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The Guide to Entrepreneurship by Michael Szycher Ph.D

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57
Chapter 4
The Entrepreneurial
Environment
4.1 Introduction
Open the curtains and behind any major innovation and you will
nd an entrepreneur.
An entrepreneur is one who envisions, organizes, directs, funds, and
manages a new business. A successful business is one that will build lasting
value for the founder as well as for all stakeholders. Figure4.1 presents, in
graphical format, what the entrepreneurial animal looks like.
As the gure shows, many skills have been identied as crucial to
entrepreneurs, including initiative, problem solving, perseverance, inde-
pendent thinking, stamina, commitment, self-condence, and, above
all, an instinct for risk taking—not gambling, but accepting managing
risks. The entrepreneurial environment can be visualized as shown in
Figure4.2.
Lifelong employment in a large corporation is no longer a preferred
objective of many college graduates, as the corporate world is no longer
perceived as the ultimate expression of individual success. The “self-made”
person has a unique, romantic, and individualistic appeal, particularly if
the result is gaining personal wealth while contributing to the nations
overall economic well-being. Becoming nancially independent through
individual effort—entrepreneurship—is the highest expression of the
American dream.
58The Guide to Entrepreneurship: How to Create Wealth for Your Company
Some individuals appear “entrepreneurial” from a tender age, for exam-
ple, selling lemonade, cutting grass, or selling cupcakes. Once an inher-
ent entrepreneurial talent has been discovered, most learned entrepreneurs
could tip the balance in their favor by following and studying the behavior
patterns of experienced entrepreneurs. This chapter will allow you to closely
Entrepreneurial Balance
Managing risks Gambling
Figure 4.2 Entrepreneurial balanceSuccessful entrepreneurs are risk managers, not
gamblers.
Brain: learn and adapt
e entrepreneur at a glance
Heart: stamina
Guts: determination, ambition
Elbow (grease): willing to work
Feet: change on a dime
Quick reaction
Eyes: vision
Shoulder: carry responsibility
Skin (tough hide):
Accept criticism
Backbone: power, influence
Stomach: fire in the belly
Mouth: persuasive speaker
Nails (tough as):
Indomitable, valiant
Figure 4.1 The entrepreneur at a glance—Skills crucial to entrepreneurs.
The Entrepreneurial Environment59
analyze the secrets behind successful founder/entrepreneurs and to improve
your chances of success.
4.2 Leadership Qualities
“Startups are started by leaders.
Leadership can be dened as knowledge and skills that enable a person
to use reason, power, and inuence to persuade others to follow a desired
course of action. Murphy
1
discovered that leadership can be dened and
measured as a form of intelligence, exemplied by eight specic roles shown
in Table4.1.
Visually, some of the most crucial leadership skills found in founder/lead-
ers are depicted in Figure4.3.
4.2.1 Leaders vs. Managers
The major difference between a leader and a manager is behavior patterns.
The ability to raise capital, inspire condence, and nurture the edgling
business is critical to leader-entrepreneurs, not to managers. The differences
between leaders and managers are greatly magnied in a startup organiza-
tion, as noted in Table4.2.
Thus, according to our denition, Lee Iacocca (Ford Mustang), Carly
Fiorina (Hewlett-Packard), and Jack Welch (General Electric) are not
Table4.1 Murphy’s Eight Leadership Roles
1. Select the right people.
2. Connect them to the right cause.
3. Solve problems that arise.
4. Evaluate progress toward objectives.
5. Negotiate resolutions to conicts.
6. Heal the wounds inicted by change.
7. Protect their cultures from the perils of crisis.
8. Synergize all stakeholders to achieve improvements together.
60The Guide to Entrepreneurship: How to Create Wealth for Your Company
entrepreneurs. These individuals did not found new rms with innova-
tions but instead created new wealth for their existing shareholders. In
contrast, business leaders such as Bill Gates (Microsoft), Frederick W. Smith
(FedEx), Sam Walton (Wal-Mart), Arthur Blank and Bernie Marcus (Home
Depot), Howard Schultz (Starbucks), Steve Jobs (Apple Computers), Andrew
Carnegie (US Steel), and Michael Dell (Dell Computer) were entrepreneurs.
Leadership Skills
Founder/Leader
Manager
Problem
solver
Communicator
in chief
Power
distributor
Team builder
Strategic
planner
Fund-raiser
extraordinaire
Innovator
Figure 4.3 Leadership skills—The eight leadership skills crucial to founder/leaders.
Table4.2 Differences between Leaders and Managers in Startups
“Managing is doing things right; leadership is doing the right things. —Warren
Bennis and Peter Drucker
Leaders Managers (Traditional Roles)
Heroic gures Planning and budgeting
Strategist-in-chief; visionaries Organizers (coping with complexity)
Leading change and managing chaos Directors (organizing and stafng)
Problem solvers Controllers (monitoring activities)
Great negotiators
Motivators, inuencers, innovators
Corporate spokespersons
Resource nders

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