ENTREPRENEURSHIP

DEVELOPMENT

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ENTREPRENEURIAL

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 Evolution of the term
ENTREPRENEUR
French word
-Entreprendre

17th 18th 19th and

16th Century -
Century - Century- early 20th
Archites & Applied to Century-
Military Contractor
expedition business Innovations/
s new
challenges

2
Profile analysis
 Meaning of entrepreneurial behavior
• Entrepreneurial behavior is directly
concerned with the understanding, prediction
and control of human behavior in
enterprises.
• Definition “Entrepreneurial behavior is a
subset of entrepreneurial activities concerned
with understanding, predicting and
influencing individual behavior in
entrepreneurial settings.” -Callahan
• Entrepreneurial behavior represents the
behavioral approach of management.

1.It emerged as a distinct field of study because of the

importance of human behavior in enterprise.

2. Cause and effect relationship: Human behavior is

generally taken in terms of cause and effect relationship.
It provides generalization that entrepreneurs can use to
anticipate the effect of certain activities on human
behaviour.
3. A branch of social sciences: Entrepreneurial behavior is
greatly influenced by other social sciences viz., psychology,
sociology and anthropology.
4. Three levels of analysis: Entrepreneurial behavior is the
study of three levels of analysis
i.e. individual behavior, inter-individual behavior and
the behavior of organizations.

5. A science as well as an art: The systematic knowledge

about human behavior is a science and the application of
behavioral knowledge and skills is an art.
 Entrepreneurial motivation.
Motivation has been derived from the word
‘motive’ which implies the inner state of mind that
activates, provokes and directs our behavior
towards the goal . Motivation is a process that
motivates a person into action and induces him to
follow the course of action till the goals are finally
achieved.
• Motivating Factors:
( A ) Internal Factors :
• Educational Background .
• Occupational Experience .
• Desire to do work independently .
• Desire to branch out to manufacturing.
• Family Background
 ( B ) External Factors :
• Assistance from Government.
• Assistance from financial institutions.
• Availability of technology.
• Availability of raw material.
• Demand of the particular product.
• Achievement
• Power
• Affiliation
• Independence
• Extension
• Personal achievement
• Social achievement
 Start up
• A startup is an entrepreneurial venture in search of enough
financial backing to get off the ground.

• The first challenge for a startup is to prove the validity of the

concept to potential lenders and investors.

• Startups are always risky propositions but potential investors

have several approaches to determining their value.
• “A startup is a human institution designed to create a new
product or service under conditions of extreme uncertainty.”
― Eric Ries, The Lean Startup

• If you follow the traditional startup formula of writing a

business plan, pitching to investors, building your product, and
selling it, you might spend years on one business idea only to
have it fail.

• Did you know that 75% of all startups fail?

• While starting any kind of business has always been a risky business, the

Lean Startup Methodology, introduced by Eric Ries in 2008, is a cheap,

quick, and less risky strategy to take your business idea to market.

• The key difference between building a lean startup with the Lean Startup

Methodology rather than using a more traditional method is that

entrepreneurs must ask themselves, “Should this product be built?” rather

than “Can this product be built?” Building a lean startup is about finding a

problem, validating that problem, and building a product that will solve the

problem.
• Eric Ries – 2004

• CTO of “I M V U”

Vision - To create new online product

. 3 D avatar and instant messaging based on concept of

3D gaming + instant messaging

They work hard on this project for 6 months.

Launched it after 6 months and failed measurably.

• Called target customers

• Assumed value --- Completely wrong

• People didn’t want to use Willing

existing instant messaging to use new instant

networks messaging
service to talk

with strangers
using their 3D avatar
 Minimal Viable Product
• Product made with a minimal amount of effort, used to test a
specific value assumption.

• E.g.

Critical Assumption

Customers are willing to buy shoes online

• Continual testing and validation is built into the lean startup
process in order to get the product into the customer’s hands
as fast as possible while maximizing the business’s growth.

• When you’re building a lean startup, you want to make sure

that you’re constantly testing and validating your product so
that your product is in your customer’s hands as fast as
possible. The Lean Startup Methodology will subsequently let
you maximize your business growth.
 Lean startup vs. traditional startup approaches

• The ideas contained within lean startup contradict long-held principles about
how entrepreneurs should approach launching a new business.

• Traditional thought held that entrepreneurs should develop a multiyear business

plan and then use that plan to raise money to fund product develop activities.

• Moreover, traditional principles advise entrepreneurs to develop their product in

"stealth mode," thereby keeping their product ideas unknown to anyone beyond
the startup workers and their investors.

• The lean startup methodology calls for entrepreneurs to start their business
ventures by searching for a business model and then testing their ideas. Feedback
from potential customers is then used to adjust their ideas as they move forward.
 Characteristics
• The lean startup methodology also advocates for entrepreneurs to continually engage in this

activity loop -- exploring and developing hypotheses that they then test among customers to elicit

feedback, something known as validated learning. Entrepreneurs use that customer feedback to

re-engineer their products.

• A lean startup will build a prototype quickly, get it to market to gauge success of the product

without expending unnecessary resources and use the data generated by early marketing tests to

influence the next build phase.

• Additionally, the lean startup methodology calls for entrepreneurs to develop a minimum viable

product, or MVP, that they can test. This advocates for entrepreneurs to adjust their products

based on customer feedback -- another key concept of the methodology that is called "pivoting."
 Steps of lean start up
1. FIND the Business Idea

• “The big question of our time is not Can it be built? but Should it be built? This places us in an

unusual historical moment: our future prosperity depends on the quality of our collective

imaginations.”

― Eric Ries, The Lean Startup

• When choosing a business idea to execute with the Lean Startup Methodology, it is important

to consider whether or not the problem that your product will solve is important enough for

customers to want to purchase it. Finding a business idea can be tricky, so it is important to pay

attention to problems people are facing in everyday life . Customers must be actively searching

for a solution to the problem in order for your product to gain traction.

• Once you decide on a business idea, it is time to . . .

2. EXECUTE the Business Idea
• “As you consider building your own minimum viable product,
let this simple rule suffice: remove any feature, process, or effort
that does not contribute directly to the learning you seek.”
― Eric Ries, The Lean Startup
• Next, you will build your product – your
Minimum Viable Product (MVP). The MVP is a version of the
product you wish to build that will allow your team to easily
collect the most data about your potential customers and their
feedback on the product as possible.
• Some proponents of the Lean Startup Methodology also
suggest taking a “Kickstarter Approach” with your product –
that is, begin selling your product before it is finished being
built in order to create brand awareness and drive up interest
in your product while raising funds for your Lean Startup.
3. VALIDATE the Business idea

• “Startups exist not just to make stuff, make money, or even serve customers.
They exist to learn how to build a sustainable business. This learning can
be validated scientifically by running frequent experiments that allow
entrepreneurs to test each element of their vision.”
― Eric Ries, The Lean Startup

• Product validation is a key step in building a successful Lean Startup. In

this step, it is time to experiment with your business idea in the real world.
Test your MVP with real customers in the marketplace – early adopter or
otherwise – to see if your idea is viable and to gather information that you
can analyze. Use this data to decide if you should continue to build your
product, tweak your product, or pivot your business strategy.
• If the results from testing your MVP in the marketplace are mostly positive, continue to

build your product using your original strategy while incorporating feedback from

testers.

• If the results from testing your MVP in the marketplace are positive and negative, tweak

your product and/or business strategy in order to make your product better meet the

wants and needs of your customers.

• If the results from testing your MVP in the marketplace are mostly negative, it is time to

pivot your product and/or business strategy. This will require a dramatic shift in your

method and work to adapt your vision to meet the wants and needs of your customers. In

some cases, mostly negative feedback will suggest that a Lean Startup should exit the

marketplace altogether.