CHAPTER 1 ENTREPRENEURSHIP

AND THE ENTREPRENEURIAL

MIND-SET
The Nature of Entrepreneurship
1. Entrepreneurial actions begin
at the nexus of a lucrative
opportunity and en
enterprising individual.
2. Entrepreneurial
opportunities are those
situations in which new
goods, services, raw materials
and organizing methods can
be introduced and sold at
greater than their cost of
production.
3. An entrepreneurial
opportunity could be creating
a new technological product
for an existing market or
creating both a new
product/service and a new
market.
4. Theme = entrepreneurial
opportunity represents
something new.
5. Entrepreneurial action
through the creation of new
products and the entry into
new markets, through a
newly created organization
or within an established
organization.
6. A key to understanding
entrepreneurial action is
being able to asses the
amount of uncertainty
perceived to surround a
potential opportunity and
bear that uncertainty. Act on
what they believe is an
opportunity.
7. Individuals with knowledge
of markets and technology
are more capable of detecting
changes in the external
environment.

8. Stage 1 is an individual
realization of an opportunity
exists
9. Determine whether
represents an opportunity for
Stage 2
10. This involves assessing
whether it is feasible to
exploit the opportunity given
ones knowledge.
11. To be an entrepreneur is to
act on the possibility that has
been identified an
opportunity worth pursuing.
12. Involves entrepreneurial
thinking, means, an
individuals mental processes
of overcoming ignorance to
decide whether a signal
represents opportunity for
someone as to opportunity
for someone is an
opportunity for them too.

How Entrepreneur Think

Think Structurally
1. Forming opportunity
requires creative mental
leaps.
2. A creative mental leap is
from knowledge about
existing markets to a new
technology that could lead
to products/services that
satisfy market.
3. Making these connections
between a new product
and a target market where
it can be introduced is
aided by the superficial
and structural similarities
between the source and
the destination.
4. Superficial similarities
exist when the basic
elements of the technology
resemble the basic
elements of market.
5. Structural similarities exist
when the underlying
mechanisms of the
technology resemble the
underlying mechanisms of
the market.
6. Entrepreneurial challenge
often lies in making
creative leaps based on
structural similarities.
Bricolage
1. Entrepreneurs seek
resources from others to
provide the slack
necessary to experiment
and generate
entrepreneurial
opportunities.
2. Bricolage mean that some
entrepreneurs make do by
applying combinations of
the resources of hand to

new problems and

opportunities.
3. This involves taking
existing resources and
experimenting, tinkering,
repackaging and
reforming, so they can be
used in a way for which
they were not originally
designed or conceived.
4. From this process of
making do, entrepreneurs
can create opportunities.
Effectuation
1. Casual process means
entrepreneurs do not
always think through a
problem in a way that
starts with a desired
outcome and focuses on
the means to generate that
outcome.
2. Effectuation process
means they take what they
have and select among
possible outcomes.
3. Kotler defines a market
consists of all the potential
customers sharing a
particular need or want
who might be willing and
able to engage in exchange
to satisfy that need or
want.
4. STP segmentation,
targeting and positioning
process.
Analyze long-run
opportunities in the
market
Research and select
target markets
Identify
segmentation
variables and
segment the market
Develop profiles of
resulting segments

Evaluate the
attractiveness of
each segment
Select the target
segments
Identify possible
positioning
concepts for each
target segment
Select, develop and
communicate the
chosen positioning
concept
Design marketing
strategies
Plan marketing
programs
Organize,
implement and
control marketing
effort.
5. Effectuation helps
entrepreneurs think in an
environment of high
uncertainty.
6. Entrepreneurial mind-set
involves the ability to
rapidly sense, act and
mobilize even under
uncertain conditions.
7. In developing an
entrepreneurial mind-set,
an individual must attempt
to make sense of
opportunities in the
context of changing goals,
constantly questioning the
dominant logic in the
context of changing
environment and
revisiting deceptively
simple questions.

Cognitive Adaptability
1. Cognitive adaptability
describes the extent to
which entrepreneurs are
dynamic, flexible, selfregulating and engaged in
the process of generating
multiple decision
frameworks focused on
sensing and processing
changes in their
environments and then
acting on them.
2. Cognitive adaptability
reflected in an
entrepreneurs
metacognitive awareness,
which, the ability to reflect
upon, understand and
control ones thinking and
learning.
3. Metacognition describes a
higher-order cognitive
process that serves to
organize what individuals
know and recognize about
themselves, tasks,
situations and their
environments to promote
effective and adaptable
cognitive functioning in
the face of feedback from
complex and dynamic
environments.
4. You can learn to be more
cognitively adaptable by
asking yourself a series of
questions :
Comprehension
questions to
increase
entrepreneurs
understanding of
the nature of the
environment before
they begin to
address an
entrepreneurial
challenge.

Connection tasks to
stimulate
entrepreneurs to
think about the
current situation in
terms of similarities
to and differences
from situations
previously faced
and solved.
Strategic tasks to
stimulate
entrepreneurs to
think about which
strategies are
appropriate for
solving the problem
or pursuing the
opportunity.
Reflection tasks to
stimulate
entrepreneurs to
think about their
understanding and
feelings as they
progress through
the entrepreneurial
process.
5. Entrepreneurs who
increase the cognitive
adaptability have an
improved ability to :
Adapt to new
situation
Be creative
Communicate ones
reasoning behind a
particular response.

The Intention to act

Entrepreneurially
1. the perception of
feasibility has much to do
with an entrepreneurs
self-efficacy.
2. Entrepreneurial selfefficacy refers to the
conviction that one can
successfully execute the
entrepreneurial process.
3. High self-efficacy leads to
increased initiative and
persistence and improved
performance.
4. People with high selfefficacy think differently
and behave differently
than people with low selfefficacy.
5. Perceived desirability
refers to an individuals
attitude toward
entrepreneurial action.
6. The degree to which
individual has a favorable
or unfavorable evaluation
of the potential
entrepreneurial outcomes.
7. The higher the perceived
desirability and feasibility,
the stronger the intention
to act entrepreneurially.

Entrepreneur Background and

Characteristics
Education
1. A formal education is not
necessary for starting a new
business but it does provide a
good background, especially when
related to the field of venture.
2. Entrepreneurs have cited an
educational need in the areas of
finance, strategic planning,
marketing and management.
3. The ability to communicate with
both written and spoken word is
also important.
4. General education is valuable
because it facilitates the
integration and accumulation of
new knowledge, providing
individuals with a larger
opportunity set and assists
entrepreneurs in adapting to new
situations.
5. General education can provide
knowledge, skills and problem
solving abilities that are
transferable across many different
situations.
Age
1. In terms of chronological age,
most entrepreneurs initiate their
entrepreneurial careers between
the ages of 22 and 45.
2. As long as the entrepreneur has
the necessary experience and
financial support, and the high
energy level needed to launch and
manage a new venture
successfully.
3. Milestone ages every five years
when an individual is more
inclined to start an
entrepreneurial career.
4. Male entrepreneur tend to start
their first significant venture in
the early 30s.

5. Women entrepreneurs tend to do

so in their middle 30s.
6. Entrepreneurial career is quite
popular later in life when the
children have left home and fewer
financial concerns.
Work History
1. Work history can influence the
decision to launch a new
entrepreneurial venture.
2. It also plays a role in the growth
and eventual success of the new
venture.
3. Experience in the following areas
is particularly important :
Financing, product development,
manufacturing and development
of distribution channels.
4. When venture becomes
established, managerial
experience skills become
increasingly important.
5. Entrepreneurial experiences, like
start-up process, making decisions
and managing high growth are
also important.
6. Previous start-up experience can
provide entrepreneurs with
expertise in running an
independent business as well as
benchmarks for judging the
relevance of information that can
lead to an understanding of the
real value of the new
opportunities, speed up the
business creation process and
enhance performance.
7. Previous start-up experience is
relatively good predictor of
starting subsequent business.

Role Models and Support Systems

1. Role models are individuals whose
exampled an entrepreneur can
aspire to and copy.
2. Role models can also serve in a
supportive capacity as mentors
during and after the launch of a
new venture.
3. An entrepreneur needs a strong
support and advisory system in
every phase of the new venture.
4. Entrepreneurship is a social role
embedded in social context, it is
important that an entrepreneur
establish connections and
eventually networks early in the
new venture formation process.
5. The strength of the ties between
the entrepreneur and individual in
network is dependent upon the
frequency, level and reciprocity of
the relationship.
Moral-Support Network
1. Moral-support network is
individual who give psychological
support to an entrepreneur.
2. Plays a critical role during the
many difficult and lonely times
that occur throughout the
entrepreneurial process.
3. Entrepreneurs can confide in
friends without fear of criticism.
4. Relatives also can be strong
sources of moral support,
particularly if they are also
entrepreneurs.
Professional-Support Network
1. Professional-support network is
an individual who help the
entrepreneur in business
activities.
2. An entrepreneur can start the
mentor-finding process by
preparing a list of experts in
various field and who can provide
the practical how-to advice.

3. A good source of advice can be

cultivated by establishing a
network of business associates,
like, self-employed individuals
who have experienced starting a
business.
4. A new venture needs to establish a
solid track record with suppliers
to build a good relationship and to
ensure the adequate availability of
supplies.
5. Suppliers provide good
information on the nature trends
and competition in the industry.
6. Trade association members can
help keep the new venture
competitive by keep up with the
new developments and can
provide overall industry data.
7. Affiliations developed with
individuals through shared
hobbies and school alumni groups
are excellent sources of referrals,
advice and information.

Sustainable Entrepreneurship
1. Sustainable entrepreneurship is
focused on preserving nature, life
support and community in the
pursuit of perceived opportunities
to bring future products,
processes and services into
existence for gain, where gain is
broadly construed to include
economic and non economic
benefits to individual, the
economy and society.
2. Those with greater knowledge of
the natural environment more
likely to notice changes in an
environment that form
opportunity.
3. For entrepreneurial actions that
preserve nature to be considered
sustainable entrepreneurship,
they must also develop gains for
the entrepreneur and society.
4. Entrepreneurs can generate
economic wealth themselves but
their impact on development can
be far greater.
5. It is not just the natural
environment that can be
sustained, the communities also
need to be preserved.