Sunday, January 27, 2013

How to Become an Entrepreneurial Thinker in 10 Simple Steps

The reason why lawyers go to law is school is so they can learn how to think like a lawyer. So what does one have to do, in order to learn how to think like an entrepreneur?

Surprising, an MBA program is not the answer. Most MBA programs focus on casual reasoning: formulas, probabilities, market research, and so on. Generally, MBA students are taught to focus on a goal and devise a number of strategies. Ironically, this line of thinking is the polar opposite of how an entrepreneur actually thinks. Recent studies show that entrepreneurs use effectual reasoning, a form of logic that starts with internal resources and extrapolates possibilities. In other words, entrepreneurs do not have a planned destination or a goal in mind. Instead, they jump into the market, learn with nearly zero risk and change along the way. In the end, they may end up in an industry they had no idea or conception of in the beginning.

Start thinking like an Entrepreneur:

1) Clarity & Happiness: 

When it comes to being creative, inventive, and entrepreneurial stress is a killer! In fact, stress and negativity can reduce your performance by 25% while being positive, happy, and rationally optimistic and increase your brain power by 40%!

2) Observe:

Observe what is around you and how businesses function. When you go to a restaurant, you should walk out of there knowing how many people were there, average price of plate, estimated revenue and so on.  You should know if that is a great business or not.

3) Learn:

Have you noticed how certain business are most always on the corner (gas stations, fast food, cash checking) while big box stores are in the back of a plaza? Do you know which types of business need an anchor tenant and which don't? Look for patterns and meaning. Why is the restaurant busy? Location, service, product, branding, etc... What are their strengths and what can you learn from other's successes. The right information is all around you.

4) Association:

Entrepreneurs are great at making cross discipline associations. Look at the big picture and how midst all of complexity, everything is connected. Why do people do the things that they do? Associate cross disciplines from psychology, brain chemistry, marketing, economics and you may have an insight into human behavior and how you can help solve a problem/concern.

5) Get Out of the Box

Practice thinking outside the box with a focus on problems that require both logic and creative solutions. Entrepreneurs are spontaneous, their whole direction may change in a minute or they might stay the course. You should be open to both possibilites.

6) Be Inventive

Go beyond being creative, strive for inventiveness. Think of ideas that are 'new' and dynamic and that change the current status quo is some way. These ideas can be simple or obvious or they can be revolutionary or even both.

7) Effectual Reasoning: 

Forget your goals, plans, or even doing market research. Instead focus on your skills, strengths, experiences, and your network. From these internal advantages draw up possibilites and explore them.

8) Affordable Loss: 

Entrepreneurs don't invest for returns based on probability  Instead, they focus on getting a start-up off of the ground with moneys they can afford to lose. This means that they are investing very little money or no money at all. Often an entrepreneur will sell a product or services that they do not even have. This is brilliant, as it allows for direct hands on experience with the market. In the process, the entrepreneur will learn plenty which may strongly influence him to change direction, if in the process he discovers that another product or services that is more viable.

9) Minimal Effort: 

An entrepreneur does not want to was time, effort, or energy so they focus on projects that require the minimum of each. This means that your idea should not take 5 years of research and development to get off of the ground and tie up all of your resources. Instead, it should be something you can do within a few months.

10) Strategic Partnerships: 

Entrepreneurs like to focus on building the right relationships with the right partners. This allows for one to mitigate risk by spreading it around a number of parties that bring both money and expertise to the table. Further, investing is a team sport, so learn how to play with and involve others.

Related Articles: How to Start a Business in 7 Simple Steps 


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