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Entrepreneurship. The Entrepreneurial Process. What does it take to get started?. The Timmons Model of the Entrepreneurial Process. Communication. Opportunity (2). Resources (4). Business Plan. Fits and gaps. Ambiguity. Exogenous forces. Creativity. Team (3). Leadership.

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The Entrepreneurial Process

What does it take to get started

What does it take to get started?

The timmons model of the entrepreneurial process

The Timmons Model of the Entrepreneurial Process






Business Plan

Fits and gaps


Exogenous forces






Capital market context

Founder (1)

The entrepreneurial process

The Entrepreneurial Process


    • Idea => Opportunity

      • 90% of opportunities arise from your employment

      • 8-10 years of experience typical

    • Resources

    • Champions (Entrepreneur and team)

  • Build an organization

  • You do need money, but not necessarily a lot of money, to get started

Value creation the driving forces

Value Creation: The Driving Forces

  • A core, fundamental entrepreneurial process

  • Central themes or driving forces dominate this highly dynamic entrepreneurial process

    • It is opportunity driven

    • It is driven by a lead entrepreneur and an entrepreneurial team

    • It is resource parsimonious and creative

    • It depends on the fit and balance among these

    • It is integrated and holistic

What is an opportunity

What is an Opportunity?

  • It has the qualities of being attractive, durable, and timely and is anchored in a product or service that creates or adds value for the end user (or buyer).

  • Opportunities arise from…

    • Societal change

    • Market & regulatory dynamics & change

    • Technology change

What is an opportunity1


Recognizing a desired future state involving growth or change

A belief that achievement of that state is possible

What is an Opportunity?

The opportunity

The Opportunity

  • Market Demand

    • Reachable customer

    • Payback < 1 year

    • Share

    • Growth 20%+ and Durable

  • Market Structure/Size

    • Emerging/Fragmented

    • $50 million => 1 billion

    • Barriers to entry

  • Margin Analysis

    • Low cost provider

    • Low capital requirements

    • Break even 1-2 years

    • Value added increase of P/E ratio

The opportunity1

The Opportunity

  • A good idea is not necessarily a good opportunity.

  • For every 100 ideas presented to investors, usually fewer than 4 get funded.

  • An investor has to be able to quickly evaluate whether potential exists and to decide how much time and effort to invest.

  • Underlying market demand drives the value creation potential.

  • The greater the growth, size, durability, and robustness of the gross and net margins and free cash flow, the greater the opportunity.

Resources creative and parsimonious

Resources – Creative and Parsimonious

  • Basic Resources

    • Financial Resources , Assets, People, Your Business Plan

  • One of the most common misconceptions is that you first need to have all the resources in place, especially the money, to succeed.

  • Money follows high potential opportunities conceived of and led by a strong management team.

Minimize and control vs maximize and own

Minimize and Control vs. Maximize and Own

  • Successful entrepreneurs devise ingeniously creative and stingy strategies to marshal and gain control of resources

  • Example – Howard Head (metal ski)

  • Bootstrapping can create a significant competitive advantage.

  • Think Cash Last!

  • Such strategies encourage a discipline of leanness, where everyone knows that every rupee counts.

The entrepreneurial team

The Entrepreneurial Team

  • Key ingredient in the higher potential venture

  • VC John Doerr:

    • “I prefer

      a Grade A entrepreneur and team with a Grade B idea, …

      over a Grade B team with a Grade A idea”

  • Biggest challenge – building a Great Team

An entrepreneurial leader

An Entrepreneurial Leader

  • Learns and teaches—faster, better

  • Deals with adversity, is resilient

  • Exhibits integrity, dependability, honesty

  • Builds entrepreneurial culture and organisation

Quality of the team

Quality of the Team

  • Relevant experience and track record

  • Motivation to excel

  • Commitment, Determination and Persistence

  • Tolerance of risk, ambiguity, and uncertainty

  • Creativity

  • Team locus of control

  • Adaptability

  • Opportunity obsession

  • Leadership and courage

  • Communication

Importance of fit and balance

Importance of Fit and Balance

  • Concept of fit and balance between and among the three forces

  • When envisioning a company’s future, the entrepreneur can ask:

    • What pitfalls will I encounter to get to the next boundary of success?

    • Will my current team be large enough?

    • Are my resources sufficient (or too abundant)?

  • Vivid examples of the failure to maintain a balance are everwhere

Importance of fit and balance1

Importance of Fit and Balance

  • The entrepreneurial process is based on both:

    • Logic, and,

    • Trial and error

  • Some of the most successful investments ever were turned down by numerous investors before the founders received backing.

  • The unique combination of people, opportunity, and resources coming together at a particular time may determine a venture’s ultimate chance for success.

Enlightened serendipity


  • Being in the right place

  • At the right time,

  • Recognizing it, and

  • Acting upon it,


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