· Father of Entreprenuership: Joseph Schumpeter (look up)
o First of all theres a dream and a will to find a private kingdom. Then there is a…and finally there is the joy of creating, of getting things done,
· Barnes and Noble and Borders
o Led to bankruptcies for small bookstores
o It’s amazing how in 15 years, preferences in technology made Borders go out of business
· Viktor Schreckengost
o Has done more good for my life than anyone else we can name
o Industrial designer
o Invented riding lawnmower, lightweight material for tires, and also decided to put trucks on top of their engines
· Norman Volag
o Father of the Green Revolution (won a Nobel Prize for it)
o New hybrid seeds which were easier to grow
o Helped billions of people survive because the seeds helped feed billions of people
· Health Care makes money not by keeping us sick, but by making us well!
o In summer 1994, he lost 7 pound in 36 hours and was mad sick with what was probably food poisoning. He had 6 pounds of liquids pumped into him, slept 18 hours, and ended up with 1250 dollars in bills. The doctors spent great energy saving his life even though they didn’t know him, they would not have been there had they not gotten paid for working there.
o Conclusion: Thank God, there are people doing this stuff, even though they are doing this for money
§ Also, the biggest motivator for a person is usually money
· Entrepreneur
o Real costs that matter
o Factors of production
§ Land
· Explicit: Rent
· Implicit: Rent
§ Labor
· Explicit: wages
· Implicit: wages
§ Capital
· Explicit: Rent
· Implicit: Rent
§ Goal: find the right mix of the above in order to capitalize the most off of the business
· Profitability
o = Rental rate + Appreciation Rate – Interest Cost
§ Rental rate = Annual rent / Price of good
o Example: Rizzo’s car
§ Lease: 1 year at $12,000 a year
§ Buy: $32,000, but sell the following year for $24,000
§ Rental rate is 37%
§ You can buy the car, but you’d have to take out a loan at 10% interest rate
§ Rental Rate = Annual rent/ Price of a good + Change in asset price/price
· From this equation, you can figure that you are 2.5% richer each year for buying the car instead of renting the car
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