Chapter 1

ENTREPRENEURSHIP AND THE

ENTREPRENEURIAL MIND-SET
 ENTREPRENEURSHIP

An entrepreneur is someone who jumps

off a cliff and builds a plane on the way
down. ― Reid Hoffman

Having an Idea, working on it until it is

materialised, face challenges daily,
competing with others in the industry and
ultimately increasing the profits of the
business.
TWO IMPORTANT ASPECTS FOR
ENTREPRENEURS
1. ENTREPRENEURIAL OPPORTUNITY
Situations in which new goods, services, raw materials and organising
methods can be introduced and sold at greater than their cost of
production.

2. ENTREPRENEURIAL ACTION
Behaviour in response to judgmental decision under uncertainty about
a possible opportunity.
Action means creation of new product, entry into a new market
through newly created organization or in an existing organization
 OPPORTUNITY EXISTS IN HIGH
UNCERTAINTY, SO NEED TO BEAR
RISK
THE IMPORATNT POINTS TO CONSIDER:

1.ENTREPRENEUR’S PRIOR KNOWLEDGE-(what one already

knows) (is it feasible?)

2.ENTREPRENEUR’S MOTIVATION/WILLINGNESS TO
BEAR UNCERTAINTY-(influencing personal behavior) (is it desirable?)
 What an Entrepreneur does?

 Creates value
 Innovates
 Problem solvers
 They keep economy moving
 Creates jobs
 Why you need to be an
Entrepreneur?

Reward?

Have the freedom to make own

decisions
Make your own rules
Free to bring changes
Create wealth
 How Entrepreneurs think?
1. Think structurally:-
Having knowledge about existing market/about a technology
in a new market.
Create a structural match between a technology and a target
market.
NASA’s flight simulators to train airline pilots/teenage drivers

2. Bricolage:-
Taking existing resources and experiencing, repackaging,
reframing them so that they can be used in a way to create
something new.
•Using trapped methane (in an abandoned mine) as fuel 
•Using plastic bottles to improvise a low cost solar light
3. Effectuation:-
Think rationally
A way of thinking that serves entrepreneur in the
process of opportunity identification and new
venture creation.
Chefs using the available items to come up with a suitable recipe
4. Cognitive Adaptability:-
Helps to adapt to a new situation
The ability to effectively and appropriately
evolve or adapt decision policies.
Being dynamic, flexible, and engaged in
the process of generating multiple decision
frameworks focused on sensing and
processing changes in their environment
and then acting on them.
 What do you need to achieve cognitive adaptability
Comprehension questions
Connection tasks
Strategic tasks
Reflection tasks

Comprehension questions: understanding of the nature of the

1.
environment before advertising an entrepreneurial challenge.
What is the market all about? What is the technology all about?
What do we want to achieve by creating this new firm?

2. Connection tasks: stimulates thinking the current situation in

terms of similarities and differences in situation previously faced
and solved.

How this problem similar to the one I already solved? How this is
different and why?
3. Strategic tasks: stimulates thoughts about which
strategies are appropriate for solving the problems
and why, or pursuing the opportunity and how.
What, why and how to approach to the situation.
4. Reflection Tasks: Stimulates thinking about their
understanding and feelings as they progress through
the entrepreneurial process.
What am I doing? Does it make sense?
 Entrepreneurs need to learn :
From business failure
&
Gain Motivation to try again
 Innovation is depicted as the key to economic
development
3 types of innovations
1. Ordinary: new products with little technological
change
2. Technological- new products with some
technological advancement.
3. Breakthrough- new products with significant
technological change.
Entrepreneur's background & characteristics

1.Education:
 Provides a background about starting a business.
 Helps in the development of communication skills
and problem-solving skills.
 Provides individuals with a larger opportunity set.
 Does not determine whether an entrepreneur will
create a new business to exploit the discovered
opportunity.
. Age
2
 Most entrepreneurs initiate their
entrepreneurial careers between the ages of 22
and 45.
 Individuals are more inclined to start an
entrepreneurial career at milestone ages every
five years (25, 30, 35, 40, and 45).
 Male entrepreneurs tend to start their ventures
in their early 30s, while women entrepreneurs
do so in their middle 30s.
3. Work History
The decision to launch a new venture can be influenced by:
Dissatisfaction with one’s job.
Previous technical and industry experience.
Managerial skills and entrepreneurial experiences are also
important once the venture starts growing.
Previous start-up experience is a relatively good predictor of
starting subsequent businesses.
 Role models & Support systems

Role model: whose example an entrepreneur

aspires to and copy
Individuals influencing an entrepreneur’s career choice
and style
 Can be parents, family members, or other
entrepreneurs.
 Successful entrepreneurs are viewed as catalysts by
potential entrepreneurs.
 Role models can serve in a supportive capacity as
mentors by providing information, advice and
guidance.
Role models can be a source
of two Support systems
1. Moral support system- psychological support comes
from family, friends
2. Professional support network- advise & counselling
from a mentor, business associates, personal affiliation