Since the publication of the first edition of Entrepreneurship: Strategies and Resources, the field of entrepreneurship has grown even faster than I would have predicted. There are more courses and schools teaching entrepreneurship than ever. The major business periodicals, Business Week, Fortune, and The Wall Street Journal continue expanding their coverage of entrepreneurs and their companies. Success magazine has begun a ranking of top business school entrepreneurship programs. Business plan competitions at the graduate and undergraduate level continue to proliferate and the prizes get larger and larger. International interest in new venture creation has grown exponentially and some of this has been delivered through the Internet in distance learning formats. I personally participated in one such effort between Indiana University and City University of Hong Kong. The technology enabled us to form joint ventures between students in the United States and Hong Kong for the purpose of starting businesses. It was marvelous. In this third edition of Entrepreneurship: Strategies and Resources, I have tried to improve upon the foundation set in the first and second editions. This book is designed to be friendlier to the user, beginning with its new design and softcover. A number of new features will help make the text easier to read and understand. Dozens of new examples and minicases, called "Street Story," have been added. International examples and applications are integrated throughout the book. ORGANIZATION OF THE BOOK Entrepreneurship: Strategies and Resources is organized into three parts. Part I introduces the major themes and theory of the book. Chapter 1 describes the roles that new venture creation plays in the international economy, defines entrepreneurship, and shows how three factors individuals, environments, and organizations come together to create the entrepreneurial event. Chapter 2 sets this textbook apart from others because it casts entrepreneurial phenomena in terms of the predictive theory of the resource-based framework. In this chapter, we present the basic concepts and model of the resource-based theory. There are six types of resources in our theory: financial, physical, technological, human, organizational, and reputational. The theory says that entrepreneurs can create sustainable competitive advantage for their ventures when they possess or can acquire and control resources that are rare, valuable, hard to duplicate, and nonsubstitutable. Here we emphasize the importance of human resources, especially the entrepreneur. We then explain how these resources are a source of profit and rent for the entrepreneur and how the new venture needs to protect these rents and profits through isolating mechanisms and first-mover advantages. Last, we offer a model of resource-based feasibility analysis to guide the student throughout the rest of the book. Part II Entrepreneurship: Strategies and Resources describes the environment for entrepreneurship. It presents the tools and techniques for analyzing business and competitive conditions and evaluating entrepreneurial opportunities. It is comparable to the strategy formulation phase of corporate strategic management. The purpose of this section is to show how the environment affects, directs, and impinges on the strategy formulation problem in new venture creation. It does this in two ways that can be expressed by the resource-based model: The environment helps determine what is rare, valuable, imitable, and substitutable and it is the source of resources that possess these four attributes. The strategy formulation problem in new venture creation can be Stated as follows: What configuration of resources will provide the new firm with the best chances of achieving a competitive advantage? Chapter 3 covers the aspects of the macro- and microenvironment that affect entrepreneurship and new venture creation. We present a process model for environmental analysis and then describe a five-element model of the macroenvironment: political, economic, technological, sociodemographic, and ecological factors. Next we offer the elements of the competitive environment. We incorporate the Porter model (5-forces model) into the analysis. We begin by asking two questions of utmost importance to the entrepreneur in the early stages of new venture creation: Is the industry the entrepreneur is about to enter an attractive one? What are the best ways to compete to increase the chances of creating a high profitability venture? To address the first question, the chapter depicts an industry's profitability as a function of buyer and supplier power, the threat of substitutes, entry barriers, and the state of interfirm rivalry. Students are shown how to do this analysis in sufficient depth and with limited data by resorting to the basics of microeconomic theory. To address the second question, we discuss the ways that the possession and acquisition of the fourattribute resource base provides the entrepreneur with tools to overcome strong industry forces and exploit weak industry forces. The resource-based model is incorporated into this discussion by demonstrating its applicability as a screening device for new venture ideas. We create and describe a resource-based implementation matrix the four attributes of sustainable competitive advantage by the six types of resources: financial, physical, technological, reputational, human, and organizational resources. Chapter 4 presents types of new venture strategies and examines different positions that entrepreneurs take regarding the resources required for their firms. We present the basic entry wedges available to the new venture and develop the set of resource-based strategies. We look at how the industry life cycle influences strategy choice. New ventures can be created successfully across the life cycle, but each poses its special challenges. The chapter concludes with an overview of strategic postures and orientations that entrepreneurs can take. Chapter 5 presents the major tool for formulating and creating new ventures: the business plan. We offer an in-depth outline for a business plan, including all the key sections and tips on how to structure the plan and the financial proposal for maximum effectiveness. The chapter continues with a discussion of the criteria and techniques for evaluating business plans. At the end of the chapter, we offer proven tips for the format and presentation, writing, and editing of successful business plans. A complete business plan follows the chapters. Part III of Entrepreneurship: Strategies and Resources makes the transition from the formulation of entrepreneurial strategy to the implementation stage. The section covers strategic choice, implementation issues, and the problems of securing resources. Chapter 6 is an entirely new chapter called "The E-Entrepreneur." It explores the special nature of electronic entrepreneurship and the impact the Internet has had on entrepreneurs and start-ups everywhere. We examine who is likely to be an e-entrepreneur and what makes Internet start-ups likely to succeed. Within the framework of the resource-based theory, we conclude that you must be able to do something that provides you with a competitive advantage. We then take a look at the underlying strategies that e-entrepreneurs can employ for their firms. Finally, we evaluate a number of e-commerce models that have been tried during the e-commerce boom. Chapter 6 in the first and second editions covered entrepreneurship and marketing. We still think there is important information in this chapter, but it will be included in the auxiliary material for the instructor. Chapter 7 introduces the elements of entrepreneurial finance. We discuss how financial resources can and cannot be a source of advantage for the new venture. Then we show how the venture can determine its financial and cash flow needs. After reviewing the types and sources of potential financing, we present three methods of new venture valuation. The chapter has an appendix: a brief introduction into the process of going public. Chapter 8 shows how entrepreneurs actually obtain investors and structure the financial deal. We look at the characteristics of various types of investors and how to appeal to their needs. The basic elements of the deal structure are presented, and then more advanced elements, such as phased financing and the use of options, are introduced. The chapter concludes with a review of the legal and tax issues raised by seeking outside investors. This chapter has two appendices: an outline of a typical investment agreement and a description of the negotiable terms to a financial agreement. Chapter 9 examines the creation and development of the organization. We begin with a discussion of the top management team and provide guidelines for effective top management processes. We do the same for boards of directors. Then we discuss the design of the new venture. Two new sections have been included in Chapter 9. The first is a summary of the research from Collins and Porras's Built to Last. We feel that the time to begin to think about building an enduring organization is right at the start of the venture, and the Built to Last concepts have great insight into the entrepreneurial problem. The second is an introduction to the dimensions of the balanced scorecard. We explore these in the context of entrepreneurial performance and show that performance is not just financial, but a set of indicators across four dimensions. The balanced scorecard can be a system of management for the entrepreneurial TMT. Last we offer a vision of the entrepreneurial workplace. We discuss how culture, ethics, and personnel practices can help make organizations unique and, therefore, provide a competitive advantage. Chapter 10 discusses corporate entrepreneurship (intrapreneurship) and the factors that lead to successful intrapreneurship and those that hinder large corporations from being entrepreneurial. The second section discusses the possible networking and alliance f...