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Summary all lectures The Entrepreneurial Individual
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This document is a summary of all lectures (2022) of the course The Entrepreneurial Individual.
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Summary PowerPoint Slides Entrepreneurial Individual:Table of content
Week 1: Real options reasoning ...................................................................................................2
Week 2: Entrepreneurial behavior ................................................................................................4
Strategies: ..................................................................................................................................4
Hustle theory .............................................................................................................................7
Scientific theory: .......................................................................................................................9
Week 3: Fear and anxieties:........................................................................................................10
Sources of anxiety: ..................................................................................................................12
Week 4: The innovative idea ......................................................................................................14
Tutorial week 4: ......................................................................................................................17
Week 5: persuasion & the pitch ..................................................................................................20
Tutorial week 5: ......................................................................................................................23
,Week 1: Real options reasoning
The enemy of an entrepreneur is Confirmation Bias and escalation of commitment bias
We all have these beliefs about the future but it’s important we don’t become ideological and
fixed about them
Confirmation bias is defined as the tendency to search for and interpret information in a way
that confirms one's own existing preconceptions, beliefs and opinions.
Leads to escalation of commitment - tendency to remain committed to our past behaviors,
particularly those exhibited publicly, even if they do not (or likely will not) have desirable
outcomes.
Solving (reducing) the confirmation bias problem (Falling forward article (McGrath)
1. View your venture as an option. An option is the exclusive right but not obligation to continue
invest time/money/effort.
2. If investments are staged so that expenditures end under poor conditions, losses can be
contained.
3. Should conditions prove favorable at each stage, further investments may be made, which is
referred to as exercising the option.
4. Can also pursue multiple paths to organizing in the beginning, not being committed to any one
in particular. These should not be too related to each other.
Real options reasoning:
• If you set it up smart, what makes a ‘good’ entrepreneur is not avoiding failure, but
managing the cost of failure by limiting exposure to the downside risks while preserving
access to attractive opportunities and maximizing gains.
• Investing in stages means that you can learn and adapt to signals, saving yourself from
confirmation bias
• Think of success/failure in terms of testing different condition assumptions (not venture
as a whole), then you’ll better redirect efforts or terminate without too much costs.
, Smart entrepreneurship is about trying to organize others and things around belief, looking
to see if belief is justified, and using that information to adapt or quit.
Entrepreneurial learning: learning propositional knowledge (justified true belief) and practical
knowledge (knowing how to do something)
Methods:
• Experiential learning theory – learning by doing (Startup Project next period)
• Social learning theory – learning with others ; “the process of developing shared
understanding amongst individuals and the taking of coordinated action through
mutual adjustment” (discussions) and institutionalizing as “the process of ensuring
that routinized actions occur” (teamwork software, like Slack)
• exploratory learning - emphasizes learning through enactment and interpretation to
generate enough variations that some will prove ex post to yield desirable results
(see ROR, creativity or market A/B testing)
• exploitative learning – directed information search that is amenable to ex ante planning
and control to limit variety achieved by honing in on and deepening initial ideas
(marketing survey or focus group)
• Sensing learning involves learning by knowing facts or details based on external
contacts through sights, sounds and physical sensations
• Intuitive learning involves learning by knowing relationships of facts and
possibilities
Myth: The reason for success is that some individuals are more talented than others:
When thinking about individual entrepreneurship, its possible to place too much emphasis on
individual skill, thoughts, and behavior:
Since we cannot ‘know’ the future, unsexy things like existing rules and chance are a big part of
entrepreneurship
Some entrepreneurs will be successful and become very wealthy, but most will not, even though
(in this fictional world) everyone started out in this game with the same resources and played
with the same skill and effort.
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