Why entrepreneurs succeed: don’t forget the third reason

Reason 1 : Obstacles may not really be obstacles

What really drives entrepreneurs?  In short, they look around and say “I can do this better!”  You and I see a constraint or barrier and see it as fixed.  An entrepreneur says:  “This can go.  I can take it away. I can ignore it. I could use it as a vaulting-horse and jump over it.”

Reason 2 :  Organize to take the profit

What makes a successful economic entrepreneur is that they also notice that they can rejig the working arrangements and take the profit themselves:  “All the better for making me better off!”

Reason 3:  Don’t forget reason 3

So, entrepreneurs are “in” the game and they see an opportunity.  Then, they notice how to rearrange the game to seize the opportunity for themselves.

But, they don’t stop there.  They do something else that is critical to their success.  They rally people to help them win.

Entrepreneurship is competitive.  Even if entrepreneurs are not about to bring their old industry or business to its knees, they are going to become more important than their former colleagues and bosses.  A certainty of entrepreneurial life is that whomever is going to lose out or become less important than them will fight back!

Make sure people are better off with them than against them

And, so it should be.  Why should others stand back and give up their right and impulse to compete! This is why rallying a team is so important to entrepreneurial success.  In essence, an entrepreneur wants to make sure people are better off with them than against them.

This is the skill that psychologists can help teach entrepreneurs.

  • We will let you spot the opportunity in the business that you are in.
  • We will let accountants help you figure out the business structure and financing.
  • What we do is help you learn that all important skill:  to build a team where people are better off with you than against you!

 ACADEMIC REFERENCE

Power as Practice: A Micro-sociological Analysis of the Dynamics of Emancipatory Entrepreneurship
David Goss, Robert Jones, Michela Betta and James Latham
Organization Studies, 2011, 32
[Downloadable from David Goss’ homepage at Surrey]

What does hope have to do with a positive attitude towards error?

Hope is a central concept of positive psychology

I’ve just spotted this brilliantly titled blog on the WordPress Dash and landed on a post about hope, made topical by the man-of-the-hour, Barack Obama. I also believe that hope is key to wellbeing. Without hope, we are so miserable.

As a concept, it is tricky to handle though. In English, hope is often used ironically and so much so, we think of hope as pie in the sky as in “I hope so”.

Hope is seeing the way ahead

Hope is more about seeing the way ahead. And seeing the way ahead depends on your knowledge, both academic and real-world, your ability to bring different bodies of knowledge together, and your knowledge of your own abilities.

Showing the importance of hope in a lab

Two psych experiments are very important.

If I put you in a room with a boring and unpleasant task to do, you will persist longer if I also put a button for you to call me when you have had enough.

I don’t have to connect the button to anything (sigh, psychologists!) because you are never going to use it. Just having it there is enough for you to think you have an ‘out’ that is under your control!

I spotted a post yesterday, but didn’t hang on to the link, about someone who gave up his family wealth and went downtown with 25 bucks in his pocket. In 9 months, he had demonstrated the American dream by building up to an apartment and vehicle. Not to be down on this guy, but he hasn’t really worked his way up. He always knew he could opt out, which is what he did eventually. Working your way up without the opt-ut button is much harder because it is scary.

The morale of the story is keep your contingency fund. Keep your social support. And provide that life line for others too!

You must see the way ahead in our mind’s eye. They must see the way ahead in their mind’s eye.

The second interesting experiment is the famous marshmallow experiment.

We put a little kid in a room with a marshmallow and tell him or her: if that is still there in 15 minutes when I come back, I will give you another one. Kids that wait to get two (delayed gratification) do better in life.

Now let’s try a thought experiment. Say the kid knows I cheat and I am not going to deliver. Or worse, when I come back, I will take the first one away as well. They’d do better to scoff the first marshmallow in an instance.

The world must also work for us and we need to know it works for us.  Hence we plan but don’t overplan. We bring things under our control but leave enough room to adapt to circumstances as they unfold. Michael Frese of Giessen University has shown this with entrepreneurs all over Africa.

The key: be realistic. Hope is not pie in the sky. It is built on a realistic understanding of what we are doing and for most of us, that gives us a very real pleasure.

Hope and the entrepreneur or creative artist

Will your relatives and friends undermine your entrepreneurial efforts, or your dreams to be an artist, or your determination to do something different?

Sure they will. They don’t know what you know.

So you must help them. Give them some time lines. Give them some concrete markers. Don’t expect them to see the world through the same lens as you. Your lens is your knowledge of the situation, your knowledge of the way ahead, and your knowledge of your skills.

That is hope, and it is delicious and self-affirming and encouraging and magnificent and even miraculous.

Learning about hope through movies

To explore hope further, try contrasting these movies:

Shawshank Redemption for knowledge and intricate planning.

Polyanna (is it called Tomorrow?) for optimism and infectious cheerfulness (for those doubting Thomas’)

The Legend of Bagger Vance for accepting social support and trusting to the coherence and timeliness of your ideas

Hope and Mistakes

And what has any of this to do with making mistakes? What will seem like a mistake to others is simply a learning curve to you (at least most of the time).   We are positive about errors when we trust the task, ourselves and the partners in our adventure.

Thanks for the stimulating post. For more ideas on entrepreneurship, go here.

Watch list: effectuation

The logic of entrepreneurship.  Is this a term to watch?

UPDATE 2011 (four years since my first post):  Effectuation has become a bigger deal.  It’s even in Wikipedia now.

UPDATE:  Work seems to be going on at this website. They even have a unconference of sorts in December 2009. [which website?]

The papers on this site explain well the tough concept of “Ready Fire Aim”.  From these papers, its possible to translate the concepts of positive psychology and positive organizational scholarship into business practice.

It is also possible to argue logically for a strategic approach based on the level of predictability in the environment.