What is an Entrepreneur?
* Someone who recognizes an opportunity, to act, and to improve the happiness around him/her. * The definition is accumulated by a set of examples of entrepreneurial behavior.
There is a direct correlation between the size of the problem (how many people suffer from it) and the quality of the solution.
Angel Investors use their own money to finance other business ventures.
Adversarial Quotient measures the ability to ‘get up’ from hardship. * High levels mean that ‘you can keep getting knocked down’ but always managed to get back up. * How well one can withstand adversity and how they overcome it with success. *
Locus of Control deals with how a person views the world – someone who takes responsibly for his or her action or one who blames other people for their actions. * If someone has a high locus of control, accept responsibility for their universe and whatever happens to them. * Locus of Control refers to an individual's perception about the underlying main causes of events in his/her life * Internal Locus of Control - Individual believes that his/her behavior is guided by his/her personal decisions and efforts * External Locus of Control - Individual believes that his/her behavior is guided by fate, luck, or other external circumstances * Entrepreneurs have high levels of internal locus of control
“If you haven’t failed, you are not trying hard enough”
“Challenge yourself as an entrepreneur or else why try?”
Case Study #1 – Richard Branson
* New Youth Magazine (Student) – tried to use the magazine to change the world (established during the 70s when the hippies were beginning to come out) * Became a business and editorial success
* Developed a student advisory program to encourage the youth to solve their problems etc. (Discussed homosexuality, abortion) *
* Started Virgin Records was established through the magazine under mail ordering, and then later changed the environment to a storefront. * Transferred the record store to a studio by purchasing a mansion * Opened two nightclubs soon after the record company was picking up. * By 1980, Virgin Records was millions in debt.
* Next venture was the Airline Industry, started “Virgin Atlantic” * To gain publicity, Richard attempted to cross the Atlantic with a small boat. (New York to London) – than later used a hot balloon to travel across the Atlantic * High Internal Locus of Control – starts his own airline when advised not to.
* High Adversarial Quotient
* Serial Entrepreneur
Suboptimal Solutions is a theory that the goal of an entrepreneur is to be an agent of change. * Entrepreneur sees unmet need as opportunity and wants to shift the suboptimal equilibrium. * The current state does not satisfy everyone.
Suboptimal Equilibrium Solutions
* So an entrepreneur is one who sees the original state, sees the happiness deficient and moves to change it * Leads to creative destruction
Martin’s 3 Elements for Entrepreneurship
* Suboptimal Solution exists (there is a pain in the market – unmet need) * Person brings
* Direct action
* Results in a 10x shift in equilibrium, shifting the entire market
Creative Destruction - process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. * Digital Music destroys CD-ROM
* iTunes/ Napster (discontinues the purpose of record label company distribution) - this proved that consumers wanted a different distribution module * Google Maps (discontinues ATLAS)
* Wikipedia (discontinued the Encyclopedia BOOKS)
10X RULE – The 10x rule means that in order to gain market...