An entrepreneur is someone who perceives an opportunity and
creates an organization to pursue it. The entrepreneurial process includes all
the functions, activities, and actions that are part of perceiving opportunities
and creating organizations to pursue them.
But is the birth of a new enterprise
just happenstance and its subsequent success or failure a chance process? Or
can the art and science of entrepreneurship be taught? Clearly, professors and
their students believe that it can be taught and learned because
entrepreneurship is one of the fastest growing new fields of study in American
higher education. A study by the Kauffman Foundation found that 61% of U.S.
colleges and universities have at least one course in entrepreneurship.1 It is
possible to study entrepreneurship in certificate, associates, bachelors,
masters, and PhD programs.
That transformation in higher educationitself a wonderful
example of entrepreneurial changehas come about because a whole body of
knowledge about entrepreneurship has developed during the past two decades or
so. The process of creating a new business is well understood. Yes,
entrepreneurship can be taught. No one is guaranteed to become a Bill Gates or
a Donna Karan, any more than a physics professor can guarantee to produce an
Albert Einstein or a tennis coach can guarantee a Serena Williams. But students
with the aptitude to start a business can become better entrepreneurs.
Critical Factors for Starting a New Enterprise
We will begin by examining the entrepreneurial process (see
Figure 2.1). These are the factorspersonal, sociological, organizational, and
environmentalthat give birth to a new enterprise and influence how it develops
from an idea to a viable enterprise. A person gets an idea for a new business
through either a deliberate search or a chance encounter. Whether he or she
decides to pursue that idea depends on factors such as alternative career
prospects, family, friends, role models, the state of the economy, and the
availability of resources.
Origins of Home Depot
Bernie Marcus was president of the now-defunct Handy Dan
home improvement chain, based in California, when he and Arthur Blank were
abruptly fired by new management. That day and the months that followed were
the most pivotal period in his career, he says. I
was 49 years old at the time and I was pretty devastated by
being fired. Still, I think its a question of believing in yourself. Soon
after, we [Blank and Marcus] started to realize that this was our opportunity
to start over, says Marcus.
Marcus and Blank then happened upon a 120,000- square-foot
store called Homeco, operating in Long Beach, California. The two instantly
realized that the conceptan oversized store packed with merchan- dise tagged
with low priceshad a magical quality. They wanted to buy the business, but it
was essentially bankrupt. Marcus and Blank talked Homeco owner Pat
Farah into joining them in Atlanta, and the trio, along with
Ron Brill, began sketching the blueprint for Home Depot.3
There is almost always a triggering event that gives birth
to a new organization. Perhaps the entrepreneur has no better career prospects.
For example, Melanie Stevens was a high school dropout who, after working a
number of minor jobs, had run out of career options. She decided that making
canvas bags in her own tiny business was better than earning low wages working
for someone else. Within a few years, she had built a chain of retail stores
throughout Canada.
Sometimes the person has been passed over for a promotion or
even laid off or fired. Howard Rose had been laid off four times as a result of
mergers and consolidations in the pharmaceutical industry, and he had had
enough of it. So he started his own drug packaging business, Waverly
Pharmaceutical. Tim Waterstone founded Waterstones bookstores after he was
fired by W. H. Smith. Ann Gloag quit her nursing job and used her bus-driver
fathers $40,000 severance pay to set up Stagecoach bus company with her
brother, exploiting legislation deregulating the United Kingdoms bus industry.
Jordan Rubin was debilitated by Crohns disease when he invented a diet
supplement that restored his health; he founded a company, Garden of Life, to
sell that diet. Noreen Kenny was working for a semiconductor company and could
not find a supplier to do precision mechanical work, so she launched her own
company, Evolve Manufacturing Technologies, to fill that void. The Baby
Einstein Company was started by Julie Aigner-Clark when she discovered that there
were no age- appropriate products available to help her share her love of art,
classical music, language, and poetry with her newborn daughter. Jim Poss,
while walking down a Boston street, observed a conceptan oversized store
packed with merchan- dise tagged with low priceshad a magical quality. They
wanted to buy the business, but it was essentially bankrupt. Marcus and Blank
talked Homeco owner Pat
Farah into joining them in Atlanta, and the trio, along with
Ron Brill, began sketching the blueprint for Home Depot.3
There is almost always a triggering event that gives birth
to a new organization. Perhaps the entrepreneur has no better career prospects.
For example, Melanie Stevens was a high school dropout who, after working a
number of minor jobs, had run out of career options. She decided that making
canvas bags in her own tiny business was better than earning low wages working
for someone else. Within a few years, she had built a chain of retail stores
throughout Canada.
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