I, The Absolute

Archive for August 4th, 2005

Further lessons for an entrepreneur

Posted by itheabsolute on August 4, 2005

It is not capital that is central to an entrepreneurial venture. It is not even an idea because an idea cannot sustain on its own. It needs to be carried around and forward. It is social capital that appears to be a sine qua non. Network capabilities, good friendships and partners are key to converting an idea into a venture and then taking it forward to keeping the venture alive. The importance of capital, through equity from outside or debt, comes much later.

Entrepreneurship is about a particular way of thinking called effectual thinking. What we are taught at a b-school or we learn in an organization is causal thinking, which is about having a certain means to achieve pre-determined goals. This kind of thinking does not help an entrepreneurial venture, at its start up stage. Effectual thinking, in contrast, is about having various means to explore the possibility of various goals.

The entrepreneur should worry about the following more than anything else

1. Who am I
2. What do I know
3. Who do I know

Even more interesting is the following, which illustrates how an entrepreneur should start and how he can be frugal and effectively make a beginning

1. Do not buy new that you can buy used
2. Do not buy used what you can lease
3. Do not lease what you can borrow
4. Do not borrow what you can barter
5. Do not barter what you can beg (moral obligation)
6. Do not beg what you can scavenge
7. Do not scavenge what you can get free
8. Do not take for free what someone will pay you for
9. Do not take payment for something that people will bid for

Some of the cases that we discuss in class show of the above being done by the entrepreneurs.

PS: I realise that what the entrepreneurship course teaches is a way of thinking which can even be used in an organizational context to develop onself as an intrapreneur.

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