ENTREP LESSON 1-2

• An entrepreneur owns a business, invests, transforms, and balances effort, purpose, and profit
• Components of an entrepreneur include:

  • Owner who invests resources
  • Calculated risk-taking
  • Commitment
  • Brings an idea to life
  • Defining the best options
  • Competency
  • Setting direction
  • Quality information and making choices
  • Making things happen
  • Interdependent elements are in harmony
  • Coordination
  • Adding value
  • Financial understanding
• An innovator is a person who introduces new products, processes, services, or business models to the marketplace that become commercially successful
• Entrepreneurs need 4 types of commitment:

  • Money
  • Mindset
  • Machinery
  • Moving forward
• Entrepreneurs need 4 types of coordination:

  • Model
  • Market
  • Methods
  • Mission
• Entrepreneurs need 4 types of competencies:

  • Mentors
  • Message
  • Management skills
  • Mastery
• Entrepreneurship is not for everyone, and entrepreneurs need 7 competencies:

  • Risk appetite
  • Sensemaking
  • Customer-focus
  • Initiative
  • Influence
  • Adaptability
  • Grit
• 4 Cs competencies to be innovators:

  • Creativity
  • Critical thinking
  • Collaboration
  • Communication
• Preparation for a business involves doing a feasibility study, constructing a business model, and having a good, doable idea
• Investors need to ask key questions related to market, product, people, and ROI to maximize return on investment
• Forming a team involves choosing partners, founding members, and mentors
• 4 simplest ways to raise capital:

  • Operational
  • Functional
  • Personal
  • Strategic
• Gate 1: Preparation (IQ)

  • Money: cash component that creates the cycle of wealth conversion and prosperity
  • Model: big picture plan to generate sales revenues, profit, cash flow, and how to scale up
  • Mentors: experienced advisers that give sound guidance to increase competency, lessen risks, and help open more opportunities for the entrepreneur to succeed
• Gate 2: Marketing (CQ)

  • Mindset: beliefs
  • Market: set of buyers
  • Message: brand positioning
• Gate 3: Rewards and leadership (EQ)

  • Machinery: organization structure
  • Management Skills: ability to carry out plans through people
  • Methods: systems and processes
• Gate 4: Self-Leadership (AQ)

  • Moving Forward: having the grit to continue the business despite obstacles
  • Mission: purpose
  • Mastery: building capabilities, knowing the nuts and bolts of the business well, and eliminating gaps in the know-how; knowing the self, the environment, and the operations
• An entrepreneur needs 4 different types of commitment:

  • Money: to maximize return of investment
  • Mindset: have an innovation mindset
  • Machinery: create an effective organization
  • Moving Forward: to keep iterating toward objectives and goals
• An entrepreneur needs 4 different types of coordination:

  • Model: the interdependency of a business model
  • Market: choice and penetration of the target market
  • Methods: processes needed to routinize operations
  • Mission: the establishment and fulfillment of a company’s mission
• An entrepreneur needs 4 different types of competencies:

  • Mentors: related to sense making and risk assessment that can be provided or guided by mentors
  • Message: related to customer-focused communication, expressed in terms of a positioning or a message
  • Management Skills: related to initiative and resource management and influencing people skills as part of critical management tasks
  • Mastery: related to adaptability and grit resulting in mastery of strategy and change, as well as customer understanding and self-transformation
• 4 Cluster Capacity Requirements

  • Intelligence Quotient (IQ): for preparation, or the capacity to think and reason
  • Creativity Quotient (CQ): for marketing, or the capacity to innovate
  • Emotional Quotient (EQ): for execution, or the capacity to sense and empathize
  • Adversity Quotient (AQ): for self-leadership, or the capacity to recover and make progress
• 7 Competencies of Entrepreneurs:

  • Risk Appetite
  • Sensemaking
  • Customer-Focus
  • Initiative
  • Influence
  • Adaptability
  • Grit
• 4 Cs Competencies to be Innovators:

  • Creativity
  • Critical Thinking
  • Collaboration
  • Communication
• In preparing a business, students and neophyte businessmen must be aware of the important task of doing a feasibility study
• It is recommended that a business model be constructed before a business plan is written, in order to have greater clarity and facilitate ease of writing
• Personal Branding:

  • The image of one’s self in the public mind from previous choices that will affect the future level of personal influence, which is a part of self-awareness and self-mastery
• EBITDA: earnings before interests, taxes, depreciation and amortization

  • A high EBITDA means a company is able to keep its earnings at a good level via efficient processes that have kept certain expenses low
• Endowment Effect and Loss Aversion:

  • A supply-side thinking of overvaluing the things they have, more than they are actually worth in the market, a reflection of emotions and cognitive blind spots