Mississippi State University
MGT 3323
Entrepreneurship
Daniel T. Holt
Assistant Professor of
Management
“The people’s university”
-- Dr. Mark Keenum
Mississippi State University
Introduction
Entrepreneurs
Syllabus Review
Administrative Issues
Professor
Danny Holt
302T McCool Hall
daniel.holt@msstate.edu
(662) 325-5101 (Office)
(937) 361-4291 (Mobile; if you text, let me know who
the message is from)
Class
Mondays:
3:30 p.m. – 6:00 p.m., 202 McCool Hall
Danny Holt
• As a professional construction manager & engineer, I
have…
• Worked with several entrepreneurial firms all over the world
• Qatar, Pakistan, Jordan, Kuwait, Kyrgyzstan, United Arab Emirates,
Honduras, & Korea
• As a professor, I have…
• A diverse academic background
• Electrical Engineering, Human Resource Development, Engineering
& Environmental Management, Human Resource Management,
Organizational Analysis, & Entrepreneurship
• Taught at…
• Mississippi State University for slightly over a year
• Air Force’s graduate (Air Force Institute of Technology, Wright
Patterson AFB, OH) before joining the Business Bulldogs
My likes…
• Running on a hot & humid day
• Practicing my chipping & putting (unfortunately, I
don’t get to play golf as often as I’d like)
• Watching college sports (Live or on TV)
• Cheering as my favorites win (Louisville, Auburn, &
Mississippi State)
• Cheering as my least favorites lose (Kentucky, Alabama, &
Ole Miss)
• Learning, trying, & seeing new things
• Bartending school graduate, licensed panhandler, licensed
bull dozer operator, handwriting analyst, theater, baseball
parks
Introductions
Mississippi State University
Introduction
Entrepreneurs
Syllabus Review
Entrepreneurship Movement
• Barringer (2009; the book’s preface) claims that there
is an increased interest in the study of
entrepreneurship
• 2,100 colleges and universities offer entrepreneurship
coursework
• About 400,000 students took at least one entrepreneurship
course in 2005
What are your thoughts about this? Why would
you care?
So what?
• 72% of American adults have considered starting a business
• Significant economic influence
• There are over 20 million small entrepreneurial firms
• They contribute to
• Job Creation
• In a recent 2 year period, small businesses created nearly 75% of new
jobs
• Innovation
• Helps Big Business
• 80% of small entrepreneurial firms provide intangible services
(wholesaling, professional services) that often serve big business
• 20% of small entrepreneurial firms provide tangible goods
New Jobs by Firm Size
There still might
be a better
question….
Does entrepreneurship education
make a difference financially?
Comparisons made by the Kauffman
Foundation between graduates of
entrepreneurship programs and nongraduates who started new
ventures…
Entrepreneurship
Graduates
Comparison
Non-graduates
Financial Assets
$278,000
$172,000
What is an entrepreneur?
(5 minutes to decide)
An entrepreneur…
A person who identifies an opportunity and
creates an organization to pursue that
opportunity.
Thomas Edison
Most recall that his tireless
experimentation led to the creation of
the light bulb.
But, he also saw opportunity in urban
electric illumination, forming the
organization that began to realize this
vision. This firm was the forerunner of
General Electric (GE).
Entrepreneurs
• Rollin King & Herb Kelleher
• Recognized an opportunity in short-haul, low cost
airlines
• Mark Zuckerberg, Chris Hughes, Dustin
Moskovitz, & Eduardo Saverin
• Recognized an opportunity in a directory among
Harvard students with photographs and basic
profile information that could be easily shared
• Vincent McMahon
• Recognized an opportunity in promoting wrestling
more as entertainment and theater than sport
Lifestyle Entrepreneurs
• Becki & Mark Huesel
• Recognized an opportunity in designing interiors
for industry and individuals in Oxford & Starkville
• Matt Walls & Chris Knapik
• Recognized an opportunity in novel T-Shirt
designs that reference pop culture
• Cory Geiger (MGT 3323 last Fall)
• Recognized an opportunity in the duck hunting
industry for unique apparel for duck hunters
Snorg Tees
Opportunity: Real or Not Real
• How to flirt
• A marketing expert has a subscription website ($49 per
month) to give advice on how to impress those you are
interested in romantically
• Pedal Pubs
• A mobile bar that holds up to 16 people that is powered by
bicycle pedals
• Bebarang
• The Netflix of baby clothes where mothers can rent the
latest children fashions
• Barrier Bulldozing
• A firm that provides underwater bulldozing support for
coastal and river construction projects
Entrepreneurial Process
Opportunity
Entrepreneur
A person who recognizes an
opportunity and creates an
organization to pursue that
opportunity.
Technical &
managerial
competence
Human &
Organization
financial
capital
Where do ideas come from?
Changing Environmental
Factors
• Economic trends
• Social trends
• Impact the way people live their lives and the products and services
they need
• Products often do more to satisfy a social need than the actual need
the product fills
• Technological advances
• Technologies can satisfy basic or changing human needs
• Once a technology is created, products emerge to advance it
• Political and Regulatory changes
• New laws create opportunities for entrepreneurs
• Changes in government regulations motivate entrepreneurs to
differentiate themselves by exceeding the regulation
• Political change can encourage the emergence of new business ideas
Gaps in the Marketplace
• Large retailers…
• Compete on price and target the
mainstream customer
• May leave gaps in the
marketplace for specific niches
• New business ideas can be
formed by…
• taking an existing product &
targeting a new market or
geographic area
Succeeding in Business is Hard!
What firm is this?
New Ventures
• Four-year survival rate
is…
• 38 percent in the
information sector
• 55 percent in the
education sector
• 55 percent in the health
services sector
Example
Description
Cited as high
performers*
• Voted most influential
business title in the
last 20 years by
Forbes magazine
43
• Focused on
"excellent" companies
that showed high
growth and profitability
• Looked at market
performance, historical
research, & survey of
165 CEOs
• Identified common
characteristics of
companies considered
to be best performing
& most visionary
Where are they now?
54* companies
Highperformers
Don’t
exist
18
Struggling
New Venture Difficulties
Contributing factor examples
66% of new ventures fail
•
Bad Idea
•
Succeed*
34
•
Cash Problems
•
Inexperience or
Incompetence
Fail*
66%
Inability to handle
growth
•
•
•
Lack of upfront analysis of
market demands
No system of evaluating ideas
Failure to secure external
funding
Overly aggressive estimates of
financials leading to shortfalls
Failure to recognize gaps in
knowledge
Capability deficits are not or
insufficiently addressed
No institutionalizing plans to
grow and align resources
requirements
* Success defined through holistic assessment of company performance (non-public companies) or market outperformance (public companies) 6 years after the venture was started
Source: Press clippings
Being an Entrepreneur Involves Risk!
Entrepreneurs’ Challenge
Organization-specific
factors
“80% of explained variance in
performance is due to [organization]specific effects”
“Performance is driven primarily by
environmental effects: being at the
right place at the right time”
What drives organization
performance and
health in the long run
is complex.
Uncertainty & Luck
“Success is a complex system in
which stochastic effects play a large
part”
The answer may not be a
silver bullet, but a
complex combination
of several factors
Global factors
“Macro economic conditions determine
the success of an industrial or
corporate system”
Environmental factors
Source: McGahan & Porter (1997, 2003), Stuckey (2005), Schmalensee & Willig (1989), Rumelt (1991), Hawawini, et. al (2003), Vigurie et.
al (2005)
How can we
minimize risk such
that we have an
opportunity for
success?
Course Outline
• Understanding innovation & opportunity recognition
• Creativity exercises, framing new business opportunities
• Analyzing the feasibility of a new venture
• Initial screening; industry, competitor, &market analysis
• Understanding the key elements of business success
• Financial feasibility, marketing, operations, and locations
• Understanding yourself as an entrepreneur
• Assessment of your entrepreneurial desires and
tendencies
• Conveying the details associated with a new
opportunity
• Presentation of a full feasibility study of a new business
What do you want to
cover?
Mississippi State University
Introduction
Entrepreneurs
Syllabus Review
Administrative Issues
• Materials posted on MISWEB (you can access these
materials now)
• Syllabus, assignments, & tools
• Site location
• http://misweb.cbi.msstate.edu/~COBI/faculty/publicWeb.shtml?dholt|MGT3323
• Grade book will be posted after the drop add date
• Upcoming guest speakers (others are planned through
the term
• Chuck, CJ’s pizza—23 Jan
• Presentation of a project idea
• Kelly Atwood, MSU Career Center—6 Feb (meet in Room 218)
• Presentation of industry and firm research skills that are useful as you
prepare for interviews (and complete your industry and competitor
analysis)
Class Preparation & Notes
• You can best prepare by…
• Reviewing the course schedule
• Readings are outlined on the schedule and additional handouts will
be provided on the days noted
• Reading the assigned pages prior to class
• Readings are the basis of that day’s discussion
• Accessing course slides and materials that are posted on
MISWEB
• A version of slides will be posted the day prior to class (some slides
will include questions that I’d like you to think about; you may be
called upon to answer them)
• Answering & mulling any discussion questions that are
included on the posted slides
Planning Process
Assignments (on MISWEB)
Individual creativity exercise (Bug Report)
Individual entrepreneurial propensity measure
First screen & opportunity analysis (can be done individually or in a
group of no more than 3)
Industry, Competitor, & Target Market Analysis (can be done
individually or in a group of no more than 3)
Financial Feasibility Analysis (can be done individually or in a group of
no more than 3)
--
On-line assessment
8 page worksheet
with comments
20 – 25 page paper
5 page paper
Full Feasibility Study (can be done individually or in a group of no
larger than 3)
50 – 60 page paper
Individual Final Exam (Cumulative exam done individually)
Long answer essay
(expect 5+ pages)
Previous Course Feedback
•
Consider a revision to the attendance policy
•
•
Consider more incremental assignments & exams
•
•
•
•
Eliminated the attendance policy
Included the creativity exercise, first screen
Divided the feasibility study into three pieces (giving you opportunities to improve)
Included a final
Consider self-awareness exercises
•
Included self assessment (due 23 Jan at 3:30 p.m.)
•
•
•
•
Link was forwarded to those enrolled in class by e-mail on 5 Jan
Link is available on the course website
Those completing this by the date and time specified receive 100 (otherwise a 0)
Reconsider group work
•
•
Previous versions required a business plan done in 6-7 person groups (students
found them difficult to manage)
Offered the opportunity to work individually or in smaller (& ideally more
manageable ) groups
40
Grading
Grades
Individual creativity exercise (Bug Report)
5
100 – 90 %
Individual entrepreneurial propensity measure
5
B
89.9 – 80 %
First screen & opportunity analysis (can be done
individually or in a group of no more than 3)
10
C
79.9 – 70 %
20
D
69.9 – 60 %
Industry, Competitor, & Target Market Analysis
(can be done individually or in a group of no more
than 3)
F
Less than 60 %
Financial Feasibility Analysis (can be done
individually or in a group of no more than 3)
10
Full Feasibility Study (can be done individually or
in a group of no larger than 3)
30
Individual Final Exam (Cumulative exam done
individually)
20
A
Grades will be rounded to the
nearest tenth of a point (i.e.,
0.1)
Danny’s
Assignment Idiosyncrasies
• Be on time with your assignments
• Late assignments are not accepted
• Any moment beyond the time specified for an assignment to be
turned in is late
• Follow the instructions
• While entrepreneurs confront much ambiguity, I try to
eliminate as much as I can be giving detailed assignment
directions
• Waiting to ask clarifying questions after something is to be
submitted is too late
• Don’t be afraid to ask me for help
• Submit drafts of things to me for feedback in advance of due
dates—I’ll happily provide you with feedback (those who get
this feedback tend to do better)
Academic Standards
“As a Mississippi State University student I will conduct
myself with honor and integrity at all times. I will not
lie, cheat, or steal, nor will I accept the actions of
those who do.”
• If you chose to work with a group, collaborate!
• Self manage your group
• Look for feedback from others but don’t submit their work
Other Expectations
•
Actively participate in class with questions & comments anytime
•
•
Respect & assist your classmates
•
•
Come prepared
Take responsibility for administrative issues (i.e., post & exchange material
elsewhere if you have problems)
Provide me & your classmates frank & candid feedback
•
Share any & all thoughts you have about the class, assignments, & me
• Improvements can’t be made if you don’t speak up
•
Challenge yourself
•
•
•
Read the assignment information & adhere to the guidelines
Don’t turn in “close enough” work—strive for perfection on assignments &
exams (we may never get there, I know I don’t, but we should always try)
Grading issues
•
Understand the standards for performance—I will hold you to them
•
•
Late assignments are not accepted
Have fun—if you’re not, let me know!
What expectations do you have
for me?
Other Danny “quirks”
47
Other Danny “quirks”
• E-mail
• Don’t e-mail me & expect an immediate response
• Come see me or call if you have “urgent” questions (I check email in the morning & evening)
• Cell phones & electronic devices—turn them off,
it’s a professional courtesy (I don’t bring my
phone to class)
• If I note you are texting or using a laptop when it is
inappropriate, I will ask you to leave
48
Things…
• For you to do before we meet next week…
• Register for this course in MISWEB
• Read Chapter 1 in the book
• Download the first assignment from MISWEB
• For me to do before we meet next week…
• Finish posting documents on MISWEB (putting up slides,
assignment sheets, etc.)
• Build the on-line grade book
Questions, Comments, or
Criticisms?
50
Mississippi State University
Engaged
Collaborative
Have Fun with Learning