Introduction to Entrepreneurship for Computer Scientists

Introduction to Entrepreneurship

Defining Entrepreneurship and the Role of the Entrepreneur

Entrepreneurship is a dynamic process involving the creation and management of new ventures. Entrepreneurs play a critical role in identifying opportunities and transforming ideas into viable businesses.

• Entrepreneurship is the process by which individuals pursue opportunities without regard to resources they currently control (Stevenson & Jarillo, 1990).

• According to venture capitalist Fred Wilson, entrepreneurship is "the art of turning an idea into a business."

• Entrepreneurs assemble and integrate resources—such as money, people, business models, and strategies—to transform inventions or ideas into viable businesses.

Corporate Entrepreneurship

Entrepreneurship at the Firm Level

Corporate entrepreneurship refers to entrepreneurial behavior within established organizations. Firms can be placed on a continuum from highly conservative to highly entrepreneurial, a concept known as entrepreneurial intensity.

• Highly entrepreneurial firms are proactive, innovative, and willing to take risks.

• Conservative firms tend to be more risk-averse, less innovative, and take a "wait and see" approach.

Entrepreneurial Firms	Conservative Firms
Proactive	Takes a more "wait and see" posture
Innovative	Less innovative
Risk-taking	Risk averse

Motivations for Becoming an Entrepreneur

Primary Reasons for Entrepreneurship

People choose to become entrepreneurs for various reasons, often driven by personal and professional motivations.

1. Desire to be their own boss

2. Desire to pursue their own ideas

3. Financial rewards

Characteristics of Successful Entrepreneurs

Key Traits and Qualities

Successful entrepreneurs often share several defining characteristics that contribute to their ability to launch and sustain new ventures.

• Passion for the Business: A strong belief that the business will positively influence people's lives.

• Product/Customer Focus: A commitment to delivering value to customers through products and services.

• Tenacity Despite Failure: The ability to persevere through setbacks and failures, which are common in entrepreneurial endeavors.

• Execution Intelligence: The capability to turn a business idea into a viable enterprise.

Common Myths About Entrepreneurs

Debunking Misconceptions

• Myth 1: Entrepreneurs Are Born, Not Made

  • Entrepreneurship is not an innate trait; it is shaped by environment, experiences, and choices.

• Myth 2: Entrepreneurs Are Gamblers

  • Most entrepreneurs are moderate risk-takers, not gamblers. Their risk-taking is calculated and based on informed decisions.

• Myth 3: Entrepreneurs Are Motivated Primarily by Money

  • While financial rewards are a factor, entrepreneurs are often driven by passion, purpose, and the desire to make an impact.

• Myth 4: Entrepreneurs Should Be Young and Energetic

  • Entrepreneurial activity spans all age groups. Experience, maturity, and a solid reputation are highly valued by investors.

• Myth 5: Entrepreneurs Love the Spotlight

  • Most entrepreneurs do not seek public attention; many operate successfully without widespread recognition.

Common Traits of Successful Entrepreneurs:

• Moderate risk taker

• Persuasive

• Promoter

• Resource assembler/leverager

• Creative

• Self-starter

• Tenacious

• Tolerant of ambiguity

• Visionary

• Optimistic disposition

• Networker

• Achievement motivated

• Alert to opportunities

• Self-confident

• Decisive

• Energetic

• Strong work ethic

• Lengthy attention span

Types of Start-Up Firms

Classification of New Ventures

Salary-Substitute Firms	Lifestyle Firms	Entrepreneurial Firms
Provide owners with income similar to what they would earn in a conventional job. Examples: Dry cleaners, convenience stores, restaurants.	Allow owners to pursue a particular lifestyle and earn a living. Examples: Ski instructors, golf pros, tour guides.	Bring new products or services to market by creating and seizing opportunities. Examples: Google, Facebook, Zynga.

Demographics of Barbadian Small Businesses

Definition and Classification

Small businesses in Barbados are defined by the Small Business Development (Amendment) Act, 2006, Section 3, based on several criteria:

• Incorporated under the Companies Act

• Must satisfy any two of the following:

  • No more than $1,000,000.00 in stated or paid-up capital

  • No more than $2,000,000.00 in annual sales

  • No more than 25 employees

• Not more than 25% owned or controlled by a larger company

• No ongoing agreements for managerial or other services outside normal operations (unless financed by venture capital)

Medium-sized enterprises are defined as having between 26 and 50 employees, according to the SBA and Barbados Statistical Service.

Statistical Overview

Barbadian small businesses are distributed across various sectors, with the majority being micro or small enterprises. The following tables summarize key demographic data:

Number of Businesses by Size Category

Sector	Micro (less than 5)	Small (6 to 25)	Medium (26 to 50)	Large (51+)	Total
Agriculture	266	366	16	15	663
Manufacturing	155	167	15	13	350
Retail	1312	1087	87	30	2516
Total	4376	4527	399	362	9654

Additional info: Table truncated for brevity; other sectors include Mining, Finance, Construction, etc.

Number of Persons Employed by Enterprise Size

Size Category	Estimated Enterprises	Estimated Employment	Share (%)
Micro	4376	10580	20.2
Small	4527	31215	59.7
Medium	399	6467	12.4
Large	362	3962	7.6
Total	9664	52424	100.0

Contribution to Exports by Enterprise Size and Sector

Size	Number of Exporting Firms	Total Exports ($)	Share of Total Exports (%)
Micro	73	4001800	0.3
Small	136	13300000	1.0
Medium	53	31200000	2.4
Large	41	124271700	96.3
Total	303	129689500	100.0

Gender Distribution of Business Ownership by Sector (%)

Sector	Male	Female	Equally owned
Agriculture/Fisheries	7.50	7.50	7.50
Manufacturing	18.80	15.00	11.30
Retail	10.00	6.10	6.10
Total	100.00	100.00	100.00

Additional info: Table truncated for brevity; other sectors include Construction, Transport, Health, etc.

Economic Impact of Entrepreneurship

Innovation and Job Creation

• Innovation: The process of creating something new, central to entrepreneurship. Small innovative firms are significantly more productive in terms of patents per employee than larger firms.

• Job Creation: Small businesses are major contributors to net new jobs. In the U.S., firms with 500 or fewer employees created two million of the three million private sector jobs in 2014.

Impact on Society and Larger Firms

• Entrepreneurial innovations improve quality of life, productivity, health, and entertainment.

• Many entrepreneurial firms support larger firms by providing products and services that enhance efficiency and effectiveness.

The Entrepreneurial Process

Four Key Steps

1. Deciding to become an entrepreneur

2. Developing successful business ideas

3. Moving from an idea to an entrepreneurial firm

4. Managing and growing the entrepreneurial firm

Each step is essential for transforming an idea into a sustainable business and requires a combination of creativity, planning, and execution.