Entrepreneurship: Theory, Process,

Practice, 5th Asia-Pacific Edition

Howard Frederick
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ENTRE
PRE
5TH

EDITION

NEUR
SHIP
THEORY / PROCESS
PROCE /
PRACTICE
5TH

FREDERICK / O’CONN
O’CONNOR /
KURATKO
iv BRIEF CONTENTS

BRIEF CONTENTS

PART 1 ENTREPRENEURSHIP IN THE TWENTY-FIRST

CENTURY ............................................................................. 1
1 ENTREPRENEURSHIP: EVOLUTIONARY DEVELOPMENT,
REVOLUTIONARY IMPACT ..................................................................2

2 THE ENTREPRENEURIAL MINDSET: COGNITION

AND CAREER ....................................................................................38

3 ETHICAL, SOCIAL AND SUSTAINABLE ENTREPRENEURSHIP ......70

4 PATHWAYS TO ENTREPRENEURIAL VENTURES ..........................112

PART 2 DESIGNING RESILIENT ENTREPRENEURSHIP:

FROM OPPORTUNITY IDENTIFICATION TO
BUSINESS MODEL........................................................... 149
5 OPPORTUNITY IDENTIFICATION AND THE CREATIVE
PURSUIT OF INNOVATIVE IDEAS ...................................................150

6 DESIGN THINKING FOR ENTREPRENEURIAL VENTURES...........184

7 LEAN ENTREPRENEURSHIP AND IDENTIFYING CUSTOMER

NEEDS.............................................................................................221

8 LEAN MARKETING AND BUSINESS MODEL DESIGN ...................254

PART 3 GROWING AND PLANNING ENTREPRENEURIAL

VENTURES....................................................................... 295
9 STRATEGIC ENTREPRENEURIAL GROWTH ..................................296

10 LEGAL AND REGULATORY CHALLENGES.....................................334

11 BUSINESS PLANNING ...................................................................374

PART 4 FINANCIAL MATTERS FOR ENTREPRENEURIAL

VENTURES....................................................................... 409
12 FINANCIAL PERFORMANCE FOR ENTREPRENEURIAL
VENTURES ......................................................................................410

13 SOURCES OF FINANCE FOR ENTREPRENEURIAL

VENTURES ......................................................................................456

14 VALUING AND HARVESTING ENTREPRENEURIAL

VENTURES ......................................................................................492
 CONTENTS v

CONTENTS
GUIDE TO THE TEXT ................................................................................................ IX
GUIDE TO THE ONLINE RESOURCES .................................................................... XIV
ENTREPRENEURSHIP: FOREWORD...................................................................... XVI
PREFACE............................................................................................................... XVII
ABOUT THE AUTHORS.......................................................................................XXVIII
ACKNOWLEDGEMENTS ........................................................................................ XXX

PART 1 ENTREPRENEURSHIP IN THE TWENTY-FIRST

CENTURY ...........................................................................1

CHAPTER 1 ENTREPRENEURSHIP: EVOLUTIONARY DEVELOPMENT,

REVOLUTIONARY IMPACT..................................................................2
CHAPTER OBJECTIVES ....................................................................................... 2
Entrepreneurs and innovators at the core of the economy.......... 3
Definitions of entrepreneurship ..................................................... 8
Entrepreneurship through the ages ............................................ 10
Theoretical approaches to entrepreneurship.............................. 13
Types of entrepreneurs ................................................................ 18
The entrepreneurial revolution: A global phenomenon.............. 21
CHAPTER 2 THE ENTREPRENEURIAL MINDSET: COGNITION
AND CAREER ....................................................................................38
CHAPTER OBJECTIVES ..................................................................................... 38
Fundamentals of the entrepreneurial mind ................................ 39
Contextual influences ................................................................... 41
Entrepreneurial motivation .......................................................... 45
Building entrepreneurial capabilities .......................................... 46
Entrepreneurial cognition............................................................. 47
The dark side of entrepreneurship .............................................. 51
Personal pathways to an entrepreneurial career ....................... 55
CHAPTER 3 ETHICAL, SOCIAL AND SUSTAINABLE ENTREPRENEURSHIP......70
CHAPTER OBJECTIVES ..................................................................................... 70
Social entrepreneurship ............................................................... 71
The ethical entrepreneur.............................................................. 75
Entrepreneurship and organised crime ...................................... 80
Entrepreneurship and disadvantaged groups ............................. 81
Indigenous entrepreneurs: At home and across the Tasman.... 83
Sustainability entrepreneurship................................................... 86
vi CONTENTS

CHAPTER 4 PATHWAYS TO ENTREPRENEURIAL VENTURES..........................112

CHAPTER OBJECTIVES ................................................................................... 112
Walking entrepreneurship pathways ......................................... 113
Bootstrapping and minipreneurship .......................................... 114
The classic pathway: (Disruptive) new-venture creation.......... 117
Acquiring an established venture............................................... 120
Family venturing and succession............................................... 122
The entrepreneurial organisation .............................................. 125
Re-engineering intrapreneurial organisations ......................... 128

ENTREPRENEURIAL CASE ANALYSIS

AN ENTREPRENEURIAL LENS: SAME PROBLEM, DIFFERENT
MINDSET.........................................................................................146

PART 2 DESIGNING RESILIENT ENTREPRENEURSHIP:

FROM OPPORTUNITY IDENTIFICATION TO
BUSINESS MODEL .........................................................149

CHAPTER 5 OPPORTUNITY IDENTIFICATION AND THE CREATIVE

PURSUIT OF INNOVATIVE IDEAS...................................................150
CHAPTER OBJECTIVES....................................................................... 150
Using creativity to build-measure-learn ................................... 151
Entrepreneurial imagination and creativity ............................... 151
Theories and sources of opportunity ......................................... 157
How can we visually depict opportunity recognition? ............... 159
When is an idea not an opportunity?.......................................... 163
Sources of opportunity................................................................ 164
Mapping out your value proposition........................................... 167
CHAPTER 6 DESIGN THINKING FOR ENTREPRENEURIAL VENTURES ..........184
CHAPTER OBJECTIVES....................................................................... 184
Nothing more noble than design ............................................... 185
Ways to think about design......................................................... 187
Ways to approach design thinking ............................................. 189
Design thinking process models................................................ 197
Design thinking tools .................................................................. 197
CHAPTER 7 LEAN ENTREPRENEURSHIP AND IDENTIFYING
CUSTOMER NEEDS ........................................................................221
CHAPTER OBJECTIVES....................................................................... 221
Bringing opportunities to life...................................................... 222
Pivot, persevere or perish: An innovation graveyard ................ 222
Pretotyping .................................................................................. 226
Developing minimum viable products ....................................... 229
Validation & Hypothesis-driven entrepreneurship.................... 236
Methods of experimental validation........................................... 237
Types of pivots ............................................................................. 240
The ethics of hypothesis-driven entrepreneurship ................... 241
 CONTENTS vii

CHAPTER 8 LEAN MARKETING AND BUSINESS MODEL DESIGN...................254

CHAPTER OBJECTIVES....................................................................... 254
Experimenting with marketing and modelling .......................... 255
Lean marketing ........................................................................... 255
Lean business modelling............................................................ 269
The logic of value creation.......................................................... 270
Two canvases that we use for business modelling................... 272
Forces outside your lean canvas................................................ 274

ENTREPRENEURIAL CASE ANALYSIS

PRETOTYPING A SOCIAL ETHNODROID TO TEST CHILDREN’S
LEARNING PROGRESS...................................................................291

PART 3 GROWING AND PLANNING ENTREPRENEURIAL

VENTURES .....................................................................295

CHAPTER 9 STRATEGIC ENTREPRENEURIAL GROWTH ..................................296

CHAPTER OBJECTIVES....................................................................... 296
Uncertainty and growth: The key drivers of strategic
planning ....................................................................................... 297
Strategy, venture development and growth .............................. 304
Managing entrepreneurial growth ............................................. 309
Going global for growth .............................................................. 314
Preparing to go global ................................................................ 317
Other growth opportunities ........................................................ 320
CHAPTER 10 LEGAL AND REGULATORY CHALLENGES ....................................334
CHAPTER OBJECTIVES....................................................................... 334
Legal and regulatory challenges................................................ 335
Understanding Asia-Pacific regulatory environments.............. 339
Intellectual property protection ................................................. 341
Identifying legal structures for entrepreneurial ventures........ 355
Insolvency and bankruptcy ......................................................... 364

CHAPTER 11 BUSINESS PLANNING ...................................................................374

CHAPTER OBJECTIVES....................................................................... 374
The why and when of business planning ................................... 375
The need for lean business planning......................................... 378
Traditional business planning .................................................... 383
Who reads the full plan?............................................................. 383
How to structure your long-form plan....................................... 384
Hints and tips for writing an effective business plan................ 394
Presentation of the business plan: The ‘pitch’.......................... 395

ENTREPRENEURIAL CASE ANALYSIS

INCREASE: TRANSFORMING THE ECONOMY BY EMPOWERING
MERCHANTS ..................................................................................406
viii CONTENTS

PART 4 FINANCIAL MATTERS FOR ENTREPRENEURIAL

VENTURES ....................................................................409

CHAPTER 12 FINANCIAL PERFORMANCE FOR ENTREPRENEURIAL

VENTURES .....................................................................................410
CHAPTER OBJECTIVES....................................................................... 410
The dimensions of performance measurement ....................... 411
Measuring financial performance.............................................. 411
Understanding the key financial statements ............................ 413
Preparing financial budgets ....................................................... 426
Capital budgeting ........................................................................ 435
Break-even analysis ................................................................... 441
Financial ratio analysis............................................................... 444
CHAPTER 13 SOURCES OF FINANCE FOR ENTREPRENEURIAL
VENTURES .....................................................................................456
CHAPTER OBJECTIVES....................................................................... 456
Sources of financial capital ........................................................ 457
Debt versus equity....................................................................... 458
The venture capital market ........................................................ 463
Starting up with ‘informal investors’ ......................................... 470
New forms of entrepreneurial capital....................................... 475
CHAPTER 14 VALUING AND HARVESTING ENTREPRENEURIAL
VENTURES .....................................................................................492
CHAPTER OBJECTIVES....................................................................... 492
The core issues of venture acquisition ...................................... 493
Business valuation in practice ................................................... 495
Valuation methods ...................................................................... 498
Additional factors in the valuation process ............................... 503
Harvesting the venture: A focus on the future .......................... 505
The management succession strategy...................................... 506
The exit strategy: Liquidity events.............................................. 513

ENTREPRENEURIAL CASE ANALYSIS

THE POWER OF THE CROWD-EQUITY CROWDFUNDING AT
PLEDGEME.....................................................................................524

BUSINESS PLAN................................................................................................... 527

GLOSSARY............................................................................................................. 564
INDEX .................................................................................................................... 586
GUIDE TO THE TEXT ix
x GUIDE TO THE TEXT
GUIDE TO THE TEXT xi
xii GUIDE TO THE TEXT
GUIDE TO THE TEXT xiii
xiv GUIDE TO THE ONLINE RESOURCES
GUIDE TO THE ONLINE RESOURCES xv
xvi ENTREPRENEURSHIP: FOREWORD

ENTREPRENEURSHIP: FOREWORD
Recently, I met a PhD student studying astrophysics. Ten years ago,
he would have been overqualified for a job in Australia and would
have been on a plane to NASA or Boeing in the US.
But this is a new world for students today. Abundant with
opportunity, and crazy new. Today’s students have a side-hustle. In
his spare time, he is starting a new business to prospect asteroids for
mining companies. How exciting! He can see a future that the rest of
us have missed, and he has unique knowledge to make it a reality. If
he is successful, there will be a great new company, new jobs and a
new way to support planet Earth.
This student has the opportunity, the tools and the support he
needs to make that company. This new way of working has become
increasingly sophisticated, surprisingly predictable and well supported by a global community. We call
this new way of working ‘entrepreneurship’ and this book is a brilliant map to navigate through this
new terrain.
Ten years ago, when I co-founded the first start-up incubator in Australia, Pollenizer, the world was
quite different. The support for entrepreneurs wasn’t there. This book couldn’t have been written as it
has been today. People were just starting to learn the new ways of working and telling each other about
them. This is a characteristic of entrepreneurs – they are determined to learn faster than everyone else,
and to do so out loud so that ‘the rising tide lifts all boats’. This book is your ‘hack’ to skip the first 10
years and learn what we learned from its pages.
We’ve learned that ‘[a] startup is not a small version of a big company’ (Steve Blank), and making
one requires a different set of skills, tools and mindsets to a traditional MBA. Start-ups are not
companies with less money, less access to resources and fewer employees. Start-ups are different in
purpose, because they are generally building something that no one has seen before and customers
don’t care about – yet. Everything they do is intended to discover and prove the highest value solution
to a clear problem and a known customer segment.
Start-ups are also different in kind, because they are riskier. Literally everything about this fragile
entity could be wrong at the start. What if there is not an actual problem to solve here? What if the
solution does not work? What if the founders hate each other and quit? What if the start-up can’t get
funding or get to revenue before it runs out of resources?
But this beginning is also a precious time because the company can take more risks with less to lose
than a big company. That’s how start-up practice can unlock powerful and disruptive new models.
So, read this book. Gobble up its contents and then do what entrepreneurs do. Start something. Go
and find a problem to solve and solve it with a company. After all, the best way to learn
entrepreneurship is to be an entrepreneur.
Phil Morle, May 2018
Main Sequence Ventures
The CSIRO’s Innovation Fund
 PREFACE xvii

PREFACE
LEARNING-THROUGH-CREATING-VALUE-FOR-OTHERS
We do not have a word for it in English yet, but Learning-through-creating-value-for-others is the
educational philosophy that drives this book.1 We support personal enterprise; wherever it exists,
whenever it exists, and whatever it is – social, environmental, business; the list is endless. It is about the
‘enterprising spirit’ that everyone has at birth. It is the spirit of true creativity and inventiveness, of
curiosity and daring, of calculated risk against gain. Sadly, this burning spirit can be extinguished by
parents, by oppressive society, by conformism of the school system, by crime or civil war, or by cultural
proscriptions. However, it is always there in every person, even later in life, and they can choose to
follow a path less travelled if the right conditions emerge that ignite a passion.
Starting a venture of any type – be it social, business, community, or environmental – requires a new
mind-set, lots of passion, and deep knowledge. Entrepreneurs reach into their hearts and minds to find
that special idea or innovation that excites them. When they find it, nothing can stop this ‘force of
nature’. ‘I can do this’, they say to themselves. ‘I can design a solution to their pain or problem.’
From artists to zoologists, the enterprising spirit arises everywhere. Everyone can benefit from a
basic course in entrepreneurship. Think of how many self-employed professions there are – artists, real-
estate brokers, photographers, musicians, designers, writers, financial advisors, analysts and interior
designers. Beyond this, think of the creative and innovative people in arts, civil society, not-for-profits,
community trusts and social enterprises. All are on their personal entrepreneurship pathway.
Ours is a knowledge- and tools-based approach to entrepreneurship where you create value for
others through testing and inquiry. You create a ‘pretotype’ (pretend-prototype) so that you can share
and learn from your customer/client/stakeholder to design a solution to a problem that they will be
thankful for. This approach triggers deep engagement and even deeper learning. Entrepreneurs learn by
applying their existing and future competencies to create something novel of value of use to society.
Your teachers act as mentors and promote a student-centred approach based on project work,
problem-based learning, and social team-based learning. You are fortunate that your university offers
just for you a progressive method that teaches motivation, awareness, habits of thought, and skills
needed to enable and achieve entrepreneurial success.

CAN YOU ACTUALLY TEACH ENTREPRENEURS?

People typically ask two questions of entrepreneurship educators such as your authors:
• Does an entrepreneur really need teaching? The answer is actually mixed. True, there are many
entrepreneurs (maybe as high as 10-15 per cent) who dropped out of school. They never had patience
to learn (nor did their teachers have much patience with them!). Other research shows that there is a
higher rate of ADHD (they simply found it difficult to focus and complete their schoolwork). Even
illiterate and dyslexic entrepreneurs can succeed without education (by learning visually and relying on
others). Then there is teenage non-conformity amongst entrepreneurs (‘modest rule breaking’ never
hurt them). Yet, the fact is that education and entrepreneurship are highly correlated – the more
education you have, the more likely you will intend to exploit entrepreneurial opportunities.
• Yes, but can you actually learn entrepreneurship? Again, yes and no. You most definitely can learn it if
someone helps you discover that spark and passion within yourself. What this book and good teachers
do is create a world for you where you can experiment/experience being an entrepreneur and cultivate
a creative, confident habit of mind using scientific method to identify and exploit opportunities. And
xviii PREFACE

the answer can be no when you think of most classrooms. In those precious minutes together with
learners, entrepreneurship educators supply just-in-time content that is both enabling and
experiential, where you can sit at the elbow of real entrepreneurs, be challenged by the real problems of
an entrepreneur, be given access to tools and techniques to work through those problems and
ultimately, where you can learn the theory, process and practice of being an entrepreneur.
Teaching entrepreneurship is not new – it was well underway by the early nineteen eighties.2 From the
beginning, there was considerable consensus that entrepreneurship was distinguishable from management
education, and that studying it can positively influence entrepreneurial attributes.3 By the end of the
millennium, there was a ranking of entrepreneurship schools.4 Now, entrepreneurship education has spread
widely around the world, has diversified its teaching approaches, sports a vigorous research literature, and
has become a well-established academic discipline. Baptista and Naia’s literature review shows that
theoretical contributions about entrepreneurship education has been increasing and improving.5
One of our field’s challenges is that entrepreneurship education is offered predominantly only in
business schools, even though it does not totally belong there. If entrepreneurship is isolated to the business
faculty, then it may not reach out to other non-business disciplines, with potentially more enterprising
potential. Fortunately, it is now expanding into arts, sciences, design, engineering, and most any subject.
Entrepreneurship education is becoming university-wide, drawing on cross-disciplinary programs with
diverse missions, rather than existing simply as a subspecialty in business or engineering programs.6

PATHWAYS, GYRES AND PINNACLES

For entrepreneurs, education is like a gyre (j(#)r). Have a look at one, the inside steps (right) of the Bell
Rock Lighthouse off the coast of Scotland, scene of innumerable wrecks on a huge reef just below the
surface. Entrepreneur-architect Robert Stevenson built a lighthouse on rocks exposed only two hours a day!
Rising from the sub-surface reef, inside the lighthouse, is a gyre, a stairway that moves from the base
progressively higher and narrower. That is the metaphor for the entrepreneur’s heroic journey. Through
education, we are reaching higher levels of achievement as we narrow in on our goals at the top.

Source: Adapted from https://commons.wikimedia.org/wiki/File:Joseph_Mallord_William_Turner_-_Bell_Rock_Lighthouse_-_

Google_Art_Project.jpg; Wikimedia/George Gastin: https://creativecommons.org/licenses/by-sa/3.0/deed.en.
 PREFACE xix

How to reach the pinnacle of the gyre? This book outlines an approach that we might call the
‘Etappe Method’. In many languages, etappe means ‘a step in a journey’.7 In the famous bicycle race
Tour de France, we call each stage ‘une étape. For your authors, Etappe also stands for a method –
‘Entrepreneurship Theory Process and Practice for the Environment’ – because in addition to social and
business entrepreneurship, our method stresses the environment. We use etappe, step, or pathway to
signify the entrepreneur’s heroic journey from ‘mind to implementation’. Whoever you are, whether in
art, architecture, or zoology, entrepreneurs are the enterprising people who initiate creative ideas and
formulate them into actionable visions. You will see that Chapter 4 is entirely dedicated to these many
entrepreneurial pathways.
This new method of entrepreneurship education rests on the deep base of knowledge that is our
latest fifth Asia-Pacific edition. Our method is based on best practices now used throughout the world.
Looking back at our intellectual antecedents, here are the progenitors:
• This book descends directly from the work of pioneering educators Donald F. Kuratko and
Richard M. Hodgetts, who in 1989 published the world’s first comprehensive entrepreneurship
textbook.8 Indiana University‘s ‘‘Dr. K’’ has passionately published ten editions of the North
American edition.9 Howard Frederick joined Kuratko and Hodgetts in 2007 to create the first
Asia-Pacific edition for the needs of Australasian entrepreneurs and Allan O’Connor joined the
team in 2013. Here we remain – Frederick, O’Connor, and Kuratko (Cengage, 2019), one of the
most widely used learning manuals for entrepreneurs.
• Beyond this solid base, we have integrated the latest thinking in ‘lean entrepreneurship’. Steve
Blank’s 2013 Harvard Business Review article ‘Why the Lean Start-up Changes Everything’ and
his other works showed that time had arrived for this new pedagogical approach.10 Eric Ries’s
books and articles, particularly The Lean Start-up, systematised Blank’s approach scientifically
into ‘hypothesis-driven entrepreneurship’.11 Alberto Savoia opened up our minds to diverse
ways of testing minimum viable products and ideas through ‘pretotyping’.12 Other important
influences include the educational material by Stanford and Hasso-Plattner-Institut13, IDEO14,
Rotman15 and others16 that support cross-disciplinary teaching of lean entrepreneurship.
• Another important influence on this book comes from principal author Howard Frederick’s
residence at the Tecnológico de Monterrey, the world’s only university that requires
entrepreneurship of every graduate.17 Each semester, 120 professors of entrepreneurship teach
the course to some 8,000 students – using the ‘lean approach to entrepreneurship education’.
What is ‘Lean Entrepreneurship’, the concept that suffuses this approach? It means launching and
testing hypotheses fast and furiously. It means finding out if there is a market for your bright idea by
testing your minimum viable product. Contrast this with the standard thinking about entrepreneurship,
which is too frontloaded: do research upfront, write the business plan upfront, get investors upfront,
develop the product and so on – even before having one customer. In our method, we use the Build-
Measure-Learn feedback loop to solve ‘pains’ of real people, test our assumptions, and then pivot our
concept. Done well, you can co-create your bright solutions with actual customers in real time. Lean
entrepreneurship means start small and fast, and build as you go. The methodology is hardly a secret
formula anymore, as it is in use in hundreds of university entrepreneurship courses globally.
xx PREFACE

HOW THE BOOK IS ORGANISED

Text, cases and exercises that appear in this edition bring together, in one place, the most significant
resources for developing new and emerging business and social ventures. We present these resources in
an exciting, organised and challenging manner. We put together this book in order to compact and
synthesise a large body of knowledge for the budding entrepreneur and enterprising spirit of all types.
Our aims are to simplify, condense, organise and translate a vast area of knowledge into a form useful
for building commercially viable, socially and environmentally responsible projects of all sorts.
We have sourced ideas from multiple places and repackaged them to make a new whole. As the
American Historical Association says, textbooks are different from other scholarly writing in the ‘form of
attribution, and the permissible extent of dependence on prior scholarship’.18 Every attempt has been
made to trace and acknowledge copyright holders. Where the attempt has been unsuccessful, the
publishers welcome information that would redress the situation. Within our organisation and
accumulation of knowledge on Asia-Pacific entrepreneurship, we have cited many authors in the field
and aim to provide ready access to their works, including more than 1,600 of hyperlinks. At the end of
each chapter, you will find a wealth of references that have been carefully selected and updated to 2019
in order to provide professors and students with a thorough background of the latest research that
relates to the entrepreneurship material being presented.
Here are the 14 chapters that compose four Parts to the book, along with additional material in the
online environment CourseMate.

CHAPTER SUMMARY NEW AND REVISED MATERIAL

PART 1: ENTREPRENEURSHIP IN THE TWENTY-FIRST CENTURY

In Chapter 1 ‘Entrepreneurship: evolutionary development, New section on the role of entrepreneurs in ‘transformative
revolutionary impact’, we see how entrepreneurs drive the innovation’ of society and the planet. Re-tooled section on
economy through innovation. Entrepreneurship has many Schools of Thought. Refreshed section on our
meanings around the world, but there are overriding Entrepreneurial Economy and updated insights into the
themes that unite them. The ancient history of social and economic contributions of high growth
entrepreneurs gives us an appreciation of our current businesses.
predicaments. A survey of theoretical approaches helps us
distinguish between the different kinds of entrepreneurs.
We look particularly at high-growth businesses that propel
societies forward.

Chapter 2 ‘The entrepreneurial mind-set: Cognition and Re-imagined chapter on fundamentals of the
Career’ leads us to a contextual and cognitive view entrepreneurial mind and cognition. The Career section is
entrepreneurship. From that, we map the most common now introductory and moved to conclude the chapter to
characteristics exhibited by successful entrepreneurs. This improve the flow of the text. The demography section
depends upon their growing capabilities and their replaced with international perspectives and strengthening
entrepreneurial mind-set (which even has a dark side). Are of entrepreneurial leadership and motivation. New cases
you a social entrepreneur, ecopreneur, intrapreneur, or and boxes.
family-preneur?
continue
 PREFACE xxi

continue

CHAPTER SUMMARY NEW AND REVISED MATERIAL

With Chapter 3 ‘Ethical, social, sustainable New discussion about ‘destructive entrepreneurs’.
entrepreneurship’ we show that social entrepreneurs have Corruption and organised crime statistics update. New
a great many of the same characteristics as business section on ‘Differently-Abled’ Entrepreneurs’ to
entrepreneurs, but their underlying motivations are complement ‘Disadvantaged Entrepreneurs’. Sections on
different. Entrepreneurs around the world are some of the Indigenous Entrepreneurs and Entrepreneurial Ecology
planet’s best hopes to solve the big problems. retained from third edition.
Entrepreneurs face many ethical decisions, including
corruption and bribery in many countries. There is also a
criminal side to entrepreneurship. There are differently-
abled and disadvantaged entrepreneurs. The chapter
finishes with a look at how entrepreneurship affects
ecology. Entrepreneurs have greatly undervalued
biodiversity and ecosystems.

Chapter 4 ‘Pathways to entrepreneurial ventures’ examines Updated with content on family entrepreneurs and
primary routes to building an entrepreneurial career. intrapreneurs. New and refreshed content on pathways and
Entrepreneurs come in all shapes, sizes and types and so careers. Reduced the attention given to the career models
too do their ventures. Social ventures, family ventures, new of small and franchised businesses and re-positioned these
ventures from within other organisations often use similar as options in the growth sections of this book.
planning tools to regular business ventures, but at each
step, there are different considerations.

PART 2: DESIGNING RESILIENT ENTREPRENEURSHIP: FROM OPPORTUNITY IDENTIFICATION TO BUSINESS MODEL

Chapter 5 ‘Opportunity identification and the creative This new chapter focuses on lean entrepreneurship as a
pursuit of ideas’ looks at how to identify ‘really big’ ideas scientific approach to create ventures. Reimagines new
that are commercialisable in the business sense and/or are content on opportunity identification, the creative pursuit
high-impact in the social sense. We learn techniques for of innovative ideas, and assessment of entrepreneurial
identifying and assessing opportunities and for creating opportunities. All new ‘Experiencing Entrepreneurship’
that all-important value proposition. boxes and chapter cases and examples.

Chapter 6 ‘Design Thinking for entrepreneurial ventures’ This entirely new tools-oriented chapter focuses on
goes on to develop your entrepreneurial capacity through ‘designerly ways of knowing’ about nature, mind-sets,
imagination, creativity and design. You will learn the human sense perception, addressable problems, and
techniques of creativity blockbusting and Design Thinking, cognitive and reasoning perspectives. Includes a new
which will help you to construct the exact solution that ‘Design Thinking Process Model’ from preparation to
your customers are looking for. launch.

In Chapter 7 ‘Lean entrepreneurship and identifying This new chapter brings alive the ‘lean method’ widely
customer needs’ you will learn how to create inexpensive used in entrepreneurship education. Particularly important
but a market tested ‘minimum viable product’ that you can are the toolkits such as value proposition and validation.
show to your customers to get that all important feedback. Five new Experiencing Entrepreneurship exercises.
Then, the validation process will help you with decision
making to either pivot (change course), persevere, or
abandon the start-up.

In Chapter 8 ‘Lean marketing and business model design’, This new chapter conforms to the latest entrepreneurship
we put it all together using the techniques of Business pedagogy about ‘Lean Marketing’ and extends hypothesis
Modelling, and see how Lean Marketing lends itself to testing to the marketing space. It includes lean planning
scientific, hypothesis-based entrepreneurship. techniques to bolster the customer segmentation and
behaviour sections.

continue
xxii PREFACE

continue

CHAPTER SUMMARY NEW AND REVISED MATERIAL

PART 3: GROWING AND PLANNING ENTREPRENEURIAL VENTURES

Chapter 9 ‘Strategic entrepreneurial growth’ puts our We strengthened the link between business growth and
learnings into action. You need to position yourself planning to illustrate the validity of planning as new
strategically in the ‘market’, while minimising your ventures expand by number of employees, market
competition. What if you want to grow? If you have the penetration or expansion, and product portfolio.
entrepreneurial frame of mind, you could go global. Consolidated international opportunities, franchising and
other growth avenues into the one chapter.

In Chapter 10 ‘Legal and regulatory challenges’ we dive into Updated chapter and strengthened the reference to non-
the regulatory environment. Entrepreneurs must comply with profit organisations. Included more on the strategic value
local and national laws but also be aware of overseas havens and preparation of IP and when the IP decision should be
that rob your intellectual property rights. Equally important is addressed. Addressed open innovation and replaced an ‘In
to examine the advantages and disadvantages of major forms Practice’ box with relevant content to support this alternate
of legal organisation for your new venture. viewpoint.

In Chapter 11 ‘Lean and sustainable business planning’, This new chapter covers ‘lean’ and ‘traditional, long-form’
we learn that there are many kinds of business plans, business planning. In a departure with custom of previous
depending on how it will be used, and for whom. Whether editions, we point to business planning resources instead of
lean or long-form, entrepreneurs develop business plans as providing a long form plan. More attention is paid to
communication tools, as an instrument to raise funding, as contrarian views on business planning.
a tool for analysis and to lessen uncertainty, as an action
plan, and as a builder of the new venture’s reputation.

PART 4: FINANCIAL MATTERS FOR ENTREPRENEURIAL VENTURES

Chapter 12 ‘Financial performance for entrepreneurial Updated chapter included refreshed and current endnotes.
ventures’ is a plus especially for non-accountants. All Replaced aging ‘When Currency loses its value’ with a box
ventures need performance measures. We describe the on a Kiwi entrepreneur who crosses break-even after ten
principles of traditional financial accounting to years.
entrepreneurs. Finally, we look at ratio analysis to show
relationships between financial statement accounts.

Chapter 13 ‘Sources of capital’ lays out paths to source and Updated sections and focused the chapter on issues of
acquire financial capital for an entrepreneurial venture finance. Refreshed the micro-finance and micro-credit
through revenue growth, self-funding or external sources. sections and strengthened the crowdfunding section.
There are more sources of capital than most people know Added references to new advances in cryptocurrencies and
about. We have special sections on venture capital and block chain.
informal capital. We also discuss socially responsible investors.
Then come some very twenty-first-century ways to raise
funding through peer-to-peer lending, crowdfunding, and
cryptocurrency.

Finally, Chapter 14 ‘Valuing and harvesting entrepreneurial Re-introduced this chapter on valuation and harvest in this
ventures’ is for those entrepreneurs ready to ‘harvest’ the edition as an advanced topic for entrepreneurship. Three
value they have created. Here we learn how to valuate a principle techniques of valuation are introduced which
business for either purchase or sale. Another consideration underpin the decision-making process relating to harvest
for many entrepreneurs is succession in a family business. strategies and timing. Various means of harvest from
The most fortunate amongst us will want an IPO. succession to initial public offering are discussed.

We also include an exceptional new set of teaching PowerPoints developed for teachers by teachers. In
addition to the experiential exercises, we know that teachers must convey serious content, and that reading,
listening and watching are good ways to accomplish that.
 PREFACE xxiii

ENDNOTES
1 For inspiring this definition, we credit Lackéus, M., Lundqvist, M., & Middleton, K. W. (2016).
Bridging the traditional-progressive education rift through entrepreneurship. International Journal of
Entrepreneurial Behavior & Research, 22(6), 777–803. https://doi.org/10.1108/IJEBR-03-2016-0072. See
also Lackéus, M. (2013). Developing Entrepreneurial Competencies - An Action-Based Approach and
Classification in Education. Chalmers University of Technology. https://research.chalmers.se/publication/
186625; Lackéus, M. (2014). An emotion based approach to assessing entrepreneurial education. The
International Journal of Management Education, 12(3), 374–396. https://doi.org/10.1016/j.ijme.2014.06.005;
Lackéus, M. (2015). Entrepreneurship in education: What, why, when, how. OECD. https://www.oecd.org/
cfe/leed/BGP_Entrepreneurship-in-Education.pdf; Lackéus, M., Lundqvist, M., & Middleton, K. W.
(2011). Obstacles to Establishing Venture Creation Based Entrepreneurship Education Programs. Nordic
Academy of Management Meeting (NFF) Conference, Stockholm. https://research.chalmers.se/publication/
142642; Lackéus, M., & Middleton, K. W. (2015). Venture creation programs: bridging entrepreneurship
education and technology transfer. Education + Training, 57(1), 48–73. https://doi.org/10.1108/ET-02-
2013-0013.
2 The first comprehensive textbook was our predecessor Kuratko, Donald F., and Richard M. Hodgetts.
Entrepreneurship: A Contemporary Approach. Dryden Press Series in Management. Chicago: Dryden
Press, 1989. See also: Greenwood, K., & And Others. (1984). Resources for Entrepreneurship Education.
https://eric.ed.gov/?id=ED269577; Miller, M. D., Wimberley, D., Oklahoma State University,
Occupational and Adult Education, United States, Office of Vocational and Adult Education, … Minority
Business Development Agency (Eds.). (1984). Promoting entrepreneurship education in vocational education
a final report. Stillwater, OK: Oklahoma State University, College of Education, Occupational and Adult
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(U.S.), United States, & Office of Vocational and Adult Education (Eds.). (1984). National
Entrepreneurship Education Forum. In National Entrepreneurship Education Forum proceedings of a
conference, September 5-6, 1984. Columbus, Ohio: National Center for Research in Vocational Education.
https://eric.ed.gov/?id=ED262153; Ross, N., National Center for Research in Vocational Education (U.S.),
United States, & Office of Vocational and Adult Education (Eds.). (1984). A National entrepreneurship
education agenda for action. Columbus, Ohio: National Center for Research in Vocational Education,
Ohio State University. http://www.voced.edu.au/content/ngv:42680; Worthington, R. M. (1984). Critical
Issues Surrounding Entrepreneurship Education–Present, Past, Future–A Federal Perspective. Office of
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(1987). Entrepreneurship education in the nineties. Journal of Business Venturing, 2(3), 261–275. https://
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3 Gorman, G., Hanlon, D., & King, W. (1997). Some Research Perspectives on Entrepreneurship
Education, Enterprise Education and Education for Small Business Management: A Ten-Year Literature
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Henry, C., Hill, F., & Leitch, C. (1996). Entrepreneurship Education and Training. Aldershot, Hants,
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7 For example, used in Czech etapa; Danish Etape; Dutch Etappe; English step; Estonian etapp; Finnish
etappi; French étape; German Etappe; Italian tappa; Lithuanian etapas; Norwegian etappe; Polish etap;
Portuguese etapa; Romanian etapă; Russian ýnag; Slovak Etapa; Slovenian etapa; Spanish etapa; Swedish
Etapp; Turkish etap.
8 Kuratko, Donald F., and Richard M. Hodgetts. Entrepreneurship: A Contemporary Approach. Dryden
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15 Martin, Roger. ‘What Is Design Thinking Anyway?’ Design Observer, 2009. http://
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xxviii ABOUT THE AUTHORS

ABOUT THE AUTHORS

Dr Howard H Frederick1 is Teaching Professor of Entrepreneurship Education at Plymouth State
University, New Hampshire, United States; and Research Professor at Monterrey Institute of
Technology, Mexico. He was Professor of Entrepreneurship Education at Deakin University in
Melbourne, Australia, and was New Zealand’s longest-serving Professor of Innovation &
Entrepreneurship; and Director, New Zealand Centre for Innovation & Entrepreneurship, at Unitec New
Zealand in Auckland. He was previously Fulbright Professor in Austria, Mexico and the German
Democratic Republic; Senior Scholar, University of Southern California, USA; and Professor and Chair
in Global Communication, Victoria University of Wellington, New Zealand. Howard is a graduate of
Stanford University, San Francisco State University and The American University, and has broad
European, Latin American and Asia-Pacific experience. Fluent in several languages, he is recognised as
an authority in the field of ICT, business innovation and economic development. Author of 200+ journal
articles and books; 40 years professor, teaching, executive education, research business development,
entrepreneurship and multimedia communications; 15 years as company director; four of his own
businesses; $1m+ external grant funding, he is a dynamic teacher whose keen insight has inspired
thousands of students to launch their own social, business, and environmental ventures.

Dr Allan J O’Connor2 is an Associate Professor in Enterprise Dynamics at The University of South

Australia, Australia. With qualifications that include a Master in Enterprise Innovation and a PhD that
focused on issues of public policy for entrepreneurship education and economic development, he has
developed undergraduate and postgraduate curricula in leading entrepreneurship programs in Australia.
He has taught entrepreneurship topics that include New Venture Strategy, Innovation Management,
Business Plan, Opportunity Evaluation, and Research Methods, since 2001. Entrepreneurship has been
at the core of much of Allan’s life experience. Entrepreneurship has served as a means of transition.
From leveraging his skills at age 18 as a musician to buy a business that supported his education and
training in mechanical engineering, to undertaking an intrapreneurial venture to grow the market
presence of his then-employer before later venturing out on his own to develop and market innovative
products and consulting services, Allan has walked the path of innovation and entrepreneurship and
faced market challenges that demand new thinking.
Allan now enjoys the thrill of higher learning and revels in the challenges of an entrepreneurial
academic career. Increasingly, Allan is engaged in research designed to advise governments in matters
of innovation and entrepreneurship that drives regional competitiveness. With the assistance of funding
from the South Australian state government, in 2014–15 Allan led the development of the Australian
Cluster Observatory, and has embarked on pioneering research into the entrepreneurial ecosystem in
South Australia. His growing portfolio of more than fifty research publications including internationally
peer reviewed journal articles, book chapters, conference papers, and research reports, is testament to
the significance of his research agenda and contribution to his research field.

Dr Donald F Kuratko3 (known as ‘Dr. K’) is the Jack M. Gill Chair of Entrepreneurship, Professor of
Entrepreneurship and Executive Director, Johnson Center for Entrepreneurship & Innovation, Kelley
School of Business, Indiana University, Bloomington, USA. Dr Kuratko is considered a prominent
scholar and national leader in the field of entrepreneurship. He has published more than 180 articles on
aspects of entrepreneurship, new venture development, and corporate entrepreneurship. Professor
Kuratko has authored 30 books, including the leading entrepreneurship book in North American
 ABOUT THE AUTHORS xxix

universities today, Entrepreneurship: Theory, Process, Practice, 10th edition (South-Western/Cengage

Learning, 2017). Before coming to Indiana University, he was the Stoops Distinguished Professor of
Entrepreneurship and Founding Director of the Entrepreneurship Program at Ball State University. The
U.S. Association for Small Business and Entrepreneurship (USASBE) has named him National
Outstanding Entrepreneurship Educator and bestowed John E. Hughes Entrepreneurial Advocacy
Award for his career achievements in entrepreneurship.

ENDNOTES
1
Frederick, Howard H. (n.d.). LinkedIn page. Accessed June 26, 2018. https://www.linkedin.com/in/
hfrederick/; Frederick, Howard H. (n.d.) Academia.edu page. Accessed June 26, 2018. https://
plymouthstate.academia.edu/HowardFrederick.
2
O’Connor, Allan (n.d.). LinkedIn page. Accessed June 26, 2018. https://www.linkedin.com/in/allan-o-
connor-60464933/; O’Connor, Allan (n.d.) ResearchGate page. Accessed June 26, 2018. https://
www.researchgate.net/profile/Allan_Oconnor.
3
Kuratko, Donald F. (n.d.) LinkedIn page. Accessed June 26, 2018. https://www.linkedin.com/in/dr-
donald-f-kuratko-dr-k-b00641124/. ‘Faculty Profile.’ Kelley School of Business. Accessed June 26, 2018.
https://kelley.iu.edu/faculty-research/faculty-directory/profile.cshtml.
xxx ACKNOWLEDGEMENTS

ACKNOWLEDGEMENTS
The authors would like to thank all of the staff at Cengage Australia who made this work possible. This
includes Michelle Aarons, Rachael Pictor, Laura Di Iorio, Sutha Surenddar and Stephanie Ayres.
Cengage would also like to say a big thank you to Jodyanne Kirkwood of Otago Polytechnic for her
pre-proposal and draft manuscript reviews, and the following reviewers for their incisive and helpful
feedback:
• Frances Chang – Macquarie University
• Afreen Huq – RMIT Univesity
• Fara Azmat – Deakin University
• George Comodromos – Victoria University
• Alex Maritz – La Trobe University
• Jochen Schweitzer – University of Technology Sydney
• Morgan P. Miles – University of Canterbury
• Gregory Mowle – University of Canberra
• Stuart Schonell – University of Tasmania
• Anna Jenkins – The University of Queensland
• Gary Hancock – The University of Adelaide
• Eddy Widjaja – Western Sydney University
• Dennis Foley – University of Canberra
Howard Frederick would like to thank his life partner Hanna Fejerdy Frederick for her support and
sacrifices throughout the five editions of this work. For their personal and institutional support during
the writing of this book, he would like to thank:
• Colleagues at the Eugenio Garza Lagüera Entrepreneurship Institute at the Monterrey Institute
of Technology / Tecnológico de Monterrey (ITESM): Margarita Herrera Avilés, Sergio Ortı́z
Valdés, Yazmin Morales Serrano, Lizbeth Alicia Gonzalez Tamayo, Alejandra Peña Romero, Aura
Elena Moreno Guzmán, Patricia Lopez Molina, Manuel Calderon, Hilda Margarita Ortiz
Martı́nez, José Ernesto Amorós.
• Colleagues in the Innovation & Entrepreneurship Cluster at Plymouth State University: Robyn
Parker, Eric Spieth, Tom Guarino, Bonnie Bechard, Deborah Brownstein, Roy Stever.
Allan O’Connor is blessed with an understanding and thoroughly supportive spouse and soul mate,
Suzi, whose unwavering support is largely responsible for making the contributions to this book
possible and to whom a deep debt of gratitude will forever be owed, thank you. There are numerous
others without whose support and encouragement over the years would leave too much
entrepreneurship learning undiscovered. In addition to my co-authors, these include colleagues Gary
Hancock, Scott Gordon, Kai Du, Huanmei (Mushui) Li, Manjula Dissanayake, Xu Ting, Chis Medlin,
Lisa Daniel, Retha Scheepers, Martin Bliemel, Morgan Miles, Nita Cherry, Shahid Yamin, and more
recent mentors David Audretsch, Colin Mason and Erik Stam. Allan would also like to acknowledge
and thank Martin Pannall of Madderns Patent and Trademark Attorneys for his particular assistance
with and contributions to the legal chapter and peers who have provided advice and feedback on
previous editions of this book in use. He also wishes to acknowledge and thank all his entrepreneurship
students who over the years provide the reason and purpose for the work created.
As authors we jointly wish to express our gratitude to our case authors Jodyanne Kirkwood, Tracey
Dodd and Maria Eugenia Buteler who provide relevant, current and targeted articles that assist us to
stretch our students’ knowledge and experience.
PART
ONE
ENTREPRENEURSHIP IN THE
TWENTY-FIRST CENTURY

CHAPTER 1
Entrepreneurship: Evolutionary development, revolutionary impact

CHAPTER 2
The entrepreneurial mindset: Cognition and career

CHAPTER 3
Ethical, social and sustainable entrepreneurship

CHAPTER 4
Pathways to entrepreneurial ventures

Entrepreneurship
 CHAPTER 1
ENTREPRENEURSHIP: EVOLUTIONARY
DEVELOPMENT, REVOLUTIONARY IMPACT

Those Australian and American Most of what you hear about Humanity cannot survive without
values, democracy, freedom, the entrepreneurship is all wrong. It’s functional ecosystems, and the
rule of law, enterprise, enabling not magic; it’s not mysterious; and actions of all people are needed to
the spirit of enterprise, these it has nothing to do with genes. It’s act together as a species on a
values are timeless. a discipline and, like any discipline, planetary scale.
Malcolm Turnbull it can be learned. John Liu,
Australian Prime Minister, 20181 Peter F. Drucker, Filmmaker and Ecologist 3
Innovation and Entrepreneurship2

CHAPTER OBJECTIVES

1 To illustrate today’s entrepreneurial context

2 To examine different definitional perspectives and conclude a comprehensive
definition
3 To examine the historical development of entrepreneurship
4 To identify the major theoretical approaches to entrepreneurship
5 To distinguish between types of entrepreneurs
6 To demonstrate the global revolution and interests in entrepreneurship

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Entrepreneurship
 Chapter 1: Entrepreneurship: Evolutionary development, revolutionary impact 3

ENTREPRENEURS AND INNOVATORS AT THE CORE OF

THE ECONOMY
Entrepreneurs are individuals who recognise opportunities where others see chaos, contradiction and
confusion. They are aggressive catalysts for change within the marketplace. They have been compared
to Olympic athletes challenging themselves to break new barriers, to long-distance runners dealing
with the agony of the miles, to symphony orchestra conductors balancing different skills and sounds
into a cohesive whole, and to top-gun pilots continually pushing the envelope of speed and daring.
Whatever their passion, entrepreneurs are heralded as the heroes of today’s marketplace. They start
companies and create jobs. The global economy rests on their efforts, and the world now largely
embraces free enterprise as the most significant force for economic development. The passion and drive
of entrepreneurs moves the world of business forward. start-up
As this book focuses on the needs of Australia, New Zealand, and the Asia-Pacific, let’s have a A new business or new
venture – such as self-
look at our own entrepreneurial environment. Typical of most developed countries, Australian small employment, a new
businesses account for almost two-thirds of employment.4 business organisation or
the expansion of an
The quote from Malcolm Turnbull, Australia’s Prime Minister at the time of writing, at the opening existing business by
of this chapter signals the importance of the enterprising spirit as a shared value for large developed starting a new related
venture – by an individual,
economies such as the USA and Australia. Nonetheless, some commentators claim of Australia that team of individuals or
established business.
‘The confronting fact is we are not entrepreneurial, we are not enterprising, we don’t demonstrate
initiative’5 and that Australia does not produce high-growth and high-value companies. The data simply intrapreneurs
do not bear out this pessimistic assessment. Entrepreneurs who start
ventures from within
According to the Global Entrepreneurship Monitor (GEM; we will frequently refer to GEM larger companies.
throughout this book), data on the rates of new venture start-up in Australia and the USA are actually
quite similar. risk
In an entrepreneurship
We can readily identify a number of companies listed on the Australian Stock Exchange founded by context, the possibility of
entrepreneurs that have today reached greater than AUD$1 billion market valuations (see Table 1.1).6 economic, personal or
reputational loss faced by
And this doesn’t even include ventures started by entrepreneurs from within larger companies (we call the entrepreneur and their
backers, financial or
these people intrapreneurs), nor does it include Australian and New Zealand companies listed on foreign
otherwise, acquired
stock exchanges. In the Australian context, the impact of these companies is huge. The 15 companies in through new-venture
activity and as a result of
Table 1.1 alone, each starting with less than a handful of people in their team, today combined have the initiation, conversion
around 30 000 employees.7 This kind of job creation is the magic of the entrepreneurial economy. and exploitation of an idea
as a new venture. (See
One cautionary note, though. As you can see, Table 1.1 ends at 2010. It can take time to build calculated risk taking,
businesses with high valuations that employ significant numbers of people; it isn’t achieved in the blink career risk, financial risk,
psychic risk, risk
of an eye. Many entrepreneurs have started or managed businesses before walking into this sort of propensity.)
success. They may have struggled through early survival and made choices that put not only their own
and/or others’ money on the line but also risk their family lives and personal health. But this is the way entrepreneurship
The practice of starting
of the entrepreneur. new organisations,
As you work through the contents of this book, we provide much of what is needed to professionalise particularly new
businesses; the process of
your journey into entrepreneurship, to help you reduce and manage risk, and to provide guidance on innovation and new-
venture creation; the
what is and isn’t a worthwhile idea and opportunity. Even with all this assistance though, it is ultimately
commercialisation of
the choices you make that define your pathway through the winding road of entrepreneurship. innovation.
4 Part 1: Entrepreneurship in the twenty-first century

TABLE 1.1 AUSTRALIA AND NEW ZEALAND AUD$1 BILLION ENTREPRENEURIAL COMPANIES

COMPANY (LISTED ON APPROX. VALUATION (AS ENTREPRENEUR(S)

THE AUSTRALIAN STOCK AT 1 FEBRUARY 2018, IN (AUSTRALIAN START-UP
FOUNDED DESCRIPTION
EXCHANGE UNLESS AUD$BILLION UNLESS UNLESS OTHERWISE
NOTED OTHERWISE) OTHERWISE NOTED) NOTED)

Resmed 17.6 1989 Peter C. Farrell Global manufacturer of products for

sleep-disordered breathing, chronic
obstructive pulmonary disease and
other respiratory conditions

MYOB 2.09 1991 Christopher Lee Cloud-based business management

solutions provider

Iress 1.84 1993 Peter Dunai, Neil Detering Software systems and services for
and Hung Do financial markets and wealth
management

Corporate Travel 2.15 1994 Jamie Pherous Corporate travel management

Management

WiseTech Global 3.36 1994 Richard White Provider of software solutions to the
logistics industry globally

REA Group 10.33 1995 Karl Sabljak, Carmel A global online real estate advertising
Sabljak, Steve Sabljak, company
Marty Howell

Carsales 3.44 1996 Gregory Paul Roebuck Operates a portfolio of automotive

and related industry websites,
including an automotive classifieds
website

Seek Ltd 7.13 1997 Andrew Bassat, Paul Matching jobseekers and employment
Bassat, Matt Rockman opportunities

Sirtex Medical 1.54 1997 Dr Bruce Gray Medical device company, providing a
radioactive treatment for inoperable
liver cancer

Webjet 1.22 1998 David Clarke, Allan Travel booking company

Nahum, John Lemish

Aconex 1.56 2000 Leigh Jasper, Robert Providing mobile and web-based
Phillpot collaboration technologies for project
information and process management

Atlassian (NASDAQ listed) (USD) 12.37 2002 Mike Cannon-Brookes, Enterprise software company
Scott Farquhar

Xero Ltd 4.2 2006 Rod Drury (NZ) Cloud-based accounting software for
small and medium-sized businesses

Vocus 1.47 2008 James Spenceleyas A wholesale and business

telecommunications provider

NextDC 1.92 2010 Bevan Slattery Development and operation of

independent data centres in Australia

Source: Author created from Australian Stock Exchange ASX300 data files, company and media reports.
 Chapter 1: Entrepreneurship: Evolutionary development, revolutionary impact 5

ENTREPRENEURIAL EDGE

WHAT ENTREPRENEURS CAN EXPECT IN THE TWENTY-FIRST CENTURY

FIGURE 1.1
ROLLER COASTER
ENTREPRENEUR CARL
MILER’S MASTERWORK,
DESTROYED BY RISING
SEA LEVELS AFTER
GLOBAL WARMING–
INDUCED HURRICANE
SANDY (U.S.)

Source: Flickr/Anthony Quintano, Flickr.com (2013). Attribution 4.0 International (CC BY 4.0). https://creativecommons.org/licenses/by/
2.0/legalcode. https://www.flickr.com/photos/quintanomedia/8506303672/sizes/l.

Here’s just one story that shows you how unexpected your world has become: Carl Miler and his brilliant idea that made him
millions – the portable roller coaster. He recounted:

The secret is to come up with a good collapsible rig that’s as exciting as any you’ve ever ridden, but that can be
taken down and moved at short notice. And it’s worth a lot of patents, I can assure you.8
How could Miler possibly guess that within half a century one of his great innovations, the Jet Star portable roller coaster at
Casino Pier, New Jersey (USA), would be swept away by the rising seas of a global warming-induced hurricane (see Figure 1.1)?
Today, entrepreneurs have to take such calamities into account. What is today’s entrepreneur to do? Perhaps invent a floating
portable roller coaster?

Needless to say, the garden is not all roses for entrepreneurs. With the benefit of hindsight, since the Industrial Revolution
Usually dated from 1750 to
Industrial Revolution in the late eighteenth and early nineteenth centuries – a time of high hope for 1900, the movement from
many for better lifestyles, greater production and stronger economies – many business entrepreneurs an agricultural economy to
an industrial economy
around the world have plundered and exploited the environment in ignorance of or without any based on production of
thought for sustainability. It is no exaggeration to say that entrepreneurs such as Thomas Edison and factories and machine
labour. A period
Henry Ford have played a major role in contributing to the climate crisis. It is also no joke to think that characterised by many
today’s entrepreneurs – perhaps like Elon Musk, with his electric car that uses new battery technology, industrial innovations and
discoveries.
his Tesla automobile, and his SpaceX Mars program – can help ease the problem.
sustainability
This was and is the promise of entrepreneurship. The entrepreneurial behaviour of individuals can have Avoidance of depletion of
transformative impacts on our economies and our societies. Elon Musk has even launched his Tesla into natural resources; pursuit
of solutions with the long
space!9 In 100 years we could be condemning our hero for leaving a trail of space junk that litters the term (several hundred
interplanetary super highway. Or Musk could be honoured as a pioneer in fields of business previously years or more) in mind.
Applies to many
untapped. Who knows? The point is those who create new ventures have a responsibility to look to the future disciplines, including
and question what they do and why they do it. In this book, we encourage you to take entrepreneurial steps economic development,
environment, food
but we also seek to equip you with tools that make those steps mindful and rewarding. production, energy and
lifestyle.
 6 Part 1: Entrepreneurship in the twenty-first century

TRANSFORMATION OF SOCIETY: WHY WE ARE HOPEFUL

wicked problems How can we as entrepreneurs stop (or at least ameliorate) wicked problems? It’s not rocket science. In
Some problems are
‘tame’ – the path to
fact, most of the technologies we need to improve the situation already exist, developed by entrepreneurs
solution is short and clear. and inventors in the last quarter-century. What we need is a commitment to take what we already know
Wicked problems are not
well defined and do not how to do, make it cheaper and spread it to every corner of every economy in the world. Business as usual
have a clear process is dead and green growth is the answer to both climate and economic problems. Again, who is best
toward solution. They are
difficult to formulate; positioned to commercialise existing innovations and create new technologies? It’s entrepreneurs!
involve many decision Economies around the world have evolved and have been repeatedly revitalised because of the
makers with conflicting
values; have resource efforts of entrepreneurs and entrepreneurial characteristics such as passion, promotion, networking and
constraints; and/or, are drive that move society forward.10 They take the unknown as a challenge and continuously influence
interconnected with other
wicked problems. the path of the future. It is their ideas, savings, investment and innovation that lead to development.
Entrepreneurs are unleashing a wave of creativity not seen since the Industrial Revolution. As Nobel
Prize winner and one-time chairman of the Intergovernmental Panel on Climate Change (IPCC),
Rajendra Pachauri, has said: ‘Entrepreneurs who respond to the [climate] challenge will reap
commercial success – while businesses which fail to do so face oblivion.’11 Throughout the world, there
is enough entrepreneurial energy to build a world that does not succumb to the challenges of wicked
human-induced problems. That’s what this book is all about. It is about entrepreneurial leadership for
transformative ‘transformative innovation’. The demarcation of ‘transformative’ means it describes those changes in the
innovation
economy, environment, social welfare – indeed entire systems on Earth.12 As Joseph Schumpeter
Innovation that provides
significant improved value pointed out, entrepreneurs generate innovations that ‘strike not at the margins of the profits and the
and change in economic,
social and/or
outputs of existing firms, but at their foundations and their very lives’.13
environmental systems Innovation has been classified into four different types (see Table 1.2). In order of increasing
and the way societies are
accustomed to doing
originality, they are:
things; can create • duplication – simply reproduces an already existing product, service or process
opportunity spaces for
entrepreneurs and give • extension – extends an existing product, service or process
rise to entirely new • synthesis – combines existing concepts and factors into a new formulation
industries.
• invention – truly creates a new product, service or process, one that is novel or untried.

TABLE 1.2 INNOVATION IN ACTION

TYPE DESCRIPTION EXAMPLES

Duplication Creative replication of an existing concept Bill Hamilton (NZ) – Hamilton Jet Boat
Dean Kamen (US) – Segway Human Transporter
Dan and Frank Carney (US) – Pizza Hut
John Britten (NZ) – Britten motorcycle
Extension New use or different application of an already existing Mervyn Victor (AUS) – lawnmower
product, service or process Sir Edmund Hillary (NZ) – farm tractors for ice exploration
Robert Dane (AUS) – solar panel yacht sail
Ray Kroc (US) – McDonald’s
Bill Gallagher (NZ) – electric fence
Mark Zuckerberg (US) – Facebook
Synthesis Combination of existing concepts and factors into a Howard Schultz (US) – Starbucks
new formulation or use John Neustroski (NZ) – portable fur plucker for possums
Ben Lexcen (AUS) – America’s Cup–winning winged keel design
Alan Gibb (NZ) – Aquada (car on water)
Paul Beckett (NZ) – Blokart (wind sailing on land)

continue
 Chapter 1: Entrepreneurship: Evolutionary development, revolutionary impact 7

continue

TYPE DESCRIPTION EXAMPLES

Invention Totally new product, service or process Wright brothers (US) – aeroplane
Henry Sutton (AUS) – fax machine
Thomas Edison (US) – light bulb
Sir Ernest Rutherford (NZ) – atom splitting

These types of innovation give rise to different effects on markets and societies, such as:
• Innovation that sustains – as in ‘business as usual’, improves the efficiency and prolongs the life of
existing systems
• Innovation that disrupts – shakes things up in the short term before being mainstreamed to
help sustain existing systems or further developed to lead to genuine industrial or social
transformations
• Innovation that transforms – transforms entire industries, social segments or ecological systems;
leads to a whole new way of doing business and providing value.
Innovations can accumulate into large-scale transformations. For instance, mobile phones have
disrupted and transformed our day-to-day lifestyles. The technology dates back to 1947 when ‘signal
duplexing’ allowed two-way flow, but not ‘turn-taking’, and sped up transmission. But it took years for
the regulatory environment to catch up so that mobile phone technology could be primed for the
consumer market.14 Meanwhile, Motorola pioneered the small size; Apple and Android the operating
systems. The mobile phone market was later disrupted through miniaturised computing technology (led
by Apple iPhone particularly).15 Huge manufacturers like Motorola and Nokia rose and fell, again
disrupting the market and opening the door to smartphones that have transformed lifestyles,
workplaces and social expectations.
Transformative innovation (TI; ‘innovation that transforms’) requires many actors, such as
businesses, suppliers, universities and knowledge institutes, government, public interest groups and
users.16 This kind of innovation delivers a fundamental shift toward new patterns of viability in tune
with our aspirations for the future.17 You can see TI elegantly in the United Nation’s famous
‘Sustainable Development Goals’, published in 2015.18 These goals predict far-reaching changes in
technology, affecting several branches of the economy, as well as giving rise to entirely new sectors. The
industrial age led to inequality, resource intensity, carbon lock-in and environmental degradation, but
today, transformative innovation can adapt, reverse, learn from and anticipate solutions.19
While not all innovation is transformative, there is no shortage of disruption. Table 1.3 illustrates a
number of disruptive innovations. Examples of truly transformative innovations are easy to find. Just in
the business world we can count such TIs as the cold chain, bookkeeping, department store, tax haven,
shipping containers, insurance, Google, barcode, robots, ad infinitum.

TABLE 1.3 EXAMPLES OF DISRUPTIVE INNOVATION

DISRUPTIVE INNOVATION DISPLACED OR PRESSURED PRODUCT CATEGORY

Personal computers Mainframe computers

Smart mobile technologies Personal computers

No-frills airlines Full-service airlines

Digital cameras Photographic film

continue
8 Part 1: Entrepreneurship in the twenty-first century

continue

DISRUPTIVE INNOVATION DISPLACED OR PRESSURED PRODUCT CATEGORY

Mass-market mobile telephony, EFTPOS and e-commerce Cash registers

Boutique steel mini-mills Vertically integrated steel mills

Wikipedia Encyclopaedia Britannica

Tablet computers Typewriters

Blogging Phototypesetting and manual paste-up

Mobile or cellular telephones Fixed-line telephones

Container ships and containerisation Cargo ships and wharf labourers

DEFINITIONS OF ENTREPRENEURSHIP
The recognition of entrepreneurs as a class dates back to eighteenth-century France, when Irish French
banker and investor Richard Cantillon associated entrepreneurs with ‘risk-bearing’ activity in the
economy.20 In England during the same period, the Industrial Revolution was growing and the
entrepreneur played a visible role in risk taking and the transformation of resources.21
entrepreneur The word entrepreneur is derived from the French entreprendre, meaning ‘to take in between’ or ‘to
(1) An innovator or
developer who recognises undertake’. English doesn’t really have its own word for entrepreneur – or better said, it once had such a
and seizes opportunities; word but tragically lost it. We use the French word in English because the proper word for entrepreneur,
converts these
opportunities into ‘undertaker’ (someone who undertakes, used by the original theorists of entrepreneurship), is now
workable/marketable used by another profession. Undertakers today are morticians and funeral directors! So, in English and
ideas; adds value through
time, effort, money or in most Romance languages, the term ‘entrepreneur’ has been adopted and used to describe someone
skills; assumes the risks who undertakes to organise, manage and assume the risks of a business.
of the competitive
marketplace to implement However, the definition has broadened so that today an entrepreneur is considered to be a social or
these ideas; and realises business innovator or developer who recognises and seizes opportunities; converts those opportunities
the rewards from these
efforts. (2) An individual into workable/marketable ideas; adds value through time, effort, money or skills; assumes the risks of
who organises and the competitive marketplace to implement these ideas; and realises the rewards from those efforts.22
manages labour, capital
and natural resources to This includes a huge mob of characters. There are even some special words. For example, an impresario
produce goods and
is a theatre entrepreneur. We also use the word ‘entrepreneur’ as the base for other words:
services to earn a profit,
but who also runs the risk ‘seniorpreneur’, ‘intrapreneur’, ‘mumpreneur’ and many others.
of failure.
Not all languages follow the ‘undertaker model’, though.23 In Malay, usahawan means someone
undertaker who does a commercial activity at some financial risk. In the Thai language, the word for entrepreneur
The original translation of is pupagongan, which means literally ‘someone who assembles other people together’. In Indonesian,
the French word
entrepreneur, taken from wiraswasta has the signification of ‘courageous private sector’. In the Garinagala language of Australian
the verb entreprendre, ‘to Aborigines, they use egargal or ‘story-teller’ to mean entrepreneurs. The Maori language of the
undertake’. Unfortunately
the term ‘undertaker’ in Polynesians of New Zealand has two words for entrepreneurship: ngira tuitui, ‘the needle that binds
English language is things together’, and tinihanga a M aui, ‘the tricks of Maui’. Maui in Polynesian mythology is a demigod
already used by another
profession, namely funeral and cultural hero famous for his exploits and trickery. Maori admire his entrepreneurial spirit, heroism,
directors. altruism and brashness. Take the following story, for example:

Every day Maui’s brothers went fishing, but they always refused to take Maui with them
because they were afraid of his magical tricks. One day, however, Maui hid in their canoe and
revealed himself when they were far out to sea. Maui drew out his fishhook made from the
 Chapter 1: Entrepreneurship: Evolutionary development, revolutionary impact 9

magical jawbone of his grandmother, baited it with some blood from his nose, and then
lowered it deep down in the ocean … Maui pulled the greatest of all fishes into the boat …
and it miraculously turned itself into land that became the islands of New Zealand.24

However we say it, entrepreneurs are the aggressive catalyst for change in the world of business.
They are independent thinkers who dare to be different in a background of common events. Research
reveals that many entrepreneurs have certain characteristics in common, including the ability to
consolidate resources, management skills and a desire for autonomy and risk taking. Other
characteristics include brashness, competitiveness, goal-oriented behaviour, confidence, opportunistic
behaviour, intuitiveness, pragmatism, the ability to learn from mistakes and the ability to employ
human relations skills.25
Economists have long claimed the word as their own. In fact, until the 1950s, the majority of
definitions and references to entrepreneurship had come from economists. For example, Richard
Cantillon (1680–1734), renowned French economist Jean Baptiste Say (1767–1832) and twentieth-
century economic genius Joseph Schumpeter (1883–1950) all wrote about entrepreneurship and its
impact on economic development.26 Such was Schumpeter’s influence that many academics today still
subscribe to a Schumpeterian viewpoint. Schumpeterian
Someone who believes
Over the decades, writers have tried to define what entrepreneurship is all about. Here are some
that innovation and
early examples: technological change
comes from the ‘wild
Entrepreneurship … consists in doing things that are not generally done in the ordinary spirits’ or ‘fiery souls’ of
entrepreneurs who engage
course of business routine; it is essentially a phenomenon that comes under the wider aspect in a process of ‘creative
of leadership.27 destruction’.
Entrepreneurship, at least in all non-authoritarian societies, constitutes a bridge between
society as a whole, especially the non-economic aspects of that society, and the profit-oriented
institutions established to take advantage of its economic endowments and to satisfy, as best
they can, its economic desires.28
In … entrepreneurship, there is agreement that we are talking about a kind of behaviour
that includes: (1) initiative taking, (2) the organizing or reorganizing of social economic
mechanisms to turn resources and situations to practical account, and (3) the acceptance of
risk of failure.29

Economists have argued whether or not an entrepreneur exploits equilibrium (that is, stabilises a free enterprise
market) or creates disequilibrium (disrupts a market). But research shows the entrepreneur is risk- Private ownership of the
means of production and
bearing, capital-owning, exceptional, a leader, a combiner of factors and more innovative or more alert enterprise management
than the general population.30 Ronstadt’s definition is helpful: that is free and
independent from state
control. The allocation of
Entrepreneurship is the dynamic process of creating incremental wealth. This wealth is created productive resources is
by individuals who assume the major risks in terms of equity, time, and/or career commitment decentralised and obeys
of providing value for some product or service. The product or service itself may or may not be the decisions of free
individuals who act guided
new or unique but value must somehow be infused by the entrepreneur by securing and by their own interest.
allocating the necessary skills and resources.31
capitalism
In the twentieth century, the word entrepreneur has become linked with free enterprise and An economic system based
capitalism. Also, it is generally recognised that entrepreneurs serve as agents of change; create on private ownership of
the means of production.
innovative, exploitable ideas; and help businesses grow and become profitable. The term entrepreneur Individuals, companies or
has now become associated with people who create added value, whether that be social or business corporations invest in, own
and share in profits (or
value. Think Australian Instagram influencers such as Steph Claire Smith and Rebecca Judd, who have losses) of the entities that
created empires on social media and are paid by brands to endorse products to their thousands of produce goods, distribute
products or provide
followers. But be aware of other reactions. Just the reverse, there are people out there who complain services.
10 Part 1: Entrepreneurship in the twenty-first century

about ‘rampant entrepreneurialism’; the word entrepreneur sometimes carries a negative connotation
outside the U.S. and Australia.
In recognising the importance of the evolution of entrepreneurship into the twenty-first century, we
have developed an integrated definition:

Entrepreneurship is a dynamic process of adding value to society, business and environment.

It requires you to apply energy and passion toward the creation and implementation of new
value-adding ideas and creative solutions. You need to take calculated risks; build an effective
venture team; assemble the needed resources; conceive and convince others of a solid
business model and plan; and finally be able to recognise opportunity where others see chaos,
contradiction and confusion.

ENTREPRENEURIAL EDGE

SPENDING THE OLD MAN’S DOUGH

Ivan is a successful first-generation Australian entrepreneur who emigrated from Russia. He started out as a mechanic in Melbourne
and dreamed of building a better future for his new (Australian) children. Ivan was thrifty and disciplined. Although in a low-status
occupation, he was very proud of how hard he worked. He took a few punts that paid off until he could open his own garage, and
he now runs a successful franchise business of several dozen oil and lube operations, where he trains other immigrants.
Ivan is a classical entrepreneur, but how should he teach his children? Should he encourage them to follow his lead and create
financial success as entrepreneurs? The chances are he won’t. Fewer than one in five do.
Sure enough, Ivan wanted his children to have a ‘better’ life. He encouraged them to spend many years at university. He wanted
his children to become physicians, lawyers, accountants, executives and so on. But in encouraging them to do so, Ivan essentially
discouraged his children from becoming entrepreneurs. He unknowingly had them postpone their entry into the labour market
until they had finished the finest education that Australia has to offer. And, of course, he encouraged them to reject his lifestyle of
thrift and self-imposed environment of scarcity, and instead to be consumers of material goods.
Ivan defines ‘better’ as having better ‘stuff’: finer homes, new luxury cars, quality clothing and club memberships. What he
doesn’t include are the elements that were the foundations of his own success: hard work, risk taking and perseverance.
Ivan does not realise that being well educated has certain economic drawbacks. What Ivan’s well-educated children learn by the
time they are adults is to be grand consumers of material goods. And at the same time, they are underperformers as entrepreneurs.
They are the opposite of their father, the blue-collar, successful business owner. They are part of the high-consuming, self-
employment-postponing generation, and what’s worse they still live at home, enjoying the old man’s wealth!

Questions
1 In your own experience, what are the social and cultural reasons that Ivan’s children are underachievers?
2 Do you know people who are like Ivan’s children? Are you like them?
3 What would you recommend to ‘kick some sense’ into their heads?
4 Is more schooling, or different schooling, the right answer?

ENTREPRENEURSHIP THROUGH THE AGES

Throughout history there have been enterprising individuals who spotted and exploited smart
individualism opportunities. But as humans developed a sense of individualism, these ‘dreamers who often face
Degree of emphasis placed
on individual
daunting, even life-threatening challenges to realise their dreams. Entrepreneurs frequently experienced
accomplishment rather prejudice, discrimination and even death for their beliefs and activities. When xenophobia raises its ugly
than on collectivism or
group accomplishment.
head, it is often enterprising immigrant entrepreneurs (e.g. Somali shopkeepers in South Africa) who are
first killed.32
Were there entrepreneurs in the Palaeolithic period 40 000 years ago? From a Darwinian perspective,
perhaps there were. Taking risks probably generated an evolutionary advantage. In today’s terminology,
 Chapter 1: Entrepreneurship: Evolutionary development, revolutionary impact 11

we might say that a primitive hunter-gatherer who developed a new weapon might have been seeking
niche advantage in the wild marketplace. As hunting technology developed, some people started to niche advantage
An advantage created by
accumulate a surplus and then turned from their struggle for mere survival into using their accumulated offering a valuable and
wealth and knowledge to start settled communities. Some clever people must also have decided to lend unique product and/or
service specifically to a
their capital and knowledge to others for personal gain or the benefit of the clan, but in a collective single, narrow market or
society it was sometimes better to hide your wealth and assets. customer segment. A
market niche is usually a
Data from anthropology tell us that entrepreneurial wealth creation has existed for millennia. subset of a larger market
Excavated business tablets show that innovation and entrepreneurship were key aspects in civilisations or customer segment that
has specific needs not
that have long disappeared.33 Ancient Assyrians (their empire was in today’s Iraq) carried out addressed by competitors
innovation transfer, had a corps of knowledge workers and developed business communication.34 The who seek volume sales
from less-defined and
Assyrians inherited a system of private enterprise from Sumer and Babylon. larger customer
Wingham believes that entrepreneurship as we know it today developed in the eleventh century groupings.

BCE in ancient Phoenicia, located in today’s Lebanon.35 A sailing nation of merchants and traders, the
Phoenicians peacefully connected a commercial empire that ranged from Syria in the east to Spain and
even Ireland in the west. Phoenician traders were the Star Trekkers of their age – true entrepreneurs
who took risks, explored the unknown and faced chaos on a daily basis. Certainly they returned profit to
investors, merchants and themselves. This peaceful trading nation was swept aside by the bellicose and
avaricious Persian Empire, and with it the concept of the risk-taking ‘undertaker’.
In biblical times an enterprising individual with high ability and independence faced prejudices that
societies had against usury (charging a fee for the use of money), which in the Bible was viewed as a usury
The lending of money at
great crime. Ezekiel 18:13 says: ‘He who lends at usury and takes excessive interest. Will such a man exorbitant interest rates.
live? He will not! Because he has done all these detestable things, he will surely be put to death and his
blood will be on his own head.’ Imagine how dangerous loan sharking was in those times.
The Romans did permit usury, but, curiously, not by Romans themselves. Any actual business
enterprise by a nobleman led to loss of prestige. Wealth accumulation was highly valued as long as it
did not involve a nobleman’s own participation in industry or commerce.36 In Rome, to be sure, there
was no absence of wealth creation, only of commerce. Landholding and usury were the usual routes to
wealth creation: ‘Money poured in from booty, indemnities, provincial taxes, loans and miscellaneous
extractions’.37 This aversion to commerce among the Roman nobility left the way open for entrepreneurial
freedmen, who were former slaves set up by their masters to run the businesses. Slavery may have been
one of the few avenues to commercial advancement for people of the lower classes.
Amazing as it may sound, in ancient Rome, innovation and profit were completely disconnected.
Certainly, Romans made considerable advances in technology, but this was divorced from commerce.
Pliny writes that one day an inventor came before Emperor Tiberius to show him his invention of an
unbreakable glass window and to beseech him for an inventor’s fee. Tiberius asked whether he had told
anyone the formula. The man assured him that the invention was absolutely secret, whereupon the
emperor immediately cut his head off ‘lest gold be reduced to the value of mud’. The sad lesson of this
story is that the inventor had to turn to the emperor for a reward rather than to a venture capitalist for
investment – and he couldn’t even protect his intellectual property!38
Turning now to medieval China, how could an entrepreneur begin a venture when the monarch
owned all the property? When the emperor needed cash, he simply seized it from his wealthy
noblemen. This meant that no one would invest in a productive enterprise for fear of losing it so easily.
Only scholarship and officialdom were routes to success, and value was tied up in land, not enterprise.
Wealth came to those who passed examinations and gained government positions.
 12 Part 1: Entrepreneurship in the twenty-first century

In contrast, Islam has always promoted business entrepreneurship. Though Islam prohibited pork,
alcohol, gambling, prostitution and usury, Muslims were otherwise free to invest their money in any
economic activity, and to produce, trade and consume in whatever way they wished. Trade and
commerce have always been a part of Islam. From pre-Islamic days, the Holy City of Mecca has been
the centre of commercial activities. There is no basic conflict between good business practice and profit
making in Islam. One scholar of entrepreneurship from Turkey writes that in the spring of 595 CE,
businesswoman Lady Khadija had a dream telling her to hire a particular man named Mohammed as
her trade agent because of his honesty and stamina on the long camel routes. Indeed, writes Adas, had
the Prophet Mohammed lived today, ‘on his business card it would have been written ‘‘exporter and
importer’’.’39
Meanwhile in Europe in the Middle Ages, great wealth and power came not from business acumen
but from military conquest. Innovations such as armour, the crossbow and gunpowder were needed for
military campaigns, not retail shops. As Europe moved from a feudal economy to nascent capitalism,
conditions began to change. Merchant entrepreneurs excelled in shipbuilding, built global trading
networks and used advanced weaponry to protect them. Forms of usury appeared, such as loans to
rulers, leased monopolies, buying on credit, fixed exchange rates and so forth. Merchant entrepreneurs
became major players in European politics, and the owners of shipping fleets and banks produced
descendants who, like the Medici, could become secular rulers or even popes.40 By the late Middle
Ages, the revival of towns saw tax-free zones and emancipated serfs, leading to the growth of an
entrepreneurial spirit.
The sad fact is that in the Industrial Revolution of the nineteenth to twentieth centuries, in Europe at
least, an entrepreneur’s life could lead to decapitation, death on the battlefield or appropriation by the
emperor. Hardly a conducive environment!
As perilous as the profession may have been, the entrepreneurial spirit has driven many of
humanity’s achievements. Indeed, some say not much has really changed. Multinational corporations
existed in Assyria. Ancient Greeks had brand-name competitions. Business travel was not unknown to
Marco Polo. There were industry clusters in Phoenicia. Creative and innovative forms of free enterprise
endured, sometimes for centuries.41
Humanity’s progress from caves to campuses has been explained in numerous ways, but central to
virtually all of these explanations has been the role of the agent of change, the force that initiates and
implements material progress. New thinking even sees a Darwinian aspect. Just like selected organisms
in biological systems, entrepreneurs are at the cutting edge of developing, retaining and selecting
information useful to survival.42
Today, we recognise that the agent of change in human history has been and most likely will
rugged individualist continue to be the entrepreneur.43 Rugged individualists, those who cherish individual liberty and self-
A person who cherishes
individual liberty and self-
reliance, frequently found themselves opposed to authority and to controls over the individual. At the
reliance. core of it was the mantra that entrepreneurs ‘mind their own business’ (as in take charge of or look after
themselves).
sovereign individual Entrepreneurs today may well be the prototypical sovereign individuals. In The Sovereign Individual,
A person or a business
that is not beholden to a
Davidson and Rees-Mogg see history as a series of roughly 500-year cycles – from Athens’ glory and
nation. For example, decline (500 BCE), to the dawn of Christianity and the fall of Rome (500 CE), to the emergence of
someone who resides on
the internet and selects
feudalism (1000 CE) and its subsequent collapse (around 1500 CE). Each cycle sees the rigid grip of the
where to do business governmental system ultimately breaking down and the (temporary) liberation of individuals from
based on cost versus
profit. undesirable controls. The authors say that in the modern age citizens no longer need to be beholden to
the authority of a nation-state. Tomorrow’s entrepreneurs will reside on the internet and select where to
 Chapter 1: Entrepreneurship: Evolutionary development, revolutionary impact 13

reside and do business based on cost versus profit. They will comparison-shop for services (utilities,
police protection and even currency) in a marketplace no longer dominated by state monopolies.44

THEORETICAL APPROACHES TO ENTREPRENEURSHIP

To understand the nature of entrepreneurship and better recognise its emerging importance, let’s now
consider some of its theory. The research on entrepreneurship has grown dramatically over the years.
Research methodology has progressed from empirical surveys of entrepreneurs to more contextual and
process-oriented research. Theory development is what drives a field of study. Entrepreneurship theory
has been developing for at least 40 years and it is apparent that the field is growing. It is important to
understand some of that development to better appreciate the discipline of entrepreneurship. The study
of the basic theories in the field also helps to form a foundation upon which a student can build an
understanding of the process and practice of entrepreneurship.
A theory of entrepreneurship is defined as a verifiable and logically coherent formulation of theory
A well-substantiated
relationships or underlying principles that explain entrepreneurship. These principles predict explanation of some
entrepreneurial activity (for example, by characterising conditions that are likely to lead to value creation aspect of the natural
world; an organised
or social opportunities and the formation of new enterprises), or provide normative guidance (that is, system of accepted
prescribe the right action in particular circumstances).45 In the new millennium, it has become knowledge that applies in
a variety of circumstances
increasingly apparent that we need to have some cohesive theories or classifications to better to explain a specific set of
understand this emerging field. phenomena.

In the study of entrepreneurship, one concept recurs: entrepreneurship is interdisciplinary, which interdisciplinary
Relating to more than one
means combining fields and crossing boundaries between disciplines or schools of thought. As such, it
branch of knowledge.
contains various approaches that can increase one’s understanding of the field.46 Therefore, we need to
recognise the diversity of theories as representative of an emergence of entrepreneurial understanding.
One way to examine these theories is within a ‘schools of thought’ approach, which divides
entrepreneurship into specific activities. These activities may be within a macro view or a micro view, yet
all address the conceptual nature of entrepreneurship.

SCHOOLS OF ENTREPRENEURIAL THOUGHT

A school of thought is a body of belief, literature or theory that is accepted as authoritative by a group of school of thought
Opinion subscribed to by a
scholars or writers. In this section we will highlight the ideas emanating from the macro (meaning group of scholars,
‘wide-scale’ perspective) and micro (meaning ‘small-scale’) views of entrepreneurial thought. We will theorists or researchers.
further break down these two major views into seven distinct schools of thought (see Figure 1.2). We
don’t claim to limit the number of schools of thought to these seven. It is simply organising some of our
knowledge in an efficient way.

Social and cultural school of thought FIGURE 1.2

ENTREPRENEURIAL
Financial/capital school of thought SCHOOLS OF THOUGHT
Macro view
Displacement school of thought
Ecological school of thought

Entrepreneurial trait school of thought (people school)

Micro view Venture opportunity school of thought

Strategic planning school of thought

 14 Part 1: Entrepreneurship in the twenty-first century

The macro view

macro view of
entrepreneurship
The macro view of entrepreneurship presents a broad array of external factors, such as education,
A view of physical infrastructure, culture and financing that relate to success or failure in contemporary
entrepreneurship that
examines the huge array
entrepreneurial ventures. This assortment of factors includes external processes that are sometimes
of external processes and beyond the control of the individual entrepreneur, for they exhibit a strong external locus of control
factors that are sometimes
beyond the control of the point of view. Four schools of entrepreneurial thought represent a breakdown of the macro view. The
individual entrepreneur, first of these is the broadest and most pervasive school.
such as the environment
and financial markets. • The social and cultural school of thought deals with external factors and surrounding conditions
(See also micro view of and influences that affect a potential entrepreneur’s lifestyle. These contexts can be either
entrepreneurship,
external locus of control.) positive or negative forces in the moulding of entrepreneurial desires. The focus is on
institutions, values and social mores that, grouped together, form a sociopolitical environmental
external locus of control framework that strongly influences the development of entrepreneurs.47 For example, if a middle
The perception that factors
external to the self are manager experiences the freedom and support to develop ideas, initiate contracts or create and
responsible for the
institute new methods, the work environment will serve to promote that person’s desire to
outcome of an event.
pursue an entrepreneurial career. (We call this type of person an ‘intrapreneur’; see Chapter 8.)
social and cultural Another environmental factor is their social group. The atmosphere of friends and relatives can
school of thought
The school of thought that
influence the desire to become an entrepreneur. Migrants are also more entrepreneurial than
deals with external native residents of a country. In Australia and the rest of the world, certain immigrant groups,
factors, surrounding
conditions and influences
such as Koreans, Jewish people, Greeks and Italians, have been more likely to launch start-ups.48
that affect a potential • The financial/capital school of thought is based on the capital-seeking process; the search for
entrepreneur’s lifestyle.
seed and growth capital is the entire focus of this entrepreneurial emphasis. Certain literature is
financial/capital school devoted specifically to this process, whereas other sources tend to treat it as but one segment of
of thought the entrepreneurial venture. In any case, capital seeking is vital to an entrepreneur’s
Refers to the need for
capital and focuses on the development. Business planning guides and texts for entrepreneurs emphasise this phase, and
relationship between development seminars often focus on the funds application process. This school of thought
entrepreneurs and
investors, funding sources, views the entire entrepreneurial venture from a financial management standpoint.49
performance of • The displacement school of thought focuses on the negative side of group phenomena, in which
entrepreneurial
investments and returns someone feels out of place – or is literally displaced – from the group. This theory holds that
for investors and
sometimes the social group hinders a person from advancing or eliminates certain critical factors
entrepreneurs, and public
policy issues. needed for that person to advance. As a result, the frustrated individual will be projected into an
entrepreneurial pursuit out of his or her own motivations to succeed. As researchers have noted,
displacement school of
thought individuals fight adversity and tend to pursue a venture when they are prevented or displaced
Entrepreneurial school of from doing other activities.50
thought that focuses on
factors that prevent (or Three major types of entrepreneurial displacement illustrate this school of thought. Each leads
displace) a person from some people to becomes entrepreneurs.
doing other activities, such
as a political regime or a – Political displacement: This is caused by factors ranging from an entire political regime that
regulatory environment rejects free enterprise to governmental regulations and policies that limit or redirect certain
that blocks free
enterprise; cultural industries.
aspects that might prevent – Cultural displacement: This deals with social groups precluded from professional fields. Ethnic
a person from choosing
self-employment; or background, religion, race and sex are examples of factors that figure in the minority
economic factors such as experience. Increasingly this experience will turn various individuals from standard business
job loss or even full
employment, and the professions toward entrepreneurial ventures.
effect these factors might – Economic displacement: This is concerned with the economic variations of recession and
have on the choice to
become an entrepreneur. depression. Job loss, capital shrinkage or simply bad times can create the foundation for
entrepreneurial pursuits, just as they can affect venture development and reduction.
 Chapter 1: Entrepreneurship: Evolutionary development, revolutionary impact 15

These examples of displacement illustrate the external forces that can influence the development ecological school of
thought
of entrepreneurship. Cultural awareness, knowledge of political and public policy and economic School of entrepreneurial
indoctrination will aid and improve entrepreneurial understanding under the displacement thought that focuses on
our perception of the
school of thought. The broader the educational base in economics and political science, the natural world and our
stronger the entrepreneurial understanding. relationship to it as
entrepreneurs. Based on
• The relatively new ecological school of thought comes from the growing perception of the the idea that everything is
natural world and our relationship to it as entrepreneurs. It is based on the idea that everything related to everything
everywhere. Encompasses
is related to everything everywhere. The systems that uphold life on the planet can no longer intergenerational equity,
endure the wanton exploitation and consumption that entrepreneurs have subjected them to. irreversibility of
environmental change,
This school of thought is based on the fields of green economics and ecological economics. It is uncertainty of long-term
defined by its focus on intergenerational equity, irreversibility of environmental change, outcomes and sustainable
development.
uncertainty of long-term outcomes and sustainable development. Ecological entrepreneurship
looks at the metabolism of new venture creation; that is, the study of the flows of energy and micro view of
materials that enter and exit entrepreneurial businesses.51 entrepreneurship
A view of
entrepreneurship that
The micro view examines factors that are
within the entrepreneur’s
The micro view of entrepreneurship examines the factors that are specific to entrepreneurship and are ability to direct or adjust.
part of one’s internal locus of control.52 The potential entrepreneur has the ability, or control, to direct or (See also macro view of
entrepreneurship, internal
adjust the outcome of each major influence in this view. As part of this approach we present locus of control.)
entrepreneurial trait theory (sometimes referred to as the ‘people school of thought’), venture
opportunity theory and the strategic planning theory of entrepreneurship. Unlike the macro approach, entrepreneurial trait
school of thought
which focuses on events from the outside looking in, the micro approach concentrates on specifics from A micro view of
the inside looking out. The first of these schools of thought is the most widely recognised in the field of entrepreneurship that
seeks to identify traits
entrepreneurship research. common to successful
• The entrepreneurial trait school of thought is grounded in the study of successful people who entrepreneurs (e.g.
achievement, creativity,
tend to exhibit similar characteristics that, if copied, would increase success opportunities for the determination and
technical knowledge). (See
emulators. Many researchers and writers have been interested in identifying traits common to
also micro view of
successful entrepreneurs.53 For example, achievement, creativity, determination and technical entrepreneurship.)
knowledge are four factors that usually are exhibited by successful entrepreneurs. Family
traits
development and educational incubation are also examined. Is education important? Some Personal characteristics
argue that education and success as an entrepreneur are highly correlated, while others believe it that distinguish
individuals, including
stands in the way of the creative and challenging nature of entrepreneurship, and that the best entrepreneurs.
entrepreneurs actually drop out of school.54 (In Chapter 2, the concepts of entrepreneurial
venture opportunity
cognition and metacognition, which are beginning to take hold in the research on entrepreneurs,
school of thought
are discussed.) A micro view of
• The venture opportunity school of thought focuses on the opportunity aspect of venture entrepreneurship that
focuses on sources of
development. The search for idea sources, the development of concepts and the implementation ideas and development of
concepts within the
of venture opportunities are the important interest areas for this school. Creativity and
context of creativity and
market awareness are viewed as essential. Additionally, according to this school of thought, market awareness:
developing the right idea
developing the right idea at the right time for the right market niche is the key to entrepreneurial at the right time for the
success.55 right market. (See also
micro view of
entrepreneurship.)
Another random document with
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 INTESTINAL INDIGESTION AND
OBSTRUCTION IN BIRDS.

Causes: Age, debility, atony, matting of feathers, dry or indigestible food, lack of
water, diseased oviducts, sand or gravel, lack of pebbles or power in gizzard.
Lesions: masses of egg, uric acid, or fæces in cloaca, implicating colon and cæca.
Symptoms: dullness, stupor, vertigo, staggering, erect plumage, trailing wings and
tail, bulging anus, covered with matted feathers, impaction felt by finger.
Treatment: extract mass, castor oil, laudanum, chalk, bismuth, pepper,
demulcents, phenol, exercise, silage, green food, pebbles.

Causes. These resemble those already noted for the dog. Old age,
debility, and atony of the bowel, the matting together of feathers
across the anus, dry feeding, indigestible food, scarcity of water, and
lack of exercise are especially to be noted. Malformations or other
changes lead to obstruction of the cloaca, and of defecation. Sand
and gravel passing from an atonic gizzard accumulate in the small
intestine or in the cæca distending them to great excess. Imperfect
trituration in the gizzard, from lack of pebbles, may prove a factor in
stoneless prairies.
Lesions. The most common seat of obstruction is at the cloaca, and
the impacted matter may be yellow partaking of the nature of yolk of
egg, or it may consist of feculent matters and uric acid in various
proportions, white, hard and fœtid. As in the dog this distension may
be continued forward blocking the colon and cæca as well. Lucet
mentions a case in which the impacted mass measured seven inches
long, and eight in circumference at its posterior and larger end.
Symptoms. The bird is dull, sluggish, stupid, giddy or unsteady on
its limbs, with feathers erect, wings, tail and head pendent and loses
flesh rapidly. Often a felted mass of feathers and fæces cover the
anus. In its absence there appears the rounded swelling or on
manipulation the impacted cloaca or rectum can be felt firm and
resistant.
Treatment. Soften and remove the external mass of fæces by the
aid of tepid water, clip off the feathers, which would tend to restore
it, then by the oiled finger and warm water injections break up and
extract the contents of cloaca and rectum. If impaction remains
farther forward give a teaspoonful of castor oil. If diarrhœa has
already set in, give 5 drops laudanum, and mix chalk or bismuth and
pepper in a mush to be fed to the patient. Injections of slippery elm
containing a teaspoonful of carbolic acid in the pint will prove useful.
The bird should be allowed plenty of exercise, its grain being fed
on a floor covered lightly with straw to encourage scratching, and
silage or green food should be allowed. On the prairies where pebbles
cannot be secured, imported gravel or vitrified brick broken into
small pieces should be allowed.
 COLIC IN SOLIPEDS FROM VERMINOUS
EMBOLISM. INTESTINAL CONGESTION.
Definition. Causes: presence of sclerostoma in arteries, form, habit, nature,
immature, biology, life in bowel, in submucosa, in arteries, outside the mammal,
pathogenesis, blood-sucking, verminous cysts, verminous aneurisms, seats of
latter, coagula, embolism, stagnation of blood, œdema and thickening of intestine,
mesentery, fermentations, tympany, infective inflammations, blood extravasations,
infection of liver and spleen. Symptoms: sudden attack, violent colics, reckless
movements, frequent defecation followed by its arrest, palsy of peristaltic
movement, of pain, prostration. Course: two to twenty-four hours, death from
indigestion, tympany, obstruction, hemorrhage, poisoning, recovery, sequelæ,
laminitis, intestinal catarrh or atony, debility. Treatment: aneurism worms beyond
reach, treat lesions, venesection, anodynes, stimulants of peristalsis, antiseptics,
compresses, sinapisms. Prevention: expel intestinal worms, exclude embryos,
tartar emetic, iron sulphate, arsenic, phenol, pure water, occasional vermifuges.
Definition. Congestion and spasms of the intestines in connection
with blocking (thrombus or embolism) of the mesenteric arteries,
and verminous aneurism.
Causes. The essential cause is the migration of the sclerostoma
equinum (strongylus armatus, Rud.) into the mesenteric arteries in
its agamous condition. It seems appropriate therefore to here notice
the life history of this parasite.
The sclerostoma equinum (strongylus armatus) is one of the
common pin worms of the horse. It is distinguished by its dull gray
or reddish brown body, thickest at the cephalic end and tapering off
toward the caudal, but ending in a blunt point; by the round, open
mouth furnished with several firm chitinous rings, of which the outer
bears six short symmetrically arranged papillæ, an intermediate row
of rounded blunt tooth-like projections, and the innermost a row of
fine, closely aggregated and very sharply pointed teeth for
penetration of the mucosa. Male ¾ to 1½ inches long, with caudal
membranous alæ in two lateral lobes, joined by a rudimentary
central lobe: two delicate spicula. Female ¾ to 2 inches long, blunt
pointed tail, vulva in posterior half of the body. Eggs ovoid with
slightly raised ring around the centre: oviparous.
 Habitats. They are found in solipeds in two stages of existence, the
mature worms in the cæcum and colon, and the immature in the
same organs encapsuled in little pellets of manure, and in cysts in the
mucosa but also apart in the arterial system especially in the anterior
mesenteric artery and other gastric or intestinal trunks.
The mature sclerostomata are found attached to the mucosa of
the large intestine into which the head is sunk for the purpose of
sucking the blood, and they may be gray, brown or red according to
the quantity of blood which they have imbibed. The author has found
them in little hernial sacs of the mucosa hanging from the peritoneal
surface.
The sexually immature sclerostomata are found in little pill-
like masses of ingesta in the large intestines and from which they
project part of the body through a narrow opening. Another habitat
is in cysts of the mucosa of the cæcum and colon and less frequently
of the small intestine, individual cysts varying in size from a pin’s
head to a hazel nut, and containing the young worm rolled upon
itself, and varying in size but always less than the intestinal worm
and always asexual. In some cases the cyst is found empty but with a
small opening toward the lumen of the bowel showing the means of
escape of the parasite. A third habitat of the immature worm is in the
blood-vessels, especially the posterior aorta and its divisions, and
still more constantly the anterior and other mesenteric arteries.
Biology. The ova of the sclerostoma are segmented in the oviduct
but are hatched out after they have been laid. The hatching may be
effected in the intestine or in manure or water external to the body.
When hatched out in the intestine they may pass out at once with the
manure or they may envelop themselves in pellets of the finer ingesta
and remain for a time in the bowel and finally pass out in this
condition. Baillet has traced their development out of the body. In a
watery or damp medium they are hatched out in a few days as a
cylindroid worm ¼ to ⅓ mm. long, thick in front and with a filiform
tail. In moist environment but especially in damp manure they grow
to 1 mm. or 1.5 mm. and continue for months in this condition, but
remain small and asexual, until taken in, in the drink or green food
of the soliped. Reaching the intestine and especially the cæcum and
colon they bore their way into the mucosa and encyst themselves, or
if they happen to perforate a blood-vessel they make a habitat of that.
In the cyst, development proceeds and when it has reached a certain
stage the worm once more bores its way through the mucosa and
reaching the intestine becomes sexually mature.
In this last migration the young worm is liable to perforate a
blood-vessel in which case it is destined to a period of existence in
the blood. It may, however, have blundered upon a blood-vessel at an
earlier stage when seeking a temporary home in the mucous
membrane, so that the sclerostomata of aneurisms may be derived
from two separate sources. In the blood-vessels the parasite attains a
length of 1 to 8 lines, whereas in the mucous cysts it does not exceed
3½ lines. Yet Neumann holds that after leaving the blood-vessels
they may again encyst themselves in the mucosa before escaping into
the intestine.
Several moultings take place in the asexual condition.
Other views have been advanced as to the development of the
sclerostomata. Colin believed that the ova deposited in the ducts of
the mucous glands and in the perforations made by the parasite in
blood-sucking, hatched in this situation and the embryo at once
encysted itself in the mucosa.
Leuckart imagines that the embryo found in the fæces or in water
outside the body of the soliped, should pass through an intermediate
host before it can return to gain sexual maturity in the horse. But no
evidence of the existence of such intermediate host is furnished, and
the encysted intestinal worms show no indication of a special
development which would have been accomplished in such host.
Willach holds to a hermaphrodite stage passed in the intestine of
the soliped. He found in the bowel small worms apparently related to
the sclerostomata by the appearance of the head and the caudal
membrane, but not exceeding three to five lines in length. Some were
evidently females and contained not only eggs with soft shells, but in
one case embryos. Others had the caudal membrane of the male, yet
contained also a few eggs. There is no vulva and the embryos escape
by rupture of the oviducts. These embryos he supposes are developed
in the same host into the familiar mature sclerostomata.
Whatever may be said of those alleged modes, the first described
series of changes and migrations may be taken as the usual and
regular method of development.
 Pathogenesis. Lesions. These embrace perforations of the
mucosa, cysts, aneurisms, embolisms and congestions.
Irritation of the mucosa. The adult worms, like so many
leeches are continually biting and sucking blood from the mucosa
and when present in large numbers, hundreds, thousands, or a
million create an aggregate of irritation which may determine violent
indigestions and congestions.
Verminous Cysts. These are like a pin’s head, a pea or hazel nut,
containing the asexual worm in a mass of purulent debris, or if
empty, presenting a small orifice where it made its exit.
Verminous Aneurisms. These are perhaps the most important
lesions caused by the sclerostome as they are the steppingstone to
the dangerous embolisms, and too often fatal colics and congestions
of the intestines. They are very common in some localities, and rare
in others following the distribution of the sclerostomata. Bollinger
found them in 90 to 94 per cent. of adult horses, and Ellenberger in
84 out of 85 horses dissected. They are found in all ages from six
months up, and are nearly always in the short, stubby trunk of the
anterior mesenteric artery. Often two or three exist in the same
animal, the whole length of the posterior aorta showing patches of
disease, exudations, neoplastic elevations alternating with
depressions, and aneurisms and thrombosis in its different branches.
In 100 horses Bollinger found 168 aneurisms, 153 in the anterior
mesenteric, and its divisions, 4 in the cœliac axis and its divisions, 3
in the hepatic artery, 3 in the posterior mesenteric artery, 3 in the
renal arteries and 2 in the posterior aorta.
The special predisposition of the anterior mesenteric artery is
variously accounted for: 1st. There is the obvious fact that its
branches are distributed to the cæcum and double colon, the home of
the mature parasite, and to the small intestines which are first
reached by the young parasites that are taken in with the water and
the food. These are therefore most likely to get into the branches of
this vessel and to follow them up toward its origin. 2nd. The anterior
mesenteric artery distributes its branches to the small intestines the
most motile portion of the intestinal tract, and the cæcum and colon
the most heavily loaded with solid ingesta, it is therefore the most
subject to traction, and distensions, and the more so that the parent
trunk is extremely short and the divisions pass in all directions and
to a large extent at right angles, so that there is a dragging of the
walls apart as well as an obstruction to the blood flow and an
increase of internal tension. The distension, laceration, inflammation
and softening of the internal coat have accordingly been regarded as
the starting point of an endarteritis upon which the parasites have
been implanted as a further cause of trouble. We must not forget,
however, that the sharp circle of teeth of the parasite, by which it
fixes itself on the intima of the vessel are quite enough to produce
initial endarteritis, without any assistance from distension, traction
or laceration.
The irritation of the intima from whatever cause determines here
as elsewhere exudation, and coagulation, and the inflamed walls
losing their tone yield more and more readily to the internal tension.
Sometimes the coagulum lines the aneurism or vessel all round,
leaving a narrow central passage through which the blood still flows;
in other cases the clot extends into the adjacent smaller vessels,
completely blocking them and disturbing circulation and innervation
in the parts which they supply. As a rule the parasites are found in
galleries hollowed out in the clot, and heads or tails may be seen to
project into the circulating blood. Sometimes they are found
imbedded in the arterial coat, or in an adjacent small abscess. The
formation of aneurisms in the other arterial trunks may follow the
same method.
Embolisms. These come very naturally from the formation of
thrombi in the various arteries. The coagulum determined by the
presence of the worms, tends to undergo retrogressive changes
notably fatty degeneration, to which germs brought on the worms or
in their alimentary canals contribute. This together with the
movements of the parasites tends to break up the mass, and minute
portions are washed on into the different smaller vessels. Soon these
reach divisions which are too small to admit them, which are
accordingly occluded and the circulation through them abolished.
The presence of microbes as well as fibrine contributes to cause
further coagulation, more absolute embolism and arrest of the
circulation.
It is further alleged that the sexual instinct in the summer months
(May to August) leads the worms to leave the aneurisms, to pass
through the smaller divisions to the cæcum or colon where alone full
sexual evolution is possible. In these migrations they cause the
thrombosis of the smaller trunks and determine the verminous
congestions of the bowels which are especially common in these
months.
Disturbances of the Intestinal Circulation. As these usually
occur in the lines of distribution of the anterior mesenteric artery a
knowledge of its divisions and their destination and anastomosis, is
essential to an intelligent understanding of the pathogenesis and
lesions. As first pointed out by Lecoq the anterior mesenteric artery
is divided into three primary bundles: (a) a left of 15 to 20 trunks
which are destined to the small intestine; (b) a right which gives off
cæcal branches, one to the double colon, and one to the ilium to
anastomose with the last trunk of the left bundle; and (c) an anterior
which gives one branch to the second division of the double colon
and anastomosis with the colic branch of the right bundle at the
pelvic flexure; and a second branch to the floating colon to
anastomose with the posterior mesenteric artery.
The divisions of the left bundle anastomose so freely with each
other in the mesentery and immediately above the intestine that the
blocking of any one branch cannot entirely arrest the circulation in
the corresponding part of the intestine. It may however produce a
partial local stagnation in the vessels of a short loop of intestine,
resulting in œdematous infiltration and thickening with resulting
induration and stricture of the gut. Chronic and permanent lesions
are produced by such blocking, but only rarely acutely fatal ones.
Acute and fatal congestive lesions of the small intestine from
verminous embolism, occur only when several adjacent divisions of
the artery are blocked at once, and this is a rare occurrence.
The right bundle of branches furnishes the only two arteries which
are supplied to the cæcum and the only artery furnished to the first
half of the double colon. The ileo-cæcal branch is less involved, first,
because being less dependent and smaller, it is less likely to receive
an embolus, and, second, because any lack of blood supply is
counterbalanced by the free anastomosis with the last iliac division
of the left bundle. When the embolus blocks the undivided trunk of
the right bundle this same principle comes into play, the free supply
of blood from the posterior branch of the left bundle supplying blood
through its anastomosis with the iliac and cæcal branches of the
right.
But when the emboli are lower down, in the cæcal branches of the
right bundle, or in these and the colic branch, arrest of the
circulation in the intestinal walls ensues, followed by paresis, passive
congestion and hemorrhage. The cæcum and double colon thus
become the seats of the grave and fatal lesions of verminous
embolism.
The resulting lesions are to be variously accounted for. The
stagnation of blood in the vessels below the embolus, determines a
speedy exhaustion of its oxygen and increase of its carbon dioxide, so
that it is rendered unfit to maintain the normal nutrition and
functions of the part, and the capillary and intestinal walls are alike
struck with atony or paresis. The blood filters into the stagnant
vessels slowly from adjacent anastomosing trunks, and the liquor
sauguinis exudes into the substance of the tissues and lumen of the
intestine, leaving behind the greater part of the blood globules so
that the stagnant blood is rendered more and more abnormal in
composition. The walls of the capillaries soon lose their cohesion as
well as their contractility, and giving way at different points, allow
the escape of blood into the tissues, bowels and peritoneal cavity. It
has been further claimed that the emboli already infected and in
process of degeneration communicate this to the walls of the vessels
and to the stagnant blood, hastening the process of degeneration and
rupture.
Another series of circulatory disorders are liable to take place. The
blocking of the vessels of the right bundle, tends to increase the
blood pressure in the left bundle and the anterior one, and thus to
determine congestions, paresis and inflammations in the small
intestines, the second division of the double colon and the floating
colon. The resulting inflammation and increased vascular tension
may lead indirectly to implications of the brain and lung.
Extravasations so extensive as to appear like blood clots may be
present between the layers of the mesentery or in the mucosa and
submucosa, and blood, liquid or coagulated, may have accumulated
in the abdominal cavity. Blood effusion into the intestine gives a dark
red coloration to the contents which are further mixed with distinct
clots.
 The atonic bowels are always the seat of extensive fermentations
and tympany. The microbes engaged in these fermentations and
their toxins, are accountable for toxic changes occurring in the locally
diseased parts and in distant organs. To this may be attributed the
congestion and softening of the liver and the engorgements and
hemorrhagic centres in the spleen.
Symptoms. An animal, perhaps known to harbor the sclerostoma
equinum, is suddenly attacked with violent and persistent colic. He
trembles, paws, moves his hind feet uneasily, kicks the abdomen,
throws anxious looks at the flanks, crouches, lies down, rolls, gets up,
and at once gets down again. The intensity of the suffering rapidly
increases, the face is drawn and pinched, the eye is extremely
anxious, the patient no longer lies down, but throws himself down
reckless of consequences, when down he is not quiet for an instant,
but now on his breast, then on his side, then on his back, the limbs
struggling and jerked violently, the head turned first to one side and
then to the other, he is a picture of extreme agony. If made to walk
the same indications continue; he walks with head down and limbs
semiflexed ready to drop at any moment, and often he will drop
suddenly in spite of every effort to keep him on his feet. The pulse is
at first strong and full, but as extensive effusion takes place into the
bowels or abdomen, or as the animal is poisoned by toxins, it
becomes small, weak, and it may be imperceptible. Breathing is
quick and catching, and the mucous membranes are dark red.
Sweating which shows first about the elbows or flanks or back of the
ears finally becomes general, the surface cold and the limbs
especially so. Fæces may be passed at first, a few dry balls at a time
from the floating colon or rectum, but soon they are suppressed
entirely. Some patients strain frequently to micturate but pass little
at a time.
In some instances the acute pain seems to suddenly cease, but
there is no general improvement, the patient stands with head
depressed, eyes sunken and expressionless, ears lopped, cold
perspiration, chilly limbs, unsteady gait and imperceptible pulse. It
implies merely a paralysis of the affected bowels in connection with
the extensive congestion and extravasation.
Course. Duration. The more acute cases reach their acme with
great rapidity, death may occur after two hours illness, and in other
cases it may be delayed ten or even twenty-four hours. It may be
caused by indigestion and tympany, by volvulus or invagination, by
excessive hemorrhage, or by poisoning with toxic matters.
Recovery occurs when the vessel blocked is an unimportant one as
a branch of the left bundle so that circulation may be reëstablished
from collateral trunks; or when a more important trunk has been but
partially blocked, and after a time it either clears itself, or collateral
circulation comes in with sufficient compensation. There is a more or
less rapid disappearance of the colics and other symptoms, a free
passage of urine, the rejection of fæces, it may be in a liquid, semi-
liquid or sanguineous condition, yet enough to indicate the
restoration of intestinal tone. The patient begins to pick morsels of
food and soon acquires his former appetite.
In some instances, however, the recovery is not complete. Trasbot
has noted a case of laminitis occurring within fifteen hours after the
improvement, and in other cases there remain chronic debility and
catarrh of the intestines. The appetite remains poor, there are
occasional colics, the bowels are irregular, loose or costive, and the
fæces are dry, glossy and covered with mucus. The back is arched,
the belly tucked up, strength and vigor are both lacking, and the
patient spends much time in the recumbent position.
Complications of various kinds may follow as in other diseases of
the intestines. After even the best recoveries, a relapse is always to be
apprehended as the original cause remains and the animal is liable to
be cut off at any time.
Treatment. This is very unsatisfactory as the original source of
trouble, the worms, being in the blood-vessels, cannot be reached by
vermifuges that would be harmless to the host, and clots blocking the
smaller intestinal vessels, cannot be dissolved and removed.
Moreover, although we could compass the death of the worms in the
aneurisms, we would leave their dead bodies as sources of septic
change, blood coagulation and embolism.
A certain number of cases, however, are not necessarily fatal, and
the worms of the blood-vessels have not an indefinite period of life,
so that there is some encouragement for both therapeutic and
preventive treatment. During the attack we must be content to treat
symptoms. French veterinarians still trust largely to general
bleeding, adopted at the very outset and to the extent of 6 to 10
quarts. It will temporarily lessen the vascular tension, more
permanently dilute the blood, and calm nervous excitement, and in
the most violent cases, as a kind of forlorn hope, it might be tried
with the view of tiding over the acute stage until a freer collateral
circulation could be established.
The use of anodynes will be more generally acceptable to American
practitioners. Two to four grains of sulphate of morphia or codeine
may be given hypodermically in combination with 1½ gr. eserin, 7
grs. barium chloride, or 2 grs. pilocarpin, to secure a speedy
movement of the bowels.
To counteract intestinal fermentation perhaps no better agent can
be got than chloral hydrate, ½ oz. of which may be given by the
mouth in water, and ½ oz. more by the rectum.
Wet compresses to the abdomen, or fomentations with water
rather hotter than the hand can bear or even the application of
mustard is sometimes useful as a soothing or derivative agent.
In the absence of morphia or chloral, laudanum, ether,
chloroform, camphor or assafœtida have been recommended.
It is important to keep the patient on a soft, littered floor to
prevent injury from his throwing himself down, and walking him
around may be resorted to for the same purpose.
Prevention. After a non-fatal attack and in every case in which a
horse is found to harbor the sclerostoma equinum in quantity,
measures should be taken to expel those present in the bowels and to
prevent the entry of embryos. The infested horse may be purged and
put on two drachms each of tartar emetic and sulphate of iron every
morning in a handful of feed half an hour before the first meal. After
six doses he may take a second active purgative. In case of need the
addition of 6 grains arsenious acid and a drachm of carbolic acid to
each dose will render them much more effective. All water must be
withheld that comes from streams running by farm-yards, from
ponds or open wells in barn-yards, from uncovered cisterns and from
any source which receives drainage or leaching from land occupied
by solipeds or spread with their manure.
A course of vermifuge medicine should be given at intervals of two
or three months to get rid of the worms which have passed in the
interval from the cysts of the colon, into the intestine.
 NON-VERMINOUS INTESTINAL
CONGESTION IN SOLIPEDS.
Causes: sudden changes to green food, or leguminous fodder, newly harvested
fodder, frosted food, iced water, microbian infection, toxin poisoning, intestinal
fermentations, experiments, volvulus, invagination, strangulation, compression,
atony. Symptoms: as in verminous aneurisms. Diagnosis: absence of worms,
presence of other causes. Treatment.
Causes. Acute intestinal congestion apart from verminous
aneurisms is ascribed to a variety of causes. Sudden changes of food
especially to green food, in spring, or to some of the leguminous
fodder plants (alfalfa, cowpea, clover, tares, vetches), newly
harvested grain or hay, fodders covered with hoarfrost, iced water,
and microbian infection or poisoning with toxins or other irritant
products of intestinal fermentations. Experimentally the injection
into the circulation of pyogenic toxins and putrid matters has
determined intestinal congestion and hemorrhage. In the same way
musty hay or grain have proved the occasion of these attacks. Finally
mechanical blocking of the circulation of the intestine as by volvulus,
invagination, strangulated hernia, or even compression by bulky
food has seemed to operate in this way.
It ought to be borne in mind that the habitual microbes of the
healthy bowel may become pathogenic when brought in contact with
a mucosa which is the seat of irritation, atony or any condition of
debility.
Symptoms and Lesions. The verminous aneurisms and thrombosis
aside, the symptoms and lesions of this form of congestion so closely
resemble those of the verminous affection that it seems needless to
repeat them.
Diagnosis is difficult but the absence of worms in the affected
animals and their fellows, and the presence of some one of the other
recognized causes may lead to a fair conclusion.
Treatment of the affection is more hopeful than in the verminous
affection, and may be conducted on the same general lines.
 PSEUDOMEMBRANOUS (CROUPOUS)
ENTERITIS IN SOLIPEDS.
Definition. Causes: As in ordinary enteritis, with added infections or toxins.
Symptoms: As in enteritis, nervous symptoms, diarrhœa. Lesions: Congested
mucosa, whitish or grayish false membranes, in patches or tubular casts, granular,
mucous, albuminoid, fibrinous. Diagnosis: False membranes in stools. Treatment:
Glauber salts, calomel, alkaline carbonates or tartrates, oils, antiferments,
demulcents, careful diet, bitters.
Definition. An inflammatory affection of the bowels characterized
by the ejection with the fæces of false membranes.
Causes. It has been long attributed to the causes which produce
other forms of enteritis and indigestions, as youth, rich stimulating
feeding, sudden change to green food in spring, sudden chills, over-
fatigue, confinement indoors, and prolonged costiveness. In man it is
found as a sequel of infectious diseases (pneumonia, pyæmia), in
Bright’s disease, cirrhosis of the liver and cancer, and in poisoning by
lead, mercury or arsenic (Osler). Cadeac, who found great numbers
of streptococci in the false membranes in animals, is certain it is a
microbian disease, and this is doubtless true, if qualified by the
statement that the microbe as is so often the case with other
intestinal affections, requires an occasion in the form of a diseased or
debilitated condition of the mucosa to enable it to become
pathogenic. The disease is not known to propagate itself indefinitely
or without such a predisposing occasion.
Symptoms. There are dullness, prostration, langor, hyperthermia,
accelerated pulse, and colics which may be slight or very severe. In
some cases nervous symptoms have been observed, such as
irritability or stupor and somnolence with icterus and fœtid stools.
The fæces are usually semi-liquid, implying an excessive liquid
secretion as well as the exudation of the membranous matter.
Lesions. There is a pink congestion of the intestinal mucosa more
or less generally distributed. Whitish false membranes cover patches
chiefly on the terminal portion of the small intestine, but frequently
also on the cæcum and colon, covering an especially red and angry
mucosa. They may occur as simple patches, as ribbon shaped pieces,
or as hollow cylinders lining the entire circumference of the
intestine. They appear as if fibrillated, but contain abundance of
granular matter and seem to be composed mainly of mucus with
albuminoid matter and probably a little fibrine. The deeper layers, in
contact with the inflamed surface are soft and gelatinoid. It is alleged
that coexisting wounds on other parts of the body become covered by
a soft pultaceous false membrane.
Diagnosis is based on the presence of the false membranes of a
considerable thickness, so that they can be distinguished from the
film of mucus which covers the fæcal balls in constipation or enteric
catarrh.
Treatment. Facilitate the secretion from the mucosa, and the
separation of the false membrane by giving 1 lb. Glauber salts, or give
this agent in doses of 5 or 6 ozs. per day. Calomel 1 dr. may be used
instead and has the additional advantage of acting as a disinfectant.
The alkaline carbonates or tartrates or even olive or castor oil may be
used as substitutes. Antiferments like salol, naphthol, salicylic acid,
and salicylate of soda have been prescribed to check the
multiplication of the germ. Flaxseed tea, elm bark, and other
mucilaginous agents may also be given. An easily digestible and
laxative diet and a course of bitters may follow.
 PSEUDOMEMBRANOUS (CROUPOUS)
ENTERITIS IN CATTLE.

Causes: as in solipeds, youth, overfeeding, plethora, dietetic blunders,

temperament, over-exertion, chill when heated, gestation, foul water, irritants,
drastics, infections. Symptoms: as in enteritis with false membranes,
complications. Duration. Lesions: false membranes, extent, color, structure,
composition, congested mucosa. Treatment: Glauber and other salts, pilocarpin,
potassium iodide, antiseptics, sulphites, sulphides, borax, bismuth, naphthol,
creolin, muriatic acid, bitters.

Causes. The same causes are quoted as in solipeds, youth, extra

high condition, rich feeding, sudden change to the green food of
spring, climatic vicissitudes of the same season, a sanguineous
(Reynal) or lymphatic (Friedberger and Fröhner) temperament,
overwork, exhausting travel, suppressed perspiration, gestation,
plethora, foul drinking water, special irritant plants (chicory,
Huzard), and drastic purgatives. Cadeac suggests bacteria, quoting
instances of a fifth or a fourth of a herd suffering at once. The same
would come from any other cause acting on the whole herd and it
seems probable that a microbian factor is present but can find
occasion for its pathogenesis only in given morbid conditions of the
mucous membrane. This would explain the failure of the affection to
propagate itself like a plague, and at the same time its tendency to
manifest itself extensively in given herds with a common
predisposing condition.
Symptoms. There are indications of enteric inflammation and
fever, rigors, slight hyperthermia, drying up of the milk secretion,
impaired or suspended appetite and rumination, constipation, colicy
pains, increasing dullness and prostration. As the disease advances
the excrements become soft, pultaceous or watery, with floating hard
baked pieces, dark and even glistening on the surface and more or
less false membranes. These are sometimes stained with blood,
which may also be mingled with the liquid debris. As in solipeds
these membranes constitute the only true diagnostic symptom. They
may appear as shreds, bands or complete cylindroid casts of the
intestine.
Other complications, like pseudomembranous exudate on wounds,
abortions and profound weakness are sometimes noted. The disease
may last eight days before ending in recovery. When death takes
place it is about the fourth or sixth day.
Lesions. The false membranes are found on the ilium and colon, in
thin films or in thick masses, or tubular casts. In extreme cases the
membrane has covered an extent of 24 feet in length, and if recent it
is soft and friable. If older it may be firm, consistent and yellow or
stained by the blood or ingesta. As in solipeds it shows a reticulated
network and a fine granular structure, and is composed mainly of
inspissated mucus with albuminoids and fibrine. The exudate covers
a surface of extreme redness, with points of darker blood-staining
and even abrasion or ulceration. The surrounding mucosa is also
congested, the villi hypertrophied, the mucous follicles swollen.
Treatment. In the early stages a laxative of soda sulphate is of
especial value in depleting from the inflamed mucosa, liquefying the
secretions and dissolving and loosening the false membranes. Epsom
salts, cream of tartar, Rochelle salts, calomel, and pilocarpin are
more or less valuable substitutes. Iodide of potassium is most
valuable in dissolving the exudate and acting as a microbicide (dose
3–4 drs.).
Other alkaline salts may be substituted or as antiseptics the
sulphites, hyposulphites, or sulphides of potash or soda. Borax,
bismuth, naphthol and creolin have also been recommended.
Enemata of warm water are desirable.
In very adynamic conditions, muriatic acid (½ dr. doses) may be
given with vegetable bitters and the same may be allowed during
convalescence.
 PSEUDOMEMBRANOUS (CROUPOUS)
ENTERITIS IN SHEEP.
Causes: As in cattle, draughts in folds, overfeeding. Symptoms: fever,
inappetence, weakness of hind parts, diarrhœa, tenesmus, false membranes, blood
in stools, tympany. Treatment: change diet of dam, exercise, Glauber salts,
potassium iodide, bismuth, flaxseed, elm bark, mallow, gum, carminatives, bitters,
antiseptics.
Causes. The same causes are claimed as for cattle. Clavel
attributed it to too rich milk, and exposure to cold draughts, in
folded lambs.
Symptoms. To the general symptoms of fever are added refusal of
the teat, weakness or paresis of the hind limbs, looseness of the
bowels and the ejection of false membranes with an unusual amount
of straining. The dejections may be watery and mixed with blood. In
some cases defecation is suppressed, the intestines being blocked by
the membranes, and then acute indigestion and fatal tympany may
follow.
The pathological anatomy and lesions resemble those seen in the
ox.
Treatment. Change the diet of the ewe, and allow more outdoor
exercise. Give the lamb Glauber salts (½ to 1 oz.) with potassium
iodide (10 grs.), and bismuth (1 dr.). Decoctions of flaxseed, or
solutions of elm bark, mallow or gum arabic are desirable, and
infusions of aromatic plants or oils of peppermint, anise, or fennel
may be added with quinia. As in the other animals such antiseptics
as salol, naphthol, naphthalin, boric acid, or salicylate of soda may be
administered.
 PSEUDOMEMBRANOUS (CROUPOUS)
ENTERITIS IN DOGS.
Complication of other diseases like distemper. Symptoms: fever, retching,
vomiting, tense, tender, tympanitic abdomen, irregular bowels, false membranes.
Lesions: stomach empty, congested, croupous exudate, extravasations. Treatment:
sodium sulphate, boric acid, sodium salicylate, salol, bismuth, by mouth or enema,
strychnia, vermifuges.
In dogs the formation of false membranes on the intestinal mucosa
seems to have less of an individual character, and is found associated
with other affections, like canine distemper and parasitism. In the
absence, however, of accurate knowledge of the specific cause of
croupous enteritis in other animals it seems permissible for the
present, to arrange the whole in one class characterized by the
presence of false membranes.
Symptoms. Along with the general symptoms of fever and the
special ones of the existing specific disease there is more or less
disturbance of the digestive organs, anorexia, vomiting, tense,
tender, perhaps tympanitic abdomen, irregularity of the bowels and
the passage of the false membranes. A morose disposition and
tendency to snap has been noticed by Röll.
Lesions. The stomach is empty with red or dark mottled mucosa,
the intestinal mucosa is congested covered with a layer of
mucopurulent exudate, and at intervals patches of false membranes
which are also found in shreds floating in the glairy contents. The
exudates are of a yellowish gray color, more or less streaked with
blood, and the mucosa infiltrated, swollen, highly congested and with
spots of extravasation of blood.
Treatment. Small doses (1 to 2 drachms) of sulphate of soda may
be given by the mouth, or boric acid (1 scruple), salicylate of soda (10
grains), salol (5 grains), or bismuth nitrate (½ drachm). Injections of
boric acid, borax, sodium hyposulphite, or even Glauber salts prove
useful, and powdered nux vomica (1 grain twice daily) may be added.
In case of intestinal parasites vermifuges must be resorted to.
 PSEUDOMEMBRANOUS (CROUPOUS)
ENTERITIS IN BIRDS.
In pigeons: Ærobic, non-motile bacillus, in lesions, membrane and internal
organs, pathogenesis, in chickens pathogenesis differs, also in man, parts attacked,
exudate, other symptoms, mortality early and late in outbreak, American form,
pathogenesis to rabbits and Guinea-pigs. Prevention: Avoidance of infection,
quarantine of birds, separation of sick, disinfection, accidental bearers of infection,
pigeons, buzzards, carrion crows, dogs, men, cleanliness. Treatment: Locally
antiseptics, phenol, boric acid, generally, phenol.
This has been especially seen in pigeons in which it has been
studied by Löffler, Cornil and Megnin, and Babes and Puscarin.
Löffler found an ærobic, non-motile, non-liquefying bacillus in the
false membranes, inflamed tissues, liver, lungs and blood, even in
the leucocytes. It formed irregular masses, and grew in nutrient
gelatine, blood serum and potato. It proved pathogenic to pigeons,
linnets, rabbits and mice, but not to hens, Guinea-pigs, rats or dogs.
Chickens, however, suffer from an acute diphtheritic affection caused
by a nearly allied bacillus, and it remains to be seen whether the
varying pathogenesis may not be due to the habit of long continued
growth in a particular genus and an acquired unfitness for growing
in the other. The pathogenesis is also different from the bacillus of
diphtheria of man, and the two diseases are not usually inter-
communicable, in spite of the fact that in rare instances infection has
appeared to have taken place from man to birds.
In pigeons and fowls the upper parts of the air passages and
digestive tract are mainly involved, the tongue, fauces, corners of the
mouth, nares, larynx, and conjunctiva. The bowels suffer less
frequently and mostly concurrently with the mouth, nose and throat.
The mucosa is deeply congested and in part covered by a yellowish
exudate which may accumulate in masses, and dry into a firm
substance. The disease affects particularly high bred birds, kept in
close warm houses, and is often imported by prize animals returned
from a show. There may be dullness, listlessness, sunken head,
trailing wings and tail, erect plumage, diarrhœa, and, if the nose and
throat are affected, a modification of the voice as in roup. Death may