1. E-EntrepreneurshipOBJECTIVES12-1 Explain the difference between bricks-and-mortar and virtual businesses.12-2 Discuss the scope of the e-entrepreneurship market and how to address e-entrepreneurship in the business plan.12-3 Explain the process of creating an e-business web site.12-4 Discuss e-entrepreneurship and the law.12-5 Evaluate an e-business web site according to a checklist of important factors.12-6 Discuss the myths of e-entrepreneurship.12-7 Analyze common e-entrepreneurship mistakes.

2. E-entrepreneur An e-entrepreneur is defined as anindividual willing to take the risk ofinvesting time and money in anelectronic business that has thepotential to make a profit or incur a loss. E-entrepreneurship is the act ofmanaging an electronic enterprise thathas the potential to make a profit orincur a loss. 3. Bricks and Mortar Business Has a material presence Has a tangible location where potentialcustomers can actually walk in andinteract with employees Examples: storefront, storage facility,office space, or manufacturing facility 4. Virtual Business Does not have a material spacedesigned to receive customers Transacts most of its business online Can deal with customers from anylocation that offers Internet capability 5. The E-Entrepreneurship Market Approximately 75 percent of Americanshave access to the Internet from home. That means over 200 million people arepotential customers for theentrepreneur with an Internet site. 6. History of E-Entrepreneurship In the early 1990s, electronic data interchange wasstandardized and companies could reliably completetransactions among themselves. In 1992, Compuserve offered online retail products toits customers. Netscape arrived on the scene in 1994 and providedusers with a simple and colorful browser with whichto surf the Internet. Netscape also provided a safe online transactiontechnology called Secure Sockets Layer. 7. (continued)History of E-Entrepreneurship The following year saw the launch of Amazon.comand eBay. In 1998, DSL, or Digital Subscriber Line, whichprovided fast, always-on Internet service, was offeredto customers across California. By 1999 retail spending over the Internet reached anestimated $20 billion. In 2004, the U.S. government extended the original1998 moratorium on Internet taxes until at least 2009. 8. E-Entrepreneurshipin the Business Plan The e-entrepreneurship components of thebusiness planning process integrate yourInternet site and your basic business model. They should address web site planning,development, marketing, legal, financial,management, and special considerations. They should be designed to ensure that yourInternet content reaches the right customerwhile leveraging the full value of the Internetas a marketing tool. 9. Create an E-Business The first step toward e-entrepreneurshipis usually the selection and registrationof a domain name, which is the uniquename that identifies an Internet site. The selection of a domain name is achief concern when doing businessonline. 10. Domain Name Process Choose a domain name that is easy toremember and is not easily confused withother names. Use a search engine to check for othercompanies using the same name or aderivation of it. Through registration it becomes a legitimatepart of the Domain Name System (DNS). 11. Domain Name System Every computer linked to the Internet has anexclusive address, called its InternetProtocol (IP) address. The DNS makes using the Internet easier byallowing a recognizable string of letters (thedomain name) to be used instead of thenumeric IP address. So instead of keying a long number, you cankey the URL (Uniform Resource Locator), forexample http://domainname.com. 12. ICANN Registration of domain names is controlled bya private-public partnership called theInternet Corporation for Assigned Namesand Numbers (ICANN). Numerous companies have been accreditedby ICANN to act as registrars. Domain names can be registered through themany different registrar companies. 13. Components ofan E-Business Site Web site design Content Web host Security and/or firewalls Search site submission On-site search engine Database software 14. Additional FeaturesNeeded for Online Payment Product catalog Shopping cart Merchant account provider Alternative payment options Order fulfillment Customer service E-mail notification Customer FAQs 15. E-Entrepreneurship and the Law Fraud and deception are unlawful nomatter what the medium. The Federal Trade Commission hasenforced and will continue enforcing itsconsumer protection laws. 16. Advertising Online consumers are protected bymany of the general principles ofadvertising law that also apply toInternet ads. The same consumer protection lawsthat apply to commercial activities inother media apply online. 17. Spam Spam is defined as unsolicited junk e-mail sent to large numbers of people topromote products or services. 18. E-Consumer Complaints The FTC has an online generalcomplaint form that can be used byconsumers to register complaintsrelating to online transactions in theU.S. Another FTC form may be used for e-business complaints involving a foreigncompany. 19. Global E-EntrepreneurshipAgreement The U.S. and 29 other countries aremembers of the Organization forEconomic Cooperation andDevelopment (OECD). 20. Global E-EntrepreneurshipAgreement Guidelines Fair business, advertising, and marketingpractices Enough information to allow consumers tomake informed choices, including disclosuresabout online businesses, their goods andservices, and the terms and conditions of sale Clear processes for confirming transactions Secure payment mechanisms 21. Global E-EntrepreneurshipAgreement Guidelines (continued) Timely and affordable dispute resolution andredress processes Privacy protection Consumer and business education International government cooperation 22. Application of OECD Guidelines Follow fair business, advertising, and marketingpractices. Provide accurate, clear, and easily accessibleinformation about the company and the goods orservices it offers. Disclose full information about the terms, conditions,and costs of the transaction. Ensure that consumers know they are making acommitment to buy before closing the deal. Provide an easy-to-use and secure method for onlinepayments. 23. (continued)Application of OECD Guidelines Protect consumer privacy during electronictransactions. Have policies and procedures to address consumerproblems quickly, fairly, and without excessive cost orinconvenience to the consumer. Adopt fair, effective, and easy-to-understand self-regulatory policies and procedures. Help educate consumers about electronic commerce,thereby contributing to a consumer-friendly electronicmarketplace. 24. Better Business Bureau/BBB OnlineCode of Online Business Practices Truthful and accurate communications Disclosure Information practices and security Customer satisfaction Protecting children 25. Web SiteChecklist 26. Myths of E-Entrepreneurship E-entrepreneurship is a no-brainer. E-entrepreneurship is cheap. The best price is always online. E-commerce will kill traditional retail. E-entrepreneurships make an obsceneamount of money. E-entrepreneurship is not safe. 27. (continued)Myths of E-Entrepreneurship E-entrepreneurship success dependson the right technology. Getting products to consumers is ane-entrepreneurs biggest cost. Most Web consumers are young. If a product or service can be sold, itcan be sold on the Web. Everyone else is selling online. 28. 15 Most CommonE-Entrepreneurship Mistakes1. Trying to sell the wrong product online2. Misjudging the web sites potential3. Forgetting that a first impression canonly be made once4. Making the site too complicated5. Using a complicated navigation system6. Forgetting to list your phone number7. Supporting only one browser8. Featuring out-of-date content 29. 15 Most CommonE-Entrepreneurship Mistakes (continued)9.Requiring excessive download times10. Ignoring customer service11. Not validating the functionality of your site12. Not merging your web site with yourconventional business13. Not promoting the site14. Using spam promotion15. Failing to deliver products 30. Creating a Winning E-Business 31. Learning Objectives Identify entrepreneurial abilities Describe the entrepreneurial process Understand the factors affecting e- business success Identify ways to exploit e-business advantages31 32. The Entrepreneur and the Entrepreneurial Process Entrepreneur Assumes the risks of starting and operating his or her own business Must be able to lead others Must believe in his or her business idea Must have the self-confidence to accomplish business goals32 33. The Entrepreneur and the Entrepreneurial Process (continued) E-business entrepreneur examples Jeff Bezos, Amazon.com Pierre Omidyar, eBay Kelby Hagar, GroceryWorks.com and Digital Witness Jason Zasky, Failure Magazine33 34. The Entrepreneur and the Entrepreneurial Process (continued) Entrepreneurial abilities Leadership traits High-energy level Self-confidence Organizational skills Ability to act quickly and decisively Independent, goal-oriented, creative, competitive34 35. The Entrepreneur and the Entrepreneurial Process (continued) Entrepreneurial process Stage 1: Are you an entrepreneur? Assess your entrepreneurial abilities Evaluate time and effort involved instarting/running your own business Consider the effect of the business commitment onyour family life35 36. The Entrepreneur and the Entrepreneurial Process (continued) Entrepreneurial process (continued) Stage 2: Buy existing business or start own business?36 37. The Entrepreneur and the Entrepreneurial Process (continued) Entrepreneurial process (continued) Stage 3: For a new business startup you must Define the business idea Create a business plan Secure financing37 38. The Entrepreneur and the Entrepreneurial Process (continued) Entrepreneurial process (continued) Stage 4: Operate and grow your business38 39. The Entrepreneur and the Entrepreneurial Process (continued) Entrepreneurial process (continued) Stage 5: Harvest your business Continue to operate cash cow Go public Sell the business Liquidate the business39 40. The Entrepreneur and the Entrepreneurial Process (continued)40 41. Factors Affecting E-Business Success The network effect Total value of a product, service, or technology grows as more and more people use it Telephone system example Single telephone has no value; as more people join thetelephone system, the value of each telephone increases uBid online auction site example As more people participate, the auction site becomesmore valuable to buyers and sellers41 42. Factors Affecting E-Business Success (continued)42 43. Factors Affecting E-Business Success (continued)43 44. Factors Affecting E-Business Success (continued) Innovative marketing ideas Hotmail and viral marketing example Hotmail users grew at a rapid rate because ofelectronic word of mouth coupled with the networkeffect Electronic word of mouth or viral marketingspreads from user to user in the same way ahuman virus spreads from person to person44 45. Factors Affecting E-Business Success (continued)45 46. Factors Affecting E-Business Success (continued) Scalability Ability of a business to function well in the face of rapid growthSystems and procedures meet customers needsAllAdvantage e-business failure example E-business idea: Paying for users to browse the Web and view advertising Millions of customers signed on; advertisers did not No scalability with rapid growth in customers46 47. Factors Affecting E-Business Success (continued) Ease of entry into electronic markets Low-cost technologies make it easy to create new e-businesses eBay and online auction exampleEasy for consumers to interact at auction siteWeb auction software is cheap and easy to install /maintainE-businesses earn commissions without having to manage, warehouse, and distribute products47 48. Factors Affecting E-Business Success (continued)48 49. Factors Affecting E-Business Success (continued) Ease of entry into electronic markets (continued) Competitive barriers to overcomeFailure to secure first-mover advantageLack of name identificationLack of customer loyalty49 50. Factors Affecting E-Business Success (continued) Ability to quickly adapt to marketplace changes Rapid knowledge transfer Need to make decisions quickly Exploit new ideas and opportunities Handle new challengesAmazon.com is an example of ongoing evolution from a basic e-business idea50 51. Factors Affecting E-Business Success (continued)51 52. Exploiting E-Business Advantages (continued) Expand the market Business and consumers are no longer bound by constraints of time, space, physical location Opportunity to reach larger market Ticketmaster example52 53. Exploiting E-Business Advantages (continued)53 54. Exploiting E-Business Advantages (continued) Acquire greater business visibility Get business name, products, and services in front of potential customers more quickly Auto industry example54 55. Exploiting E-Business Advantages (continued)55 56. Exploiting E-Business Advantages (continued)56 57. Exploiting E-Business Advantages (continued) Use power of the Internet and Web to maximize customer relationships and improve responsiveness Create customer loyalty Stay in touch with customer needs Build one-on-one relationships Provide information to enrich customers online experience Southwest Airlines example57 58. Exploiting E-Business Advantages (continued)58 59. Exploiting E-Business Advantages (continued) Create new products and services Opportunities for new e-business ideas where products or services are accessed over the Web Business software applications Server facilities for data file backup Legal dispute resolution Cybersettle example Web hosting services Rackspace Managed Hosting example59 60. Exploiting E-Business Advantages (continued)60 61. Exploiting E-Business Advantages (continued)61 62. Exploiting E-Business Advantages (continued) Reduce costs of running a business Sales and customer support costs Transaction costs Order handling costs Dell Computers, Cisco Systems, and MicrosoftCorporation examples62 63. Exploiting E-Business Advantages (continued)63 64. Exploiting E-Business Advantages (continued)64 65. Summary An entrepreneur assumes the risks of starting and operating his or her own business Entrepreneurial abilities Leadership High-energy Self-confidence Organization skills Ability to act quickly65 66. Summary (continued) Five stages of the entrepreneurial process Decide if you are an entrepreneur Decide to buy or start new business Plan the business Operate the business Harvest the business66 67. Summary (continued) Factors that can affect e-business success Network effect Innovative marketing ideas Scalability of the e-business idea Cost of entry into the marketplace Ability to overcome competitive barriers Ability to exploit inherent advantages67