“Entrepreneurial mindset refers to a specific state of mind which orientates human conduct towards entrepreneurial activities and outcomes. Individuals with entrepreneurial mindsets are often drawn to opportunities, innovation, and new value creation” (Dr. Alain Fayolle). Davis et al. (2015) have further elaborated that an entrepreneurial mindset is a mixture of motives, skills, and thought processes that differentiate entrepreneurs from non-entrepreneurs. It is a state of mind in a complex environment that is intent on pursuing opportunities with scarce resources. The end goal is to deliver user-defined value at numerous multiples of the existing competitive offering through reliance on innovation. Thus, to further our understanding, the features of an entrepreneurial mindset will be illustrated along with ways in which it can be developed.
The first feature of an entrepreneurial mindset is to seek new opportunities, but with discipline. As explained by Shane and Venkataraman (2000), it is a mindset of discovery, evaluation, and exploitation of opportunities to bring into existence future goods and services. There are two competing yet complementary schools of thought, while one believes opportunities emerge because entrepreneurs detect a gap in the existing market which he or she can fill, and the other perceives opportunities are created because entrepreneurs are able to initiate a new gap in the existing market based on their ability to offer higher value-added product or service. McGrath and MacMillan (2000) defined an entrepreneurial mindset as the ability to rapidly sense, act, and mobilize, even under highly uncertain conditions. As stated by them, entrepreneurs are open to new opportunities but do not pursue all of them at the same time. Instead, they are conscious of their scarce resources and prioritize their energy on those avenues that are in line with their strategy and ensure the highest return. For the implementation of projects, it is expected of entrepreneurs to be adaptive to the evolving reality to ensure the best exploitation of opportunities. To ensure this, they leverage their existing internal and external social networks.
The second feature is a constructive attitude towards uncertainty. Ireland et al. (2001) describe an entrepreneurial mindset as a 'way of thinking' that creates a competitive advantage out of the positive aspects of uncertainty. In times of uncertainty, entrepreneurs rely on effectuation rather than causal reasoning. Rather than trying to anticipate an uncertain future to meet a set of predetermined goals, entrepreneurs will focus on elements they can control. Considering the means at their disposal, they will rely on their skills to analyze the market, make certain assumptions, identify risks in advance, strategically take calculated ones, and devise ways to manage any other risks beyond their control. Complexity and uncertainty are the norm in today’s business world, but having an entrepreneurial mindset equips them to address the challenges of coping with and adapting to such environments. Thus having an overall positive impact on their survival.
The third feature is to focus on execution, specifically adaptive execution. An outcome of entrepreneurs' meta-cognitive awareness is their ability to adapt their thinking process to the changing context and task demands (Haynie and Shepherd, 2007). Though they are optimistic and inspired, they focus on their means and rely on trial and error to arrive at probable solutions. They do not make huge investments rather they choose to follow the affordable loss principle. That is, they evaluate opportunities based on if the downside is acceptable rather than the predicted upside. Take the example of the promotion of Dropbox by Drew Houston by posting a video to Hacker-News: the downside was the time spent on putting together the video, but the large upside was the interest generated and signing of the product along with a spot in Y Combinator.
The fourth feature of an entrepreneurial mindset is to focus on building partnerships. Through cooperative trustful relationships with stakeholders and experience, creating social capital is an investment as it requires energy, time, and financial means. Especially in complex and uncertain circumstances, it is a differentiating factor for entrepreneurs (Venkataraman, 1997). Also as discussed by Baron (2006), to gain an advantage entrepreneurs can use social interactions as a mode to access diverse information, make connections, and identify emerging patterns. Thus, by leveraging these networks, entrepreneurs can utilize resources involved in unique and hard-to-imitate ways (Alvarez & Busenitz, 2001).
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