5. The Mindset: Thinking and Acting like an Entrepreneur Flashcards
Difference between self-efficacy and overconfidence.
-Entrepreneurial self-efficacy: High perceived feasibility → Building of entrepreneurial intentions, Increased
likelihood of success
-Entrepreneurial overconfidence: Over-assess their abilities → Ignore important information, Increased
probability of failure. Reasons:
—-The Hard-Easy Effect: Underestimating easy tasks → overconfidence in harder tasks
—-Locus of Control: Overestimating control of external factors
—-Increased Information: too much information → easy to miss the important points
—-Autopilot Mode: experience → tendency to neglect the simple essentials
Motivation to start a business
-Do something great, solve a particular problem, bring new technology to the world
-Not ego gratification!
Anticipating and planning is cost intensive → you will newer know for sure until trying for real Even a failed idea can be useful if you learn from it.
-Failure creates extraordinary change
-Failure builds up tough skin
-Failure keeps the ego in check
-Failure creates “aha” moments
-It propels growth as an entrepreneur
Don’t make mistakes twice
-Call failure something else
-Use failure as stepping stone
-Never fail alone
-Do not hide your failures
-Redefine what you want
Build-Measure-Learn: process that helps you to learn as quickly as possible from your experience and/or mistakes.
- Build the MVP: The Leap of Faith: Hypothesis of Value / Growth
- Product: Goal: Test hypothesis, Target: Early adopters, Focus: Time to market
- Measure: Reliability ≠ Vanity Metrics
- Data: Split tests & cohort analyses
- Learn: validated learning
- Idea: pivot or preserve
The Minimum-Viable-Product (MVP)
Purpose:
-Test leap-of-faith assumptions
-Learn as fast as possible
-Not only product design and answering technical questions
-Target groups are early adopters
-No more!
MVP
Features
-Generate feedback for one hypothesis
-BML cycle time is minimal
-No additional features / design
Use several MVPs in different production stages to gain valuable insights
-Improve product quality
-Keep track of customer preferences
-Generate feedback for hypotheses
Approaches Non-Entrepreneurs vs. Entrepreneurs
-Non-Entrepreneurs: Goal-driven decisions → Define resources
-Entrepreneurs: Resource-driven decisions → Create best possible output
Entrepreneurial process:
Aim:
-reach the prior defined goals
with your means
-co-create new products,
markets, and firms
-exploit contingencies
Partnerships vs. team members:
-Define required know-how, skills and expertise, important key tasks and action steps, prerequisites to
success
-Job is
—-one-time or periodic, periphal to key tasks → Partnerships
—-consistently essential for business → Team members
Possible stakeholders:
-External: Suppliers, customers, government, shareholders, creditors, competition, society, …
-Internal: Founder, employees, management
Advantages of partnerships → build up network of committed partners
-New ideas & changing business goals
-Higher growth potential
-Higher focus on own expertise
-Greater pool of resources & ideas
-Shared risks and losses
Keep stakeholders’ relationship between each other in mind Visualize stakeholders → mark relationships → get connected
