Video Case 5.3: Seventh Generation Cleans Up with Consumer Products

www.downloadslide.net



It’s true that Seventh Generation is now a large enough

company that Hollender can speak with a voice heard by

media, legislators, and the general public. But it wasn’t

always this way. “We started in 1988 selling energy products like compact fluorescent light bulbs (CFLs) that cost

about $28 a piece,” recalls Hollender. His company operated out of a single room in Vermont with half a dozen

employees. At first, most consumers were reluctant to pay

the high price for CFLs or the firm’s organic bedding and

cleaning products. But Hollender and his staff remained

committed. “We basically sold products we needed to live

a more responsible, natural lifestyle,” explains Hollender.

Despite the company’s small size, word about its

fresh ideas in household cleaning and energy use spread

quickly, despite the fact that many people thought Seventh

Generation was a nonprofit organization. “We grew a

lot the first three years,” says Hollender. “We went from

$100,000 to $1 million to $8 million in sales—then we

crashed, we hit a wall.” Seventh Generation experienced

the growing pains that nearly every small business goes

through. Hollender admits that the most difficult aspect

of growth was realizing it had happened too fast. He cut

his own salary, but the decision that caused Hollender the

most pain was the layoffs necessary to keep the firm running. “Letting someone go because we had failed to be

financially viable enough to employ them, that’s my failing,” he asserts. “Letting people go has to be the absolute

last resort.”

But the firm regained its balance and began to grow

again with a new sense of purpose. Recently, Seventh

Generation is nearing $200 million in sales, with its

laundry detergent and diapers as its top-selling products.

This figure that allows the company to hire experts in

research and development, build stronger relationships

with suppliers and customers, engage in business practices

that promote sustainability, and market products that

fulfill its promise to reduce human impact on the natural

environment. “Growth brings credibility,” observes Dave

Rappaport, Seventh Generation’s director of corporate

consciousness.

Hollender agrees. “Our size allows a platform to

influence the way business is done in America,” he comments. Hollender, who turned the job of CEO over to



Chuck Maniscalco, now uses his clout to spend more time

on not-for-profit environmental initiatives such as the

Sustainability Institute.

In addition, Seventh Generation has entered into a

strategic partnership with retail giant Walmart to offer

environmentally friendly products at more than 1,500 of

its stores nationwide as well as on Walmart.com. As part

of the alliance, Walmart stores will now carry a range of

Seventh Generation’s cleaning products, including its bestselling laundry detergent, dish soap, and cleaning spray.

An expanded array of products, including baby diapers

and wipes, are offered on Walmart.com. CEO Maniscalco

is enthusiastic about the partnership. “Seventh Generation

and Walmart are committed to helping people learn about

natural alternatives and ways to protect themselves and

their families,” he remarked recently.

Jeffrey Hollender notes that Seventh Generation’s

work is far from finished. “We need to become a business

that is all good rather than less bad,” he states. When the

company reaches that point, he predicts, its growth could

have no limits.



Questions for Critical Thinking

1. Describe specific contributions that you believe

Seventh Generation makes to the economy.

2. Given the high failure rate of small businesses,

why do you think Seventh Generation has

survived?

3. Seventh Generation is a privately held company. Create a chart showing possible benefits

and pitfalls for the company if its management

decided to sell stock to the general public.

4. Seventh Generation has entered into a strategic

partnership with Walmart. Do you think this

partnership will be a successful match for both

parties? Why or why not?

Sources: Company Web site, http://www.seventhgeneration.com,

accessed March 6, 2012; Ronnie Ribitzky, “7 Facts About Seventh

Generation,” Portfolio.com, http://www.portfolio.com, accessed March

6, 2012; “Seventh Generation and Walmart Announce Strategic

Partnership,” MarketWire, July 26, 2010, http://www.marketwire.com;

Danielle Sacks, “Jeffrey Hollender: Seventh Generation, Triple Bottom Line

Entrepreneur,” Fast Company.com, February 2, 2010, http://fastcompany.com.



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Learning Objectives

1 Define what is an entrepreneur.

2 Identify the different categories of entrepreneurs.



Chapter



6



3 Explain why people choose entrepreneurship as a career path.

4 Discuss the environment for entrepreneurs.

5 Identify the characteristics of entrepreneurs.

6 Summarize the process of starting a new venture.

7 Explain intrapreneurship.



Juanmonino/iStockphoto



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The Marketing Zen Group:

From $1,500 to Millions in Five Years



“Y



oung entrepreneurs have to create their own opportunities. This economy needs fresh blood and bold new ideas.”

That forthright attitude is what took The Marketing Zen Group,

Shama Kabani’s entrepreneurial Web marketing firm, from a

one-person start-up in 2009 to a 30-person global firm in two

short years.

Kabani, who founded the Dallas-based company at age 24 with

$1,500 of her own money, saw an opportunity while still in

college to help firms struggling to get up to speed with online

marketing and social media. Their needs and Kabani’s interests

were a match, so she quickly adapted her original idea, which

was to start a general consulting firm, and shifted to building a

company that takes over Web marketing services for clients.

For clients like Arthur Murray Dance Studios and k9cuisine

.com, Marketing Zen Group handles everything from setting up

a Facebook and Twitter presence to creating interactive Web



sites, developing e-mail marketing campaigns, optimizing search

engine results, and launching blogs aimed at clients’ target

markets. Clients have already seen record results from the firm’s

efforts, in terms of both Web traffic and sales dollars.

Kabani, who has also written a best-selling book about social

media marketing, expects her firm to soon reach multimilliondollar status. She keeps overhead low by using virtual hiring

and lets most employees work off-site. Kabani says hiring is

different in an entrepreneurial firm. A large corporation can

accommodate many different types of employees, but “in a

smaller business, passion is a must in every position. Hire people who are driven to do well and see your business succeed.”

Kabani herself brings the same degree of passion to her work.

At the same time, she cautions against multitasking because it

“decreases brain power,” believes in elevating value over price,

and stresses forgiveness and treating your team well. Kabani

declares, “Aim for joy.”1



Overview

You think you want to start and run

your own company. Like Shama Kabani,

you’ve got a great idea for a new business.

Maybe you even dream of achieving fame

and fortune. If you’ve been bitten by the

entrepreneurial bug, you’re not alone. More

than ever, people like you, your classmates,

and your friends are choosing the path of

entrepreneurship.

How do you become an entrepreneur?

Experts advise aspiring entrepreneurs to

learn as much as possible about business by

completing academic programs such as the

one in which you are currently enrolled and

by gaining practical experience by working

part- or full-time for businesses. In addition, you can obtain valuable insights about

the pleasures and pitfalls of entrepreneurship by reading newspaper and magazine

articles and biographies of successful entrepreneurs. These sources will help you learn

how entrepreneurs handle the challenges



c06.indd 169



of starting their businesses. For advice on

how to launch and grow a new venture,

turn to magazines such as Entrepreneur,

Forbes, Fast Company, Success, Black Enterprise,

Hispanic, and Inc. Entrepreneurship associations such as the Association of AfricanAmerican Women Business Owners and the

Entrepreneurs’ Organization also provide

valuable assistance. Finally, any aspiring

entrepreneur should visit these Web sites:

• U.S. Chamber of Commerce

(http://www.uschamber.com)

• Entrepreneur.com (http://www

.entrepreneur.com)

• Kauffman Foundation (http://www

.kauffman.org)

• The Small Business Administration

(http://www.sba.gov)

• The Wall Street Journal Small Business

(http://online.wsj.com/small-business)



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In this chapter, we focus on pathways

for entering the world of entrepreneurship,

describing the activities, the different kinds

of small business owners, and the reason

a growing number of people choose to be

entrepreneurs. It discusses the business



1



entrepreneur is a risk

taker in the private enterprise system, a person who

seeks a profitable opportunity and takes the necessary risks to set up and

operate a business.



environment in which business owners work,

the characteristics that help them succeed,

and the ways they start new ventures. The

chapter ends with a discussion of methods by

which large companies try to incorporate the

entrepreneurial spirit.



What Is an Entrepreneur?

An entrepreneur is a risk taker in the private enterprise system, a person who seeks

a profitable opportunity and takes the necessary risks to set up and operate a business.

Consider Sam Walton, Walmart’s founder, who started by franchising a few small Ben

Franklin variety stores and then opened his own Walton Five and Dime stores. Today,

Walmart has grown into a multibillion-dollar global business that is the largest company

on earth.

Entrepreneurs differ from many small-business owners. Although many small-business

owners possess the same drive, creative energy, and desire to succeed, what makes

entrepreneurs different is that one of their major goals is expansion and growth. (Many

small-business owners prefer to keep their businesses small.) Sam Walton wasn’t satisfied

with just one successful Ben Franklin franchise, so he purchased others. And when that

wasn’t enough, he started and grew his own stores. Entrepreneurs combine their ideas and

drive with money, employees, and other resources to create a business that fills a market

need. That entrepreneurial role can make something significant out of a small beginning.

Walmart, the company that Sam Walton started, reported net sales in excess of $411 billion

for one recent year.2



Assessment

Check

1. What tools do entrepreneurs use to create a

new business?

2. How do entrepreneurs

differ from managers?



170



c06.indd 170



Entrepreneurs also differ from managers. Managers are employees who direct the efforts

of others to achieve an organization’s goals. Owners of some small start-up firms serve as

owner-managers to implement their plans for their businesses and to offset human resource

limitations at their fledgling companies. Entrepreneurs may also perform a managerial role,

but their overriding responsibility is to use the resources of their organizations—employees,

money, equipment, and facilities—to accomplish their goals. When Bobbie Weiner found

herself divorced and struggling for cash, she signed up for a special-effects makeup course,

hoping that she could acquire some new skills and support herself working in the movie

industry. Her hard work has resulted in a successful business. She realized that specialized

makeup is needed by many categories of people—actors, the military, Halloween revelers,

sports fans, and funeral directors. After doing a few makeup jobs on horror films, Weiner was

recruited to work on the blockbuster Titanic. That led to a rush of other movies, a contract

with the military for camouflage paint, worldwide requests from funeral homes, and her own

product line, called Bloody Mary. Although Weiner is now worth millions and employs 250

people at her company, Bobbie Weiner Enterprises in Fort Worth, Texas, she is still very

much in charge of the firm’s mission, goals, and image.3

Studies have identified certain personality traits and behaviors common to entrepreneurs

that differ from those required for managerial success. One of these traits is the willingness

to assume the risks involved in starting a new venture. Some, like Bobbie Weiner, take that

risk out of necessity—they’ve left or lost previous jobs or simply need a way to generate

cash. Others want a challenge or a different quality of life. Entrepreneurial characteristics are

examined in detail in a later section of this chapter.

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2



Categories of Entrepreneurs

Entrepreneurs apply their talents in different situations. These differences can be

classified into distinct categories: classic entrepreneurs, serial entrepreneurs, and social

entrepreneurs.

Classic entrepreneurs identify business opportunities and allocate available resources

to tap those markets. Dana Hood is a classic entrepreneur. She recognized that dog owners

want special attention for their pets when they leave those animals in the care of others. She

also knew that pet owners spent $3.4 billion for boarding and daycare centers during one

recent year. So, when she founded her daycare center for dogs in Denver, she made certain

that her services stood out from the average kennel. At For the Love of Dog, Hood and her

staff offer customized services such as grooming and anesthesia–free teeth cleaning, a treadmill, swimming pools, and water misters to cool off her customers’ pets during hot weather.

In addition, pet owners can purchase high-end organic foods and treats, beds and toys, as

well as other retail goods. 4



serial entrepreneur 

person who starts one

business, runs it, and then

starts and runs additional

businesses in succession.



Courtesy Stella & Dot



While a classic entrepreneur starts a new company by identifying a business opportunity

and allocating resources to tap a new market, serial entrepreneurs start one business, run

it, and then start and run additional businesses in succession. Elon Musk, the founder of such

businesses as PayPal, Tesla Motors, and SpaceX, is a serial entrepreneur. Jessica Herrin is also

a serial entrepreneur. When Herrin graduated from college with an economics degree, she

joined a software start-up firm where she got hooked on the idea of “unlimited potential.” At

age 24, Herrin co-founded WeddingChannel.com in Los Angeles, which grew within a few

years to 100 employees and $21 million in revenues. When her firm was purchased by The

Knot, Herrin went on to start Stella & Dot, a high-quality fashion jewelry business sold by

more than 12,000 independent representatives at parties and online. Already, Stella & Dot

has hit $104 million in revenues, and the jewelry has been featured in business and fashion

press—and perhaps more importantly, on celebrities. “I want to build a company that is the

next great global brand that changes the lives of women around the world,” asserts Herrin.5



classic entrepreneur 

person who identifies

a business opportunity

and allocates available

resources to tap that

market.



After selling WeddingChannel.com to The Knot, serial entrepreneur Jessica Herrin founded

Stella & Dot, a high-quality jewelry business that has topped more than $100 million in

revenues.

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social entrepreneur 

person who recognizes

societal problems and

uses business principles

to develop innovative

solutions.



Some entrepreneurs focus on solving society’s challenges through their businesses.

Social entrepreneurs recognize a societal problem and use business principles to develop

innovative solutions. Social entrepreneurs are pioneers of innovations that benefit humanity.

When Samuel Kaymen moved his family to New Hampshire seeking a more rural lifestyle,

little did he know that would be the start of a business that eventually would be known for

its socially and environmentally responsible approach. A diabetic, Kaymen experimented

with making homemade yogurt with no added sugar and sold the product to local health

food stores. This was the humble beginnings of Stonyfield Farm, which today is a hugely

successful company and a model for social entrepreneurs. In addition to producing the

healthiest organic yogurt available, the company established a “Profits for the Planet”

program that commits 10 percent of its annual profits to people and organizations working to restore and protect the environment. Stonyfield is also known for using its yogurt

lids—millions of them each week—to promote causes, organizations, and environmental

initiatives. 6



Assessment

Check

1. What do classic entrepreneurs and social

entrepreneurs have in

common?

2. Is a social entrepreneur

simply a philanthropist?



3



Reasons to Choose Entrepreneurship

as a Career Path

If you want to run your own business someday, you’ll have plenty of company. During

one recent year, about 565,000 new businesses were created each month in the United

States, with the construction and service industries experiencing the highest rates of

activity.7



Photo by Cathy Heinz(www.cathyheinz.com),

provided courtesy of CarolCraig



The past few decades have witnessed a heightened interest in entrepreneurial careers,

spurred in part by publicity celebrating the successes of entrepreneurs such as Michael

Dell, who launched what would become computer giant Dell following his freshman year

at the University of Texas; Oprah Winfrey, who parlayed her career as a reporter into the

media-production empire Harpo; and Bill Gates, who left Harvard to start Microsoft with

friend Paul Allen.



Former Naval flight officer Carol

Craig considers herself an accidental

entrepreneur. After being discharged

as a disabled veteran, Craig started

a technology company that provides

avionic software development and

project management to various clients.



172



c06.indd 172



People choose to become entrepreneurs for many different reasons. Some are

motivated by dissatisfaction with the traditional work world—they want a more flexible

schedule or freedom to make all the decisions. Others launch businesses to fill a gap in

goods or services that they could use themselves. Still others start their own firms out

of financial necessity, like Bobbie Weiner did with her makeup business. Carol Craig is

another such entrepreneur. Craig was a flight officer and computer engineer, specializing

in anti-submarine and subsurface warfare for the U.S. Navy. When unsuccessful knee

surgery left her with a disabled veteran discharge, she was forced to reevaluate her career

plans. She followed her husband, a Navy pilot, around to military posts and discovered

that there was greater need for her after all—as a civilian consultant. So she founded

Craig Technologies, now headquartered in Florida, which provides system engineering, software development, project management, courseware and training applications,

modeling and simulation, database and information technology services to the federal

government and other commercial entities. In one decade, the firm has grown from one

employee—Carol Craig—to 285 employees and $28 million in revenue. Although Craig

didn’t plan this to be her career, she says, “I was never afraid of trying new things. I’m an

accidental entrepreneur.”8



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As pointed out in Figure 6.1, people become entrepreneurs for one or

more of four major reasons: a desire to be their own boss, succeed financially,

attain job security, and improve their quality of life. Each of these reasons is

described in more detail in the following sections.



FIGURE



6.1



Why People Become Entrepreneurs

Desire to Be

One's Own Boss



Desire to

Succeed

Financially



Being Your Own Boss

The freedom to make all the decisions—being your own boss—is

one of the biggest lures of entrepreneurship. After 20 years of working in

the fitness industry, Peter Taunton wanted out of the big-box health club

scene. But he wasn’t finished with fitness. He decided to create a different

kind of gym, one for average people who prefer to work out without wearing Spandex shorts or being bombarded by loud music and big-screen TVs.

Taunton founded Taunton’s Snap Fitness—small, neighborhood-oriented fitness clubs based on affordability, convenience, and cleanliness—headquartered

Desire for

in Chanhassen, Minnesota. Snap Fitness clubs—there are now nearly 2,000

Job Security

franchised locations—are smaller than the average gym but are open 24 hours

a day. They feature up-to-date cardio and training equipment, but that’s about

all. There are no childcare facilities or smoothie bars, no pools or racquetball

courts. This means that the cost of membership falls way below the national

average. Taunton likes the fact that he had the authority to put his dreams into action. And

his customers seem to agree with his decisions. “People see us, I think, as a breath of fresh

air,” Taunton observes.9



Desire for an

Improved

Quality of Life



Being your own boss generally means getting to make all the important decisions. It also

means engaging in much—if not all—of the communication related to your business, including customers, suppliers, distributors, retailers, and the like. The “Business Etiquette” feature

offers tips for professional-style communication—even if you’re on the run and using your

thumbs.



Financial Success

Entrepreneurs are wealth creators. Many start their ventures with the specific goal of

becoming rich—or at least financially successful. Often they believe they have an idea for

a superior product and they want to be the first to bring it to market, reaping the financial

rewards as a result. Entrepreneurs believe they won’t achieve their greatest success by working for someone else, and they’re generally right. Of course, the downside is that when they

fail, they don’t have the cushion of employment.

John Vechey recalls growing up without luxuries. “I bond with anyone who

has ever eaten government cheese,” he quips. While in college, Vechey and a friend

developed an online game called ARC that the pair eventually sold to Sierra for $100,000.

Next, with Jason Kapalka and Brian Fiete, Vechey co-founded Seattle-based PopCap, developing such popular games as Bejeweled and Plants vs. Zombies on the premise that online

games should be simple and fun for everyone. Believing they still had more to accomplish,

the trio turned down a $60 million offer for their company. Their gamble paid off:

Video game publisher Electronic Arts recently bought PopCap in a deal worth as much as

$1.3 billion.10



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BusinessEtiquette

Job Security

Communicating Electronically

Most entrepreneurs rely heavily on electronic communication to reach the

people in their network. They’re on the run; busy multitasking. Although you

may be adept with your smart phone, it’s wise to review a few tips about

messaging.

• Don’t write in all caps. It makes your message look as if you’re yelling at

the recipient.

• Avoid subject lines like “Important—Please Read.” Such e-mails end up

in the spam folder, unread. Instead, use short, descriptive subject lines

that help your recipient know what the message is about—for example,

“Review of Tuesday’s Meeting.”

• Don’t use slang or shorthand like “LOL,” “ru,” and “L8.” Also avoid

smiley or sad-face icons.

• Be friendly but not overly familiar. Never include jokes in a business

e-mail or text message.

• Keep it brief. Short messages are more helpful than long ones. If more

discussion is necessary, conclude saying you’ll follow up with a phone call.

• Remember: Computers and phones are like tape recorders. Messages can

be saved—and could come back to haunt you. Never include personal

messages within professional ones, and refrain from comments that could

damage your company’s image or the reputation of others.

Sources: Mark Grossman, “Email Etiquette Is Important,” Grossman Law Group, http://www

.ecomputerlaw.com, accessed February 5, 2012; “Business Email Etiquette: What You Should

Know BEFORE You Hit Send,” http://www.evancarmichael.com/Women-Entrepreneurs, accessed

February 5, 2012; Karl Stolley and Allen Brizee, “Email Etiquette,” Purdue Owl, http://owl

.english.purdue.edu, accessed February 5, 2012; Nina Kaufman, “Making It Legal,”

Entrepreneur.com, http://legal.entrepreneur.com, accessed February 5, 2012.



Although the demand for skilled employees remains high in many industries, working

for a company, even a Fortune 500 firm, is no

guarantee of job security. In fact, over the past

ten years, large companies sought efficiency

by downsizing and eliminated more jobs than

they created. As a result, a growing number of

American workers—both first-time job seekers

and laid-off long-term employees—are deciding to create their own job security by starting

their own businesses. While running your own

business doesn’t guarantee job security, the U.S.

Small Business Administration has found that

most newly created jobs come from small businesses, with a significant share of those jobs

coming from new companies.11

As economies around the world are changing, workers are discovering the benefits of

entrepreneurship compared to employment by

big firms. In China, where entire industries, such

as banking, steel, and telecommunications, are

government-owned, young businesspeople are

starting their own small firms. There are nearly

500 million people under the age of 30 in China,

and their role models are Bill Gates and Michael

Dell, reports an entrepreneurship professor at

the Europe International Business School in

Shanghai.12



Quality of Life



lifestyle entrepreneur 

person who starts a business to gain flexibility in

work hours and control

over his or her life.



Entrepreneurship is an attractive career option

for people seeking to improve their quality of life.

Starting a business gives the founder independence

and some freedom to decide when, where, and how

to work. A lifestyle entrepreneur is a person who

starts a business to gain flexibility in work hours

and control over his or her life. But this does not

mean working fewer hours or with less intensity.

Generally it is the opposite—people who start their

own businesses often work longer and harder than

ever before, at least in the beginning. But they enjoy

the satisfaction of success, both materially and in the

way they live their lives.

Dan Abrams wanted it all—wealth and

the freedom to do the things he loves. An avid



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backcountry skier, Abrams faced a serious problem: On just about every strenuous run, he

was ripping the seams on his ski pants and jackets. “Fortunately, the manufacturers who

made that stuff were good about honoring their warranties,” acknowledges Abrams. But

Abrams wondered, why not make clothes that could withstand the rigors of the backcountry?

So Abrams and his friend Greg Steen borrowed $38,000 on their credit cards and launched

Flylow Gear in Denver, Colorado, starting with durable new t-shirts. Then they added

triple-stitched ski pants and sold out their entire first production run. Flylow’s revenues are

on course to break $1 million soon. Abrams and Steen are still skiing. “I could build a $1

million company or ski 100 days a year,” says Abrams. “I choose to do both and have it all.”13



4



Assessment

Check

1. What are the four main

reasons people choose to

become entrepreneurs?

2. What factors affect

the entrepreneur’s job

security?



The Environment for Entrepreneurs

Are you ready to start your own company? Do some research about the environment in

which you will be conducting business. There are several important overall factors to consider. There’s the economy—whether it is lagging or booming, you may find opportunities.

Consider where you want to locate your business. Currently, the states with the highest rate

of entrepreneurial activity are Nevada, Georgia, California, Louisiana, and Colorado. And

the metropolitan area with the highest rate of activity is Los Angeles.14

Overall, the general attitude toward entrepreneurs in the United States is positive.

In addition to favorable public attitudes toward entrepreneurs and the growing number

of financing options, several other factors—identified in Figure 6.2—also support and

expand opportunities for entrepreneurs: globalization, education, information technology,

and demographic and economic trends. Each of these factors is discussed in the following

sections.



Globalization

The rapid globalization of business has created many opportunities for

entrepreneurs. Entrepreneurs market their products abroad and hire

international talent. Among the fastest-growing small U.S. companies,

almost two of every five have international sales. Despite her location

in Wisconsin, Margaret Maggard sells her yoga-inspired, handmade

jewelry—called Bhati Beads—all over the world. The jewelry, which

often features hand-carved beads strung on a hand-dyed silk cord,

has been showcased on models in magazines ranging from Lucky and

Newsweek to the European fashion magazine Grazia.15

Growth in entrepreneurship is a worldwide phenomenon.

The role of entrepreneurs is growing in most industrialized and newly

industrialized nations, as well as in the emerging free-market countries

in central and eastern Europe. However, as shown in Figure 6.3, the

level of entrepreneurship varies considerably. In factor-driven economies—

that is, in countries such as Bangladesh or Jamaica that compete based

on unskilled labor and natural resources—on average, more than

10 percent of adults are starting or managing a new business. In countries whose economies are driven by innovation—such as Hong Kong

and the United States—the average rate of entrepreneurship is much

lower: less than 4 percent.16



FIGURE



6.2



Factors Supporting and Expanding

Opportunities for Entrepreneurs



Globalization



Expanded

Opportunities

for

Entrepreneurs

Demographic

& Economic

Trends



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Education



Information

Technology



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FIGURE



6.3



Levels of Entrepreneurial Activity in Various Countries

30



25



Total Entrepreneurial Activity



Average (unweighted) 9.2



Average (unweighted) 8.4



Average (unweighted) 4.0



20

17.9



15



14.6



15.2

13.9



13.1

11.8

10.8



12.0



11.8

10.8



11.0

10.1



10



9.2



9.0



8.3

7.1

5.3



5



8.3



7.5

6.8

5.4



5.3



6.4

5.7



6.0



6.3

5.6



6.0



5.2



4.8



5.1



4.1



4.4 4.3



4.1

2.5



2.7



2.4



3.1 3.0



3.4



4.3

3.3



4.7



4.6

3.7



3.8



3.7 3.6 3.7

3.3 3.5



2.9

1.9



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0



Countries

Factor-Driven Economies



Efficiency-Driven Economies



Innovation-Driven Economies



Source: Niels Bosma, Sander Wennekers, and José Ernesto Amorós, “2011 Extended Report: Entrepreneurs and Entrepreneurial Employees Across the Globe,” Global Entrepreneurship

Monitor, 2011, p. 20.



Organizations worldwide recognize the importance of developing the next generation

of entrepreneurs. Global Entrepreneurship Week (GEW) is one way of reaching out to students as well as recent graduates to encourage entrepreneurship. Founded by the Kauffman

Organization and Enterprise UK, the recent week-long GEW held 95,000 events in more

than 100 countries for nearly 20 million participants. More than 24,000 companies and

organizations planned youth-oriented business events in countries ranging from the United

States to South Africa.17



Education

The past two decades have brought tremendous growth in the number of educational

opportunities for would-be entrepreneurs. Today, more than 100 U.S. universities offer fullfledged majors in entrepreneurship, dozens of others offer an emphasis in entrepreneurship,

and hundreds more offer one or two courses in how to start a business.

In addition to traditional classroom experience, a number of schools offer opportunities to intern with a start-up or actually work toward launching a company. The

Entrepreneurship and Innovation Group at Northeastern University in Boston,



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which is staffed by professors who are entrepreneurs themselves, provides students with

the chance to work in entrepreneurial settings in a variety of industries including

retail, commercial real estate development, financial services, health care, and high-growth

technology.18

Besides schools, many organizations have sprouted up in recent years to teach entrepreneurship to young people. The Kauffman Center for Entrepreneurial Leadership in Kansas

City, Missouri, offers training programs for learners from kindergarten through community

college. The center’s EntrePrep summer program, which is taught in conjunction with local

colleges and universities, teaches high school juniors how to start and manage a company.

Students in Free Enterprise (SIFE) is a worldwide not-for-profit organization in which college students, working with faculty advisors, teach grade school and high school students

and other community members the value of private enterprise and entrepreneurship.19 The

Association of Collegiate Entrepreneurs has chapters on many college campuses in the

United States and Canada.

You don’t have to major in business to become an entrepreneur, but students who

do major in entrepreneurship or take entrepreneurship courses are three times more

likely to start their own business or help someone else start a business.20 In fact, you

don’t have to wait for graduation to launch your first start-up, and your business idea

doesn’t have to change the world. Ge Wang did finish college before starting his business, but he never intended to be an entrepreneur. Wang was a music professor who had

earned a bit of notoriety by creating the first orchestra composed entirely of mobile

phones. One of Wang’s students, Jeff Smith, had started a small tech company before

returning to teaching. When Smith met Wang he thought, “This dude is going to

change music.” So Wang began to create iPhone apps for Smith’s new venture, including Sonic Lighter and Ocarina (which turns an iPhone into a flute and has sold more

than 3 million downloads). More recent creations are Magic Piano and Glee karaoke.

“We want to make apps that make people feel less inhibited—to play music by accident,” explains Wang. “There’s a little creativity in everyone. We just think we need to

nudge them.”21



Information Technology

The explosion in information technology (IT) has provided one of the biggest boosts

for entrepreneurs. As computer and communications technologies have merged and dropped

dramatically in cost, entrepreneurs have gained tools that help them compete with large

companies. Information technology helps entrepreneurs work quickly and efficiently, provide

immediate and attentive customer service, increase sales, and project professional images. In

fact, technology has leveled the playing field to the point that, with the use of smartphones

and other wireless devices, along with instant Web distribution, a dorm-room innovator can

compete with a much larger firm. Technology has also assisted in the tremendous increase of

homepreneurs—entrepreneurs who run home-based businesses. These successful ventures are

described in the “Hit & Miss” feature.

Social networking has further transformed the business environment for entrepreneurs.

According to a recent study, more than 90 percent of successful companies now use at least

one social media tool. One entrepreneur who embraces the full impact of social media on

his business is Adam Kidron, who runs an upscale, health-conscious burger joint in New

York City, called 4food. Customers “design” their own burgers on one of the iPads in the



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