Session 2 of getting started with technology startups. Let me go ahead and share my screen and we'll take a quick look at what we're going to cover today. There we go. In this session, first, we're just going to compare some of the organizational properties of established large organizations in contrast to an entrepreneurial organization and we'll look at that in the context of what we call agency theory. Then we're going to talk a little bit more about the entrepreneurial mindset and entrepreneurial habits. This is something that will be more or less than undercurrent, if you will, many of the topics that we'll be covering throughout the course. We'll also be looking at multiple perspectives. The concept of a holistic understanding of a given scenario and we'll emphasize why it's important to understand that all of these perspectives are existing and which ones are we giving our attention to at any given time. To begin to also recognize a particular entrepreneurial orientation and that includes things like risk tolerance, for example. We'll also touch on some of the key motivators for starting a new business and try to identify some of the support systems that help entrepreneurs when they're launching their new business. We're getting started with things. Let's go ahead and jump in. First of all, like I said, we'll talk a little bit about organizational properties and agency theory. A large organization. Well, so one of the key things to recognize in a large organization is generally there's no one person that is critical to the success. The responsibility is widely distributed among the departments, among people. Oftentimes there are backup resources and ways to get things done. There're documentation or their maybe an entire department it is with nothing but documentation and clearly defined procedures and roles and responsibilities among people and different groups and knowledge itself is spread and widely dispersed. But in an entrepreneurial business, it's often dependent on individuals. There may be one person who is holding the body of knowledge or a particular individual who's exceptionally skilled at one aspect of the business or the operation very unlike a large organization, it's not as easy to just find someone to serve as a backup. There's often a concentration of knowledge around the individual or perhaps a small group, which of course, introduces additional degrees of vulnerability and uncertainty. There's greater excess resources in a large organization. In other words, there's more things, there's access to various different types of things necessary to get a start-up going and these can be simple things from admin support to getting organized with how to hire someone and the ability to bring in experts or consultants to fill critical needs. On the other hand, in entrepreneurial business, there is often limited resources, founders are critical to the success and oftentimes the organization is run like a lean operation. It's essential that it's able to adapt and to be flexible and to adjust as changing conditions appear. One more here, managers are not owners and this is where we really start to dig into the issue of agency and motivation. Whereas an entrepreneurial business, typically it's owned and operated by the same people so it's possible to streamline decisions, but the issue we have is there may be an inhibited response time in a large organization in the operations, the culture, because of the fact that owners may not necessarily be managers. In a entrepreneurial business, there's a lot of flexibility and adaptability and generally, it is possible, it doesn't always happen, but it is possible to respond quickly to changes and to come up with some approach to any threats that may present themselves. Well, in a large organization, a competitive advantage sometimes ways with time as the making momentum in the market but the adjustments to competitive advantage may be a little slower to come, but in an entrepreneurial business it's all about competitive advantage. Of course, it's important across the board in a large organization as well, but it's highlighted more and it's more important in an entrepreneurial business because of the sensitivity of the vulnerability of the smaller organization. This leads us to this concept of agency theory and the suggestion that individuals will act in a way to maximize their own benefit and that's natural, it's almost intuitive, we may be consciously or even unconsciously respond that way. But in a large organization, if the manager is not an owner we had no clarity or no certainty that they're necessarily going to act in the benefit of the shareholders. This is really critical, a very key, and the owners in general are aiming to maximize the value of the business. This is the motivation of ownership and to maximize shareholder value. Sometimes you might hear I describe this shareholder wealth. Well, the owner of the business interests are well aligned in an entrepreneurial business. That assures that individuals are operating in the best interests of the business, which is in their best interest as well and when those things are not aligned, we have conflict and thus this issue of agency theory and also a big reason why many startup companies will offer options and various different incentives for individuals to join a company. Let's see, that completes Video 1 of 9 session 2. Let me get my numbers clear and I'll see you again shortly. Cheers.