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Course Description
Who is likely to become an entrepreneur? How do you discover entrepreneurial
opportunities? What are the factors that affect the success of entrepreneurial ventures?
We will examine these questions in light of classic and contemporary theory and
empirical research in the social sciences.
We use action learning as a method of instructionwhich integrates theory and research
with interaction with expert practitioners in the venturing community. Readings
underscore universal principles; action learning teaches current practices and market
cycles.
Entrepreneurship is the endeavor to commercialize innovation. We examine how
individuals discover and create innovations, as well as how innovations are brought to
market by building a start-up venture, either independently or as a part of an existing
organization. We focus on the levels of both person and place persons with the ability
to recognize and create innovations, and places where innovations and resources to
develop innovation are highly concentrated. Students conduct interviews in places that
are rich sources of entrepreneurial innovations, such as technology licensing offices,
venture capital and corporate venturing firms, and entrepreneurial development
organizations.
The first part of the course focuses on how human, social, and cultural capital influences
the discovery of innovations. The second part examines how markets and organizations
are drivers of innovation and entrepreneurship. The model below summarizes these
relationships.
PERSON ----------------- PLACE ------------------ ENTREPRENEURSHIP
*Social Capital
*Environments
*Discover Innovations
*Networks
*Incubator Orgs/Regions
*Develop Innovations
*Prior Experience
*Cultures
*Finance/Human Capital
*Markets
*Hierarchies
*States
t1, t2, ..
The last part of the course we apply theories of competition, cooperation, technological
change, and leadership to understand how to anticipate windows of entrepreneurial
opportunity and how to manage the challenges of new venture development.
Who should take this course?
Undergraduate and co-term students who would like to have the analytical skills to found
their own companies and create innovation in existing companies.
What are the course prerequisites?
There are no prerequisites. The course recruits across majors. It is helpful if you have
courses in psychology, sociology, and economics and have taken sociology 160.
What are the course objectives? Knowledge of:
1. social science theories for discovering and developing innovations
2. how to use theory to recognize & solve problems & predict future outcomes
3. the organization of environments that are rich sources of innovations
4. the resources for founding new ventures
5. theories and strategies for leading the stages of growth in nascent companies
Why should I care about this course?
Entrepreneurship is a central determinant of innovation in societies, the accumulation and
distribution of wealth, and the social and economic status of individuals and
organizations.
Course format
Class sessions make use of lectures, discussions, film, and student and guest speaker
presentations. The study questions on the syllabus are designed to focus your
attention on the points to be discussed in class and are useful to prepare the case
study and interview assignments. To shorten the length of case study assignments use
attachments. Attachments are information in diagram, graph, and numeric form. I
have paired a theoretical reading with each case study. The theoretical reading will
help you to interpret the facts in the case and address the questions on the syllabus.
The best grades go to students who use the theory reading to construct an argument
that guides insightful statements about the meaning and implications of the facts in
the case study. Logon on to the CourseWork website to view the power point slides
presented in class and an annotated syllabus which motivates and summarizes key
points of the readings and how the readings as a whole fit together.
Teams
It is your responsibility to form a team and if you select to complete the innovation
environment interview assignment you will need to schedule a presentation date by the
second or third class. Also I emphasize that it takes considerable lead time to schedule
interviews with expert practitioners to complete this assignment. Please see me or the
teaching assistant if you are having any difficulties.
Caveats
All forms of entrepreneurship cannot be adequately covered in one course. We will focus
on business innovations with the ability for high growth, not on non-profit social
entrepreneurship and lifestyle companies. However, with prior approval students
have the flexibility to craft assignments around these other forms of
entrepreneurship. Students do not develop a business plan in this course.
Due Dates and Relative Values of Course Assignments
ASSIGNMENT DUE
DATE
INDIVIDUAL
4/9
4/14
5/12
6/2
6/4
TEAM (select 1 of 2)
6/4
DESCRIPTION
% OF FINAL GRADE
Class Participation
3 D Printing Case
Alex Laats Case
Apple Case
Mission Evaluation
Smile Factory Case
Innovation Environment
interview & presentation
Case Study of Entrepreneur
Managing New Venture
Growth
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Co-term Students
In addition to the above assignments, co-term students will need to update the innovation
website addresses at the end of the syllabus. This update should identify any sites that
may have become inactive and add new sites. Please email this assignment to me no later
than the last day of finals.
Ph.D. Students
Class participation is required. The above assignments are optional. A 25 page paper
exploring new research questions in entrepreneurship is due the last day of class. Students
may make prior arrangements to study a phenomenon of interest in the field of
entrepreneurship.
Team Assignments (select 1 of 2)
Innovation Environments Interview Write-up OR Presentation
It may be easier to found new ventures in places that have more infrastructure, for
example regions with technology licensing offices, venture capital firms, angel
organizations, corporate venturing programs, incubators and other entrepreneurial
development organizations. An inherent part of the mission of these organizations is to
influence individuals on how to discover and exploit entrepreneurial opportunities. Your
assignment is to conduct an interview with an individual(s) with line responsibility in an
environment rich in entrepreneurial ideas and resources. The websites at the end of the
syllabus may spark possible ideas. Your interview experience should allow you to
become familiar with one of these places and it should focus on how such
environments provide training, socialization, mentoring, and resources for individuals
who want to become entrepreneurs and develop innovative companies. Your report
should cover both the pros and the cons of discovering and developing innovations in
such environments from the perspective of the entrepreneur.
To learn from your interview experiences, student teams will present a 30 minute report
of their interview in the beginning of class. To organize your interview and to frame your
analysis you should draw on one or two of the theories covered in a prior class. Your
class presentation should use a combination of media, including video if possible. A
written report that summarizes your main findings is due one week after your class
presentation and should approximate 8 double spaced pages, plus attachments.
Attachments are information in diagram, graph, and numeric form. Please include a word
count at the end of the report and submit your presentation slides in hard and electronic
copy so that they can be placed on the course website.
While a combination of secondary research methods may be used, you are required to
take part in actual face-to-face conversations with at least one human being who is
knowledgeable about the organization/environment you are studying. Email chats and
phone conversations are not substitutes, but may be used in addition to face-to-face and
on-site conversations.
Case Study of Entrepreneur Managing New Venture Growth
Conduct a case study of an entrepreneur who is currently facing the challenges of
managing new venture growth. For guidance see the below articles at the end of the
syllabus.
1. Hamermesh, Heskett, and Roberts (2005). A Note on Managing the Growing
Venture, Harvard Business School Case 9-805-092.
2. Churchill, Neil C. and Virginia L. Lewis (1983). The Five Stages of Small Business
Growth, Harvard Business Review reprint 83301.
Select an individual on the founding team who is in a line management position of a
company that has grown beyond the initial start-up stage, but is not a mature business.
Your case should not focus on the individuals personal characteristics, but instead on the
entrepreneurs management style and strategies to overcome start-up challenges. You
should interview this person about growth-related stumbling blocks and alternative
strategies that may have been used to address these problems. Please do not interview a
friend or a family member. This assignment should be an opportunity to build your social
capital. This assignment should be informed by the readings and be approximately 20
pages double-spaced plus attachments. Secondary data sources are very useful for the
necessary background information. This assignment requires a face-to-face interview
unless the entrepreneur is located outside the geographic area. Please seek prior approval
for such cases. .
Specifically, your case study should demonstrate an understanding of:
90.94 A87.89 B+
84-86 B
80.83B75-79 C+
70-74 C, and so on
To determine your final grade your scores are weighted per the relative values in the chart
on p. 3. All members of a team receive the same grade. If for any reason you believe that
team members are not contributing equitably, please do not wait until the end of the
course to discuss this problem with me. In such rare cases I reserve the right to survey
team members and adjust individual grades based on a survey of student feedback.
Late Assignments and Emergencies
The five case analysis assignments cannot be late because they form the basis for
class discussion and feedback on the CourseWork website. Because emergencies tend
to happen, you have the option to drop 1 case assignment or if you complete all case
assignments to drop the one with the lowest score. Assignments other than discussion
cases will be down graded 10% of the earned grade for each week they are late.
Reading
You will have the opportunity to read the original theoretical arguments that are tested in
contemporary empirical research. There is one classic book, Leadership in Administration
by Philip Selznick and a course pack. All materials are available through University
Readers at www.universityreaders.com/students. You should be able to download the first
20% of the coursepack prior to purchase. An asterisk* identifies the recommended
reading. To reduce costs, recommended readings are not included in the course pack and
can be found on reserve in Green library or via the University Internet journal stores.
W 4.2
Class Introduction and Overview
M 4.7
PersonsWho Becomes an EntrepreneurPsychology of Entrepreneurship
Reading:
1. Brockhaus and Horwitz (1986) "The Psychology of the Entrepreneur" in The Art
and Science of Entrepreneurship 25-44
2. Case: Guilder (1984) "A Patch of Sand" The Spirit of Enterprise 23-41.
Case Preparation Questions:
1. In what ways are entrepreneurs psychologically distinct from other types of
individuals?
2. Is there an entrepreneurial personality?
3. What type of risk takers are entrepreneurs?
4. What do you think of the psychological research on entrepreneurs?
2. Case: Shane, Scott (1999). Alex Laats and NBX Corporation (Darden UVA-ENT0005), pp. 1-25.
3. * Shane, Scott and D. Cable (2002) Network Ties, Reputation, and the
Financing of New Ventures Management Science, 48: (3) 364-381.
4. * Stuart, Toby et al. (1999). Interorganizational Endorsements and the
Performance of Entrepreneurial Ventures, Administrative Science Quarterly, 44:
315-349.
Case Preparation Questions:
1. Why did Alex Laats leave his law firm? Do you agree with his motivation? If yes,
why? If not, why?
2. Using your knowledge of Burts concept of structural holes, evaluate the
structure of Alexs network. Is Alexs network organized to produce high
entrepreneurial returns? If yes, why? If not, how should his network be
structured?
3. Do you agree or disagree with how Alex raised venture capital? Be prepared to
support your position.
4. Based on your evaluation of Alexs network, what advice would you give Alex
about his ability to use social capital to raise venture capital?
5. Should Alex have given MIT equity in NBX Corporation.
6. Should Alex have shopped the NBX deal around to more venture capitalists?
Class Activity and Assignment:
1. We will review the case preparation questions in class as we discuss the case.
2. Bring to class a diagram of Alexs network and be prepared to present and discuss your
analysis of Alexs network in light of the readings. Write a 1-2 page essay explaining the
benefits and detriments (with respect to discovering entrepreneurial opportunities and the
resources to develop them) for Alex of having a network high in cohesion versus high in
structural holes.
3. What is missing from Burts argument on structural holes in light of Alexs situation?
W 4.16
CultureInstitutional TheoryCultural Capital
Reading:
1. Becker, Sascha and Ludger Woessmann (2007). Was Weber Wrong? A Human
Capital Theory of Protestant Economic History, CESifo Working Paper No.
1987.
2. * Liao, Debbie and Philip Sohman (2001). The Development of Modern
Entrepreneurship in China, Stanford Journal of East Asian Studies, vol. 1,
Spring.
3. *http://www.geert-hofstede.com/geert_hofstede_resources.shtml
Questions:
1. Webers argument in his classic 1904 book The Protestant Ethic and the Spirit of
Capitalism concerns the cultural legitimation of individualism. Based on Webers
2.
3.
4.
5.
6.
argument what are the key differences between Catholicism and reformed
Protestantism that laid the groundwork of Webers thesis?
How can Webers theory be interpreted as a human capital theory?
Is religion a good measure of the concept of culture?
Based on the implications of the institutional logics case, where would you look
for innovative ideas with the potential for commercialization? Why?
Give an example of an innovation and entrepreneurial opportunity that comes
from bridging the cultures of different societal sectors.
Can you predict a future innovation based on the theoretical arguments of the
institutional logics case?
1. Can you associate the different types of funding with different types and stages of
development of start-ups?
2. What are the benefits and detriments for the entrepreneur of founding a company
with debt versus equity financing?
Class Activity:
1. Guest speaker: Angel Investor
W 4.23 Professor out of town, this class will be a session with the TA on your team
projects
Reading:
1. Roberts, Michael J. (2004). How Venture Capitalists Evaluate Potential Venture
Opportunities, Harvard Business School Case, 9-805-019.
2. *Gompers, Paul and Joshua Lerner (2003). Equity Financing, Handbook of
Entrepreneurship Research: An Interdisciplinary Survey and Introduction.
Questions:
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Reading:
1. Aldrich, Howard and Martin Ruef (2006). Organizations Evolving, chapter10,
Sage.
Questions:
1. Define the basic concepts of ecological theories that predict founding rates.
a. For example, density, legitimacy, density dependence, carrying capacity,
resource partitioning, specialist and generalist organizations.
2. What kinds of organizations prosper at different points in the life cycle of an
industry?
3. According to population ecology theory, describe the characteristics of a market
or an industry that represent the best window of opportunity for an entrepreneur to
found a start-up?
4. According to resource partitioning theory, is there a second window of
opportunity for the entrepreneur? If so, Why?
Class Activities:
1. Discuss reading and questions
M 5.12
Competition and Market Structure Shapes Window of Opportunity to Found
Industrial Economic Theory
Reading:
1. Porter, Michael E. (1979). How Competitive Forces Shape Strategy. Harvard
Business Review, reprint 79208.
2. Apple Computer, 2006 Harvard Business School Case 5-706-513
Questions:
1. Historically, what were Apples competitive advantages?
2. Who were the buyers and suppliers and how have they changed?
a. What were they like, what did they want?
3. Why did the buyers change so dramatically?
a. How is industry structure related to these changes?
i. What happened to the competitive forces, e.g., threat of substitutes,
the use of complements, rivalry, and barriers to entry within the
industry?
1. Why is rivalry so vicious despite high growth industry
wide?
2. Are there products that could replace PCs in the future that
are a threat?
4. Where does the balance of bargaining power lie between manufacturers and
suppliers?
5. How has the change in industry structure challenged Apples ability to sustain
competitive advantage?
6. Has Jobs finally solved Apples long-standing problems? Is the iPod different?
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DATE
M 4-7
TOPIC
INTRODUCTION
Course Overview
WHO BECOMES AN ENTREPRENEUR
Unique Personalities?
W 4-9
INNOVATION DISCOVERYPerson
Distribution of InformationPrior Experience
M 4-14
W 4-16
CultureInstitutional Theory
W 4-2
M 4-21
W 4-23
INNOVATION DISCOVERYPlace
MarketsEngines of Entrepreneurship, The
Organization of Angel Investors
MarketsEngines of Entrepreneurship, The
Organization of Venture Capital Investors
M 4-28
HierarchiesEngines of Entrepreneurship,
Entrepreneur as Aggregator; Entrepreneur as
Broker of Companies
W 4-30
M 5-5
RegionsEngines of Entrepreneurship
W 5-7
MARKET CREATION/CHANGE
Legitimacy & Competition Shape Windows of
Opportunity to Found
M 5-12
W 5-14
M 5-19
LEARNING TOOLS
Psychological Theories;
PracticeSimplot Case
Human Capital Theory
Practice3 DP Printing
Case
Social Capital Theory
PracticeAlex Laats
Case
Cultural Capital Theory
PracticeAngel
Investor Group Speaker
Session with TA on
projects: Professor out of
town
Contingency,
Transaction Cost,
Institutional Theories;
PracticeBuy-Out Firm
Case
PracticeVenture
Capitalist Speaker
PracticeCorporate
Venture Capitalist
Speaker
Population Ecology,
Resource Partitioning
Theories
Industrial Economic
Theory; PracticeApple
Case
Cooperation & Market Structure Shapes
Increasing Returns
Windows of Opportunity for Developing Products Theory; Open Source
and Partners
Movement, Practice
Technology Innovation Changes the Structure of
Punctuated Equilibrium
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M 6-2
W 6-4
Theory; PracticeDisk
Drive Industry Case
Institutional Theory;
Practicefilm Henry V
Institutional Theory;
PracticeCritique
mission statements
Institutional Theory;
PracticeSmile Factory
Case
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The National Venture Capital Association regularly reports the latest data on venture
capital and has a directory of all member venture capital firms www.nvca.org
For regional differences in venture capital deal flow see www.pwcmoneytree.com
Mid-Atlantic Venture Association www.mava.org
The European Private Equity and Venture Capital Association www.evca.com
The Intersouth Partners, www.intersouth.com
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MIT: http://web.mit.edu/tlo/www/
Berkeley: http://otl.Berkeley.edu
Stanford http://otl.stanford.edu/flash.html
Harvard http://www.techtransfer.harvard.edu/
Caltech http://www.ott.caltech.edu/
National Institutes of Health Office of Technology Transfer monitors and handles transfer
of NIH inventions and also manages the patent and licensing activities for the Food
and Drug Administration
http://ott.od.nih.gov/about_nih/about.html
Linking Ideas and Innovation in Technology Transfer, http://www.ibridgenetwork.org
National University of Singapore Entrepreneurship Center: http://www.nus.edu.sg/nec/
Industry Associations and Entrepreneurship Policy
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