In my own experience through three different lenses.

 

In this paper, I attempt to
show how the
bootstrapping challenge, other ‘practical’ elements of ENSI207, as well as the
lecture material have influenced how I understand entrepreneurship. This will
be done partly by reflecting on my own experience through three different
lenses. The chosen lenses are 1)
growth and business models, 2) Learning from failure, and 3) Social context and
community. In week 4, as a group we started to come up with different ideas for
the bootstrapping challenge. As part of
the challenge, we were given up to £5 to spend. The idea we went with in the end was to sell
second-hand items. We believed that this was a good
idea as we knew we wouldn’t need to spend any money; instead of buying the
items we would help other students sell their unwanted items and in return
receive an agreed percentage of the sale. We advertised online using different
social media platforms and handed out flyers to create awareness; this didn’t cost us
anything so all the money we made would be counted as profits. Most of the items we were selling were offered by the individuals
within the group or friends, which meant we received all of the money from the
sale of some items. The products we were selling ranged from books to games
consoles to a tea set. This paper goes through each of the chosen lenses and
ultimately concluding these by summarising how the bootstrapping challenge, other ‘practical’
elements of ENSI207, as well as the lecture material have swayed my
understanding of entrepreneurship.

 

 

The first
lens focuses on growth and business models. I will look at Greiner’s (1972)
business growth model and how key performance indicators relate to business
growth. I will also be drawing
on the idea of Customer Value Proposition, to reflect on the challenges that I
have faced in determining value propositions.
Value proposition ‘is an innovation,
service, or feature intended to make a company or product attractive to
customers.’ (Oxford Dictionaries, 2017).

 

Some
examples of value propositions presented to customers are: Newness (this is
when a product fulfils needs that customers didn’t previously perceive);
Performance (when a new product is faster, more powerful or has more storage etc.)
and; Customisation (when customers are able to personalise products to their
own liking by changing the colour, size etc.).

 

One example
of a firm which uses these three value propositions to make their products more
attractive to customers is Apple. The tech giant releases newer versions of
their iPhone every year with newer features that fulfil the needs of their
customers; needs that they might not have identified earlier. Apple promotes
their by saying that the newer phones are faster and more powerful than their
predecessors; they also sell the phones in different colours and with
distinctive storage options.

 

Brands such
as Coca-Cola and Ferrero have shown the use value propositions to attract
customers by allowing them to individualise their products; making the item
more personal for their customers. Coca-Cola’s ‘Share a Coke’ campaign was a
huge success; receiving ‘998 million impressions on Twitter’. They printed over
a thousand of the UK’s most common names onto the labels of their bottles. They
sold over ‘150 million personalised bottles’. ‘Over 730,000 glass bottles were personalised via the e-commerce
store’. ‘It sparked a sharing frenzy
across the nation and quickly became one of (Coca-Cola’s) most successful
marketing campaigns.’ (Hepburn, 2017). Coca-Cola targeted young consumers and
encouraged them to share their experiences online by using the #ShareaCoke
hashtag. They were given full creative control and brand ownership and as a
result of this, they were able to create huge amounts of social media content for
Coca-Cola without feeling as though they were being used to promote the brand;
but instead were under the impression that they were just starting their own
social media conversations. (Tarver, 2015).

 

Ferrero did
something very similar with their ‘Your Nutella, Your Way’ campaign. The campaign
allowed consumers to create their own free label by adding their name
on a jar of Nutella. ‘The first year of the
Nutella personalisation campaign ‘Your Nutella Your Way’ was a huge success,
making it Ferrero UK & Ireland’s biggest ever promotion.’ (Ferrero, 2016). In week 2 of
the module, I learned about different forms of creativity in addition to customer
value proposition.

Both of these companies have used combinational creativity to offer
customers a value proposition. Combinational creativity is shown when there are
new combinations of familiar ideas. Coca-Cola combined their soft drinks with the
idea of personalised printing and; Ferrero combined the personalised printing
idea with their hazelnut cocoa spread ‘Nutella’. Other examples of value propositions presented to customers are:
Brand/Status (e.g. Rolex); Price (e.g. value pricing); Cost reduction (e.g.
when companies use technology to replace employees); Accessibility (taking
products to people previously excluded) and; Convenience/Usability (e.g. Apple
and iTunes).

 

When looking
at business growth one of the key questions is how we can tell whether a
business is growing. Key performance indicators show a business how effectively
it is meeting its targets. A business isn’t likely to be successful if its
costs are higher than its revenue. ‘Gross profit margin as a percentage of sales is an expression of
total profits as they compare to revenue. The benefit of tracking this KPI over
time is that you can easily quantify how much money you’re keeping against the
amount paid out to suppliers.’ (Maguire, 2017). Although for the bootstrapping
challenge we didn’t have any costs, we made our money by taking a commission on
some of the products we sold. For some of the products we received from friends,
we were able to take 100% of the revenue from the sale. ‘Inventory turnover measures the number of
times inventory is sold or used in a given period of time, and is
valuable because it reveals a business’ ability to move goods.’ (Maguire, 2017). Another
important key performance indicator for a business is relative market share
which managers can track over time and see how much of a given
market is controlled by their business as a percentage. (Maguire, 2017). As the business grows, managers will hope that
the relative market share also increases.

Greiner’s (1972) growth model gives insight into how small
businesses grow in five logical phases. However, we have to question whether
all businesses grow in the same way and if they all follow the same sequential
stages. Phase 1 of this model illustrates how a business start-up focuses on
creating a product and a market. The next phase looks at growth through
direction. The firms that last the first phase by appointing a proficient
manager can ’embark on a period of sustained growth under able and directive
leadership.’ ‘The delegation stage proves useful for gaining expansion through
heightened motivation at lower levels.’ (Greiner, 1972). The fourth phase is
characterized by the use of formal systems for attaining better coordination.
The final phase looks at growth through collaboration. (Greiner, 1972).

For the
bootstrapping challenge we were selling second-hand items to students at
Lancaster University on campus. As a group we felt that promoting the items we
were selling online through social media, was the best idea as it would be free
and we could reach our target market easier than through other methods of
advertising. We also printed and handed out flyers to further increase
awareness. For us, convenience was the key value proposition that was offered
as we were targeting students on campus. 
The positives of our idea for the bootstrapping challenge were that we
knew we wouldn’t be spending any money and as a result, the money we received
would be counted as profits and it wasn’t possible for us to make a loss. I think
overall, the bootstrapping challenge went well, however, I think that the idea
wasn’t very creative and if I had to do it again I would look to go for an idea
that was more focused on customer value proposition. In particular,
customisation as we have seen how offering a product that is more personal to
an individual allows you to connect with customers.

 

In terms of
how I understand entrepreneurship, this has helped me to recognise the
importance of connecting with customers. The key goal is to convince customers
to come to you and not your competitors. Customers will choose to come to you
based on the value proposition (which makes you a more attractive option than
your competitors) you are offering them. Giving customers the chance to
individualise/personalise products can be one very important value proposition
as it makes the product offered more personal for the individual.

The second
lens looks at learning from failure. I will be drawing on the concepts of learning and failure,
reflecting on ways I have learned from failure during activities on the module
and in my own life. There is a lot of literature on entrepreneurship, learning
and failure. However, ‘many aspects of entrepreneurial learning remain poorly
understood’ (Cope, 2005).

 

One piece of literature is Cope’s (2005) article which ‘maps out
and extends current boundaries of thinking regarding how entrepreneurs learn.’ In his article, Cope (2005) mentions how ‘research in entrepreneurship has been
dominated by the desire to define the entrepreneur through the identification of “entrepreneurial traits”.’ The key principle of
this viewpoint is the belief that people have a distinctive set of characteristics
that predispose them to entrepreneurial activity (Greenberger & Sexton,
1988). I disagree with this idea as I have learned
through experience of studying other entrepreneurship modules (particularly
ENSI212) that this is not the case. One of the key things I learned from
ENSI212 was how I could learn from failure. I was set task of selling paper
cups and this helped me to learn. In the first week, I started to learn about how
there are dissimilar personality styles and that buyers would need persuading
in different ways. In the first workshop, I was required to take a DISC personality
test which told me that I had a C-style personality. In the second workshop,
through a role-playing exercise, I learned about the methods I could use to
persuade buyers with different personality styles and why it is key to adapt as
a seller when trying to convince customers. After
learning about persuasion tactics, when selling the cups for the second time, I
knew that different people have unlike personalities, thus I needed to alter my
method to convince them.
Using these different methods, I saw an improvement, specifically when selling
to strangers as I found that I was more sure in my abilities. This was useful
when it came to the bootstrapping challenge as we were selling second-hand
items. Although, I may have agreed with the viewpoint
of the literature initially and; thought that I may not have the personality or entrepreneurial traits to sell;
I think that all that I have learned, the growth in confidence and experience
of selling has aided me to recognise that I may even be interested in a future
career related to selling. To me, it is clear that having a
personality or entrepreneurial trait is not key and that it is more about how
one can learn and adjust. ‘Entrepreneurship is a process of learning and a
theory of entrepreneurship requires a theory of learning’ (Minniti & Bygrave, 2001).

 

Petkova’s (2008) ‘paper develops a theory of entrepreneurial learning
from performance errors.’ In her paper, from a review of the literature, she
pointed out ‘three major sources of learning: (a) learning by repetition of
efficient practices (“learning by doing”), (b) memorizing new information as a
result of training or tutoring, and (c) replacement of incorrect knowledge and
practices with new ones based on negative feedback.’ (Petkova, 2008). From my
experience, I can say that I agree with these major sources of learning as when it came to the bootstrapping challenge I learnt by doing. I
used my experience of selling from another module and then repeated what I had
learnt. I also had to memorise new information from the lectures and workshops
to learn. As part of the ENSI212 module, I had to record a video of a sales pitch
for which I received feedback; I had to use this feedback to learn and improve.
Petkova (2008)
thought that ‘this perspective may have limited applicability to
entrepreneurial learning’. From experience, I have learnt that perspective of
entrepreneurial learning is applicable in reality.

 

Overall,
this has helped me to see that as an entrepreneur is better to experience
something first-hand and use the experience to learn and improve. A lot of the
learning on the bootstrapping challenge, was lower-level learning as it was a
repetition of past behaviours. (Fiol & Lyles, 1985). When it came to our
bootstrapping challenge, there wasn’t much that went wrong or a lot that we
could’ve learnt from. However, there were still a few difficulties. We were
given only two hours to trade and we had a lot of products to sell. The biggest
problem was that we weren’t able to display all the products as they were too
large. For example, we were looking to selling a computer, but couldn’t put it
on display. This meant that the potential customers couldn’t see some of the
products and we didn’t sell a lot of items. If I had to do the bootstrapping
challenge again, I would hope to come up with ideas quicker and spend more time
to promote what was happening to raise awareness.

 

 

The third
lens focuses on social context and community. I will be drawing on Austin,
Stevenson & Wei-Skillen’s (2006) distinction between private and social
entrepreneurship to reflect on where I see my future career and entrepreneurial
aspirations. I will look at how the two different forms
of entrepreneurship have been defined in entrepreneurial literature by the
likes of Dees (1998).

 

Private entrepreneurship refers to
entrepreneurs aiming to create ‘profitable operations resulting in
private gain.’ (Austin, Stevenson &
Wei-Skillern, 2006). Social entrepreneurship
refers to entrepreneurs that to create a business providing a product or
service that will in some way have a positive social effect or benefit. ‘Social
entrepreneurship can include social purpose business ventures, such as
for-profit community development banks, and hybrid organizations mixing
not-for-profit and for-profit elements, such as homeless shelters that start
businesses to train and employ their resident.’ (Dees, 1998). The main goal for social entrepreneurship is to
generate a positive social effect or benefit for the community, rather than individual
benefit or gain. (Austin, Stevenson & Wei-Skillern, 2006). This is what
essentially differentiates social and private entrepreneurship.

 

Social enterprises (which can be for-profit or not-for-profit
businesses) try to achieve certain social goals or objectives by offering their
product or service, to attain ‘financial sustainability independent of
government and other donors.’ (Di Domenico,
Haugh & Tracey, 2010). This means that they ‘share the pursuit of revenue generation with
organizations in the private sector as well as the achievement of social (and
environmental) goals of non-profit organizations.’ (Dees, 1998; Di Domenico, Haugh & Tracey, 2010). I think that as a possible
future entrepreneur looking to set up a business, this shows me the
difficulties that a social enterprise can face as they are not only having to
achieve their goal of delivering a social benefit, but they may also have to
compete against firms that are only focused on profits.

 

As mentioned earlier, the main goal of social entrepreneurship is to
deliver some sort of positive social benefit or effect for the community. Conversely, private
entrepreneurship is about establishing a profitable business, which results in
the entrepreneur benefiting by gaining more money. Austin, Stevenson & Wei-Skillern (2006) point out that this distinction is exaggerated and that
private entrepreneurship does in fact benefit society. They argue this by using
the example of ‘new and valuable goods, services, and jobs’ which they believe
‘can have transformative social impacts’ and that these transformations can encourage
or inspire the private entrepreneurs. (Austin, Stevenson &
Wei-Skillern, 2006). This point of view makes a good argument and shows me how
private entrepreneurs can benefit society. It also makes me think more clearly
of where I see my
future career and entrepreneurial aspirations. Learning about how private
entrepreneurship is not only about making profits, but how I could benefit
society as a private entrepreneur. This makes me believe that as a private
entrepreneur I could not only look to benefit society, but also make money at
the same time.

 

In their research on social entrepreneurship,
Marti & Mair (2006) mention how recently
many well-known entrepreneurs ‘have dedicated substantial resources to
supporting social entrepreneurship’. ‘Jeff Bezos, founder of Amazon, recently
announced a one million US dollar award for innovative approaches and
breakthrough solutions to effectively improve communities or the world at
large.’ (Marti & Mair, 2006).

 

In week 8 of
the module we explored the concept of social entrepreneurship and its role in
society. As part of the bootstrapping challenge, any
profits we made were donated to charity. Trying to see the distinction between private and social
entrepreneurship has helped me to see that there are similarities and differences between the two. (Austin,
Stevenson & Wei-Skillern, 2006). This was the most influential for me in
understanding entrepreneurship and where I see my future career and entrepreneurial aspirations as it
made me think that as a private entrepreneur I could not only look to benefit
society, but also make money at the same time.

 

Overall; In
terms of how I understand entrepreneurship, the main things I have come to
understand (through this module and the little experience that I have gained)
are the importance of connecting with customers and how customer value
proposition plays a big role in this. Customers will choose to come to you
based on the value proposition offered. One example is giving customers the
chance to personalise products which makes it more personal for them. Another thing
I have learned is that ‘entrepreneurship is a process of learning’ (Minniti & Bygrave, 2001) and that
it is better to experience something first-hand and
use the experience to learn and improve. I believe that the bootstrapping
challenge as well as the
lecture material have helped me to learn and improve. Austin, Stevenson & Wei-Skillern, (2006) make a good argument
about how private entrepreneurs can benefit society, which improved my
understanding and has made me more interested in a future entrepreneurial
career. The reason being that as a private entrepreneur I could not only look to benefit society, but
also make money at the same time.