Entrepreneurs like zeroing in on a target

• You identify other people’s needs • Build a product that meets those needs• Repeat until you get it right.• You are intensely committed • Determined perseverance• Optimistic• Burning with competitive desire

Chapter 2

The entrepreneurial mind-set: Cognition and career

Objectives1. To profile demographic features of entrepreneurs from around the globe2. To identify and discuss the most commonly cited characteristics found in

successful entrepreneurs3. To examine entrepreneurial psychology4. To discuss the ‘dark side’ of entrepreneurship5. To identify and describe the different types of risk entrepreneurs face6. To identify the major causes of stress for these individuals and the ways

they can handle stress7. To discuss important aspects with respect to an entrepreneurial career  

But first

What kind of person in their right mind would possibly take on the stress and effort of starting a new business, not being certain of its success, risking their own money, threatening their sanity, and even endangering their marriage or family life!!!?

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The entrepreneurial mind, behaviour and career•What ae the most common characteristics associated with successful entrepreneurs?

•What is the ‘dark side’ of entrepreneurship?•What are the capabilities that shape the entrepreneur’s career? •Examining the entrepreneurial mind provides an interesting look at the entrepreneurial potential within every individual.

•We believe that every person can become the sole proprietor of their own destiny at some point in their lives and carve out a career in entrepreneurship.

Top two reasons for becoming an entrepreneur• Opportunity-driven entrepreneurs

– Achievement, opportunity and money– Strong desire to be independent– bored with the same work every day– Want to be their own bosses

• Necessity-driven entrepreneurs– Coming out of some kind of adversity– Made redundant– Lost pension in GFC– No better choice than to become an entrepreneur

Men and women involved in early stage ventures

• Which regions have the largest disproportional representation between men and women entrepreneurs?

• Does that surprise you? • In our region, best performer is

Indonesia with 26 percent and 25 percent for men and women respectively

• Worst performer is Japan with 5 percent and 3 percent for men and women respectively.

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Ages of entrepreneurship

• Which has the highest youth rate?

• Highest rate of seniorpreneurship?

• Greatest drop-off rate?

• Which age group has highest proportion?

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Entrepreneurs like zeroing in on a target

• You identify other people’s needs • Build a product that meets those needs• Repeat until you get it right.• You are intensely committed • Determined perseverance• Optimistic• Burning with competitive desire

Who are entrepreneurs?

‘A person who habitually creates and innovates to build something of recognised value around perceived opportunities.’

Bolton & Thompson

Entrepreneurs actually think differently.

• How do entrepreneurs really perceive, recognise, conceive, judge, sense, reason, remember and imagine?

• Entrepreneurs use simplifying mental models to piece together previously unconnected information that helps them to identify and invent new products or services, and to assemble the necessary resources to start and grow businesses.

Rowing to your private island• Entrepreneur is a real individual with passions,

experiences and knowledge living in a particular culture and time period.

• ‘Entrepreneurs live in a sea of dreams. Their destinations are private islands – places to build, create and transform their particular dreams into reality. Being an entrepreneur entails envisioning your island and even more important, it means getting in the boat and rowing to your island’.– Shefsky, L. E. (1994). Entrepreneurs are made not

born. New York: McGraw-Hill

Characteristics attributed to entrepreneurs

• Psychologists have put together a set of profile dimensions that characterise entrepreneurs.

Determination, perseverance Drive to achieve Opportunity orientation Persistent problem solving Seeking feedback Internal locus of control Tolerance for ambiguity Calculated risk taking Tolerance for failure High energy level Creativity and innovativeness Vision Passion Team-building

The dark side of entrepreneurship

• Do entrepreneurs suffer more from mental disorders?

• Does it take a little bit of madness to start a business?

• Can a business can drive one a little bit mad?

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• Criminal entrepreneurs – Dishonest entrepreneurs.– Opportunists who either adopt a flawed

strategy or fail to deliver– Empire-builders who grow too quickly and

lose control – Entrepreneurs who make mistakes, or whose

business fails, but who determinedly make a comeback

– Entrepreneurs who attract controversy

The dark side of entrepreneurship

Marlon Brandoin the Godfather

Entrepreneurial risks

Financial risk – exposure to bankruptcy

Career risk – Can’t go back to old job

Family and social risk – missing out

Psychic risk – psychological impact of failure

What were your best failures• Can you tell us one failure that you

learned from?• Accept your failures and do not be

devastated by them.• VCs in Silicon Valley ask “Have you

failed yet?” • (You have to answer yes to get funding.)• What did you learn from them?

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Entrepreneurs and stress • ‘Type A’ behaviour

– Impatient, demanding and overstrung– Chronic and severe sense of time urgency – Constant deadlines in multiple projects– Neglect other aspects of life– Take on excessive responsibility

• Linked to coronary heart disease

The social entrepreneur

How would the mind-set of the social entrepreneur differ from a business entrepreneur??

Entrepreneurial ego• Overbearing need for control

– Entrepreneurs are driven by a strong need to control both their venture and their destiny. Preoccupation with controlling everything.

• Sense of distrust– To remain alert to competition, entrepreneurs

are continually distrustfully scanning the environment.

• Overriding desire for success– Entrepreneurs believe they are living on the

edge of existence, strong desire to succeed in spite of the odds.

• Unrealistic optimism– The ceaseless optimism that emanates from

entrepreneurs (even through the bleak times)

Your entrepreneurial career• Involves creating ventures• You don’t just produce a venture;

it comes out of you with pain and excitement

• You don’t somehow pre-exist as an entrepreneur; you emerge . . .

• Venture creation is a lived experience that, as it unfolds, forms you

• You heaps of need self-efficacy.

Entrepreneurial capabilities vary across thedifferent stages of entrepreneurial activity

Key concepts

1. How would you describe the mind-set of the entrepreneur?

2. What aspects of an entrepreneur’s mind-set might affect their relationships with other people?

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Takes this self-assessment