7 Keys to Understanding Entrepreneurship

 Here are seven Keys to help better understand the logic of entrepreneurship. The logic may surprise you, as it is not the logic taught in business school.

1. Find your flow.

Do what concentrates your motivation. Based on Mihály Csíkszentmihályi’s work entitled Flow, find the work that brings you joy, where you are creating things spontaneously, as if you were in a jazz band. Who you are, who and what you know determine the means of your entrepreneurial endeavor. According to Saras Sarasvathy inEffectuation, the founders of Starbucks did not study market trends but their own need for quality coffee. Facebook began as a sophomoric (pun intended) social comparison tool.

2. Choose the bird in the hand.

To put it another way, expert entrepreneurs follow more of an inductive process than a deductive one. They don’t analyze the environment for the best opportunities and then seek to exploit them; rather, they begin at home with what they can do and believe are worth doing. They create something new with what they have motivated by something that could be better.

College students tend to marry post-graduation. Some engineering students were frustrated they would have to hire a photographer to follow them around if they wanted to capture the look on their fiancee’s face the moment they proposed. So they created a ring box with a camera and recording device in it. It became a business called Ring Cam.

3. Get the right people on the bus.

As Jim Collins tells us in Good to Great, it’s first "who,'' then "what". Entrepreneurial knowledge, values and skills can be learned, meaning all people can become entrepreneurial. But not all people share the same worldview and values. It is important to find people to work with who share your passion

4. Be a quilt maker.

Getting the right people on the bus won’t work unless you are a quilt-maker making a patch-work quilt. Quilt-maker entrepreneurs, according to Saras Sarasvathy, begin with a bundle of ideas and organize them in a meaningful way. But more importantly, they create their work with others, who also contribute their ideas. Creating businesses is a tight-knit communal project. In contrast, puzzle-makers also work communally, but they are less business fabricators than opportunity arbitrageurs. Expert entrepreneurs seem to be business fabricators.

5. Get out of the building.

The most difficult thing for many people is to stop planning and to start doing. Specifically, according to Steve Blank in The Four Steps to the Epiphany, one of the biggest challenges for entrepreneurs is talking with potential customers, suppliers, channel members, investors, etc. The expert entrepreneurs studied by Saras Sarasvathy, in contrast, immediately created partnerships with customers who even helped finance their business project.

6. Make lemonade out of lemons.

Getting out of the building to test ideas on real people who are real customers provides immediate feedback. To do this means seeing failure -- not making immediate sales -- as a learning opportunity. Expert entrepreneurs, according to Saras Sarasvathy, leverage contingencies. Ivory soap and 3M sticky notes were mistakes.

7. Invest in riders, not horses. 

A corollary to getting the right people on the bus is looking for people who are more likely to invest in people versus their ideas. Business ideas fail, but people who keep trying are more likely to improve the odds with each new venture.