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.
I, The Absolute 
Vishy said
@ ketan/vijay : the prospect of instant money on graduation beats the uncertainty and risks of getting something off from scratch. Lots of people do give entre a thought, but risk aversion, and lack of inspiration usually buries things.
itheabsolute said
ketan
if u read it again, u will probably catch that what is taught at a b-school does not prepare one for entrepreneurship. b-schools prepare students to become managers. the causal thinking is taught and not effectual. a single course in entrepreneurship does not make on an entrepreneur; nor can it change the way one thinks.
entrepreneurship is a way of thinking. if people have become entrepreneurs after coming to a b-school, it is not necessarily because of the b-school, it is more because they now understand what is NOT to be done in being an entrepreneur.
dont think there is any data available on on ventures started by alums.
cheers
Ketan said
I just wonder with all the “gyaan” about entrepreneurship coming through courses, brillinat profs and guest lectures, why I hear very few examples of ppl graduating from ISB, IIMs or other indian bschools following this path…it still makes a “news” if some ISB/IIM fellow dont give a damn about a high paying job and start his/her own venture… shoudlnt it become a habit rahter an exception from such graduates… BTW, can you provide me with information on how many previous year batch ISB students have started their own ventures [successful or un-successful doenst matter] after graduating?
itheabsolute said
sobee
thanks. hope to meet ur expectations
cheers
itheabsolute said
amit
the words were given in one of this articles
cheers
itheabsolute said
mbablogger
thanks.
the ideas come from my Prof. but surely good enuf to be spread around
cheers
itheabsolute said
ketan
slightly different. an entrepreneur may make many mistakes. the fun is he/ she learns from that and keeps moving.
cheers
itheabsolute said
whoozline
long time. read that u had an excellent trip. thanks
cheers
Sobee said
Hey Vijay, First Time visiting your blog. Got it from Bharani@ISB.
Very Nice one and quite interesting. keep it up !!!
Amit said
Great words those from prof Venkat. surprising that you could remember all of them verbatim.
MBABlogger said
the new look seems to be better than the previous one 🙂
Interesting line of thought from buying ot making others big to pay to buy that 🙂
Ketan said
Probably this “effectual thinking” is what in common parlance is all about “flawless execution” !!
whoozlineisitanywayz said
Brilliant insights and excellent ideas ! Keep up the good thoughts.