Entrepreneurial mindset in function of entrepreneurial venture
What is Entrepreneurial mindset and how much does it influence the success of an entrepreneurial venture?
This question is closely related to the dilemma, were the entrepreneurs born or formed during their lifetime? It is believed that both are true. Above all, certain qualities are given at birth, but some others we acquire, develop and accompany over time.
Entrepreneurs were born with certain attributes, tendencies and partly prerequisites. Here are some important features:
- tendency towards optimism and a readiness to take risks.
- ability to identify opportunities and be proactive in their utilization.
- initiative and creativity in making effects from available resources.
- they take actions to create values from ideas.
- striving for independence and autonomy in business, but also in life.
- aspiration and feeling that they can control things, or at least solve arising problems in due time.
- due to good attention and perception they develop critical thinking as well.
- open to new ideas, they are often extroverted persons and strive to challenging themselves.
- flexibility, which means adapting to the circumstances and environment.
- family background, is an advantaged prerequisite, mentioned above. If so, behavioral models, during growing up, have been adopted. Such Entrepreneurs easier handle on defeats and failures and hence, sustain in business.
Entrepreneurial mindset shapes the entrepreneurial process
Listed characteristics form an Entrepreneurial mindset that shapes the entrepreneurial process, from idea creation to recognition and exploitation of opportunities and circumstances. As in other spheres, practice and repetition affect quality, so – the more you do something, the better you become. An entrepreneurial mindset also means attempting in the same or different ventures in order to find an alternative, to look at and approach the business and challenges from more different angles.
From Entrepreneurial thinking to Idea Validation
We have identified the basic characteristics of entrepreneurs and how distinctive is entrepreneurial thinking. The question now is how to recognize that the idea is actually a business opportunity? There is no simple answer, moreover, the answer is to board on an entrepreneurial adventure, or to start a business. It has been proven to nowadays that a business idea should be tested and a product or service developed just to the trial or MVP – Minimum Value Product phase. Actually, this is a prototype phase, where the product/service entrepreneurs develop with basic features and at a necessary level, which is sufficient to assess whether it will be accepted on the market.
There are recommendations that in order to reduce the risk, the idea should be shared with other people and thus tested in a close or local environment. In addition it should be tested in market conditions, until finding out that an idea can be scaled at the aspiring moment. This whole process we call business validation or idea validation. In general, it is a theory based on knowledge acquired from experience.
Successful entrepreneurs usually point out that they felt that their idea was the right one, and that it was a matter of intuition. This is only partially true. Intuition in this case is both, their internal assessment and analysis process, based on years of experience, as well as instinct to whether all the cubes fit on.
Business plan or business model for entrepreneurial venture
How to translate the business idea into something visible?
Already mentioned sharing a business idea or vision is useful, but it needs to be presented in a structured way beforehand. Traditionally, until a few years ago, this was the role of a business plan. Today, however, a very detailed business plan, including financial forecasts, is mainly applied for fundraising purposes. The business plan itself, in all the areas it strives to define, is too complex for initial phase of the startup and has shortcomings. Its structure reduces the ability to make changes and adjustments underway, And this is something that is a quality of an entrepreneurial venture, especially in the beginning phase. We have already cited creativity and flexibility, as key attributes for identifying entrepreneurs, hence the presentation for business idea needs to be different.
Business models in practice
For the last 5-10 years, business models have become a legitimate and sufficient way to describe a business idea. One model is the Business Model Canvas, created by Alexander Osterwalder. The goal and purpose of its use is also to structure and define key areas of entrepreneurial challenge in a visually effective way. Thus, through the Canvas model, the entrepreneur defines 9 areas that give an explanation to how a business creates and delivers value for its customer, but also how it captures value for itself, which means, how it converts delivered value into money. Initial and 1. area to define is a value proposition. This is a perceived value of product or service by customers that they are willing to pay for. Such value positions the entrepreneur in the market and clearly differentiates him/her from competitors.
A similar model or method of displaying and developing a business idea is a Lean start-up by Eric Reis. The aim is also to reduce the risk, which means, to develop the product to the stage necessary for market testing. This model reduces the idea validation time, reduces costs and enables owners to avoid or manage the risk of loss.
Sefini Consulting provides advice to entrepreneurs on how to apply mentioned business models in the process of defining and structuring business idea.