Small-Medium Enterprises and Entrepreneurship: Afterpay Case Study

This report offers a comprehensive analysis of Afterpay, a business venture founded by Nicholas Molnar, focusing on entrepreneurship and entrepreneurial traits. It begins with an overview of Afterpay's business activities, including its 'buy now pay later' service and its impact on the Australian retail industry. The report then defines entrepreneurship and links it to Molnar's actions, examining his entrepreneurial traits such as risk-taking, opportunity identification, and goal setting in light of various entrepreneurship theories. It highlights the company's growth, strategic alliances, and Molnar's vision. Additionally, the report assesses the strengths and weaknesses of Molnar's entrepreneurial approach and concludes by justifying his status as a successful entrepreneur, emphasizing his innovative business idea, effective use of entrepreneurial traits, and focus on customer interests and the Australian business landscape.

Running head: SMALL-MEDIUM SIZED ENTERPRISES AND ENTREPRENEURSHIP
SMALL-MEDIUM SIZED ENTERPRISES AND ENTREPRENEURSHIP: A CASE
STUDY OF AFTERPAY AND ITS ENTREPRENEUR NICHOLAS MOLNAR
Name of the Student:
Name of the University:
Author’s Note:

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EXECUTIVE SUMMARY
This report focuses on the concept of entrepreneurship and entrepreneurial traits through the
usage of the case study of Nicholas Molnar and the business venture established by him,
Afterpay. The report first offers an overview of the business activities of Afterpay in terms of the
services offered by it, the growth attained by it and other aspects. Next, the concept of
entrepreneurship had been defined and this had been linked with the same followed by Molar.
Furthermore, an analysis of the different entrepreneurial traits shown by Molar like risk-taking
nature, opportunity identification, goal or objective setting and others have been undertaken in
the light of the diverse theories of entrepreneurship. More importantly, a brief overview of the
strengths and the weaknesses of the process of entrepreneurship had also been offered in the
report. Lastly, the report concludes by offering a justification of Nicholas Molnar as an
entrepreneur.

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Table of Contents
Introduction......................................................................................................................................3
Business activities of Afterpay........................................................................................................3
Entrepreneurship and Nicholas Molnar...........................................................................................4
Entrepreneurial traits of Nicholas Molnar...................................................................................6
Strengths and Weaknesses of Nicholas Molnar as an Entrepreneur............................................7
Justification of the choice of Nicholas Molnar as an Entrepreneur.................................................8
Conclusion and Recommendations..................................................................................................9
References......................................................................................................................................10
Appendix........................................................................................................................................13

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Introduction
As stated by Cooper (2017), an important trend perceptible within the present-day
business world is that numerous entrepreneurial ventures mushroom almost on a regular basis
which focuses on the effective capitalization of the business opportunities offered by the same.
Meyer, Neck and Meeks (2017) are of the viewpoint that despite the large number of
entrepreneurial ventures which are established almost on a daily basis it is seen that only a
handful of them are being able to sustain itself or for that matter attain the desired level of
success. In this relation, it needs to be said that the success of the entrepreneurial ventures is
directly tied up with the entrepreneurial traits or the skills of the entrepreneurs who are required
to effectively manage the diverse aspects of the business ventures that they have established
(Nambisan 2017). As per Smallbusinessassociation.com.au (2019), the number of small-medium
sized enterprises within the nation of Australia itself had increased by more than 84% in the last
decade because of the large number of business ventures established by the different emerging
entrepreneurs of the concerned nation. Nicholas Molnar’s entrepreneurial venture “Afterpay” is
an important one in this regard not only in terms of the success that it had been able to attain in
the concerned nation but also on the score of the innovative business idea on which the venture
focuses on. This report intends to undertake a critical analysis of the entrepreneur Nicholas
Molnar and his entrepreneurial traits in the light of the business venture “Afterpay” established
by him.
Business activities of Afterpay
Afterpay, founded by Nicholas Molnar and Anthony Eisen in 2017, had capitalized on
the 'buy now pay later' (BNPL) market and follows the attitude of “'invest early, get paid later”

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(Afterpay.com 2019). The business venture offers the opportunity to the customers to purchase
commodities of their liking and make the payment for the same later on (Sbs.com.au 2019). In
this relation, it needs to be said that the business venture under discussion here had rejuvenated
the retail industry of Australia in a substantial manner since in the earlier times because of the
cheap commodities offered by the online overseas retailers the customers showed a high
preference towards them. However, presently it had been seen that Afterpay offers the
opportunity to the Australian customers to purchase the commodities offered by the Australian
retailers and make payments for the same later on (Smallbusinessassociation.com.au 2019). As a
matter of fact, the services offered by the concerned business venture are completely like the
ones offered by the credit card companies however the only difference is that the customers do
not have to undergo extensive paper works or for that matter pay higher interest rates for the
amount that they owe to the company (Forbes.com 2019). More importantly, it had been seen
that although the business venture till now hadn’t registered any profit yet it is seen that the stock
price of the venture had become almost four times and the valuation of the venture had reached
more than $200 million (Afr.com 2019). The venture in the recent times had been able to enter
into strategic alliances with Jetstar, Target, ASOS and others which in turn had greatly boosted
the prospects of the concerned venture in the nation of Australia and added to the success
attained by it (Afterpay.com 2019).
Entrepreneurship and Nicholas Molnar
Khoshimov, Eckhardt and Goldfarb (2019) are of the viewpoint that entrepreneurship can
be defined as the process through which the entrepreneurs establish new business ventures which
often entails a certain amount of financial and other kinds of risks. As discussed by Parker
(2018), the business idea that the entrepreneurs select for the establishment of their business

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ventures is important the profitability or for that matter the future growth prospects of the
business ventures established by them greatly depends on the kind or the nature of the business
ideas that had been selected by them. In this relation, it needs to be said that the entrepreneurs for
the identification of the right kind of business ideas need to take the process of innovative value
chain (Kuratko 2016). Taking the help of this process, they are firstly required to scan the
business environment and identify the best possible business ideas. In the second step, they are
required to select the kind of idea which is likely to yield maximum amount of success while
incurring the minimum amount of risks and in the third stage they are required to undertake the
establishment of the business venture. More importantly, Read et al. (2016) have noted that the
entrepreneurs along with the identification of the right kind of business ideas are required to
formulate the blue-print of the entire business venture including its diverse business processes
which would be followed by the same.
Nicholas Molnar, aged 28, is perhaps one of the youngest business entrepreneurs of the
nation of Australia and is widely known as the co-founder of the famous Australian business
venture Afterpay (Forbes.com 2019). Commenting on the factor which inspired him to establish
the business venture under discussion here he stated that “I think it was a combination of a
sequence of events that kind of taught me about this millennial shift in payment behavior, and
preference of debit cards and aversion of credit” (Sbs.com.au 2019). It is precisely this behavior
shown by the people on which the business venture established by him tries to capitalize on. In
this relation, the precepts of the psychological theory of entrepreneurship is important to note
which states that the individual characteristics or for that matter the emotions of the
entrepreneurs play a pivotal role in the entrepreneurial traits displayed by them (Venkataraman
2019). For example, in the particular context of Molnar it had been seen that he own past

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experiences of not being able to purchase the things that he wanted to buy because he didn’t had
the required cash at that point of time propelled him to establish the business venture under
discussion here (Forbes.com 2019).
Molnar for the establishment of the business venture, Afterpay firstly explored different
business ideas and after undertaking an effective analysis of the present market conditions and
customer demands the business venture under discussion here was established (Afr.com 2019).
More importantly, it had been seen that the blue-print of the entire business venture, Afterpay,
was designed by Molnar himself and even in the present times despite the fact that the venture
had been able to attain a substantial amount of success it is seen that he attends all the important
business meetings of the venture and also takes active part in the formulation of the different
business strategies or policies of the concerned venture (Sbs.com.au 2019). In this light, it can be
said that the active initiatives undertaken by Molnar and also the adequate usage of the process
of entrepreneurship had contributed effectively towards the establishment of the business
venture, Afterpay and also the subsequent success attained by it as well.
Entrepreneurial traits of Nicholas Molnar
An analysis of the character of Molnar reveals the fact that he is risk-taking in nature, is
quick to release as well as capitalize on the different opportunities, likes to set different
objectives or goals, displays effective decision-making skills and others. His risk-taking attitude
becomes apparent from the fact that whereas the other entrepreneurs are still taking the help of
the traditional business ideas for the establishment of their business ventures he took the help of
an innovative business idea which prior to him very few entrepreneurs have used in the nation of
Australia (Forbes.com 2019). In this relation, it needs to be said that this business idea was
identified by him through the effective usage of the Opportunity-Based Theory of

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Entrepreneurship which states that one of the most important traits of the entrepreneurs is their
ability to recognize ideas or opportunities that have potentiality and which could be converted
into successful business ventures (Parker 2018). Furthermore, this aspect of this personality also
becomes apparent from the fact he was quick to realize the benefits that the formation of
strategic alliances with Jetstar, Target, ASOS and others would offer to Afterpay
(Smallbusinessassociation.com.au 2019).
An important entrepreneurial trait displayed by Molnar is the usage of different kinds of
goals and objectives. For example, he was completely aware of the fact that it was not possible
for Afterpay to generate profitability within a year or two and thus he sought to create a positive
brand image of the concerned venture not only on the basis of the high quality of financial
services offered by it but also on the score of the different strategic alliances formed by him as
well. This in had helped in making the valuation of the business venture under discussion here to
more than $200 million and increased the stock prices of the venture by more than 400%
(Afr.com 2019). Furthermore, for the effective achievement of the different goals or the
objectives formulated by him for Afterpay he takes the help of the Resource-Based Theory of
Entrepreneurship. For example, the effective utilization of this theory of entrepreneurship had
helped Molnar to promote the optimum or effective utilization of the different resources of the
business venture and thereby contribute effectively towards the attainment of the organizational
objectives or goals and also towards the success attained by Afterpay (Venkataraman 2019).
Strengths and Weaknesses of Nicholas Molnar as an Entrepreneur
The effective utilization of the different entrepreneurial traits which Molnar has can be
said to be one of the most important strength points of Molnar as an entrepreneur. In this
relation, it needs to be said that the effective utilization of these traits not only helped Molnar to

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establish the business venture, Afterpay and design its different business processes but at the
same time helped him to contribute effectively towards the success attained by the same as well.
Furthermore, rather than merely being concerned regarding the growth of the business venture
established by him he is more concerned regarding contributing towards the growth of the
Australian business landscape and also safeguarding the interests of the customers as well
(Sbs.com.au 2019). His statement “We believe that the intervention powers present a
proportionate regulatory response that recognizes Afterpay's unique business model and ensures
we can continue to serve our millions of responsible customers and our 20,000+ retailers” is
important to note in this regard (Forbes.com 2019). This focus on the growth of the Australian
business landscape and safeguarding the interests of the customers whom Afterpay serves is
another important strength point of Molnar and the process of entrepreneurship used by him. The
strength points of the process of entrepreneurship used by Molnar notwithstanding there are
various weaknesses of the same as well. For instance, some of the most important weaknesses of
Molnar as an entrepreneur are his inexperience in managing business ventures, extreme focus on
the customers related to the retail industry at the complete disregard of the customers related to
the other industries and others.
Justification of the choice of Nicholas Molnar as an Entrepreneur
I have selected Nicholas Molnar as an Entrepreneur for this assignment because of the
effective entrepreneurial traits or skills displayed by him in the recent times. This not only
extends to the establishment of the business venture, Afterpay, but also the different innovative
strategies which are being used by him for accelerating the growth of the venture as well.
Furthermore, a detailed analysis of Molnar as an entrepreneur clearly reveals the fact that the
different business decisions made or undertaken by him can be explained effectively through the

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usage of different theories of entrepreneurship. In the light of these aspects, it can be said that
Molnar is indeed an entrepreneur whose actions comply with the different concepts related to the
process of entrepreneurship.
Conclusion and Recommendations
To conclude, the process of entrepreneurship helps the entrepreneurs to establish business
ventures and also design the blue-print of the entire venture itself. However, for the effective
usage of the process of entrepreneurship, the entrepreneurs are not only required to display
effective entrepreneur traits but also take the help of the different theories related to the same.
These are to help the entrepreneurs to not only establish business ventures but also manage the
diverse aspects of the same as well. These aspects of the process of entrepreneurship becomes
apparent from the above analysis of the same in the particular of Nicholas Molnar and the
business venture established by him, that is, Afterpay. Some of the most recommendations that
Molnar can take the help of for the purpose of further developing his entrepreneurial abilities are
listed below-
 Acquisition of effective business management skills is one way through Molnar can not
only improve his entrepreneurial abilities but at the same time can positively contribute
towards the growth of the business venture, Afterpay
 Effective utilization of the Opportunity-Based Theory of entrepreneurship for taking
advantage of the opportunities presented by the other industries of Australia like
jewellery, transportation, tourism and others. This will contribute in an effective manner
towards the growth of Afterpay

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References
Afr.com 2019. How the rich invest: Afterpay's Nicholas Molnar makes a cool $200 million.
[online] Available at: https://www.afr.com/business/banking-and-finance/how-the-rich-invest-
afterpays-nicholas-molnar-makes-a-cool-200m-20180704-h127tr [Accessed 13 Aug. 2019].
Afterpay.com 2019. Home - Afterpay - Shop Now. Enjoy Now. Pay Later.. [online] Available at:
https://www.afterpay.com/index [Accessed 13 Aug. 2019].
Barringer, B.R., 2015. Entrepreneurship: Successfully launching new ventures. Pearson
Education India.
Burns, P. and Dewhurst, J. eds., 2016. Small business and entrepreneurship. Macmillan
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Businessnewsaus.com.au 2019. Australia's top 100 young entrepreneurs. [online] Available at:
https://www.businessnewsaus.com.au/articles/australia-s-top-100-young-entrepreneurs.html
[Accessed 13 Aug. 2019].
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creating a new mindset, pp.201-222.
Forbes.com 2019. How A 28-Year-Old Turned Layaway For Millennials Into A Billion-Dollar
Business. [online] Available at: https://www.forbes.com/sites/jeffkauflin/2018/07/03/how-a-28-
year-old-turned-layaway-for-millennials-into-a-2-billion-business/#7cde3359dba4 [Accessed 13
Aug. 2019].

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Kazanjian, R.K., Drazin, R. and Glynn, M.A., 2017. Implementing strategies for corporate
entrepreneurship: A knowledge‐based perspective. Strategic entrepreneurship: Creating a new
mindset, pp.173-199.
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1, p. 12909). Briarcliff Manor, NY 10510: Academy of Management.
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Sbs.com.au 2019. Afterpay's meteoric rise. [online] Available at:
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[Accessed 13 Aug. 2019].
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Appendix
Interview Questionnaire
1. What motivated you to start your entrepreneurial venture Afterpay?
2. Do you consider yourself to be an entrepreneur?
3. What according to you are your most important entrepreneurial traits?
4. What according to you are the strengths and the weaknesses of your entrepreneurial
abilities?
5. What message would you like to give to the young entrepreneurs like you?