Entrepreneurs
Introduction to the Economics Unit
What is an Entrepreneur?
● An individual who organizes or operates a business or
businesses
● Often fails during his or her first business venture
● Most entrepreneurs that we are familiar with left a stable
life for the up-and-down life of an entrepreneur
“I never once made a discovery. I start where the last man
left off.” - Thomas Edison
Facts
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6 million NEW Entrepreneurs in the U.S. every year (some
succeed and some fail)
● Average age of company founders when they started their
business is 40
● 95.1% of founders had earned bachelor’s degrees, and 47%
had more advanced degrees
● Less than 1% come from extremely rich or extremely poor
backgrounds
“Stay hungry. Stay foolish.” - Steve Jobs
Famous Entrepreneurs
● Thomas Edison - Filed over 1,000 patents and founded 14 companies
including General Electric
● Richard Branson - Founded the Virgin Group, which consists of over 400
companies including Virgin Mobile
● Steve Jobs - Co-founder of Apple and Pixar
● Bill Gates - Co-founder of Microsoft
● Larry Page & Sergey Brin - Co-founders of Google
● Max Levchin & Elon Musk - Co-founders of PayPal
● Oprah Winfrey - Founder of Harpo Entertainment
● Mark Zuckerberg - Co-founder of Facebook
● Jeffrey Bezos - Founder of Amazon
● Evan Spiegel - Founder of SnapChat
“The best way to predict the future is to create it.” - Peter Drucker
Max Levchin
Traits of an Entrepreneur
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Passion
Perseverance (“Grit”)
Resourcefulness
Open-Mindedness
Confidence
Fearless - they embrace failure
“There are two options: You can go through failure or you
can grow through failure.” - Unknown
Three Basic Economic Questions
● What are you going to produce?
● How are you going to produce it?
● Who are you going to produce it for?
“It’s better to own the racecourse than the racehorse.” Unknown
Types of Innovation
● Sustaining - Minor change in the product (Hershey’s bar with
almonds)
● Evolutionary - An innovation that improves a product in ways that
customers are expecting (i.e., Facebook chat)
● Revolutionary - An innovation that is unexpected, but nevertheless
does not affect existing markets (i.e., digital photography)
● Disruptive - An innovation that creates a new market by applying a
different set of values, which ultimately overtakes an existing
market (i.e., Wikipedia, Twitter, Keurig)
“You don’t choose your passions; your passions choose you.” - Jeff
Bezos
The Process
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Develop an idea & protect it - Obtain a patent
Build your product - Design and create your product
Find a co-founder - Develop a business plan
Find advisors - Designed by you, they provide advice
and guidance
● Find capital - Crowdfunding, Angel Investors, Venture
Capitalists
“The entrepreneur always searches for change, responds
to it, and exploits it as an opportunity.” - Peter Drecker
Financing
● Crowdfunding: funding a project by getting many people
to donate a (normally) small amount. (Ex: Kickstarter)
● Angel investor: an affluent individual that funds a project
in its early stages. Sometimes these people will require
a some ownership of the company, sometimes not.
● Venture capitalists: Often a company or a business that
funds a project that is more high-risk. Venture capitalists
often have requirements of control and authority when
investing.
Financing
Four Factors of Production
1. LAND: naturally occurring goods (Water, air, soil, minerals,
etc.) that are used in the creation of products
2. LABOR: Human effort used in production
3. CAPITAL: Goods that are used in the production of other
goods. (Machines, roads, factories, buildings, tools, etc.)
4. TECHNOLOGY: Overall state of technology
EXAMPLE: List one example from each category that is used in
the production of a Hershey’s candy bar.
Market Economy
● Economy based on supply and demand
● Supply - the amount of product companies are willing to
sell at a given price
● Demand - the consumer’s willingness and desire to pay
a certain price for a product or service
Market and Market
Economy
● MARKET: Allows buyers and sellers of a specific good
or service to interact in order to facilitate an exchange.
● MARKET ECONOMY: An economic system in which
economic decisions and the pricing of goods and
services are guided solely by the interactions of a
country's citizens and businesses and there is little
government intervention(capitalism)
“Success is walking from failure to failure with no loss
of enthusiasm.” - Winston Churchill
Economic Terms
● Innovation (4 types)
● Capital (Crowdfunding, Angels, VCs)
● Four Factors of Production (Land, Labor,
Capital, Tech)
● Market Economy (Supply & Demand)