Chapter 1: Entrepreneurial Mindset

Question 1

Name the 7 issues for SME Failure

Answer 1

1) Non-existent management information system

2) Non-existent expense Management

3) Over-reliance on too few customers

4) Lack financial management skills

5) Lack cash flow management

6) Hire incompetant family members

7) Entrepreneurs do not ask for help

Question 2

What should entrepreneurs minimize (3)

Answer 2

Interest

Taxes

Absenteeism

Question 3

What is P.E.S.T. ?

Answer 3

Macro-environmental factors used in strategic management.

P: POLITICAL
E: ECONOMICAL
S: SOCIAL
T: TECHNOLOGICAL

Question 4

Disruptive VS Incremental Innovation

Answer 4

Disruptive:
- Disrupts the current market’s state with a NEW innovation
- 5-10% of market
- 1st Movers advantage
— EX: Battery Invention

Incremental:
- Targets a NICHE sector within an already established disruptive innovation
- 85-90% of market
— EX: Waterproof Battery

Question 5

Structural Thinking

Answer 5

• Ability to differentiate symptoms from the underlying issue
• Strategy

Question 6

Bricolage

Answer 6

Tweaking something that already exists:
Maybe competitors have not gone far enough in their process?

Question 7

Effectuate / Effectuation

Answer 7

Always ask: Why is it like this?

Always question the Status Quo

Question 8

Cognitive adaptibility

Answer 8

Make sure to answer the effectuation question and adapt product/service/process accordingly.

Be adaptable.

Question 9

Entrepreneur Background and Characteristics

Answer 9

EDUCATION:
- Broad knowledge can assist adaptibility and discovery of new opportunities
- Provides transferable knowledge/skills

AGE:
- Age reflects Experience

WORK HISTORY:
- Work history plays a role in the development of a new venture
- Experience and connections/networks

Question 10

Role Models and Support Systems

Answer 10

• Business Associates –> Advice
• Suppliers –> Recognize trends
• Trade Associations –> Industry Data
• Individuals with hobbies, civic involvement or group associations –> Advice