why b entrepreneur

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Information about why b entrepreneur
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Published on November 7, 2007

Author: Roxie

Source: authorstream.com

Why Be an Entrepreneur??:  Why Be an Entrepreneur?? NOTE:  NOTE Presentation is taken from 3 class lectures with Professor Gideon Markman who teaches two classes on Entrepreneurship, MGMT 5550 and 5530. GEM Executive Report:  GEM Executive Report What is entrepreneurship? Why is E-ship important? The process of creating and building new firms (3-4 year old companies) When opportunities are met w. skills, commitment, and hard work Why is E-ship important?:  Why is E-ship important? E-ship = Key to unlocking National Economic Growth (ex. GDP, jobs, $, prosperity) Economic growth = f(…) Activities associated w. established firms Activities associated w. E-ship processes Slide5:  Why make distinctions b/w firms – large/mature vs. small/young firms? Takehome::  Takehome: GEM Report: Creative Destruction & Business Churning: New firms displace inefficient or outmoded existing firms Slide7:  The GEM Report distinguishes b/w: A. entrepreneurial opportunities B. entrepreneurial capacity See Model 2 Why make a distinction b/w entrepreneurial opportunities & entrepreneurial capacity? Slide8:  Why make a distinction b/w entrepreneurial opportunities & entrepreneurial capacity? Slide9:  Putting it all together: Established firms, entrepreneurial opportunities & entrepreneurial capacity Takehome 1: Change () & Business Churning are everywhere!!!! Move slow  death; Take wrong turn  death:  Takehome 1: Change () & Business Churning are everywhere!!!! Move slow  death; Take wrong turn  death Mobile phone: Motorola vs. Nokia 94’ = 26 mil. c-phones; 99’ = 300 mil. analog  digital Want to grab eyeball? Sony, GE, Microsoft, etc. vs. Yahoo! Auction? Butterfield & Butterfield vs. eBay E-mail? AOL vs. Hotmail (18 vs. 40 million) vs. Freeserve Jobs? “classified” vs. Monster.com Hamel’s Gallup Survey of 500 CEOs:  Hamel’s Gallup Survey of 500 CEOs Who took best advantage of change in your industry in past 10 ys. – (a) newcomers; (b) key rivals, or (c) your own company? Why did newcomers win? Rule breaking thinking New business concepts “we are always only 2 years away from failure” Takehome 2 {about Change ()}:  Takehome 2 {about Change ()} 1) Speed & first mover advantage are no substitute to: Rule-breaking thinking (products vs. new biz concepts) 2) Whoever you think is your competitors are, they aren’t Southwest started in TX Amazon.com started as a bookstore AOL created a “merger of equals” w. Time Warner (x5) 3) A great time to be a newcomer! 4) Limited by our own imagination (“it can’t be done”), and by habits Total Entrepreneurial Activity (TEA):  Total Entrepreneurial Activity (TEA) TEA = (Nascent + New Firms) Which country has the: highest prevalence of TEA? lowest prevalence of TEA? See Figure 6 Segment, Segment, Segment: Age, Gender:  Segment, Segment, Segment: Age, Gender What age group is most likely to engage in Nascent Firms, New Firms, or TEA? What gender group is most likely to engage in Nascent Firms, New Firms, or TEA? See Figure 7 Slide17:  Different countries are characterized by different gender ratios Slide18:  Gender by Country Different countries are characterized by different gender ratios France = 12 men to 1 women (liberté, égalité, fraternité) Brazil = 1.6 men to 1 women Takehome: Gender is an issue Implications? Takehomes?:  Implications? Takehomes? E-ship activity vary by country, age, gender, etc. Need to influence… countries to sponsor E-ship opportunity people younger than 25 and older than 44 engage in E-ship activity women / minority to engage in E-ship activity E-ship & Economic Growth:  E-ship & Economic Growth Is there a strong relationship b/w E-ship activity and economic growth? See Table 1 Slide21:  Outliers: Import/Exports (Singapore, Belgium, Ireland) Agricultural Economy (India, Brazil) G-7 Nations Only What can we do to promote E-ship?:  What can we do to promote E-ship? Create new business opportunities Education (early and later stages of education) Change cultural and social values (should we?) Change infrastructure (physical, professional, gov. support, bank reforms?) Can we create high-tech high-growth entrepreneurial sector in the absence of national infrastructure? Final Takehomes:  Final Takehomes Economic prosperity = f(existing firms + TEA) TEA in a country is strongly related with its rate of economic growth (~ 50% of the difference) There is no one catalyst for economic growth, but TEA is clearly important New Firms > Nascent Firms Relationship b/w TEA and economic growth is particularly high when some countries are excluded (import/export, agriculture economy) What this class is all about:  What this class is all about Change Tolerance to Ambiguity I: Ingenuity, Imagination, Initiative, Innovation Self-Managed U-Haul / U-Fly Passion / Life Pro-action Experience Students’ Leadership Intellectually Difficult, Hard, Frustrating,… Predictability Certainty E: Education; follow my instruction or else… Managed-Care/Patronized Learn the theory of… “Sterile” / Lab Re-action Memory Professor’s Leadership Intellectually Easy, Cruise Control Creating Personal Wealth?:  Creating Personal Wealth? Only 5% earn over $100K/year Median (typical) household in US = $15K net worth (exc. home equity) $1 million net worth (or more) = 3.5% of US households 80% of US millionaires are first-generation rich …about to graduate; how will you make it? Does school prepare us for the real world? Homework:  Homework The challenge: Facts: Freshman, foreign student. No work permit (can work only on campus) Out-of-state tuition (~ $7K/Semester  $56K total) You have $30K Graduate  4 years Remain legal Income Tax History:  Income Tax History Old England: No income tax England: tax to fight Napoleon 1799-1816 America: Income tax for civil war 1861-1865 England: Permanent income tax 1874 US: permanent income tax 1913 (16th Amendment) (income tax levied only against the rich) Today: 5-6 months/year we work for… the government “the right to work” Takehome 1: Taxes punish those who produce & reward those who don’t. Takehome 2: Tax = Our Biggest Expense (e.g., ESSD) What is the ce b/w Poor & Rich?:  What is the ce b/w Poor & Rich? Love of money = root of all evil I can’t afford it…. The reason I’m not rich is b/c I have kids When it comes to $, play it safe, don’t take risks My home is my biggest investment I work for $ $ doesn’t matter Lack of money = root of all evil How can I afford it? The reason I must be rich is b/c I have kids …learn to manage risk My house is a liability $ works for me $ = power If $ = power, imagine what is the power of financial self-reliance (“you can’t “play” – effectively – if you don’t know the rules…”) Slide29:  What is the ce b/w Poor & Rich? People who work for a corporation Earn Pay Taxes Spend People who own a corporation Earn Spend Pay Taxes Car, insurance, health club, repairs, dinners, vacation? Company Expense Vacation: “meeting in Hawaii” Personal liability Slide30:  Income Expense Income Expense Assets Assets Liability Liability Asset? Liability? What is the Cashflow of ... What is the Cashflow of Tom (college student)?:  What is the Cashflow of Tom (college student)? Income (e.g., paycheck) Expense Taxes, Food, Rent, Outfits, Fun, Alcohol, Wheels, etc. Job Slide32:  What is the Cashflow of Middle Class? Income (e.g., paycheck) Expense Taxes, Food, Outfits, Fun, Rent, Alcohol, etc. Assets? Liability Mortgage, Cars, Loans, C-Cards Job Slide33:  What is the Cashflow of a Wealthy Person? Income Dividends, Interest, Rentals, Royalties, etc. Pre-Tax Expenses Food, Outfits, Fun, Alcohol, Wheels, etc. Assets Stocks, Bonds, Real Estate, IP Liability? Takehomes::  Takehomes: Buy a home, but understand the ce b/w assets & liabilities Think “Passive Income”: Invest in income-producing assets “Mind” your own business (or work to make others wealthy) Schools produce good employees (not employers) Don’t necessarily become what you study… Assets work 24/ 7/365 Takehomes (“the millionaire next door”):  Takehomes (“the millionaire next door”) Only 5% earn over $100K/year Median (typical) household in US = $15K net worth (exc. home equity) $1 million net worth (or more) = 3.5% of US households 80% of US millionaires are first-generation rich Frugal, Frugal, Frugal Time, Energy, & Money You Aren’t What You Drive Being Poor = A state in mind Being Broke = A temporary situation Entrepreneur Showcase:  Entrepreneur Showcase Kirk Kerkorian Who is He??:  Who is He?? Forbes #32 Wealthiest Person in America Owner of Tracinda Corp. Tracinda Owns 52% of MGM Mirage (ticker MGG) MGM has holdings including Mirage, Bellagio, Treasure Island, and Beau Ridge 2nd Largest Casino Holding Company but more profitable than #1. Quick BIO:  Quick BIO Son of Poor Immigrants Dropped Out of School in the 8th grade Flew Suicide for the Royal AirForce $1000 per trip Saved Much of his Money Paid $5K for single engine Cessna Flew planes to train pilots Discovered Las Vegas Bought Out Another charter service Went Public IPO Made Speculative Land deals in Vegas Built the International Built MGM READ BIO

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