Culture in Entrepreneurship and the challenges of bringing in new investors

Culture in Entrepreneurship and the challenges of bringing in new investors

Why is culture important? (Wan Ping Yao, Tan Shu Rou)

As an entrepreneur, culture is important as it provides competition among organizations. With competition and rivalry, comes innovation and motivation to be better than the rival. Therefore, advancements will rapidly emerge as all of those organizations are trying to stand out to be the best. Culture in entrepreneurship also allows organizations to open up to various new ideas and encourage them to take up various risks for said ideas. Furthermore, this forms a continuous loop in the entrepreneurship environment that organizations foster disruptions in the industry and other would also try to catch up to those disruptions with newer and more disruptive ideas by providing better services and products. Therefore, culture is important as it provides competition and innovation to organizations that are trying to be the best and the most unique in the industry which leads to the next point for why culture is important in entrepreneurship which is growth and expansion in the environment and the industry. (Mokaya, 2023)

Culture plays a crucial and significant role in shaping how a community behaves, develops, and responds. Everybody's life in the society is greatly influenced by culture. Having a common language with others creates a feeling of cultural identity. Since language is a direct result of how people communicate in a society, it changes along with culture. Because of the stability it offers, it feels comfortable and secure. Culture evokes the same feelings in most people as it does in their families. Those who belong to the same culture can connect with strangers right away between towns, states, and regions, culture offers continuity. Additionally, culture is a bridge that unites people from different towns, states, and regions by bridging geographical divides. It gives different groups of people a feeling of continuity and common heritage, which promotes a sense of solidarity and belonging. (Sally Painter, 2020)

Do you think that Facebook overpaid for WhatsApp? Why? (Benjamin Chan Xie Chung)

Facebook's decision to drop $19 billion on WhatsApp shocked everyone, but there's more to it. WhatsApp brought in a huge user base particularly abroad, which complemented Facebook's platform well. Despite not being a big money-maker back then, Facebook saw potential in ads and services. Buying WhatsApp also helped Facebook stay ahead in messaging and fend off competitors. So, while it was a hefty price tag, the strategic advantages made it a worthwhile investment.(Olson,2014)

What are some of the problems bringing new investors? (Wallace Lee Kar Shing, Teh Yin Xin) 

The difficulties in attracting new investors are due to an information overload. While some investors will surely lack expertise, others will have too much information, causing fear and unwise decisions, or putting their trust in the wrong people. When investors are overloaded with too much information, they might withdraw from division-making and reduce their efforts. Aside from that, new investors confront the issue of having limited funds to invest. This is particularly increased when specific financial instruments are excessively priced. Aside from that, there are numerous diversification difficulties in which investors buy a variety of assets to lessen the risk of missing out on substantial gains while also minimizing losses. However, if investors diversify too much or wrongly, they may not lose much, but they will also not earn much. They may also accept more risk than anticipated or pay exorbitant costs. (Rassolli, 2024) 

Investing can also be like looking into a fog. There can be surprises lurking out there that just can’t be predicted by new investors. For example, the sudden changes in the economy or new inventions that make their investment outdated. These unknown risks are like bumps in the road which can cause the carefully planned investment to lose money. Hence, new investors need to be sure of what they are getting into before they jump in.  Additionally, new investors are usually unclear about the market causing them to lose the opportunity to invest. For example, new investors might find an interesting company and want to invest in it. However, they are unclear about the market of the company’s product whether the consumer crowd is big enough and interested in their products or the company is popular in the long run. (FasterCapital, 2024) Without having a clear picture of who is the product audience, it is tough for new investors to know if it is a good investment.

References

FasterCapital. (2024, March 14). The drawbacks of not having a market opportunity for your small business - FasterCapital. https://fastercapital.com/content/The-Drawbacks-of-Not-Having-a-Market-Opportunity-For-Your-Small-Business.html

Mokaya, R. (2023, July 18). Entrepreneurship: It’s influence in entrepreneurial culture development by organizations. https://www.linkedin.com/pulse/entrepreneurship-its-influence-entrepreneurial-culture-raphael-mokaya/

Olson, P. (2014, October 6). Facebook closes $19 billion WhatsApp deal. Forbes. https://www.forbes.com/sites/parmyolson/2014/10/06/facebook-closes-19-billion-whatsapp-deal/?sh=e6ac7275c66c

Rassolli, M. (2024, February 8). 6 Common challenges faced by new investors and how to face them. TrendScout UK. https://www.trendscoutuk.com/blog/6-common-challenges-faced-by-new-investors-and-how-to-face-them/

Sally painter (2020, October 30). Why is culture important?Impact on people and society. https://www.lovetoknow.com/life/lifestyle/why-is-culture-important-impact-people-society

Effectuation in Entrepreneurship

Effectuation in Entrepreneurship

Benjamin

Can effectuation also be used in companies? Or is it useful only for entrepreneurship?

Effectuation isn't just for entrepreneurs, it can also help companies innovate and make better decisions. It encourages trying new things, uses resources flexibly, and manages risks wisely. This approach promotes teamwork, agility, and empowers employees, leading to better performance and adaptability within the company. By focusing on what's controllable and fostering a culture of experimentation, effectuation can drive growth and success in larger organizations.(Antonio,2023)

Ping Yao

What is the key difference between effectuation and other approaches in entrepreneurship?

The key difference between effectuation and other approaches in entrepreneurship is that while other frameworks might rely on forward planning and causal reasoning, effectuation focuses on reasoning from a given set of means to new anticipated outcomes. Effectuation is viewed as a "new way of thinking" that complements modern methods of managing innovation, including lean startup techniques, agile project management, and design thinking. Furthermore, effectuation is suggested to provide organizational innovation with competitive benefits by enhancing organizational ambidexterity, functioning as a dynamic capability, and promoting strategy formation. (Jorquera, 2023) (Wright, 2023)

Teh Yin Xin

Are the effectual approach and the traditional (casual) approach mutually exclusive?

The effectual approach and the traditional approach (casual) are not mutually exclusive. They are represented in different ways of thinking and decision-making in entrepreneurship. The effectual approach is non-predictive which is more flexible where entrepreneurs start by focusing on what resources they already have and how to use them. It emphasizes the use of contingencies and partnerships to create markets and opportunities. It thrives on adapting to changing circumstances. (Rizvi, 2023) However, the traditional (casual) approach is predictive rationality which is goal-oriented and it relies on prediction and planning. This approach involves setting specific goals and then taking action to acquire the resources needed to achieve the goals. (Read & Sarasvathy, 2005)

Wallace Lee Kar Shing

 Does Effectuation Mean: "Not Planning"?

 Effectuation doesn't mean not planning. Effectuation is a manner of thinking and making decisions that is predicated on the notion that entrepreneurs, through action and appearance, shape their own destiny. It's an approach of thinking that, as compared to predicting and attempting to plan for the future, focuses on grabbing chances and resolving issues with the tools at what you have. Aside from that, Effectuation is an useful concept. It is a desire to facilitate the development of businesses, goods, markets, services, and ideas in order to better the state of the world and people's lives. Therefore, even though it could appear less strict than standard planning techniques, the focus is really on flexibility and capturing opportunities as they present themselves rather than maintaining a strict schedule. (Sarasvathy, 2019)

References

Da Silva, A. D. F., & De Oliveira Lima, E. (2023, August 8). Effectuation and identity in entrepreneurship: A systematic review. https://www.redalyc.org/journal/5707/570772776020/html/

Killen, C. P. (2022). Effectuation. In Routledge eBooks (pp. 285–309). https://doi.org/10.4324/9780429346033-19

Pal, A. (2023). First Principles Entrepreneurial Effectuation. First Principles Entrepreneurial Effectuation. https://doi.org/10.1109/temsmet56707.2023.10150055

Read, S., & Sarasvathy, S. D. (2005). Knowing what to do and doing what you know. the Journal of Private Equity, 9(1), 45–62. https://doi.org/10.3905/jpe.2005.605370

Rizvi, H. (2023, April 19). Effectual vs Causal Model of Entrepreneurship: Unlocking the Secrets to Entrepreneurial Success! - Hidayat. Hidayat Rizvi. https://hidayatrizvi.com/effectual-vs-causal-model-of-entrepreneurship/

Saravasthy, S. (2019, April). What is Effectuation? Effectuation 101. https://effectuation.org/effectuation-101

Generating Good Ideas for an Entrepreneur

Generating Good Ideas for an Entrepreneur

Wan Ping Yao

Good ideas come from many form of sources and are the ways entrepreneurs generate good ideas. Here are 4 sources and ways good ideas can be generated. Firstly is inspiration. Inspirations come from many places, whether it is from a story we have heard or personal experiences. Inspirations not only provides us the ideas but also the motivation to execute them. In essence, it inspires us when it comes to coming up with good ideas as an entrepreneur. One of the many ways to get inspiration for good ideas are by connecting with people around us and also with people outside of our social circle. (Steve, 2022) Besides that, collaboration also helps generate good ideas and is also a good source for ideas in general. As the saying goes, two heads are better than one. Collaboration not only helps increase the efficiency and productivity of the work, but also helps generate and brainstorm more good ideas as we can learn more from each other. One way to generate more good ideas is by hosting team-building exercises and team meetings. By doing so, team members can have a discuss plans and ideas for a certain project or business matters. (Indeed, 2022)

Other than inspiration and collaboration, innovation is also a key source for generating good ideas. Innovations especially technological innovations can help entrepreneurs come up with not only good ideas, but also good business concepts. Ideas through innovation can bring forth many benefits that are beneficial to the business. One of the many ways of generating more good ideas using innovation is by constantly improving the product and business models through various methods. (Nibusiness, 2024) Last but not least, experimentation is also a great source for generating good ideas. As an entrepreneur, a product or a business requires experimenting to ensure its success. Hence, good ideas often emerge through experimentation. It also aids in our ability to decide on our ideas and tasks with greater knowledge. One of the many ways to generate more good ideas through experimentation is by collecting the data and look at the experiment results. (Saarelainen, 2021) With that, good ideas can be generated. 

Benjamin

Adjacent Possible

"Adjacent Possible," is proposed by scientist Stuart Kauffman. This theory suggests that innovation and creativity occur when new possibilities become reachable from the current state of things. Imagine it as opening new doors of opportunity as we explore and develop our ideas. Each new idea or innovation creates a platform for further exploration, leading to a cascade of potential ideas and opportunities that were previously inaccessible. (Whitworth,2023)

Liquid Networks

"Liquid Networks," as discussed by Steven Johnson in his book "Where Good Ideas Come From." This idea underscores the importance of dynamic interactions and collaborations among people and ideas. In these fluid and adaptable networks, ideas are free to mix, evolve, and combine in novel and unexpected ways. The diversity and interconnectivity within these networks create a fertile ground for the cross-pollination of ideas, fostering an environment where good ideas can grow, evolve, and ultimately flourish. (Martinengo,2019)

Teh Yin Xin

Where Good Ideas Come from?

Good ideas often come from a combination of factors and environments that promote creativity and innovation. The concept of the “Adjacent Possible’ states that at any given moment, the world is capable of extraordinary change, but only certain changes can occur. This means that innovations are limited by the context and knowledge of time and it often build on what already exists. However, it will gradually expanding as new pieces are added to the puzzle. (Jesuis, 2019) Hence, we can take small steps and build upon existing ideas to discover more new possibilities and ideas. Besides, “Liquid Networks” are another source of good ideas. This concept state that environments allow the diverse of individuals where ideas can flow, recombine, mutate freely and generate unexpected connections and ideas. Sometimes, good ideas come from chance we encounter or during an unexpected discovery and this known as “Serendipity”. However, it requires a prepared heart that is able to recognize and seize the opportunities.

 How to Generate Good Ideas?

Good ideas often begin with curiosity, a curious mind questions, and wonders are the seed which good ideas grow. To generate good ideas, one must cultivate the sense of wonder and branching out into the diverse fields of knowledge and experience. For example, stepping outside one’s comfort zone and embracing the diversity of cultures and perspectives. By broadening our horizons, we can allow different streams of thought to come together and create innovative ideas. Furthermore, good ideas often hidden in plain sight, waiting to be discovered by the observant. A regular practice of observation can reveal patterns, anomalies and opportunities that others may have missed. By engaging with a diverse group of people, it provides us with different perspectives and feedback which can enrich our ideas. (Paul, 2015)

Wallace Lee Kar Shing

Where good idea come from?

According to Steven Johnson's concept of the "adjacent possible," creativity and the creation of new ideas are influenced by the environment and the state of knowledge at the time they occur rather than happening at random. For example, think of the possibilities next to you as a room with plenty of doors. Every door points to a possible route or creative possibility, but the doors you can access are limited to those that are next to the ones you have previously opened. Creative ideas can come from a variety of situations and sources. Whether it's seeing a hole in the market or recognizing an issue that needs to be fixed, they frequently originate from observation and engagement with the world around us. The sharing of ideas and insights during brainstorming and collaboration sessions with teammates or peers can also result in the generation of new concepts. Moreover, environments that promote experimentation and risk-taking, where failure is perceived as a positive learning opportunity rather than a setback, are conducive to creativity. Last but not least, serendipity comes into play since unexpected connections or chance meetings can provide ground-breaking discoveries. (Paul Jenkins, 2023)

 How to Generate Good Ideas?

Rather than expecting immediate inspiration, we should actively seek out "slow hunches" and allow ideas to stew and evolve over time. This includes instilling curiosity and maintaining a feeling of wonder about the world around us. Keep a notebook or idea notepad for writing down any thoughts, observations, or connections that come to mind, even if they seem unimportant or incomplete at the moment. Capturing and revisiting these early ideas allows them to grow and develop into fully fledged concepts. In addition, immerse oneself in environments that foster creativity, such as attending workshops, exploring nature, or participating in artistic activities. (Brett Friedman,2020)

Reference

Busch, C., & Grimes, M. (2023, July). Serendipity in Entrepreneurship, Strategy, and Innovation—A Review and Conceptualisation. ResearchGate. https://www.researchgate.net/publication/372383793_Serendipity_in_Entrepreneurship_Strategy_and_Innovation-A_Review_and_Conceptualisation

Hogarty, S. (2022, September 28). What is inspiration and why is it so important? Ideas. https://www.wework.com/ideas/professional-development/creativity-culture/what-is-inspiration-and-why-is-it-so-important

Indeed Editorial Team. (2022, June 25). Collaboration ideas to boost creativity in the workplace. Indeed Career Guide. https://www.indeed.com/career-advice/career-development/ideas-for-collaboration

Jesuis, K. (2019). Where good ideas come from Steven Johnson. ResearchGate. https://www.researchgate.net/publication/332810816_Where_good_ideas_come_from_Steven_Johnson

Martinengo, G., & Martinengo, G. (2019, August 17). Liquid networks facilitate innovation | Giuseppe Martinengo. Giuseppe Martinengo | Faith and Leadership. https://giuseppemartinengo.org/liquid-networks-facilitate-innovation/

NI Business Info. (2024). Common approaches to innovation | nibusinessinfo.co.uk. https://www.nibusinessinfo.co.uk/content/common-approaches-innovation

Paul, K. a. H. a. N. (2015, October 21). 5.6 Observation for idea Generation. Pressbooks. https://open.lib.umn.edu/infostrategies/chapter/5-6-observation-for-idea-generation/

            Saarelainen, E. (2021). Why there’s no innovation without experimentation. UNHCR. https://www.unhcr.org/innovation/why-theres-no-innovation-without-experimentation/#:~:text=It%20is%20about%20answering%20your,the%20assumptions%20behind%20the%20concept.

Whitworth, E. (2023, April 25). The adjacent possible: Steven Johnson explains reachable ideas. Shortform Books. https://www.shortform.com/blog/adjacent-possible-steven-johnson/#:~:text=The%20adjacent%20possible%2C%20Steven%20Johnson%20explains%2C%20is%20a%20theory%20developed,information%2C%20resources%2C%20and%20abilities.

https://brilliantio.com/where-good-ideas-come-from/

https://www.marpipe.com/blog/how-to-get-a-good-idea

Concept, Tools and Ways for Managing Risk

The Concept, Tools and Ways of Managing Risk

Wan Ping Yao

Concept and Tools

A good concept for risk management is risk assessment. Risk assessment is a procedure used to find possible risks and examine the possible outcomes of a hazard or disaster. There are various risks to take into account, and each risk may have a variety of potential outcomes either within or as a result of it. (Ready, 2024) Risk assessment can help organizations understand more about the risks that they are currently facing. The tools involved in risk management include decision trees and cause and effect diagram, otherwise known as the fishbone diagram. Firstly, decision trees. Decision trees is a tool that can help organizations analyze potential outcomes and consequences of a risk. It does this by creating a visual representation that looks like a tree. It begins with a question node, branches out into multiple decision-making pathways, and ultimately produces a range of results. Decision trees also helps organizations to make well-informed decisions when facing a risk. (Miro, 2024) Next is the fishbone diagram. The fishbone diagram, sometimes also known as the Ishikawa diagram is a risk management tool that identifies causes and effects of a risk through depicting the elements that go into a problem. (Elaoufi, 2023) The fishbone diagram helps organizations to facilitate brainstorming and stimulate problem solving within the organization. (Allison, 2023)

How to manage risk

As an entrepreneur, there are 5 steps in managing a risk in an organization. Firstly, identify the risk. Risk identification is important as it helps organizations to recognize potential problems and how you might be able to avoid them. (SafetyCulture, 2023) The next step in managing a risk is by performing risk assessment as mentioned in the previous paragraph. This helps organizations to acknowledge the severity of a risk and it is important for the following steps. After assessing the risks, it is important to prioritize the risks faced by the organizations. Risk prioritization can assist organizations in swiftly determining which threats are the most urgent and allocating resources accordingly. It functions by giving each risk a score based on its likelihood and impact. It then shows a graphic depiction of the highest priority hazards, making it simple to compare risks and facilitate effective decision-making. (Scytale, 2023) After prioritizing the risks, organizations will then have to come up with responses and measurements and implement them in order to avoid those risks. This can lessen the possibility of negative impacts and assure project success. (Pm-Infotech, 2023) Lastly, with the risk responses implemented, organizations can make improvements and supervise the enforcement of those risk responses to ensure the effectiveness of the risk responses implemented.

Teh Yin Xin

Risk Management Concepts and Tools

Risk management is an aspect of organizational strategy and the concept of Enterprise Risk Management (ERM) stands out as a comprehensive approach. Compared to traditional risk management, ERM covers a wide range of risks and integrates them into strategic decision-making. It fosters a risk-aware culture that aligns with the achievement of strategic objectives. (Staff, 2024a)

One of the tools for risk management is the PESTLE analysis. This analysis helps the organizations to identify and assess risks arising from political, economic, social, technological and environmental factors. It is a strategic tool that allows the organization to consider the potential risks proactively. (Staff, 2024)

Managing Risk as an Entrepreneur

As an entrepreneur, a risk management plan is needed to mitigate the risks associated with starting and running a business. It is a systematic approach to identifying, assessing and controlling the risks to minimize their impact on the business while maximizing the chances of success. By having a risk management plan, an entrepreneur can address the potential issues before they become major problems and also to ensure the long-term success of a business. (Team & Team, 2023b)

Other than that, entrepreneurs should conduct a risk assessment for the business. A risk assessment helps to identify the areas where the business is most vulnerable and it prioritizes the risk management efforts. Examples of conducting a risk assessment are SWOT analysis and decision trees. Furthermore, entrepreneurs should mitigate the financial risk of the business. For example, entrepreneurs can create a detailed financial plan, maintain an emergency fund, explore alternative financing options and also establish a strong relationship with financial institutions. (Kumar & Kumar, 2023)

Benjamin

Managing risk as an entrepreneur involves adopting an effective Enterprise Risk Management (ERM) approach, which should be viewed as a strategic tool to strengthen the organization's risk oversight. ERM seeks to develop a comprehensive, top-down view of significant risks that could impact the achievement of the business's most important objectives. By integrating ERM into the strategic planning process, entrepreneurs can gain valuable insights into potential risks and proactively design strategies to navigate uncertainties, thereby reducing the likelihood of disruptions to their business operations and enhancing their preparedness to mitigate the impact of unforeseen risk events.(ERM,2024)

Entrepreneurs should leverage the insights from the ERM process to inform their strategic decisions and risk management practices. By being proactive in identifying and addressing potential risks, entrepreneurs can gain a competitive advantage, ensuring that their business is well-prepared to adapt to changing environments and seize new opportunities. This proactive approach to risk management is essential for entrepreneurs to safeguard their business's success and resilience in the face of uncertainties and challenges.(AFP,2023)

Wallace Lee Kar Shing

Concept and Tools of Risk Management

Risk management is the process of determining, evaluating, and managing risks to an organization's capital and earnings on a legal, strategic, financial, and security basis. Other than that, If an unexpected incident catches the business off guard, it might only have a little effect on your overhead expenses. In the worst situation, though, it may be disastrous and have dire consequences, like a heavy financial load or possibly the closing of your company. One of the tool of Risk management is risk reduction. Rather than totally preventing loss, this approach of risk management aims to reduce it. It remains committed to controlling the loss and preventing it from growing even after acknowledging the risk. Preventive care is one instance of this in terms of health insurance. (IBM, 2024)

How to manage risk as an Entrepreneur

Being an entrepreneur means taking a whole-hearted approach to risk management. First and foremost, it's critical to recognize possible hazards related to various company facets. Entrepreneurs should assess each risk's possibility and its consequences after it has been found. After that, they can create risk-reduction plans that include diversification, emergency preparation, or insurance. Even though certain risks might have to be taken keeping an eye on the business environment over time makes it easier to adjust as things change. It's crucial to ask mentors for guidance maintain financial stability and keep up with market developments. It's also critical to learn from mistakes and incorporate those lessons into upcoming risk management plans. Entrepreneurs may increase their chances of success and navigate uncertainty with more confidence by combining these approaches. (Talmage-Rostron, 2024)

Tan Shu Rou

Risk management

The concept of risk management is to reduce the negative impacts on a business through the implementation of various strategies. It is the process of identifying, assessing and controlling threats to an organization’s capital, earnings and operations (Tucci, n.d.). It is crucial in businesses today due to the rapid pace of globalizations causing new risks to emerge every passing day.

Here are a few risk management tools:

-           -  SWOT analysis is a strategic tool that helps businesses identify their Strengths, Weaknesses, Opportunities and Threats

Reference

AFP Staff. (2023, December 18). Trending topics in Treasury and finance. AFP. https://www.afponline.org/training-resources/resources/articles/Details/7-steps-to-an-effective-risk-management-process

Elaoufi, I. (2023, February 22). Ishikawa for risk management. https://www.linkedin.com/pulse/ishikawa-risk-management-ibtissam-elaoufi/

IBM. (2023). What is Risk Management? https://www.ibm.com/topics/risk-management

Kumar, K., & Kumar, K. (2023, July 12). “The most common risks entrepreneurs face and how to mitigate them.” CEF Insights. https://cefinsights.com/the-most-common-risks-entrepreneurs-face/

Lynch |, A. (2023). Benefits of Fishbone diagrams. Edraw. https://www.edrawsoft.com/fishbone-diagram-benefits.html

Miro. (2024). Decision Tree Analysis in Risk Management. https://miro.com/diagramming/decision-tree-analysis-in-risk-management/

Pm-Infotech. (2023, August 25). Risk Response planning. https://www.linkedin.com/pulse/risk-response-planning-pmptemp/

Ready. (2024, March 1). Risk Assessment. Ready.gov. https://www.ready.gov/business/planning/risk-assessment#:~:text=A%20risk%20assessment%20is%20a,to%20complete%20your%20risk%20assessment.

SafetyCulture Content Team. (2023, December 13). Risk identification: Importance & process. SafetyCulture. https://safetyculture.com/topics/risk-identification/

Staff, E. I. (2024, April 9). ERM tool: Using PESTLE analysis to identify potential external risks. Enterprise Risk Management Initiative. https://erm.ncsu.edu/resource-center/erm-tool-using-pestle-analysis-to-identify-potential-external-risks/

Scytale. (2023, August 11). What is Risk Prioritization. https://scytale.ai/glossary/risk-prioritization/

Staff, E. I. (2024a, April 5). What is Enterprise Risk Management (ERM)? Enterprise Risk Management Initiative. https://erm.ncsu.edu/resource-center/what-is-enterprise-risk-management/

Talmage-Rostron, M. (2024, February 6). Types & Importance of Risk taking in Entrepreneurship 2024. Nexford University. https://www.nexford.edu/insights/risk-taking-in-entrepreneurship

Team, A., & Team, A. (2023b, February 1). How to manage risk as an entrepreneur. AIContentfy. https://aicontentfy.com/en/blog/how-to-manage-risk-as-entrepreneur