BootCamp Mindset 051609

8/2/2019 BootCamp Mindset 051609

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Entrepreneurship

Boot Camp Mindset


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Do entrepreneurs think differently?

What is this outside the box all about?

Is outside the box for real?

Question for today


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Start at any of the nine dots and draw four straightlines that go through all nine dots without liftingyour pencil and no tracing over an existing line.


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Four straightwithout connecting all nine dots w\olifting your pencil,no tracing over an existing line.

You have to go outside the box twice


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ReadingWhat makes entrepreneurs entrepreneurial?

Saras Sarasvathy

We seeks to answer the question is there such a think asentrepreneurial thinking?

If there is, is it applicable only to entrepreneurs?

How is it different from the thinking process of managers?

The conclusion is Effectual vs. Causal reasoning, but can it be

learned?


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Setting the framework How Entrepreneurs ThinkCausal vs. Effectual Thinking

Causal Thinking = Managerial ThinkingChoosing best means to achieve a predetermined goal

Saras Sarasvathy, Harvard Business Review


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Managerial Thinking Causal ReasoningDistinguishing Characteristic:

Selecting between given means to achieve a pre-determined goal

GivenGoal

M1

M2

M3

M4

M5 Given Means


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Causal Thinking = Managerial Thinking

Choosing best means to achieve a predetermined goal

Strategic Thinking = Creative ThinkingGenerating new means to reach predetermined goal

Setting the framework How Entrepreneurs ThinkStrategic vs. Effectual Thinking


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Strategic Thinking Creative Causal Reasoning

Distinguishing Characteristic:Generating new means to achieve pre-determined goals

GivenGoals

M1

M2

M3

M4

M5

New meansare generated


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Causal Thinking = Managerial Thinking

Choosing best means to achieve a predetermined goal

Strategic Thinking = Creative Causal ThinkingGenerating new means to reach predetermined goal

Effectual Thinking = Entrepreneurial Thinking

Imagining possible new ends using a given set of means


Setting the framework How Entrepreneurs ThinkEffectual Thinking


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Entrepreneurial Thinking Effectual Reasoning

Distinguishing Characteristic:

Imagining possible new ends usinga given set of means

M1

M2

M3

M4 M5

E1

E2

E3

E4

E5

Given Means


ImagineNew Ends


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Market Definition Classic Causation Model from Marketing Textbooks

Process of Effectuation Used by Expert Entrepreneurs

THE CUSTOMER

Segmentation(using relevant variables such as age, income, etc.)

Targeting(based on evaluation criteria

such as expected return)

Positioning(through market

strategies)

CustomerIdentification

(through Who am I?

What do I know? Whom do I know?)Customer Definition(through strategic partnerships & selling)

Adding Segments/Strategic Partners

Definition of one of several possible markets


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Classic Causation Model from Marketing Textbooks

Customer

Preliminary Prototype $ 250M

Initial Focus Group Study $ 250MMarket Segment Study $ 100 M

Gets you to the start line

Advertising & PR $ 11MM

Gets you to the market

Sale often pull through to

get to customer

Initial cost $ 11.6MM


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Customer

Preliminary Prototype $ 250K

Initial Focus Group Study $ 250K

Market Segment Study $ 100KGets you to the start line

Advertising & PR $ 11M

Gets you to the market

Introduction of newmeans to reach goalPartnershipsNew outletsMLM ChanneleCommerce

Strategic, Creative ThinkingGenerating new means to reach customer

Initial cost $ 11.6MM + or -


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Efficacious Thinking Entrepreneurial ThinkingImagining new ends, new means

Customer

Industry KnowledgePatterns of ChangeSkill SetsSocial Networks

Phantom Sale againstdefined pain \ cure

Customer in HandInitial customer acquisition onspecial terms (early adopter,point of sale, etc.)

Initial cost $ 19.61

Pain Identification

Customer benefit need


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Pure Entrepreneurial Thinking EfficacyDistinguishing Characteristic:

Imagining possible new ends usingnew means

M1

M2

M3

M4 M5

Create New Means

Apologies to Saras Sarasvathy

Harvard Business Review

ImagineNew Ends


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Thinking like an entrepreneur

Causal Thinking

Strategic ThinkingEffectual Thinking

USC Entrepreneurial Thinking

Efficacy


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The USC thinking

Efficacy

Imagine the end,Create the means


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Types of Thinking

Ends Means

Causal (Linear) Given Given

Strategic (Creative) Given Create

some new

Effectual Create Given

new

Efficacy Imagine Create NewNew Ends Means


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Entrepreneurial Thinking

Imagine the end,

Create the means


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Tom OMaliaOrfalea Chair for Entrepreneurial [email protected]

Lloyd Greif CenterMarshall School of BusinessUniversity of Southern CaliforniaBridge Hall OneLos Angeles, CA 90089-0801

Documents

BootCamp Mindset 051609