Why Entrepreneurial Mindset Matters?

What is the basis for the entrepreneurial mindset?

  • Entrepreneurship is neither a science nor art, it is a practice. (Peter Drucker). Mindset is a set of assumptions, methods, or notations held by one or more people or groups of people.
  • An entrepreneur is using the experimental approach in creating business value; however, a manager is using the predictive approach to manage projects. Thus, the mindset held by a manager is focussing on delivering projects based on agreed plans but the entrepreneur is delivering values through validated learning.
  • An entrepreneur will require an open mindset that will excel customer mapping, value mapping, exploration of opportunities, testing and creating a business.
  • In the other hand, a manager will deliver tasks as through the processes of setting up a plan based on certain assumptions and follow-up execution.
  • Entrepreneurship mindset is based on the experimental approach as opposed to the predictive approach applied in managerial mindset.

How an entrepreneur thinks?

As explained above that the entrepreneur is using the experimental approach to create a business value. Experimental approach is basically described as a procedure carried out to support, refute, or validate a hypothesis. Experiments provide insight into cause-and-effect by demonstrating what outcome occurs when a particular factor is manipulated. Experiments vary greatly in goal and scale, but always rely on repeatable procedure and logical analysis of the results. Here is some key practices:-

  • Self understanding of challenges and opportunities
  • Explore opportunities through observing & reflecting
  • Bring stakeholders (i.e. team & partners) and work to develop values
  • Act through validated learning (Build, Measure and learn):  i.e customer mapping, value mapping, prototyping of an idea, launch and grow.
  • Experiment: i.e. testing assumptions with potential customers and act accordingly
  • Build results: As through validated learning.

In the other hand, the manager is using the predictive approach to deliver projects. Predictive approach, as opposed to the experimental approach, is the process of setting up a plan based on certain assumptions and follow-up execution. This approach is a static one, not a customer-driven approach and not suiting the entrepreneurship mindset. Here is some key practices:-

    • Identify and evaluate opportunities
    • Quantify resources required
    • Create a business plan
    • Execute a business planMeasure results & report

How An entrepreneur practices the lean principles? 

  • Principle 1- Define Value: Specify the business value from the customer point of view.
  • Principle 2- Identify Value Streams: Identify the value streams (develop an idea business concept; problem/solution fit, customer development, unique value proposition, product development, product/market fit, scaling test, improving the processes from raw materials (supply chains) into a launched product (production) and delivery to a customer – capturing the value).
  • Principle 3- Flow of Value: (Make value flows smoothly, fastly without queuing, cheaply, efficiently and with level of required quality).
  • Principle 4- Pull of Value: ( Developing, delivering and capturing values according to the requirements of the customers).
  • Principle 5- Perfection:  (delivering values exactly as on what/when @ fair price with no waste that a customer wants).

How an entrepreneur creates a new value?

  • Customer profiling: It aims at observing and analyzing customer segment to conclude the prioritized job aims, pains and gains.
  • Value mapping: It aims at creating values (value propositions) through a process of developing a product or service that will create gains and relieve pains for the target segment.
  • Fit (Problem/solution fit)- Customer discovery: It aims at testing the basic leap assumptions whether target customers (reasonable proportion) accept or realize the (pain) or definition of the problem (Verifying problem) and willing to buy developed product or value proposition (verifying solution). At this stage, business concept is tested and customer segments identified with enough evidences.
  • Product development and product/market fit- Customer validation: It is all about creating customer value, develop a product/market fit and to meet customer needs. At this stage product is defined and made visible to customer for testing along with other commercial offering, such as the selling price. it is basically the process of testing the selling model. Product development will go through different stages of concept development, design development, functional development, product profiling (features and functions), prototyping, testing and MVP.
  • Business concept development: At this stage the problem/solution fit and product/market fit are verified and vision is clearly defined. By doing this, ideation is defined in principle and will require a strategy ( business model) to take if forward toward acceleration and company creating.
  • Strategy: This is following the previous stages of designing a startup and it is taking forward step toward executing a business at real market.  It aims at transforming a business through testing key business assumptions as on how to develop, deliver and capture values. This is done through a tool called business model. Business model goes through two distinctive stages of initiating (design or define a business model with key assumptions) and testing ( get out of the building and testing assumptions through a well-defined plan and criteria or acceptance). Business model Canvas consists of 9 blocks: customer segment, value proposition, channels, customer relationships, revenue streams, partnership, resources, key activities and cost structure. Importantly, business model should be defined in an innovative way to be successful.
  • Acceleration- Customer creation: It aims at taking a startup to a next level of acceleration. At this stage, sales are achieved and growth is evidenced. Acceleration process can be achieved and evidenced through a growing and profitable revenue (value capturing processes).

How An Entrepreneur Innovates?

  • Innovation is a practical creativity and how to make new ideas useful. Seeing what others do not see; seeing what does not yet exist. (Max Mckeown). Innovation will require a powerful innovative culture that motivate people to create, think and solve problems in creative way. Innovation will be successful if it is evidenced with growing and profitable demand. The entrepreneur strives to create a unique value through innovation. A disruptive innovation will lead into a new product, new market or customers, low-end product and growing business. However, an incremental innovation will lead into improved products but with less contribution into growing the business.

Identifying Innovation: 

  • Quick Innovation Method: It is used to identify incremental product and service innovations as through adding or removing or improving features for existing products or services.
  • Value Chain Analysis: It is used to identify innovative opportunities (cheaper, quicker and better) as through analyzing processes or components of value chains at the suppliers, buyers, sellers and producers. 
  • Customer & Value Mapping (Market-Based Method): it is used to identify opportunities as through identifying and evaluating the pains and gains for the customer segment and developing a product or service that will create gains and relieve pains.
  • Technology Triggered Innovations: a new technology introduces a number of innovation opportunities. Online and internet services has derived many online software application (web & mobile) like social media platforms, e.commerce, IPhones, IPad,..etc.
  • Characteristics of a Successful Innovation:
    • Successful innovation is a business solution for a pressing pain of a group of customers.
    • Successful innovation is created when both the market and technology were ready for it.
    • Successful innovation is priced right and fulfilled the market demand before its substitutes.
  • Value of an Innovation:
    • A business solution for a pain prioritized by a large group of customers.
    • Commercial benefits.
  • Innovation Toolkits:
    • According to the Altshuller’s Innovation Pyramid: 68% of ideas are apparent solutions; 27% of ideas are for improvement; only 0.05% of ideas are for developing a new system (real innovation).
    • According to the Christensen’s Disruptive Innovation:  Disruptive innovation takes place when a technology product gets weaker over time, and this encourages another domain player to copy and develop of a new product and new markets that will supersede the existing technology.
    • Design thinking approach is becoming the heart of searching and implementing for a new idea. It is a customer based approach focussing in observing and analysing target customer segment to generate a workable business idea. It consists of empathizing, defining, ideation, designing or prototyping and testing a new business idea.
    • A new approach introduced by Eric Ries for the lean startup and the Osterwalder’s Business Model canvas are very helpful tools for lean value mapping and strategy development.

What are the powerful skills for a successful entrepreneur?

I have listed below some key skills that I have collectively learnt from my own experience: 

  • Visionary with creative thinking
  • Risk taker
  • Effective in communication
  • Business data analysis
  • Successful in Pitching
  • Prototyping for idea and product designs
  • Power of observation
  • Good listener
  • Good problem solver
  • Customer-driven thinking
  • Open mindset
  • Creative and innovative
  • Network and partnership builder
  • Practicing validated learning (Build, Measure and Learn)
  • Team leader
  • Understanding financials

Conclusion

Entrepreneurial mindset leads into creating and capturing innovative values. In global and highly competitive markets, entrepreneurial mindset and techniques have been a very successful methodology to create and capture values. The key principle of lean mindset is based on specifying, identifying, creating, delivering and capturing values as from the customer point of view or need. To do so, lean startup development goes through value stream mapping that consists of customer profiling, value making, testing, customer validation, business concept development, strategy and acceleration. Further, an entrepreneur should be equipped with basic lean-startup knowledge and tools to innovate business values and create a strategy that will lead into creating a fast growing business startup.

Call for Action:

You please feel free to feed me back with your comments and suggestions. Should you need a training or mentorship or advising assistance on entrepreneurial businesses, You please contact us.  For more details, you visit our website http://www.growenterprise.co.uk.

Useful Links:

 

Written by: Munther Al Dawood

Enterprise Development Services

www.growenterprise.co.uk

maldawood@growenterprise.co.uk

 

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