Entrepreneurship , Ch - 1

Entrepreneurship and the

Entrepreneurial Mindset

Entrepreneurship and the

Entrepreneurial Mindset

The Nature of Entrepreneurship

Entrepreneur
An individual who takes initiative to bundle resources in
innovative ways and is willing to bear the risk and/or
uncertainty to act.
Entrepreneurship
It is the process of creating something new with
value by devoting the necessary time and effort;
assuming the accompanying financial, psyche and
social risks and uncertainties; and receiving the
resulting rewards of monetary and personal
satisfaction.
Entrepreneurial Opportunities
Those situations in which new goods, services, raw
materials and organizing methods can be introduced
and sold at greater than cost of production.

Entrepreneurship and the

Entrepreneurial Mindset

Entrepreneurial Thinking
Individuals mental processes of overcoming
ignorance to decide whether a signal represents an
opportunity for someone and/or reducing doubt as to
whether an opportunity for someone is also an
opportunity for them specifically, and/or processing
feedback from action steps taken.
Entrepreneurial Action
Refers to behavior in response to a judgmental
decision under uncertainty about a possible
opportunity for profit.
Entrepreneurial Process
The process of creating something new with value by
devoting the necessary time and effort, assuming the
accompanying financial, psychic and social risks and

Entrepreneurship and the

Entrepreneurial Mindset

Identification and evaluation of the opportunity

Development of the business plan
Determination of the required resources
Management of the resulting enterprise.
Opportunity Identification
The process by which an entrepreneur comes up with the
opportunity for a new venture.
The two commonly used sources of new venture ideas are:
1. Professional, personal and casual contacts with other people
2. The deficiencies, supply gaps, substitutes, complements etc of
existing products and services.
a) What market needs does it fill b) What social conditions defines
needs c) What avl. products or patents might be available to fulfill
the need d) Competition details e) What does the intl. market look
like
f) What does the intl competition look like g) where is the money
to be made.

Entrepreneurship and the

Entrepreneurial Mindset

Window of Opportunity
The time period available for creating a new venture.
Develop a Business Plan
The description of the future direction of the business
Determine and Obtain the Resources Required
Manage the Enterprise.

How Entrepreneurs Think

Think Structurally
Superficial similarities Technology and Markets
Exist when the basic elements of the technology
resemble the basic elements of the markets
Bricolage
Entrepreneurs making do by applying combinations of the
resources at hand to new problems and opportunities.

Entrepreneurship and the Entrepreneurial

Mindset

Effectuation
Causal process - A process that starts with a desired
outcome and focuses on the means to generate that
outcome.
Effectuation process A process that starts with what
one has and selects among possible outcomes.

What is involved in Entrepreneurship?

Cognitive Adaptability (mental ability)
Describes the extent to which entrepreneurs are dynamic,
flexible, self regulating and engaged in the process of
generating multiple decision frameworks focused on sensing
and processing changes in the environments and then acting
on them.

Comprehension questions
Questions designed to increase entrepreneurs
understanding of the nature of the environment.

Entrepreneurship and the Entrepreneurial Mindset

Connection tasks
Tasks designed to stimulate entrepreneurs understanding of the
nature of the environment.

Strategic tasks
Tasks designed to stimulate entrepreneurs to think about the
current situation in terms of similarities to and differences from
situations previously faced and solved.

Reflection tasks
Designed to stimulate entrepreneurs thinking about their
understanding and feelings as they progress through the process.
Mike Haynies Measure of Self Adaptive Cognition
Flexibility scale: 1-10
Goal Orientation
Metacognitive knowledge higher order thinking involving active
control over cognitive processes engaged in learning- planning,
monitoring etc
Metacognitive Experience learning from experience
Meta is beyond

Entrepreneurship and the

Entrepreneurial Mindset

Metacognitive (knowing/perceiving) choice

Monitoring
Entrepreneurial Heuristics
Refers to practical operating policies or Rules of a Thumb
or the various success factors and avoidable situations or
corrections.
Recovery and Learning Process
Loss orientation
An approach to negative emotions that involves working
through and processing some aspect of the loss experience
and, as a result of this process, breaking emotional bonds
to the object loss.
Restoration Orientation
An approach to negative emotions based on both
avoidance and a pro-activeness toward secondary sources
of stress arising from a major loss.

Entrepreneurship and the Entrepreneurial Mindset

Dual Process for Learning from Failures

Dual process for coping with negative emotions
involves oscillation between a loss orientation and
restoration orientation.
Role of Entrepreneurship in Economic
Development
Product evolution process- process for developing and
commercializing an innovation.
Iterative synthesis the intersection of knowledge and
social need that starts product development.
Ordinary, technological, breakthrough innovations
New products with little technological change
New products with significant technological
advancement
New products with some technological change