Lecture Notes For
Entrepreneurship The Practice and Mindset 3th Edition by Heidi M. Neck (Author),
Christopher P. Neck (Author), Emma L. Murray
Chapter 1-16
Lecture Notes
Chapter 1: Practicing Entrepreneurship
Learning Objectives
1-1. Describe the six most important features of modern entrepreneurship.
1-2. Explore various pathways to participating in entrepreneurship.
1-3. Distinguish between entrepreneurship as a method and as a process.
1-4. Illustrate the key components of the Entrepreneurship Method.
1-5. Explore the role of deliberate practice in developing entrepreneurial expertise
and recognize how this book supports such a practice.
Annotated Chapter Outline
I. Introduction
A. Entrepreneurship: A way of thinking, acting, and being that combines the ability
to find or create new opportunities with the courage to act on them.
B. Entrepreneurs have consistently changed the world despite the obstacles of their
time.
II. Entrepreneurship May Be Different From What You Think
A. Startup: As defined by Steve Blank, a temporary organization in search of a
scalable business model.
B. Entrepreneur—someone who begins a startup/creates a business based on the
validity of an idea/business model.
C. Features of Modern Entrepreneurs
i. Feature 1: Entrepreneurship is a Method That Requires Practice
a. Process view of entrepreneurship—starting something new is a
linear, predictable process.
b. Entrepreneurship is not predictable and cannot be adequately
taught as a process.
c. Method view of entrepreneurship—skillsets with an
entrepreneurial mindset constitute a toolkit for entrepreneurial
action.
ii. Feature 2: Entrepreneurs Think Differently
a. Serial entrepreneurs: People who start several businesses,
either simultaneously or consecutively.
, b. Effectuation: As defined by Saras D. Sarasvathy, the idea that
the future is unpredictable yet controllable through human action.
1. Effectuation theory: a theory that describes how
entrepreneurs think in order to start new ventures; based
on the idea that the future is mostly unpredictable yet
controllable through human action.
c. Entrepreneurs create and obtain control by:
1. Taking actions to learn.
2. Collecting new and relevant information.
3. Reducing risk and uncertainty.
4. Using resources that are available.
d. Stakeholders: Individuals and groups who are impacted by the
performance of a business.
iii. Feature 3: Entrepreneurs Act More Than Plan
a. Evidence-based entrepreneurship: Planning that aligns with the
scientific method of collecting data and testing ideas to validate (or
not) that an opportunity is worth pursuing.
b. No evidence to suggest entrepreneurs take more risks than
anyone else.
c. Risks are personal and relative.
d. Entrepreneurship should never be an all-or-nothing decision.
iv. Feature 4: Profit is Not the Only Motive
a. The highest performing companies do good while making money.
b. Americans are almost equally motivated by wealth and impact.
c. Americans are less motivated to continue a family tradition.
v. Feature 5: Entrepreneurs Collaborate More Than They Compete
a. Building strong connections with others is key to business
success.
b. Best networks provide access to external information, financing,
emotional support, and expertise, and allow for mutual learning
and information exchange.
c. Network building is dynamic, and collaboration and sharing are
fundamental.
d. Having business partners/collaborators can reduce loneliness and
help new entrepreneurs develop their mindset.
vi. Feature 6: Entrepreneurship Is a Life Skill
a. Entrepreneurship education provides a set of skills that can be
applied to many other fields and organizations.
b. Hiring managers want employees with an entrepreneurial skillset
and mindset.
c. Thinking and acting more entrepreneurially helps one get
comfortable with uncertainty, accept change, and look at the world
through a solution-driven, opportunity lens.
II. Beyond the Startup: Ways to Access Entrepreneurship
,A. Corporate Entrepreneurship
i. Corporate entrepreneurship: A process wherein employees create new
products, ventures, processes, or renewal within large corporations.
a. Identify opportunities.
b. Build teams.
c. Create something of value to enhance competition and
profitability.
ii. Corporate venturing: A classification of corporate unit that can invest
directly in external startups and sometimes internal startups.
B. Entrepreneurship Inside
i. Entrepreneurs inside (intrapreneurs): Employees who think and act
entrepreneurially within any type of organizations.
ii. Feel like owners of their work.
iii. Embrace experimentation.
iv. Different level of pride/engagement than an average employee.
v. Have the capacity/desire to change organizations from within.
C. Franchising
i. Franchising: A method of distributing products or services involving a
franchisor (the founder of the original business; the creator of the brand
name and business operating system) and franchisee (the operator that
buys the license to do business using the company name and operating
system).
ii. Can help entrepreneurs get a head start in launching their own business.
iii. Often referred to as a ―turnkey operation.‖
iv. Royalties: A percentage of monthly sales revenue, usually 4–12%, that
franchisees pay the franchisor.
D. Buying a Small Business
i. Entrepreneur buys out the existing owner and takes over operations.
ii. Thousands of businesses are for sale, but only 30–40% actually sell.
E. Social Entrepreneurship
i. Social entrepreneurship: The process of sourcing innovative solutions to
social and environmental problems.
ii. Sustainable Development Goals (SDGs): A blueprint developed by the
United Nations for achieving a thriving, inclusive, and sustainable society by
2030 (e.g., ending poverty, combating climate change, improving health
care).
iii. Benefit corporation (B Corp): A form of organization certified by the
nonprofit B Lab that ensures that strict standards of social and
environmental performance, accountability, and transparency are met.
F. Family Enterprising
i. Family enterprise: A business that is owned and managed by one or more
family members beyond the founding generation.
ii. Each generation has an opportunity to bring the organization forward.
G. Serial Entrepreneurship
, i. Serial (habitual) entrepreneurs: People who start several businesses,
whether simultaneously or one after another.
ii. Not satisfied with just focusing on one business.
iii. Constantly look out for the next big thing/explore ways to implement diverse
ideas.
III. Entrepreneurship Is A Method That Requires Entrepreneurial Thinking
A. Traditionally, entrepreneurship has been viewed as a process of sequential steps
that lead to a successful business.
B. However, entrepreneurship is nonlinear, unpredictable, ill-defined, unstructured,
and complex.
C. 20% of startups fail within the first year; 50% fail by the end of the fifth year.
D. Entrepreneurship as method:
i. Approach to doing something with no guarantee of a particular outcome.
ii. Can guide you through chaos and increase your chances of success.
iii. Gets easier and more useful with practice.
E. Managerial Versus Entrepreneurial Thinking
i. Entrepreneurial ventures are not smaller versions of large corporations;
managers lead corporations (process) but entrepreneurs lead new ventures
(method).
ii. More uncertainty and risk and a lot less information and data in
entrepreneurship.
iii. We thought more entrepreneurially when we were babies—everything was a
mystery and learned by trial and error.
iv. Traditional education—the need to find the correct answer, measurement,
and assessment—inhibits entrepreneurship.
v. New ventures need entrepreneurs and managers to function; need to know
when each role is appropriate.
vi. In the beginning, you need to be thinking like an entrepreneur:
a. Fail in order to make progress.
b. Experiment with new ideas.
c. Collaborate.
d. Share ideas.
e. Recognize uncharted territory.
f. Recognize the learning process along the way.
IV. The Entrepreneurship Method Described
A. Method of entrepreneurship in the text is based on Babson‘s Entrepreneurial
Thought & Action® (ET&A), which is grounded in effectuation theory.
i. Smart action over planning.
ii. Moving quickly from whiteboard to real world.
iii. Can be learned, repeated, and practiced.
iv. Assurances:
a. You will act sooner, even when you don‘t know exactly what to do.
b. Those things you can do, you will, and those things you can‘t, you
will try.
Entrepreneurship The Practice and Mindset 3th Edition by Heidi M. Neck (Author),
Christopher P. Neck (Author), Emma L. Murray
Chapter 1-16
Lecture Notes
Chapter 1: Practicing Entrepreneurship
Learning Objectives
1-1. Describe the six most important features of modern entrepreneurship.
1-2. Explore various pathways to participating in entrepreneurship.
1-3. Distinguish between entrepreneurship as a method and as a process.
1-4. Illustrate the key components of the Entrepreneurship Method.
1-5. Explore the role of deliberate practice in developing entrepreneurial expertise
and recognize how this book supports such a practice.
Annotated Chapter Outline
I. Introduction
A. Entrepreneurship: A way of thinking, acting, and being that combines the ability
to find or create new opportunities with the courage to act on them.
B. Entrepreneurs have consistently changed the world despite the obstacles of their
time.
II. Entrepreneurship May Be Different From What You Think
A. Startup: As defined by Steve Blank, a temporary organization in search of a
scalable business model.
B. Entrepreneur—someone who begins a startup/creates a business based on the
validity of an idea/business model.
C. Features of Modern Entrepreneurs
i. Feature 1: Entrepreneurship is a Method That Requires Practice
a. Process view of entrepreneurship—starting something new is a
linear, predictable process.
b. Entrepreneurship is not predictable and cannot be adequately
taught as a process.
c. Method view of entrepreneurship—skillsets with an
entrepreneurial mindset constitute a toolkit for entrepreneurial
action.
ii. Feature 2: Entrepreneurs Think Differently
a. Serial entrepreneurs: People who start several businesses,
either simultaneously or consecutively.
, b. Effectuation: As defined by Saras D. Sarasvathy, the idea that
the future is unpredictable yet controllable through human action.
1. Effectuation theory: a theory that describes how
entrepreneurs think in order to start new ventures; based
on the idea that the future is mostly unpredictable yet
controllable through human action.
c. Entrepreneurs create and obtain control by:
1. Taking actions to learn.
2. Collecting new and relevant information.
3. Reducing risk and uncertainty.
4. Using resources that are available.
d. Stakeholders: Individuals and groups who are impacted by the
performance of a business.
iii. Feature 3: Entrepreneurs Act More Than Plan
a. Evidence-based entrepreneurship: Planning that aligns with the
scientific method of collecting data and testing ideas to validate (or
not) that an opportunity is worth pursuing.
b. No evidence to suggest entrepreneurs take more risks than
anyone else.
c. Risks are personal and relative.
d. Entrepreneurship should never be an all-or-nothing decision.
iv. Feature 4: Profit is Not the Only Motive
a. The highest performing companies do good while making money.
b. Americans are almost equally motivated by wealth and impact.
c. Americans are less motivated to continue a family tradition.
v. Feature 5: Entrepreneurs Collaborate More Than They Compete
a. Building strong connections with others is key to business
success.
b. Best networks provide access to external information, financing,
emotional support, and expertise, and allow for mutual learning
and information exchange.
c. Network building is dynamic, and collaboration and sharing are
fundamental.
d. Having business partners/collaborators can reduce loneliness and
help new entrepreneurs develop their mindset.
vi. Feature 6: Entrepreneurship Is a Life Skill
a. Entrepreneurship education provides a set of skills that can be
applied to many other fields and organizations.
b. Hiring managers want employees with an entrepreneurial skillset
and mindset.
c. Thinking and acting more entrepreneurially helps one get
comfortable with uncertainty, accept change, and look at the world
through a solution-driven, opportunity lens.
II. Beyond the Startup: Ways to Access Entrepreneurship
,A. Corporate Entrepreneurship
i. Corporate entrepreneurship: A process wherein employees create new
products, ventures, processes, or renewal within large corporations.
a. Identify opportunities.
b. Build teams.
c. Create something of value to enhance competition and
profitability.
ii. Corporate venturing: A classification of corporate unit that can invest
directly in external startups and sometimes internal startups.
B. Entrepreneurship Inside
i. Entrepreneurs inside (intrapreneurs): Employees who think and act
entrepreneurially within any type of organizations.
ii. Feel like owners of their work.
iii. Embrace experimentation.
iv. Different level of pride/engagement than an average employee.
v. Have the capacity/desire to change organizations from within.
C. Franchising
i. Franchising: A method of distributing products or services involving a
franchisor (the founder of the original business; the creator of the brand
name and business operating system) and franchisee (the operator that
buys the license to do business using the company name and operating
system).
ii. Can help entrepreneurs get a head start in launching their own business.
iii. Often referred to as a ―turnkey operation.‖
iv. Royalties: A percentage of monthly sales revenue, usually 4–12%, that
franchisees pay the franchisor.
D. Buying a Small Business
i. Entrepreneur buys out the existing owner and takes over operations.
ii. Thousands of businesses are for sale, but only 30–40% actually sell.
E. Social Entrepreneurship
i. Social entrepreneurship: The process of sourcing innovative solutions to
social and environmental problems.
ii. Sustainable Development Goals (SDGs): A blueprint developed by the
United Nations for achieving a thriving, inclusive, and sustainable society by
2030 (e.g., ending poverty, combating climate change, improving health
care).
iii. Benefit corporation (B Corp): A form of organization certified by the
nonprofit B Lab that ensures that strict standards of social and
environmental performance, accountability, and transparency are met.
F. Family Enterprising
i. Family enterprise: A business that is owned and managed by one or more
family members beyond the founding generation.
ii. Each generation has an opportunity to bring the organization forward.
G. Serial Entrepreneurship
, i. Serial (habitual) entrepreneurs: People who start several businesses,
whether simultaneously or one after another.
ii. Not satisfied with just focusing on one business.
iii. Constantly look out for the next big thing/explore ways to implement diverse
ideas.
III. Entrepreneurship Is A Method That Requires Entrepreneurial Thinking
A. Traditionally, entrepreneurship has been viewed as a process of sequential steps
that lead to a successful business.
B. However, entrepreneurship is nonlinear, unpredictable, ill-defined, unstructured,
and complex.
C. 20% of startups fail within the first year; 50% fail by the end of the fifth year.
D. Entrepreneurship as method:
i. Approach to doing something with no guarantee of a particular outcome.
ii. Can guide you through chaos and increase your chances of success.
iii. Gets easier and more useful with practice.
E. Managerial Versus Entrepreneurial Thinking
i. Entrepreneurial ventures are not smaller versions of large corporations;
managers lead corporations (process) but entrepreneurs lead new ventures
(method).
ii. More uncertainty and risk and a lot less information and data in
entrepreneurship.
iii. We thought more entrepreneurially when we were babies—everything was a
mystery and learned by trial and error.
iv. Traditional education—the need to find the correct answer, measurement,
and assessment—inhibits entrepreneurship.
v. New ventures need entrepreneurs and managers to function; need to know
when each role is appropriate.
vi. In the beginning, you need to be thinking like an entrepreneur:
a. Fail in order to make progress.
b. Experiment with new ideas.
c. Collaborate.
d. Share ideas.
e. Recognize uncharted territory.
f. Recognize the learning process along the way.
IV. The Entrepreneurship Method Described
A. Method of entrepreneurship in the text is based on Babson‘s Entrepreneurial
Thought & Action® (ET&A), which is grounded in effectuation theory.
i. Smart action over planning.
ii. Moving quickly from whiteboard to real world.
iii. Can be learned, repeated, and practiced.
iv. Assurances:
a. You will act sooner, even when you don‘t know exactly what to do.
b. Those things you can do, you will, and those things you can‘t, you
will try.
