Chapter 1
Entrepreneurship and Entrepreneurial Mind-Set
The Nature of Entrepreneurship
Entrepreneur
A person who destroys the existing economic order by introducing
new products and services, by introducing new methods of production,
by creating new forms of organization, or by exploiting new raw
materials
According to Schumpeter, that person is most likely to accomplish
this destruction by founding a new business but may also do it within
an existing one.
 Who perceives an opportunity and creates an organization to pursue
it.
The Nature of Entrepreneurship
Entrepreneurship is the process of designing, launching and running
a new business
Entrepreneurial process includes all the functions, activities, and
actions associated with perceiving opportunities and creating
organizations to pursue them.
The Nature of Entrepreneurship
Entrepreneurial Opportunities
Those situation in which new goods, services, raw materials and
organizing methods can be introduced and sold at greater than their cost
of production.
• Introducing an existing technological product used in one market to create a new market
• Creating a new technological product for an existing market or creating both a new product/service
and a new market.
• Represents something new.
Entrepreneurial Action
Knowledge:
feasibility
assessment
Knowledge: Prior
Knowledge
Third-Person
Opportunity
Motivation:
Personal strategy
Attention Stage: Ignorance
Motivation:
Desirability
assessment
Entrepreneurial
Action: firstperson
opportunity
Evaluation Stage: action-specific uncertainty
How Entrepreneurs Think
Think Structurally
• Superficial similarities: basic elements of the technology resembles with the basic elements of the market
• Structural similarities: underlying mechanisms of the technology resembles with the underlying mechanisms of the
market
• Able to create or see structural matches between a technology and a target market, especially in the presence of
superficial mismatches.
• Knowledge and skill can facilitate this ability
Bricolage
*Entrepreneurs making do by applying combinations of the resources at hand to new
problems and opportunities
*Taking existing resources and experimenting, repairing, repackaging and reframing them
so they can be used in a way for which they were not originally designed or conceived.
* Entrepreneurs creates opportunities from this making do process
How Entrepreneurs Think
Effectuation
• Casual 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 (who they are, what they know, and whom they
know) and selects among possible outcomes.
Cognitive Adaptability
Describe 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 their environments and then acting on them.
*Comprehensive Questions
*Connections Tasks
*Strategic Tasks
*Reflection Tasks
The Intention to Act Entrepreneurially
Entrepreneurial Intention
The motivational factors that influence individuals to pursue
Entrepreneurial outcomes
Entrepreneurial Self-Efficacy: The conviction that one can
successfully execute the entrepreneurial process
Perceived desirability: The degree to which an individual has a
evaluation or unfavorable evaluation of the potential Entrepreneurial
outcomes.
Entrepreneur Background and Characteristics
Education
Age
Work History