skills can be acquired
• Anyone can start a business it's luck and guts
• difference between idea and opportunity
• entrepreneur, not bureaucrat
• Entrepreneurs are gamblers
• calculated risks
• Entrepreneurs want to run the whole show
• doing everything yourself limits growth
• Entrepreneurs are their own bosses and completely
  independent
• partners, investors, customers, employers,
  suppliers, community
• Entrepreneurs work longer and harder than
  corporate managers
• some do some don't

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Myths about Entrepreneurs

• Entrepreneurs have greater stress, pressure, and
  pay a higher personal price
• no evidence that it is more stressful
• sense of accomplishment, fun, flexibility
• Starting a Business is risky and often ends in
  failure
• true in many cases 80 fail in first 5 years
• success is higher with right people and finances
• Money is the most important part of success
• if the other important parts are there, money
  tends to follow
• New Business startup is for young and energetic
• age brings experience financial stability or
  obligations
• Entrepreneurs are motivated for quest for money
• most motivated by a market opportunity and the
  chance to make a difference in a particular
  industry.
• some motivated by the opportunity to make a
  contribution to society.
• Entrepreneurs seek power, control over others to
  feel in charge
• responsibility, achievement, results rather than
  power
• thrive on accomplishment, outperforming
  competition
• control comes from results they achieve

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Advantages Disadvantages

• Advantages
• Sense of autonomy
• Own decisions to some extent
• Challenge of being involved in a start-up
• Positive feelings from knowing this is your
  creation
• Financial control
• Ability to mold the business to meet your goals

• Disadvantages
• Burden of responsibility
• Never being able to leave the job at work
• Little margin for error
• Your future is at stake
• Financial insecurity
• e.g., pensions
• Personal sacrifices
• Time away from your family and other activities
  that you enjoy

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Women Entrepreneurs

• 8 million women in US with own business
• 1/3 of all business
• from 1991-1994 women led firms have created more
  jobs than the top 100 companies in Canada
• women have been creating jobs 4 x as fast as
  average of all firms
• women led business have higher survival rate
• Why?
• Glass ceiling
• Alternative life style
• Other?

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Social Entrepreneurs

• Social entrepreneurs change agents for society
• Power of a new idea equally as applicable to
  business or social concept
• Business entrepreneur new industries
• Social entrepreneur new solutions to social
  problems
• Both visionary and realist -- practical
  implementation of the vision
• Ideas must be user-friendly, understandable, and
  ethical
• Solve problem by changing the system
• Local change makers

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Historical Examples

• Susan B. Anthony (U.S., 1820-1906) women's
  rights
• Florence Nightingale (U.K., 1820-1910) modern
  nursing
• John Muir (U.S., 1838-1914) conservationist
• Margaret Sanger (U.S., 1879-1966) family planning
  
• Jean Monnet (France, 1888-1979) European unity
• Vinoba Bhave (India, 1895-1982) land gift
  (Bhoodhan) movement (redistribution of more than
  7,000,000 acres of land)
• Maria Montessori (Italy, 1892-1952) early
  childhood education

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Look at the Dates

• Why are they all in the nineteenth or twentieth
  century?
• When did entrepreneurial businesses begin?
• What has happened since then? Last 25 years?