ENTREPRENEURSHIP
Introduction
The entrepreneur has the ability to see new business opportunities where others have failed and then develop a plan required to exploit them (Atherton, 2004). Goss (2005), pointed out that Michael Schumpeter described entrepreneurs as persons with the aim of undertaking business innovations and proactive in nature to improve production. Thus, entrepreneurs usually pursue entrepreneurial ventures via innovative and creative strategies. The venture in the case study is Avecto Limited is a Software security company that was founded in 2008.
Driving Forces in a New Venture
A new venture like Avecto is driven by the need to address a gap in the market for usable security. Thus, the need to develop new products and solve current problems drives entrepreneurs to invest in the new venture. In addition, innovativeness, risk-taking, and proactiveness compel entrepreneurs to develop new ventures in spite of the risks involved. Thus, innovativeness and creativity in order to remain competitive are needed to make changes in its line of product (Schillo, 2011). As entrepreneurs, innovativeness is necessary for business because it allows effective use of scarce resources. In addition, it allows a firm to capitalize on opportunities in the market and provide innovative products, thus replacing outdated ones. Demand for new products, which is influenced by the marketing orientation, also drives entrepreneurs to invest in new ventures. For instance, Avecto was driven by the demand to prevent cyber security threats which businesses face in daily operations.
How successful entrepreneurs and investors find profitable and durable opportunities
Successful entrepreneurs and investors create, find, and differentiate profitable and durable opportunities by marketing orientation. For instance, Market orientation entails generation, dissemination, and response to marketing data related to current as well as future customer needs (Cross, 2014). Thus, the investors and entrepreneurs employ their imaginations to imagine and identify new possibilities which can be profitable and fulfilling. In addition, they have the ability to see an innovative idea that can be developed into a high-growth company. Successful entrepreneurs and investors have the inner ability to know that a good idea is not automatically a good opportunity (Schillo, 2011). Even with scarce resources, Successful entrepreneurs and investors devise imaginatively creative, innovative, and stingy approaches to pool and have control of resources. After they have identified the opportunity, Successful entrepreneurs and investors approach venture capitalists for capital and pitch their ideas. In addition, they think cash last, and this form of business approach encourages a discipline of leanness and the principle “conserve your equity” (CYE) in order to maximize share value. Entrepreneurs find a good opportunity but evaluate the opportunities and risks involved. Identifying problems and risks prior to the launch reduces the negative effect that can be felt on the business.
Financial and Non-Financial resources
New ventures must be proactive, risk-taking, and innovative in nature. To enhance innovation, the firms require both financial and non-financial resources required for start-up support and operations of the business. The non-financial resources required for new startups include educational resources, physical resources, and emotional resources (Henderson, 2014). Physical resources entail locations and physical addresses of organizations (Henderson, 2014). Financial resources are in form of business funding. For instance, innovative firms such as Avecto Limited pursue technology as well as financial-related entrepreneurship activities in order to create new products (Littunen, 2000). Marketing orientation is also needed to gather market information and data rewired for business idea development and expansion.
New Venture Evaluation Process
Opportunities and proposals of new ventures are screened and evaluated to determine their attractiveness and level of risk. Zimmerer and Glen (1996) pointed out that “In order to determine if the new venture has the potential to become a viable business opportunity, an entrepreneur should be willing to undertake a vigorous opportunity evaluation process” (p.1). The screening and evaluation process requires entrepreneurs to answer a number of questions to provide information on the potentiality of the business idea to become a service or a product after which a venture can be developed. The higher the risks associated with the idea, the higher the returns. Nonetheless, when entrepreneurs fail to evaluate the viability and attractiveness of the venture during the initial stages, time and money may be lost when it has already been started. Entrepreneurs relate to questions associated with added value, competition, the substitution of the products, and what consumers really want in the market (Zimmerer & Glen, 1996). Evaluation and screening of the idea determine the attractiveness of the business proposals and such information is required to complete the business plan. Entrepreneurs usually take realistic views of the realities and vulnerabilities and the compelling strengths and weaknesses of the opportunity.
Venture capitalists and investors provide the money required for start-ups and new ventures which are perceived to have long-term growth potential. This is needed because most of the start-ups lack access to capital markets. Notably, it requires the investor to take high risks, but the returns of the business have to be above average. Because of the riskiness associated with new ventures, venture capitalists may also provide the technical and managerial expertise needed to run the business.
Hurdles and Success of a Start-up
The common barriers faced by startups include the inability to scale up sales performance, lack of teamwork, and inadequate capital required for the business. In addition, poor decision-making processes as a result of inadequate management and business skills are linked to business failure. In some cases, poor screening and evaluation of the idea because it is implemented it is linked to business failure in terms of waste of money and time. To be successful entrepreneurs, mentors and managers with skills and expertise are required. Patel (2013) pointed out that when entrepreneurs are motivated by others, they can implement the innovation or idea effectively. In addition, mentors provide non-financial support as well based on their past experiences to drive new, unanticipated, positive changes during the early stages of the venture. Coaching, connections, and expert advice provided by mentors as well as experts provide the support needed for business success. It should thus be classified as highly valued in terms of time and resources to enable the venture’s success.
References List
Atherton, A. (2004) Unbundling enterprise and entrepreneurship-From perceptions and preconceptions to concept and practice. Entrepreneurship and Innovation, PP. 121-127.
Cross, V. (2014) Examples of Developing Market Orientation. [Online] Available At: < http://smallbusiness.chron.com/examples-developing-market-orientation-13126.html > (Accessed 17 Dec 2016).
Goss, D. (2005) Schumpeter's Legacy? Interaction and Emotions in the Sociology of Entrepreneurship. Entrepreneurship Theory and Practice, pp. 205-218.
Henderson, K. J (2014) 5 Resources You Need to Succeed to Start a Business [Online] Available at: < http://smallbusiness.chron.com/5-resources-need-succeed-start-business-23.html> (Accessed 17 Dec 2016).
Littunen, H. (2000) Entrepreneurship and the characteristics of the entrepreneurial personality. International Journal of Entrepreneurial Behaviour and Research, vol. 6, no. 6, pp. 295-309.
Patel, P (2013) Early-Stage Enterprises Need More Than Money [Online] Available at: <https://ssir.org/articles/entry/early_stage_enterprises_need_more_than_money> (Accessed 17 Dec 2016).
Schillo, S. (2011). Entrepreneurial Orientation and Company Performance: Can the Academic Literature Guide Managers? Technology Innovation Management Review, pp. 20-25.
Zimmerer, T. W., & Glen, R (1996) New Venture Assessment Techniques: Tools For Improving Success. [Online] Available at: <http://www.freepatentsonline.com/article/Entrepreneurial-Executive/209042451.html> (Accessed 17 Dec 2016).
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