The Entrepreneur and the Internet

The Internet - a vast computer network linking smaller computer networks - has revolutionized commerce by bringing together people from all over the globe. Many of its features can be used to shape a new business.

Communications: An entrepreneur must communicate with many people-suppliers, distributors, and customers, for example. A quick and relatively inexpensive way to send letters, reports, photographs, etc.

to other Internet users is with electronic mail or “e-mail.” E-mail can be used even for marketing. Various forms of computer software are available to protect documents from unauthorized access or alteration so

that they can be securely shared and easily authenticated.

Research: Starting a business takes lots of research. An entrepreneur can find information on almost any subject very rapidly by using the Internet’s World Wide Web.. (The Web is a collection of text and multimedia documents linked to create a huge electronic library.) Many government agencies, universities, organizations, and businesses provide information on the Internet, usually at no cost.

The easiest way to find information on the Web is by using a search engine—a data retrieval system. The user types key words for a subject on the computer, clicks the enter button, and receives a list of material soften within seconds. The items are linked electronically to the actual documents so that Internet users can read them on their computer screens. Among the most popular search engines are Yahoo! (http://yahoo.com) and Google (http://google.com).

Promotion: Web sites, pages of print and visual information that are linked together electronically, offer an opportunity for entrepreneurs to introduce a new business and its products and/or services to a huge audience. In general, Web sites can be created and updated more quickly and inexpensively than printed promotional materials. Moreover, they run continuously.

To create a Web site for her business, the entrepreneur can hire a firm to create one or purchase computer software to create it on her own. Many universities offer courses that teach how to build a Web site, also.

A Web site needs a name and an address. On the Internet, the two are usually the same. Web site names and addresses must be registered. Http://rs.internic.net is a Web site that lists registrars by country and

language used. The address of the online business is expressed as a Uniform Resource Locator (URL). It usually ends in dot com (.com), which indicates a “commercial” site. Dot net (.net), an alternate ending;

is often used when a specific Web site name ending in .com has already been registered. Good business Web site names are easy to remember and evoke the firm and its products or services. 

The entrepreneur also needs a piece of property in cyberspace, where her Web site will reside. Many commercial “hosting services,” called Internet service providers (ISPs), rent space on their large computers 

(called servers) for a small monthly or annual fee.

Web site promotion is critical. A Web site address can be put on business cards, stationery, brochures-anything having to do with the new firm. Or, an entrepreneur can pay to place a colorful advertisement on

non-competitive Web sites, such as ones for complementary products. Advertising banners usually link back to the advertised firm’s Web site.

Entrepreneurs also can provide information about their Web sites to well-known Internet search engines. For a fee, most search engines will promote a Web site when a selected set of search terms is used. Online

shoppers, for instance, often use search engines to find businesses that provide specific products and services. 

Safe Use: Just as shopkeepers lock their storefronts, entrepreneurs who use the Internet need to take steps to keep their computer systems safe from the potential hazards of security breaches and viruses. One of the most effective steps is installing security software. Another is setting up an Internet firewall to screen and block undesired traffic between a computer network and the Internet. A technology consultant on contract can install these and other computer defenses. There is a lot of information about computer safety available, and often for free. For example, the National Cyber Security Alliance (http://www.staysafeonline.info/), an organization devoted to raising Internet security awareness, offers educational materials and other resources.

As Julian E. Lange, associate professor of entrepreneurship at Babson College, has said, “For creative entrepreneurs with limited resources, the Internet offers significant opportunities to build new businesses and enhance existing enterprises.” New businesses will develop solutions to enhance the Internet user’s experience. Existing businesses will take advantage of myriad Internet applications — from customer service to order processing to investor relations. Lange suggests that, for many entrepreneurs, the challenges posed by the Internet are “opportunities to delight customers and create exciting entrepreneurial ventures.”

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Choosing a Product and a Market

Choosing a Product and a Market-Entrepreneurship

Aprospective entrepreneur needs to come up with a good idea. This will serve as the foundation of the new venture.

Sometimes an entrepreneur sees a market need and—Eureka!—has an idea for a product or service
to fill it. Other times an entrepreneur gets an idea for a product or service and tries to find a market for
it. A Scottish engineer working at General Electric created putty that bounces but had no use for it. In
the hands of a creative entrepreneur, it became a toy, “Silly Putty,” with an enthusiastic market: children.

The idea doesn’t have to be revolutionary. Research, timing, and a little luck transform commonplace
ideas into successful businesses. In 1971, Chuck Burkett launched a firm to make an ordinary product, novelty key chains. But when he got a contract with a new venture in Florida—Disney World he started making Mickey Mouse key chains, and achieved tremendous success.

There are many ways to look for ideas. Read a lot, talk to people, and consider such questions as: What limitations exist in current products and services? What would you like that is not available? Are there
other uses for new technology?

What are innovative ways to use or to provide existing products? In Australia in 1996, two entrepreneurs founded Aussie Pet Mobile Inc. to bring pet bathing and grooming to busy people’s homes. It is now a top U.S. franchise business.

Is society changing? What groups have unfulfilled needs? What about people’s perceptions? Growing
demand for healthy snacks created many business opportunities in the United States, for example.

Business ideas usually fit into one of four categories that were described by H. Igor Ansoff in the 

Harvard Business Review in 1957 

An existing good or service for an existing market. This is a difficult approach for a start-up operation. It means winning over consumers through merchandising appeal, advertising, etc. Entry costs are high, and profit is uncertain. 

A new good or service for a new market. This is the riskiest strategy for a new firm because both the product and the market are unknown. It requires the most research and planning. If successful, however, it has the most potential for new business and can be extremely profitable. 

A new good or service for an existing market. (Often this is expanded to include modified goods/services.) For example, entrepreneurial greeting-card makers use edgy humor and types of messages not produced by Hallmark or American Greetings—the major greeting-card makers—to compete in an existing market. 

An existing good or service for a new market. The new market could be a different country, region, or market niche. Entrepreneurs who provide goods/services at customers’ homes or offices, or who sell them on the Internet, are also targeting a new market—people who don’t like shopping or are too busy to do so. 

The last two categories have moderate risk, but product and market research can reduce it. They also offer opportunities for utilizing effective start-up strategies—innovation, differentiation, and market specification.

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What Makes Someone an Entrepreneur?

There is no one definitive profile. Successful entrepreneurs come in various ages, income levels, gender, and race. They differ in education and experience. But research indicates that most successful entrepreneurs share certain personal attributes, including: creativity, dedication, determination, flexibility, leadership, passion, self-confidence, and “smarts.”

•    Creativity is the spark that drives the development of new products or services or ways to do business. It is the push for innovation and improvement. It is continuous learning, questioning, and thinking outside of prescribed formulas.

•    Dedication is what motivates the entrepreneur to work hard, 12 hours a day or more, even seven days a week, especially in the beginning, to get the endeavor off the ground. Planning and ideas must be joined by hard work to succeed. Dedication makes it happen.

•    Determination is the extremely strong desire to achieve success. It includes persistence and the ability to bounce back after rough times. It persuades the entrepreneur to make the 10th phone call, after nine have yielded nothing. For the true entrepreneur, money is not the motivation. Success is the motivator; money is the reward. 

•    Flexibility is the ability to move quickly in response to changing market needs. It is being true to a dream while also being mindful of market realities. A story is told about an entrepreneur who started a fancy shop selling only French pastries. But customers wanted to buy muffins as well. Rather than risking the loss of these customers, the entrepreneur modified her vision to accommodate these needs.

•     Leadership is the ability to create rules and to set goals. It is the capacity to follow through to see that rules are followed and goals are accomplished.

• Passion is what gets entrepreneurs started and keeps them there. It gives entrepreneurs the ability to convince others to believe in their vision. It can’t substitute for planning, but it will help them to stay focused and to get others to look at their plans.

•    Self-confidence comes from thorough planning, which reduces uncertainty and the level of risk. It also comes from expertise. Self-confidence gives the entrepreneur the ability to listen without being easily swayed or intimidated.

•    “Smarts” consists of common sense joined with knowledge or experience in a related business or endeavor. The former gives a person good instincts, the latter, expertise. Many people have smarts they don’t recognize. A person who successfully keeps a household on a budget has organizational and fnancial skills. Employment, education, and life experiences all contribute to smarts.

Every entrepreneur has these qualities in different degrees. But what if a person lacks one or more? Many skills can be learned. Or, someone can be hired who has strengths that the entrepreneur lacks. The most important strategy is to be aware of strengths and to build on them.

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Who can become an entrepreneur?

Who can become an entrepreneur?

What leads a person to strike out on his own and start a business? Perhaps a person has been laid off once or more. Sometimes a person is frustrated with his or her current job and doesn’t see any better career prospects on the horizon. Sometimes a person realizes that his or her job is in jeopardy. A firm may be contemplating cutbacks that could end a job or limit career or salary prospects. Perhaps a person already has been passed over for promotion. Perhaps a person sees no opportunities in existing businesses for someone with his or her interests and skills.

Some people are actually repulsed by the idea of working for someone else. They object to a system where reward is often based on seniority rather than accomplishment, or where they have to conform to a corporate culture.

Other people decide to become entrepreneurs because they are disillusioned by the bureaucracy or politics involved in getting ahead in an established business or profession. Some are tired of trying to promote a product, service, or way of doing business 
that is outside the mainstream operations of a large company.

In contrast, some people are attracted to entrepreneurship by the advantages of starting a business. 

These include:

• Entrepreneurs are their own bosses. They make the decisions. They choose whom to do usiness with and what work they will do. They decide what hours to work, as well as what to pay and whether to take vacations.
• Entrepreneurship offers a greater possibility of achieving significant financial rewards than working for someone else.
• It provides the ability to be involved in the total operation of the business, from concept to design and creation, from sales to business operations and customer response.
• It offers the prestige of being the person in charge.
• It gives an individual the opportunity to build equity, which can be kept, sold, or passed on to the next generation.
• Entrepreneurship creates an opportunity for a person to make a contribution. Most new entrepreneurs help the local economy. A few—through their innovations—contribute to society as a whole. One example is entrepreneur Steve Jobs, who co-founded Apple in 1976, and the subsequent revolution in desktop computers.

Some people evaluate the possibilities for jobs and careers where they live and make a conscious decision to pursue entrepreneurship. 

No one reason is more valid than another; none guarantee success. However, a strong desire to start a business, combined with a good idea, careful planning, and hard work, can lead to a very engaging and profitable endeavor.

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