A presentation given at the KU Leuven on myths of entrepreneurship. Being an entrepreneur and succeeding as an entrepreneur starts with getting the facts right.

1. The 7 Myths of
entrepreneurship
1

2. What is an Entrepreneur …
• French economist, J.B. Say (1767-1832), Entrepreneurs “shift
economic resources out of an area of lower productivity into
one of higher productivity and greater yield.”
• Schumpeter (1950), an entrepreneur is a person who is willing
and able to convert a new idea or invention into a successful
innovation. “creative destruction”
• Cassady (2008), someone who has the courage, drive and
talent to get something new started …
Bryan Cassady 08 2
www.leuvenresearch.be

3. Why is it important ?
• Critically important to society
• Can be personally rewarding and lots of fun …
• One of the best ways to build wealth
– Imagine a small business
• built over 3 years
• generating a profit of 100K per year
• 40% taxes  60 K net
• Sold at 10 X earnings  € 600 K
– Versus a well paid job, earning 100 K / year
Question: How many years do you need to work ?
Bryan Cassady 08 3
www.leuvenresearch.be

4. The Answer: 33 Years…
Gross Salary 100,000
Taxes 45%
Net 55,000.00 €
Savings % 33%
Savings/Year 18,150.00 €
Years 33.05785124
Net 600,000.00 €
4

5. Paradigms = models, patterns
the basic way of perceiving, thinking valuing
A dominant paradigm is seldom if ever stated
explicitly;
it exists unquestioned… transferred through
culture and unspoken business practices
William Harmon-
An incomplete guide to the future
5

6. A warm up exercise
1000
40
90 % of business 1000
executives agree 30
1000
20
1000
10
5,000
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7. The Entrepreneurship paradigm
• It is all about big ideas
• There are born Entrepreneurs
• You gotta be first
• It is all about money
• Do something you love and the money will follow
• Real entrepreneurs are risk takers
• I can’t do it
Special people with big ideas, first in, taking
huge risks and making tons of money
Bryan Cassady 08 7
www.leuvenresearch.be

8. These are comfortable,
logical business ideas and
what we have been taught….
But, they are not the whole
story
8

9. It is all about big ideas
1
Usually it is small ideas with proven
markets that work better 9

10. 90% of new business ventures fail
• Approximately 10% fail due to the product
• Approximately 80% fail for lack of a market
Great
X ? Hot
product
OK
X ? OK
Product
Poor
X X ?
Product
Poor OK Great
Marketing Marketing Marketing
Bryan Cassady 08 10
www.leuvenresearch.be

11. The Facts (USA)
• Business start-ups last year: 590,000
• Venture Capital funding: 3,000
• Companies expected to go public: 300
That is 1 in 2,000 like we think about it..
But 1/3 home businesses work…
Bryan Cassady 08 11
www.leuvenresearch.be

12. There are born Entrepreneurs
2
Anyone can be a successful
entrepreneur 12

13. A non-scientific study
• A Belgian belief
– It in their genes, families of entrepreneurs
• Belgian students
– 5% have run their own business
• American students
– 60% have run their own business
Bryan Cassady 08 13
www.leuvenresearch.be

14. 2 people calling home
Two shoe salesmen... find themselves in backward part of Africa.
The first salesman wires back to the head office.... there is no
prospect of sales.. Natives do not wear shoes.
The second wires "No one wears shoes here. We can dominate
the market. Send all available stock
14

15. You gotta be first
3
Fast seconds win just as often
15

16. PRODUCT INNOVATOR FOLLOWER WINNER
Aspirin Bayer many companies Leader
Breakfast Cereal Kelloggs Quaker Leader
Diet Cola R.C. Cola Coca Cola Follower
Discount retailing K-Mart Walmart Follower
Disposable Diapers Chux Pampers Follower
Fiber Optic Cable Corning many companies Leader
Float glass Pilkington Corning Leader
Instant Cameras Polaroid Kodak Leader
Jet Airliners De Havilland Boeing (707) Follower
Light Bulbs General Electric Sylvania Leader
Microwave Oven Raytheon Samsung Follower
MP3 music players Diamond Sony (&others) Follower
Office P.C. Xerox IBM Follower
PDA Psion, Apple Palm Follower
Plain Paper Copiers Xerox Canon Not clear
Pocket Calculator Bowmar Texas Instruments Follower
Soft Drinks Coca Cola Pepsi Leader
Video Games Players Atari Nintendo/ / Sony Followers
Web browser Netscape Microsoft Follower
X-Ray Scanner EMI General Electric Follower
16

17. A classic example of a fast second
Who needed a new search engine in
1998. No one
Who is the leader now. Google
17

18. It is all about money
4
Successful entrepreneurs: do it
cause they want to 18

19. Why do people start a new business ?
Bad news: Average Salary 39 K
Bryan Cassady 08 19
www.leuvenresearch.be

20. Do something you love and the
5
money will follow
Don’t be silly. Do something you
love and people will pay for… 20

21. What you are What are you
Good at Made to do
Magic What will people
pay for
21

22. Real entrepreneurs are risk takers
6
Successful entrepreneurs are
risk removers 22

23. A personal opinion…
• I think there are 2 types of entrepreneurs
– Risk takers (they like the macho bit)
– Risk reducers (they like getting house odds)
• A successful entrepreneur will build a strategy that increases
odds of success from
– 10%
– to 20%
– to 50%
Bryan Cassady 08 23
www.leuvenresearch.be

24. What is the real risk ???
• An MBA vs. an MBA in life
• 2 years doing an MBA = a good investment
• 2 years doing a business start-up
– A chance of real success
– You can learn more than doing an MBA
Sideline: the millionaire next door
The sons and daughters of entrepreneurs… doctors, lawyers,
Businesspeople… but significantly less financially successful
Bryan Cassady 08 24
www.leuvenresearch.be

25. I can’t do it
7
You probably can …
25

26. 26

27. 27

28. Video Link : http://youtu.be/cL9Wu2kWwSY
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29. Conclusions
• There is no guarantee that Entrepreneurship will bring you
great riches
• But the ride can be a lot of fun
• Sometimes it’s fun not to know what’s going to happen
Bryan Cassady 08 29
www.leuvenresearch.be