NEW BUSINESS DEVELOPMENT FIA FEA USP PROF. JAMES WRIGHT. Entrepreneurship. Entrepreneur qualities and Brazilian context Class # 2

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1 Entrepreneurship Entrepreneur qualities and Brazilian context Class #

2 Agenda The entrepreneurial process - Prescriptive foundations The entrepreneurial process - Descriptive foundations GEM 2015/ main results Brazilian case and practical activity References: Dornelas Chapters 1 and 2 GEM Global Report 2016/2017 GEM Brasil 2014 (Portuguese) Localiza Rent a Car 2

3 Hot topics Importance of entrepreneurship for wealth and social mobility creation Entrepreneurship expanded concept Entrepreneur s essential characteristics Motivation for entrepreneurial activity in Brazil. Factors associated with higher levels of entrepreneurial activity. 3

4 Entrepreneurship: study approaches Prescriptive What should be done Descriptive What is done Model, tools and techniques Redeeming entrepreneurs trajectory Entrepreneurship into practice Entrepreneurship understood as a phenomenon What can we learn from each approach? How, when and where to use it? 4 4

5 Entrepreneurial process - Prescriptive foundations Opportunity identification and evaluation - Creation and definition of scope - Perceived and actual values - Risks and returns - Opportunity vis-a-vis personal skills and goals - Competition status Business plan development 1. Executive summary 2. Business concept 3. Management team 4. Market and competitors 5. Marketing and sales 6. Structure and operation 7. Strategic analysis 8. Financial plan 9. Appendix Determining and capturing required resources - Personal resources - Friends - Relatives - Angels - Venture Capitalists - Banks - Government - Incubators Managing the company you created - Management style - Critical success factors - Identify current and potential problems - Implement a control system - Professional management - Entering new markets Adapted from Hisrich (1998) 5

6 Timmons Model of Entrepreneurial process Communication Opportunity Resources Ambiguity Fits and Gaps business plan Exogenous forces Creativity Leadership Uncertainty Team Capital market context Jeffry Timmons and Steven Spinelli, Babson College 6

7 Factors influencing entrepreneurial process Personal Personal achievement Risk taking Ambiguity tolerance Personal values Opportunity recognition Personal Risk taking Job dissatisfaction Job loss Education Age Gender Commitment Sociological Networks Teams Parents Family Role models Advisors Personal Entrepreneur Leader Manager Commitment Vision Organizational Team Strategy Structure Culture Products Innovation Triggering event Implementation Growth Environment Opportunities Role models Creativity Environment Economy Competition Resources Incubator Government policy Environment Competitors Customers Suppliers Investors Bankers Lawyers Resources Government policy Economy Based on Moore (1986) 7

8 GEM - Global Entrepreneurship Monitor London Business School 8

9 Global Entrepreneurship Monitor GEM began in 1999 as a joint project between Babson College (USA) and London Business School (UK). The aim was to consider why some countries are more 'entrepreneurial' than others. 17 years on, GEM is the richest resource of information on the subject, publishing a range of global, national and 'special topic' reports on an annual basis. In numbers, GEM is: 18 years of data 200,000+ interviews a year 100+ economies 500+ specialists in entrepreneurship research 300+ academic and research institutions 200+ funding institutions GEM

10 The GEM conceptual framework GEM

11 The GEM model of business phases and entrepreneurial characteristics GEM

12 Total early-stage entrepreneurial activity in 65 economies, grouped by phase of economic development Reference: GEM

13 Opportunity versus need motivation as percentage of TEA - Brazil 2002:2016 Opportunity Need 13

14 Entrepreneurship rates GDP growth rates GDP growth rates vis-a-vis early-stage entrepreneurship & established business ownership rates¹ Brazil 2002:2016 Established business ownership Early-stage entrepreneurship GDP growth Reference: GEM Brazil 2016, pp. 28 ¹ Percentage of population age 18 to 64 14

15 Percentage of early-stage entrepreneurship, by gender - Brazil 2007:2016 Male Female Reference: GEM Brazil 2016, pp

16 Percentage of early-stage entrepreneurship (TEA) & established business ownership (TEE), by gender - Brazil 2016 Male Female Reference: GEM Brazil 2016, pp

17 In Brazil early stage firms are made of young entrepreneurs! 17

18 Percentage of early-stage entrepreneurship (TEA) & established business ownership (TEE), by age - Brazil 2016 Reference: GEM Brazil 2016, pp to to to to to 64 18

19 Percentage of early-stage entrepreneurship (TEA) & established business ownership (TEE), by education - Brazil 2016 Reference: GEM Brazil 2016, pp

20 In Brazil, education supports success! 20

21 Localiza business case 21

22 Salim Mattar - founder Localiza business case Learned from his father, orange salesman in a stadium Shoeshine boy Salesman by nature Messenger delivered payment to a rental company (intuition for business) General manager of a mining company Salim Mattar Worked for supermarket chain Started 1973: Auto loan for buying 6 second-hand VW beetles. Localiza brand name mix between leasing and renting in Portuguese ( high dreams) 22

23 Localiza business case Started operation during first oil crisis Innovation 24x7 operation, fleet diversification, rent by the hour, full tank 1978 Another oil crisis - investments 1983 Foreign debt crisis franchises opening franchises plus 30 stores 1990 Collor - potential abroad (64 branches in Argentina) 1991 Second-hand cars sales directly to final customers 23

24 Localiza business case 1999 Fleet rental: opportunity. Localiza was a pioneer, created a division specialized in fleets rental, management and outsourcing: Total Fleet S/A IPO: Bovespa`s new market. Shares started at R$ 3.83 Presently employs more More than 6,000 people Company value: around US$ 3.5 billions. (975% growth from R$ 3,85 to R$ in August 2016) Current Businesses: Reference: Localiza Rent a Car S/A; Localiza Franchising S/A; Total Fleet S/A; Partnership with Gol Airlines as from Dec

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