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2
Chapter Two

The Entrepreneurial Mind: Crafting

a Personal Entrepreneurial Strategy
The secret of those who amaze the world is that they regard nothing to be
impossible.

Henry David Thoreau

American philosopher, 1817–1862

Results Expected
Upon completion of this chapter, you will be able to
1. Determine whether being an entrepreneur would enhance your life and feed your
creative energies.
2. Discuss the critical aspects of the entrepreneurial mind—the strategies, habits, atti-
tudes, and behaviors that work for entrepreneurs who build higher-potential
ventures.1
3. Describe the characteristics of various entrepreneurial groups.
4. Develop concepts for evaluating a personal entrepreneurial strategy and an appren-
ticeship, and be able to discuss the entrepreneur’s creed.
5. Utilize a framework for self-assessment, and develop a personal entrepreneurial strategy.
6. Initiate a self-assessment and goal-setting process that can become a lifelong habit of
entrepreneurial thinking and action.
7. Assess the oneworld case study.

Entrepreneurs Are Leaders

professional with the ability to scale the enterprise
Until quite recently, a distinction was often made be- (the manager).
tween the individual with the vision, skill, and mind- This old notion has given way to what we have
set to start up a high-potential venture (the entrepre- sensed all along: Effective entrepreneurs are inter-
neur) and the typically more seasoned, risk-averse nally motivated, high-energy leaders with a unique
tolerance for ambiguity, a keen eye toward mitigating

The authors would like to thank Frederic M. Alper, a longtime friend and colleague and adjunct professor at Babson College, for his insights and contributions
to this chapter, in particular the graphic representation of entrepreneurial attributes and the development of the QuickLook exercise to develop a personal
entrepreneurial strategy.

1
J. A. Timmons, The Entrepreneurial Mind (Acton, MA: Brick House, 1989).

33
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34 Part I The Entrepreneurial Mind for an Entrepreneurial World

risk, and a passion for discovery and innovation. Share the wealth that is created with all those
These leaders create or identify and pursue oppor- who have contributed to it at all levels.
tunities by marshalling the diverse resources re-
quired to develop new markets and engage the Give back to the community.
inevitable competition. More than ever, we are con- There are many legendary examples of Mr. K.
vinced that the creation and liberation of human en- practicing these principles while growing Marion
ergy resulting from entrepreneurial leadership are Labs. There was the time when he had sent his
the largest transformational force on the planet young chief financial officer to Europe to negotiate
today. a supply contract with a major German company.
The power of a single leader can be profound, When the CFO returned, he proudly showed Mr. K.
and nowhere is this more true and relevant than in the incredibly favorable terms he had extracted
entrepreneurship. Perhaps what is most exciting from the supplier—who he had determined badly
about entrepreneurial leaders is that in the aggre- needed the business. From his point of view, he
gate, their alert actions have fueled a worldwide had “cleverly won” the contract by being a sharp
revolution that continues to define and shape our and tough negotiator.
social, economic, and environmental frontiers. After reviewing the situation and the agreement,
Mr. K. blasted the CFO: “This is a totally one-sided
contract—in our favor—and it is terribly unfair.
They won’t be able to make any money on this,
Three Principles for and that’s not how we treat our suppliers, or our
cus- tomers. You get back on that plane tomorrow,
Entrepreneurial Leadership apol- ogize to them, and then create a deal that works
for us—and lets them make a reasonable return as
People don’t want to be managed, they want to be led. well.”
Ewing Marion Kauffman Stunned, the CFO sheepishly returned to Ger-
One of the most extraordinary entrepreneurial lead- many to work out a contract that met with Mr. K.’s
ership stories of our time is that of the late Ewing ap- proval. Less than two years later, a worldwide
Marion Kauffman, who founded and built Marion supply crisis forced that German supplier to reduce
Labs, a company with over $1 billion in sales, and its cus- tomer shipments by over 90 percent. Mr. K.’s
then founded the Ewing Marion Kauffman Founda- fairness principle had not been forgotten: Marion
tion. Kauffman started his pharmaceutical Labs was the only American company that
company, now one of the leading companies in the continued to have its requirements filled.
world, in 1950 with $5,000 in the basement of his As simple as these principles may be, few
Kansas City home. Previously he had been very organi- zations truly, sincerely, and consistently
successful at an- other company. Kauffman (or practice them. It takes a lot more than lip service
“Mr. K.” as he pre- ferred) recalled, “The president or a stand- alone profit-sharing plan to create an
first cut back my sales commission, then he cut entrepreneurial culture like this. Consider the
back my territory. So I quit and created Marion following unique char- acteristics at Marion Labs
Labs.” and the Ewing Marion Kauffman Foundation:
With the acquisition of the company by Merrell- No one is an employee; everyone is an associate.
Dow in 1989 (becoming Marion, Merrell Dow, Even at $1 billion in sales, there are no formal
Inc.), more than 300 people became millionaires. organizational charts.
Thirteen foundations have been created by former
Everyone who meets or exceeds high perfor-
Marion associates, and the Ewing Marion Kauff-
mance goals participates in a companywide
man Foundation is one of only a dozen or so foun-
bonus, profit-sharing, and stock option plan.
dations in America with assets of over $1 billion.
The two-pronged mission of the foundation is to Benefit programs treat all associates the same,
make a lasting difference in helping youths at risk even top management.
and encouraging leadership in all areas of American Managers who attempt to develop a new prod-
life. uct and fail are not punished with lateral pro-
The following are the core leadership principles motions or geographic relocation, nor are they
that are the cornerstone of the values, philosophy, ostracized. Failures are gateways to learning
and culture of Marion Labs and now of the Kauffman and continual improvement.
Foundation: Those who will not or cannot practice these
core principles are not tolerated.
Treat others as you would want to be treated.
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Chapter 2 The Entrepreneurial Mind: Crafting a Personal Entrepreneurial Strategy 35

Comparing
EXHIBIT 2.1 Management and Leadership
Management Leadership
Creating an Agenda Planning and budgeting—establishing detailed Establishing direction—developing a vision of
steps and timetables for achieving needed results, the future, often the distant future, and strategies
and then allocating the resources necessary to for producing the changes needed to achieve
achieve these results that vision
Developing a Human Organizing and staffing—establishing some Aligning people—communicating the direction
by Network for Achieving structure for accomplishing plan requirements,
words and deeds to all those whose cooperation the Agenda staffing that structure with
individuals, delegating may be needed to influence the creation of teams
responsibility and authority for carrying out the and coalitions that understand the vision
and plan, providing policies and procedures to help strategies, and accept their validity
guide people, and creating methods or systems to
monitor implementation
Execution Controlling and problem solving—monitoring Motivating and inspiring—energizing people to
results versus plans in some detail, identifying overcome major political, bureaucratic, and
deviations, and then planning and organizing to resource barriers to change by satisfying very basic,
solve these problems often unfulfilled human needs
Outcomes Producing a degree of predictability and order, Producing change, often to a dramatic degree,
and having the potential of consistently producing and having the potential of producing
extremely key results expected by various stakeholders useful change

Source: Reprinted with the permission of The Free Press, a Division of Simon & Schuster Adult Publishing Group, from A Force for Change:
How Leadership Differs from Management by John P. Kotter. Copyright © 1990 by John P. Kotter, Inc. All rights reserved.

The ultimate message is clear: Great companies guishes managers from leaders, as summarized in
can be built upon simple but elegant principles; Exhibit 2.1. It is widely accepted today that leader-
and all the capital, technology, service ship is an extraordinarily complex subject, depending
management, and latest information available more on the interconnections among the leader,
cannot substitute for these principles, nor will they the task, the situation, and those being led than on
cause such a culture to happen. These ideals are at inborn or inherited characteristics.
the heart of the differ- ence between good and Numerous ways of analyzing human behavior
great companies. have implications in the study of entrepreneur-
ship. For example, for over 40 years Dr. David C.
McClelland of Harvard University and Dr. John W.
Timeless Research Atkinson of the University of Michigan and their
colleagues sought to understand individual motiva-
A single psychological model of entrepreneurship has tion.2 Their theory of psychological motivation is a
not been supported by research. However, behav- generally accepted part of the literature on entre-
ioral scientists, venture capitalists, investors, and en- preneurial behavior. The theory states that people
trepreneurs share the opinion that the eventual are motivated by three principal needs: (1) the
suc- cess of a new venture will depend a great deal need for achievement, (2) the need for power, and
upon the talent and behavior of the lead (3) the need for affiliation. The need for achieve-
entrepreneur and of his or her team. ment is the need to excel and for measurable per-
A number of myths still persist about entrepre- sonal accomplishment. A person competes against a
neurs. Foremost among these myths is the belief that self-imposed standard that does not involve compe-
leaders are born, not made. The roots of much of this tition with others. The individual sets realistic and
thinking reflect the assumptions and biases of an ear- challenging goals and likes to get feedback on how
lier era, when rulers were royal and leadership well he or she is doing in order to improve per-
was the prerogative of the aristocracy. Fortunately, formance. The need for power is the need to influ-
such notions have not withstood the tests of time or ence others and to achieve an “influence goal.” The
the in- quisitiveness of researchers of leadership need for affiliation is the need to attain an “affiliation
and man- agement. Consider recent research,
which distin-

2
See J. W. Atkinson, An Introduction to Motivation (Princeton, NJ: Van Nostrand, 1964); J. W. Atkinson, Motives in Fantasy, Action and Society (Princeton, NJ:
Van Nostrand, 1958); D. C. McClelland, The Achieving Society (Princeton, NJ: Van Nostrand, 1961); J. W. Atkinson and N. T. Feather, eds., A Theory of
Achievement Motivation (New York: John Wiley & Sons, 1966); and D. C. McClelland and D. G. Winter, Motivating Economic Achievement (New York:
Free Press, 1969).
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36 Part I The Entrepreneurial Mind for an Entrepreneurial World

Characteristics
EXHIBIT 2.2 of Entrepreneurs

Date Authors Characteristics

1848 Mill Risk bearing

1917 Weber Source of formal authority
1934 Schumpeter Innovation; initiative
1954 Sutton Desire for responsibility
1959 Hartman Source of formal authority
1961 McClelland Risk taking; need for achievement
1963 Davids Ambition; desire for independence, responsibility, self-confidence
1964 Pickle Drive/mental; human relations; communication ability;
technical knowledge
1971 Palmer Risk measurement
1971 Hornaday and Need for achievement; autonomy; aggression; power;
Aboud recognition; innovative/independent
1973 Winter Need for power
1974 Borland Internal locus of power
1982 Casson Risk; innovation; power; authority
1985 Gartner Change and ambiguity
1987 Begley and Boyd Risk taking; tolerance of ambiguity
1988 Caird Drive
1998 Roper Power and authority
2000 Thomas and Mueller Risk; power; internal locus of control; innovation
2001 Lee and Tsang Internal locus of control

goal”—the goal to build a warm relationship with who is generally passionate and not exclusively
someone else and/or to enjoy mutual friendship. profit-oriented.
Other research focused on the common attitudes Academics have continued to characterize the
and behaviors of entrepreneurs. A 1983 study found special qualities of entrepreneurs. (See Exhibit 2.2
a relationship between attitudes and behaviors of for a summary of this early research.) As participants
successful entrepreneurs and various stages of com- in this quest to understand the entrepreneurial
pany development.3 A year later, another study mind, in January 1983 Howard H. Stevenson and
found that entrepreneurs were unique individuals; Jeffry Timmons spoke with 60 practicing entrepre-
for instance, this study found that “what is charac- neurs.6 One finding was that entrepreneurs felt they
teristic is not so much an overall type as a successful, had to concentrate on certain fundamentals: respon-
growth-oriented entrepreneurial type. It is the siveness, resiliency, and adaptiveness in seizing new
company builders who are distinctive.”4 A study of opportunities. These entrepreneurs spoke of other
118 entrepreneurs revealed that “those who like attitudes, including an ability “to activate vision” and
to plan are much more likely to be in the survival a willingness to learn about and invest in new
group than those who do not.”5 Clearly the get-rich- tech- niques, to be adaptable, to have a
quick entrepreneurs are not the company professional atti- tude, and to have patience. They
builders; nor are they the planners of successful talked about the importance of “enjoying and
ventures. Rather it is the visionary who participates being interested in business,” as well as the
in the day- to-day routine to achieve a long-term business as “a way of life.” Other attitudes they
objective and spoke of included a willingness

3
N. Churchill, “Entrepreneurs and Their Enterprises: A Stage Model,” Frontiers of Entrepreneurship Research: 1983, ed. J. A. Hornaday et al. (Babson Park,
MA: Babson College, 1983), pp. 1–22.
4
N. R. Smith and John B. Miner, “Motivational Considerations in the Success of Technologically Innovative Entrepreneurs,” in Frontiers of Entrepreneurship
Research: 1984, ed. J. A. Hornaday et al. (Babson Park, MA: Babson College, 1984), pp. 448–95.
5
J. B. Miller, N. R. Smith, and J. S. Bracker, “Entrepreneur Motivation and Firm Survival among Technologically Innovative Companies,” ed. N. C. Churchill et
al., Frontiers of Entrepreneurship Research: 1991 (Babson Park, MA: Babson College, 1992), p. 31.
6
J. A. Timmons and H. H. Stevenson, “Entrepreneurship Education in the 80s: What Entrepreneurs Say,” in Entrepreneurship: What It Is and How to Teach
It, ed. J. Kao and H. H. Stevenson (Boston: Harvard Business School Press, 1985), pp. 115–34.
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Chapter 2 The Entrepreneurial Mind: Crafting a Personal Entrepreneurial Strategy 37

to learn about and invest in new techniques, to be for overtime. We hold a party every month for whoever
adaptable, to have a professional attitude, and to has a birthday. Little things matter a lot.
have patience. Little things create loyalty. Dai points out: “I do
Many of the respondents recognized and en- small things like showing students how to shop
dorsed the importance of human resource and cook Chinese food if they are in the U.S. You
manage- ment; one entrepreneur said that one of cannot get loyalty without trust, so I trust people
the most challenging tasks was playing “a leadership and care about them. Listen to the people around
role in at- tracting high-quality people, imparting you and trust them.”
your vision to them, and holding and motivating
them.” Other en- trepreneurs focused on the
importance of building an organization and
teamwork. Converging on the Entrepreneurial Mind
A number of respondents believed that the abil-
ity to conceptualize their business and do strategic The entrepreneur is one of the most intriguing and at the
planning would be of growing importance, particu- same time most elusive characters in the cast that
constitutes the subject of economic analysis.
larly when thinking five years ahead. Similarly, the
Professor William Baumol
ageless importance of sensitivity to and respect for Department of Economics, NYU
employees was stressed by a chief executive officer
of a firm with $40 million in sales and 400 employ-
ees: “It is essential that the separation between
management and the average employee should be Desirable and Acquirable Attitudes,
eliminated. Students should be taught to respect Habits, and Behaviors
employees all the way down to the janitor and ac- Many successful entrepreneurs have emphasized
cept them as knowledgeable and able persons.” that while their colleagues have initiative and a take-
A consulting study by McKinsey & Co. of charge attitude, are determined to persevere, and are
medium-sized growth companies (i.e., companies resilient and able to adapt, it is not just a matter of
with sales between $25 million and $1 billion and personality. It is what they do that matters most.8
with sales or profit growth of more than 15 Although there is an undeniable core of such in-
percent annually over five years) confirms that the born characteristics as energy and raw
chief exec- utive officers of winning companies were intelligence, which an entrepreneur either has or
notable for three common traits: perseverance, a does not, it is be- coming apparent that possession of
builder’s men- tality, and a strong propensity for these characteris- tics does not necessarily an
taking calculated risks.7 entrepreneur make. There is also a good deal of
One company that has taken pains to establish evidence that entrepre- neurs are born and made
good interpersonal relationships is Verisilicon. better and that certain atti- tudes and behaviors can
How do you attract people in China? Wayne Dai, be acquired, developed, practiced, and refined
founder, chairman, president, and CEO of through a combination of ex- perience and study.9
Verisilicon Hold- ings, has a simple rule: “Hire two In addition, although not all at- titudes, habits, and
people who are paid the salary of three people to do behaviors can be acquired by everyone at the
the work of four peo- ple.” He continues: same pace and with the same profi- ciency,
How do you retain people in Shanghai? I tell people if entrepreneurs are able to significantly im- prove
you come, I will give you a down payment for an their odds of success by concentrating on those that
apart- ment. We don’t hire fresh graduates. They work, by nurturing and practicing them, and by
don’t know what they are doing. You must have eliminating, or at least mitigating, the rest.
changed jobs before but not many times. I will only hire Painstak- ing effort may be required, and much will
someone if everyone likes him. You have to make your depend on the motivation of an individual to grow;
employees think more about a career path. but it seems people have an astounding capacity to
It’s working, since everyone volunteers to do change and learn if they are motivated and
over- time [which you cannot compel in China].
committed to do so.
Turnover is less than 5 percent. We financed an
eight-day trip to Hong Kong and Taiwan, which is Testimony given by successful entrepreneurs also
cheaper than paying confirms attitudes and behaviors that successful
entre-

7
D. K. Clifford, Jr., and R. E. Cavanagh, The Winning Performance (New York: Bantam Books, 1985), p. 3.
8
Determining the attitudes and behaviors in entrepreneurs that are “acquirable and desirable” represents the synthesis of over 50 research studies compiled for
the first and second editions of this book. See extensive references in J. A. Timmons, L. E. Smollen, and A. L. M. Dingee, Jr., New Venture Creation, 2nd
ed. (Homewood, IL.: Richard D. Irwin, 1985), pp. 139–69.
9
D. C. McClelland, “Achievement Motivation Can Be Developed,” Harvard Business Review, November–December 1965; D. C. McClelland and David G.
Winter, Motivating Economic Achievement (New York: Free Press, 1969); and J. A. Timmons, “Black Is Beautiful—Is It Bountiful?” Harvard Business
Review, November–December 1971, p. 81.
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38 Part I The Entrepreneurial Mind for an Entrepreneurial World

preneurs have in common. For example, many and Nawaz Sharif, editors of the Knowledge Café
well- known successful Chinese entrepreneurs like Ji se- ries on “Intellectual Entrepreneurship and
Qi of Ctrip, Ding Lei of 163.com, Zhang Jindong of Courage to Act.” This text, the fifth in Kwiatkowski’s
Suning Group, and Zhang Yue of Changsha Broad series, pro- vides further insight into the
Air Con- ditioning mention the following attributes entrepreneurial mind-set involved in creating new
as the key elements of their success: (1) they are intellectual property and knowledge creation
passionate about their work, (2) they are ventures. We are especially swayed by their work
proactive, taking ac- tions to solve problems and valuable insight on courage as a vital aspect of
immediately, (3) they work step by step, and (4) entrepreneurial behavior, and we have
they try to live virtuously. incorporated that into our dominant themes.
Undoubtedly many attitudes and behaviors char-
New Research. While Baumol’s observation acterize the entrepreneurial mind, and there is no
will resonate far into the future, we are fortunate single set of attitudes and behaviors that every entre-
to have the Praeger Perspectives series, a 2007 preneur must have for every venture opportunity.
three- volume set of research that focuses on Further, the fit concept argues that what is
entrepreneur- ship from three angles: people, required in each situation depends on the mix and
process, and place. This series brings together match of the key players and how promising and
insights into the field of entrepreneurship by some forgiving the opportunity is, given the founders’
of the leading scholars in the world and adds strengths and shortcomings. A team might
validation, new perspectives, and further debate to collectively show many desired strengths, but even
the complex questions that sur- round the then there is no such thing as a perfect
entrepreneurial mind and entrepreneurial process. entrepreneur—yet.
We have drawn on this work liberally in this edition
of New Venture Creation.
The first volume, people, takes a broad view of Seven Dominant Themes
en- trepreneurship as a form of human action, pulling
Nothing that sends you to the grave with a smile on your
to- gether the current state of the art in academic face comes easy. Work hard doing what you love. Find
re- search with respect to cognitive, economic, out what gives you energy and improve on it.
social, and institutional factors that influence Betty Coster, Entrepreneur
entrepreneur- ial behavior. Why do people start
new businesses? How do people make A consensus has emerged around seven dominant
entrepreneurial decisions? What is the role played themes, shown in Exhibits 2.3 and 2.4.
by the social and economic environment in Commitment and Determination
individuals’ decisions about entre- preneurship? Commit- ment and determination are seen as more
Do institutions matter? Do some groups of people important than any other factor. With commitment
such as immigrants and women face particular and deter- mination, an entrepreneur can
issues when deciding to start a business? overcome incredible obstacles and also compensate
The second volume process, proceeds through the enormously for other weaknesses. PayEasy, one of
life cycle of a new venture start-up by tackling the most profitable and reputable e-commerce start-
several key steps in the process: idea, opportunity, ups in Taiwan, has been around for almost a decade.
team building, resource acquisition, managing Its founder and now gen- eral manager, Bill Lin, will
growth, and entering global markets. It is clear always remember how bad things were at the
from the work in this volume that we have (as we beginning. What makes Lin a great entrepreneur is
alluded to earlier) learned a tremendous amount the fact that the failure did not stop him. Instead the
about the entrepre- neurial process over the years. failure became the cornerstone of PayEasy’s success.
The third volume, in the series examines place, Lin’s expertise is in Internet se- curity. Because of his
which refers to a wide and diverse range of background, he paid a lot of at- tention on the
contex- tual factors that influence the security of the payment gateway dur- ing the early
entrepreneur and the entrepreneurial process. days of PayEasy, neglecting content development
Chapters in this volume ad- dress entrepreneurship and after-sales service. However, he soon realized
in the context of the corpo- ration, family, and his mistake, and Lin and his team pushed forward
franchise. The research examines the impact of innovative packages and enhance- ments to
public policy and entrepreneurship support improve users’ online shopping experience. Lin also
systems at the country and community level and from learnt that a successful e-commerce business has to
an economic and social perspective. In ad- dition, the be developed with the local environment and
volume looks at the technology environ- ment and people in mind, and at the right time. PayEasy is now
financing support structures for entrepre- neurship a partner with Taiwan’s largest chain store, 7-Eleven.
as context issues. Under the PayEasy scheme, customers can order
We will also be referring to the exciting and goods online and pick them up at a designated
provocative work of Professors Stefan Kwiatkowski
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Chapter 2 The Entrepreneurial Mind: Crafting a Personal Entrepreneurial Strategy 39

EXHIBIT 2.3
Seven Themes of Desirable and Acquirable Attitudes and Behaviors
Theme Attitude or Behavior
Commitment and determination
Tenacious and decisive, able to recommit/commit quickly
Intensely competitive in achieving goals
Persistent in solving problems, disciplined
Willing to undertake personal sacrifice
Immersed in the mission
Courage
Moral strength
Fearless experimentation
Not afraid of conflicts, failure
Intense curiosity in the face of risk
Leadership
Self-starter; high standards but not perfectionist
Team builder and hero maker; inspires others
Treats others as you want to be treated
Shares the wealth with all the people who helped create it
Honest and reliable; builds trust; practices fairness
Not a lone wolf
Superior learner and teacher;
courage Patient and urgent
Opportunity obsession
Leadership in shaping the opportunity
Has intimate knowledge of customers’ needs and wants
Market driven
Tolerance of risk, ambiguity, and
uncertainty Obsessed with value creation and enhancement
Calculated risk taker
Risk minimizer
Risk sharer
Manages paradoxes and contradictions
Tolerates uncertainty and lack of structure
Tolerates stress and conflict
Creativity, self-reliance, and adaptability Able to resolve problems and integrate solutions
Nonconventional, open-minded, lateral thinker (helicopter mind)
Restless with status quo
Able to adapt and change; creative problem solver
Quick learner
No fear of failure
Motivation to excel Able to conceptualize and “sweat details”
Goal and results oriented; high but realistic goals
Drive to achieve and grow
Low need for status and power
Interpersonally supporting (versus competitive)
Aware of weaknesses and strengths
Has perspective and sense of humor

7-Eleven store within 24 hours, and make payment at ture demands top priority for the entrepreneur’s time,
the same time. Lin’s success with the tie-up leverages emotions, and loyalty. Thus commitment and determi-
on the availability of local resources, and the ease and nation usually require personal sacrifice. An
popularity of online shopping. entrepre- neur’s commitment can be measured in
Total commitment is required in nearly all several ways
entre- preneurial ventures. Almost without —through a willingness to invest a substantial
exception, en- trepreneurs live under huge, por- tion of his or her net worth in the venture,
constant pressures— first for their firms to survive through a willingness to take a cut in pay because he
start-up, then for them to stay alive, and finally for or she will own a major piece of the venture, and
them to grow. A new ven- through other major sacrifices in lifestyle and family
circumstances.
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40 Part I The Entrepreneurial Mind for an Entrepreneurial World

EXHIBIT 2.4
Core and Desirable Entrepreneurial Attributes
The Nonentrepreneurial Attributes

Outer control

DESIRABLE ATTRIBUTES
Being "macho"

Invulnerabilit
y
CORE
Intelligence ATTRIBUTES Capacity to
Courage inspire
Perfectionist
Commitment
and
determination
Leadership
Opportunity obsession
Tolerance of risk,
ambiguity, and
Creativity uncertainty Creativity, Impulsiveness
Knows it all and self-reliance, and Values
innovativenes adaptability Motivation
s to excel

Energy, health,
and emotional
stability
Counter-dependency Being antiauthoritarian

The desire to win does not equal the will to small components. Power management technologies were
never give up. This is a critically important acquired externally and developed internally as
distinction. Countless would-be entrepreneurs (and
lots of other types of people for that matter) say
that they really want to win. But few have the
dogged tenacity and un- flinching perseverance to
make it happen. The founder of Auria Solar, Dr. Tsai,
was the general man- ager of one of Taiwan’s most
successful start-ups, E-Ton Solar, which enjoyed
the highest stock value among all listed
technological companies. Not content with that
achievement, Tsai wants to win again. He wants to
prove that the technologies he and his team develop
at Auria Solar can turn a new page in Taiwan’s high-
tech industry, especially for the competitive,
market-limited sectors such as the solar energy
indus- try. The desire to win over other
technological firms drives Tsai and his team to test
concepts and ideas on a daily basis.
Time is money, and many Asian start-ups and
well-
established firms do not shut down on national
holi- days. Instead, employees are scheduled to
work on shifts during important occasions. Tsai
once person- ally supervised a routine text on the
Lunar New Year holiday, when most people in the
country were cele- brating, because he was keen to
have the production line for testing and
manufacturing ready when his em- ployees came
back to work after the holiday.
Delta Electronics is widely known as one of Tai-
wan’s giant companies. Delta started with making
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Delta expanded. Today, Delta employs

diversified technologies in nearly all
fields of tech product design and
manufacturing, and is a leader in the
green tech- nologies industry.
Bruce Cheng, the founder of Delta
Electronics, is well-known as a humble
and pragmatic entrepreneur who pays
tremendous attention to social
development issues such as community
education and protecting the
environment. The company has been
around for nearly 40 years. Delta
Electronics started from a very small
company that focused on electronic
compo- nents and grew to become the
giant conglomerate it is today; it works
closely with some of the world’s top re-
search universities such as MIT, and is a
world leader in various technological
developments.
Delta faced many challenges in its
history, but the company rose to the
occasion each time. The mass
production of the Ni-H cell presented
one such chal- lenge. After the team at
Delta had perfected the Ni-H cell, they
needed automation machines for mass
pro- duction. However, competition
was stiff and nobody was keen to sell
their second-tier machines to Delta.
Faced with this setback, the Delta team
decided they would develop their own
automation machines. In the months of
hard work that followed, the team
accu- mulated experience, research,
and expertise, and drove itself
relentlessly to develop its
technological capacity. That hard work
has earned Delta the repu- tation of
being a producer of high-quality
automation machines and systems
today. As one saying goes, “When you
fall on the ground, don’t be anxious to
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Chapter 2 The Entrepreneurial Mind: Crafting a Personal Entrepreneurial Strategy 41

stand up immediately. First, look around and see if

there is anything to pick up even before you put your
head up.” The Delta story teaches us that success EXHIBIT 2.5
Online Search for Desirable
Attributes of Entrepreneurship
cannot be defined by the lack of failure; even in the
face of major setbacks, success can come with the commitment to act accordingly (to do the right
right attitude and determination. thing). The second is being a fearless experimenter.
Entrepreneurs are intensely competitive: They This is not to be con- fused with simply assessing
love to win and love to compete—at anything! The and weighing risk and re-
best of them direct all this competitive energy toward
the goal and toward their external competitors.
This is critical; founders who get caught up in
competing with peers in the company invariably
destroy team cohesion and spirit and, ultimately,
the team.
Entrepreneurs who successfully build new
enter- prises seek to overcome hurdles, solve
problems, and complete the job; they are disciplined,
tenacious, and persistent. They are able to commit
and recommit quickly. They are not intimidated by
difficult situa- tions; in fact, they seem to think that
the impossible just takes a little longer. However,
they are neither aimless nor foolhardy in their
relentless attack on a problem or obstacle that can
impede their business. If a task is unsolvable, an
entrepreneur will actually give up sooner than
others. Most researchers share the opinion that
while entrepreneurs are extremely persistent, they
are also realistic in recognizing what they can and
cannot do, and where they can get help to solve a
very difficult but necessary task.

Courage As we noted earlier, we are indebted

to Stefan Kwiatkowski and Nawaz Sharif for their
in- sightful and thoughtful work on Courage as an
im- portant dimension of the entrepreneurial
mind-set. Although we added courage as a
subcategory in the previous edition of this text, we
did not do it justice.
In his research essay titled “What the Hell, Let’s
Give It a Try,” Kwiatkowski asserts that courage is
not simple bravery resulting from deficient
information about a given situation, nor pluck
anchored in feel- ings of invulnerability. Courage
rather has its source in broadly understood
knowledge, experience, and integrity of the
courageous individual. To prove his point,
Kwiatkowski Googled “core and desirable en-
trepreneurial attributes” combined with
“entrepre- neurship.” Results of that search, and
two other searches also conducted in March 2005,
are depicted in Exhibit 2.5.
Hence, as we continue to converge on the entre-
preneurial mind, we have included and elevated
courage to the second of what are now seven themes.
We see courage having at least three important as-
pects: first, moral strength and principles. This
means the character and the personal integrity to
know right from wrong, and the will and
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Timmons/
Spinelli Theme Google EBSCO Proquest
Commitment 534,000 151 7,042
Leadership 1,200,000 377 7,230
Opportunity obsession 9,010 1 0
Opportunity immersion* 14,000 0 0
Risk tolerance 57,600 4 53
Adaptability 50,400 21 688
Achievement 370,000 192 4,169
Courage 81,000 10 647

*A non-Timmons/Spinelli theme.
Source: S. Kwiatkowski and N. M. Sharif, Knowledge Café for Intel-
lectual Entrepreneurship and Courage to Act (Warsaw, Poland:
Publishing house of Leon Kozminsky Academy of Entrepreneurship
and Management, 2005), p. 231.

ward, upside and downside, and one’s comfort with a

certain level of risk and uncertainty. Fearless experi-
mentation suggests a restlessness with convention
and a rejection of the status quo. It is the innovator’s
passion to create, invent, and improve. This relent-
less experimentation is enhanced by a third aspect of
courage: a lack of fear of failing at the experiment—
and most undertakings for that matter—and a lack of
fear of conflicts that may arise. In other words, there
is a mental toughness that is quite impervious to fears
but is not ignorant or oblivious to possible conse-
quences. Consider the following examples of courage to
help elucidate this important concept.
In 1961 the Cuban Missile Crisis was one of the
most dangerous and frightening moments in Ameri-
can history, and especially in the Cold War between
the old USSR and the United States. Many historians
and military observers believe the two nations came
within hours, even minutes, of hostilities that would
have led to a nuclear holocaust. A few years earlier a
young U.S. Navy ensign was on a ship in these same
waters off Cuba, but he was not on watch at the time. A
senior officer, by error, had charted a course that
the young ensign, through his own sextant and map
calculations (this was long before GPS), had con-
cluded was incorrect and would run the ship aground.
Such a calamity would end the careers of the navy
ship’s commander and officer in charge. The young
ensign, if wrong, would be demoted and court-mar-
shalled. All of his senior officers were certain that the
ensign’s much more experienced and senior officer
was correct, and the young man was urged not to pur-
sue his belief in his own calculations. Nonetheless, he
showed enormous courage, fearlessness, and confi-
dence that he was doing the right thing, and he in-
sisted on making his case to the captain of the ship.
The captain listened. Fortunately for all, the young
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42 Part I The Entrepreneurial Mind for an Entrepreneurial World

ensign had carefully and accurately done his readings a learner and a teacher, a doer and a visionary. The
and calculations—and was correct. This avoided a vi- sion of building a substantial enterprise that will
near disaster. This young ensign went on to be a con- tribute something lasting and relevant to the
highly successful entrepreneur. His name was Ewing world while realizing a capital gain requires the
Marion Kauffman. patience to stick to the task for 5 to 10 years or
The founder of Tai-Hwa Pottery, Mr. Lu, is a more.
man full of confidence in his work. Like many Work by Dr. Alan Grant lends significant
entrepre- neurs, he believes that his company can support to the fundamental “driving forces” theory
make an im- pact on the global scene and that his of entre- preneurship that will be explored in
products will be well received in his home country, Chapter 5. Grant surveyed 25 senior venture
Taiwan, and else- where. Although the Taiwanese capitalists to develop an entrepreneurial
government some- times offers incentives for his leadership paradigm. Three clear areas evolved
industry, Lu refuses to change his business model from his study: the lead entrepreneur, the venture
or his products to qualify for them. He has also been team, and the external environment influences,
known to turn down offers to market his firm. Lu is which are outlined in fur- ther detail in Exhibit 2.6.
convinced that a good firm will automatically Furthermore, Grant sug- gested that to truly
attract customers, and if an entre- preneur focuses understand this paradigm, it should be
on his product and his customers, people will see “metaphorically associated with a troika, a Russian
value in his company, and create a de- mand which vehicle pulled by three horses of equal strength.
will sustain the business. Each horse represents a cluster of the suc- cess
The core of service in Tai-Hwa is about factors. The troika was driven toward success by the
satisfying the needs of buyers, local and visions and dreams of the founding entrepre-
international visitors, strategic partners, artists, neurs.”10 Grant’s work is supported by a later
masters, and their educa- tional program study by Nigel Nicholson in his 1998 European
participants. These are the people who create and Manage- ment journal article, reporting on the
experience Tai-Hwa and they are, in fact, the force personality and entrepreneurial leadership of the
promoting Tai-Hwa through word-of-mouth heads of the U.K.’s most successful independent
marketing. Lu is intent on establishing and maintain- companies.
ing in Tai-Hwa a relaxing space for visitors to ap- Successful entrepreneurs possess a well-developed
preciate, interact, and experience the artworks capacity to exert influence without formal power.
and the culture they represent instead of listening to These people are adept at conflict resolution. They
pre- sentations in the meeting room. know when to use logic and when to persuade, when
Wretch.cc is a popular social networking site to make a concession, and when to exact one. To run
among the young people in Taiwan. The wretch a successful venture, an entrepreneur learns to get
plat- form was one of the earliest showpieces of the along with many different constituencies—the
Web2.0 application after it was launched in cus- tomer, the supplier, the financial backer, and the
Taiwan. Wretch was formed by a group of students cred- itor, as well as the partners and others on the
who clearly under- stood the industry. The founding inside— often with conflicting aims. Success comes
team turned down capital investment offers from when the entrepreneur is a mediator—a negotiator
Sequoia and Kleiner Perkins and chose Yahoo as rather than a dictator.
their partner through a merger and acquisition—a Successful entrepreneurs are interpersonally sup-
brave move that showed that the Wretch team knew porting and nurturing—not interpersonally competi-
clearly what they wanted and what their firm needed. tive. When a strong need to control, influence, and
In 2006, one in every four people in Taiwan had a gain power over others characterizes the lead entre-
Wretch account. Most of these early users were then preneur, or where he or she has an insatiable
college students and are now young working appetite for putting an associate down, the
professionals. venture usually gets into trouble. Entrepreneurs
should treat others as they want to be treated;
Leadership Successful entrepreneurs are they should share the wealth with those who
experi- enced, possessing intimate knowledge of the contributed. A dictatorial, ad- versarial, and
technol- ogy and marketplace in which they will domineering management style makes it difficult to
compete, sound general management skills, and a attract and keep people who thrive on a thirst for
proven track record. They are self-starters and have achievement, responsibility, and results. Compliant
an internal lo- cus of control with high standards. partners and managers often are chosen. Destructive
They are patient leaders, capable of installing conflicts often erupt over who has the fi- nal say, who
tangible visions and man- aging for the longer haul. is right, and whose prerogatives are what.
Entrepreneurs who create and build substantial
The entrepreneur is at once
enterprises are not lone wolves and superindepen-

10
A. Grant, “The Development of an Entrepreneurial Leadership Paradigm for Enhancing New Venture Success,” Frontiers of Entrepreneurship Research:
1992, ed. J. A. Hornaday et al. (Babson Park, MA: Babson College, 1992).
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Chapter 2 The Entrepreneurial Mind: Crafting a Personal Entrepreneurial Strategy 43

EXHIBIT 2.6
The Entrepreneurial Leadership Paradigm
The Lead Entrepreneur
Self-concept Has a realist’s attitude rather than one of
invincibility. Intellectually honest Trustworthy: his/her word is his/her contract.
Admits what and when he/she does not know.
Pacemaker Displays a high energy level and a sense of urgency.
Courage Capable of making hard decisions: setting and beating high goals.
Communication skills Maintains an effective dialogue with the venture team, in the marketplace, and with other venture constituents.
Team player Competent in people management and team-building skills.
The Venture Team
Organizational style The lead entrepreneur and the venture team blend their skills to operate in a participative
environment. Ethical behavior Practices strong adherence to ethical business practices.
Faithfulness Stretched commitments are consistently met or bettered.
Focus Long-term venture strategies are kept in focus, but tactics are varied to achieve them.
Performance/reward High standards of performance are created, and superior performance is rewarded fairly and
equitably. Adaptability Responsive to rapid changes in product/technological cycles.
External Environmental Influences
Constituent needs Organization needs are satisfied, in parallel with those of the other publics the enterprise
serves. Prior experience Extensive prior experiences are effectively applied.
Mentoring The competencies of others are sought and used.
Problem resolution New problems are immediately solved or
prioritized.
Value creation High commitment is placed on long-term value creation for backers, customers, employees, and
other stakeholders.
Skill emphasis Marketing skills are stressed over technical ones.

Source: Adapted from A. J. Grant, “The Development of an Entrepreneurial Leadership Paradigm for Enhancing Venture Capital Success,” Frontiers
of Entrepreneurship Research: 1992, ed. J. A. Hornaday et al. (Babson Park, MA: Babson College, 1992).

dent. They do not need to collect all the credit for the some of these latter items have a place and time in
effort. They not only recognize the reality that it is the entrepreneurial process, they are not the
rarely possible to build a substantial business working source and driver for new ventures. Entrepreneurs,
alone, but also actively build a team. They have an in their best creative mode, are constantly thinking
uncanny ability to make heroes out of the people they of new ideas for businesses by watching trends,
attract to the venture by giving responsibility and spotting pat- terns, and connecting the dots to
sharing credit for accomplishments. shape and mold a unique enterprise.
In the corporate setting, this “hero-making” Take for example, CupC+ which has been
abil- ity is identified as an essential attribute of around in Taiwan for only four years, but the brand
successful entrepreneurial managers.11 These hero is already famous for its excellent fruit teas. Before
makers, of both the independent and corporate embarking on the fruit franchising business, its
varieties, try to make the pie bigger and better, rather founder, Kao, searched long and hard for a niche in
than jealously clutching and hoarding a tiny pie which she could develop her career in. She
that is all theirs. They have a capacity for objective researched the franchise market and realized that
interpersonal relationships as well, which enables franchises focusing on fruit were uncommon—the
them to smooth out individual differences of stores were mostly located in departmental stores
opinion by keeping attention focused on the —and that the products were usually expensive.
common goal to be achieved.12 Kao knew she had found her busi- ness opportunity
since not every office worker could afford to pay for
Opportunity Obsession Successful
these options, and Taiwanese people do not often
entrepre- neurs are obsessed first with opportunity
shop for fruit and fruit juices at depart- mental
—not with the money, the resources, the contacts
stores. She then decided that she wanted to build a
and network- ing, and not with image or
franchising network to promote drinking juices
appearances. Although
and fruit teas made of fresh fruit.

11
D. L. Bradford and A. R. Cohen, Managing for Excellence: The Guide to Developing High Performance in Contemporary Organizations (New York: John
Wiley & Sons, 1984).
12
Churchill, “Entrepreneurs and Their Enterprises: A Stage Model,” pp. 1–22.
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44 Part I The Entrepreneurial Mind for an Entrepreneurial World

The time was right and Kao was ready, but she ing the site. The iPartment team then soon repositioned
needed a partner who could help with providing the site and designed all the possible elements to
high-quality fruit, and preserving and transporting meet the needs in the site. We set strict rules on the site
them. Serendipitously, she was introduced to her when it was out; whoever delivered messages that may
cousin’s husband, who had recently taken over his pose a danger to the rest of the users or made sexual
family business, FuFruit. FuFruit was a large and hints were not allowed and their accounts would be
reputable fruit provider in northern Taiwan, and immediately deleted if [they were] reported or
its owner was looking into expanding the business. censured.
Skilled at branding and marketing, Kao was the iPartment focuses on white-collar female users to
best person to sell their new product to major differentiate itself from other highly popular social
stores such as 7-Eleven and Family Mart, while her networking sites such as QQ, which covers almost all
cousin’s husband concentrated on promoting their social groups, and Sina, which focuses only on
brand to high-tech firms such as Quanta Computer work- ing professionals. Narrowing the target market
Inc., and large retailers such as Costo, RT-Mart, is im- portant for a start-up since resources are
and Carrefour. limited. Be- cause of the Web site’s business model,
Why the name CupC+? The first C represents the iPartment team knew it had to concentrate on
the Vitamin C in the tea leaves used in the franchise’s the group of users with the potential buying power
products, and the second C, the Vitamin C in the for the services offered.
fruit juices. In addition, Kao remembered that Entrepreneurs realize good ideas are a dime a
when 85°C, Taiwan’s leading coffeehouse chain dozen, but good opportunities are few and far be-
first emerged in the market, people were curious tween. Fortunately, a great deal is now known
about the name and wanted to see what the shop about the criteria, the patterns, and the
offered. She hoped the unusual name for her requirements that differentiate the good idea from
franchise would do the same trick. the good opportu- nity. Entrepreneurs rely heavily
Zhang Chaming, founder and CEO of iPartment, on their own previ- ous experiences (or their
certainly believes in a winning strategy. His Web frustrations as customers) to come up with their
site is one of the household names for social breakthrough opportunities. Kurt Bauer, for instance,
networking in Taiwan and beyond, with more than had no prior business training or experience before
10 million people registered on the site. Women he headed for Eastern Europe in 1990 on a
comprise around 70 percent of its users, and it is Fulbright Scholarship to work on privatiza- tion in
arguably the most popu- lar social networking Poland and Russia. In fact, he postponed his
service among females. acceptances to top medical schools in order to go
For a social networking site to be successful, it east. He was so impressed with the seemingly endless
needs to be different. When Zhang looked into the stream of new business opportunities in the old east-
operations of rival sites owned by Yahoo, ern bloc countries that upon his return two years
PCHOME, and Yam, he found that well over 70 later, he decided to go to business school and try
percent of the users were male. He and his to figure out how to recognize and pursue the best
colleagues asked them- selves, Where were those of these opportunities. We will study his venture
females? Zhang says, “Quickly we found out that here from its roots and conception, to business plan
these sites lacked the ele- ments which appealed to devel- opment, to fund-raising and launch. Kurt
females. By filling the gap, iPartment differentiates and his brother John, and their venture, are a classic
itself from its competitors.” example of a pattern of opportunity obsession.
The iPartment Web site aims to promote online Throughout this text, we will examine in great detail
romance with a high level of security in a space how entrepreneurs and investors are “opportunity ob-
free of online pornography. The team observed sessed.” We will see their ingenious, as well as
that the more popular TV shows in Taiwan were straight- forward, ways and patterns of creating,
constructed around people falling in love in an shaping, mold- ing, and recognizing opportunities
apartment-like en- vironment, and convinced by that are not just good ideas, and then transforming
feedback from poten- tial users, designed the these “caterpillars into butterflies.” These practices,
iPartment Web site with that approach in mind. strategies, and habits are part of the
iPartment reproduces the concept of a home, in a entrepreneurial mind-set and are skills and know-
virtual environment where users can “rent” their how that are learnable and ac- quirable.
online apartments, find virtual room- mates, and The entrepreneur’s credo is to think
engage in activities such as home decora- tion, opportunity first and cash last. Time and again—
gardening, and keeping pets (or pay a fee for home even after har- vesting a highly successful venture
maintenance services). Zhang elaborates: —lead entrepre- neurs will start up another
company. They possess all the money and material
We also found out that friendship for females is the key
wealth anyone would ever hope for, yet it is not
principle they lived by [and we used that] while design-
enough. Like the artist, scientist,
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Chapter 2 The Entrepreneurial Mind: Crafting a Personal Entrepreneurial Strategy 45

athlete, or musician who, at great personal or fix it so that the customer/end user will
sacrifice, strives for yet another breakthrough respond, Wow! Their thinking habits focus on
discovery, new record, or masterpiece, the greatest what can go right here—what and how can we
entrepreneurs are similarly obsessed with what change the product or service to make it go right?
they believe is the next breakthrough opportunity. What do we have to offer to become the superior,
Having created and run a very popular bulletin dominant product or service?
board system in Taiwan’s growing Internet community,
Wretch.cc founder Mr. Chien and his partners de- Tolerance of Risk, Ambiguity, and
cided to launch a similar Web site with improved fea- Uncer- tainty Because high rates of change
tures based on the Wretch brand name and user and high lev- els of risk, ambiguity, and
base. This move was inspired by Chien’s observation uncertainty are almost a given, successful
that the Taiwanese were sharing comments and entrepreneurs tolerate risk, ambigu- ity, and
images over email and MSN, which were rather uncertainty. They manage paradoxes and con-
inconvenient modes of transfer. He also noted the tradictions.
growing popular- ity of Flickr and TaipeiLink among Entrepreneurs risk money, but they also risk reputa-
the Taiwanese, and the lack of improvement in the tion. Successful entrepreneurs are not gamblers; they
latter’s performance even when the number of its take calculated risks. Like the parachutist, they are will-
users surged. In addition, Chien and his team ing to take a risk; however, in deciding to do so, they cal-
discovered that the Taiwanese were not very fond culate the risk carefully and thoroughly and do every-
of using foreign Web sites to share information as thing possible to get the odds in their favor. Entre-
these tended to require some technical skill and preneurs get others to share inherent financial and
software knowledge on the user’s part. Aware of the business risks with them. Partners put up money and
IT advancements in the Web 2.0 era, Chien felt that put their reputations on the line, and investors do like-
software engineers should make blogging easy wise. Creditors also join the party, as do customers who
even for users with limited IT know-how. Chien advance payments and suppliers who advance credit.
and his team designed a prototype of the Asian For example, one researcher studied three very
blog, in which images were as much the focus as text suc- cessful entrepreneurs in California who initiated
was. This was a radical shift away from blogs and orchestrated actions that had risk
created by West- erners, which were mostly consequences.13 It was found that while they shunned
literature-heavy. In 2003, the Wretch team created risk, they sustained their courage by the clarity and
the new Web site, which was visited mainly by optimism with which they saw the future. They limited
Tawanese university students, and which offered the risks they initiated by carefully defining and
highly customized options, such as background strategizing their ends and by controlling and
features and music. monitoring their means—and by tailor- ing them both
Next, we cite an example from China, where Tai- to what they saw the future to be. Fur- ther, they
wanese business couple Yang Ging Fa and Ging managed risk by transferring it to others.
Mei Yiang have made a name for their restaurant In 1990 John B. Miner proposed his concept of
fran- chise, Liang’an Coffee, with its unique motivation–organizational fit, within which he
concept of serving high-quality Western food in con- trasted a hierarchic (managerial) role with a
Chinese-style crockery, and in a Chinese-style task (en- trepreneurial) role.14 This study of
ambience. One of the hottest items on the menu is motivational pat- terns showed that those who are
the “Liang’an Buffett Beef,” featuring beef that is task oriented (i.e., entrepreneurs) opt for the
dried, then baked. The idea for this dish originated following roles because of the corresponding
from a BusinessWeek in- terview with Warren motivations:
Buffett, in which he mentioned that he liked beef
Role Motivation
cooked this way. Soon after the in- terview was
televised, Liang’an’s owners introduced the item to 1. Individual achievement. A desire to achieve through one’s
its menu. They had foreseen how a power- ful own efforts and to attribute
success to personal causation.
recommendation by a world celebrity would influ-
2. Risk avoidance. A desire to avoid risk and
ence consumer behavior in China. leave little to chance.
Entrepreneurs think big enough about opportuni- 3. Seeking results of behavior. A desire for feedback.
ties. They know that a mom-and-pop business can of- 4. Personal innovation. A desire to introduce innovative
ten be more exhausting and stressful, and much solutions.
less rewarding, than a high-potential business. 5. Planning and A desire to think about the future
Their op- portunity mind-set is how to create it, shape setting goals. and anticipate future possibilities.
it, mold it,

13
D. Mitton, “No Money, Know-How, Know-Who: Formula for Managing Venture Success and Personal Wealth,” Frontiers of Entrepreneurship Research: 1984,
ed. J. A. Hornaday et al. (Babson Park, MA: Babson College, 1984), p. 427.
14
J. B. Miner, “Entrepreneurs, High-Growth Entrepreneurs, and Managers: Contrasting and Overlapping Motivational Patterns,” Journal of Business Venturing
5, p. 224.
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46 Part I The Entrepreneurial Mind for an Entrepreneurial World

Entrepreneurs also tolerate ambiguity and how well they are doing and how to improve their
uncer- tainty and are comfortable with conflict. Ask performance, they need to actively seek and use
someone working in a large company how sure feedback. Seeking and using feedback is also central
they are about receiving a paycheck this month, in to the habit of learning from mistakes and
two months, in six months, and next year. Invariably setbacks, and of responding to the unexpected. For
they will say that it is virtually certain and will muse the same reasons, these entrepreneurs often are
at the question. Start- up entrepreneurs face just described as excellent listeners and quick learners.
the opposite situation: There may be no revenue at Entrepreneurs are not afraid of failing; rather, they
the beginning, and if there is, a 90-day backlog in are more intent on succeeding, counting on the
orders would be quite an exception. To make fact that “success covers a multitude of
matters worse, lack of organiza- tion, structure, blunders,”16 as George Bernard Shaw eloquently
and order is a way of life. Constant changes stated. People who fear failure will neutralize
introduce ambiguity and stress into every part of whatever achievement mo- tivation they may
the enterprise. Jobs are undefined and chang- ing possess. They will tend to engage in a very easy task,
continually, customers are new, coworkers are where there is little chance of failure, or in a very
new, and setbacks and surprises are inevitable. difficult situation, where they cannot be held
And there never seems to be enough time. personally responsible if they do not succeed.
Successful entrepreneurs maximize the good
Further, successful entrepreneurs learn from
“higher-performance” results of stress and minimize
fail- ure experiences. They better understand not
the negative reactions of exhaustion and frustration.
only their roles but also the roles of others in
Two surveys have suggested that very high levels
causing the failure, and thus they are able to avoid
of both satisfaction and stress characterize founders,
similar prob- lems in the future. There is an old
to a greater degree than managers, regardless of
saying to the effect that the cowboy who has never
the success of their ventures.15
been thrown from a horse undoubtedly has not
ridden too many! The iter- ative, trial-and-error
Creativity, Self-Reliance, and
nature of becoming a successful entrepreneur makes
Adaptability The high levels of uncertainty and
serious setbacks and disappoint- ments an integral
very rapid rates of change that characterize new
part of the learning process.
ventures require fluid and highly adaptive forms of
organization that can re- spond quickly and Motivation to Excel Successful
effectively. entrepreneurs are motivated to excel.
Successful entrepreneurs believe in themselves. Entrepreneurs are self- starters who appear
They believe that their accomplishments (and set- driven internally by a strong desire to compete
backs) lie within their own control and influence and against their own self-imposed standards and to
that they can affect the outcome. Successful entre- pursue and attain challenging goals. This need to
preneurs have the ability to see and “sweat the achieve has been well established in the literature on
details” and also to conceptualize (i.e., they have entrepreneurs since the pioneering work of
“helicopter minds”). They are dissatisfied with the McClelland and Atkinson on motivation in the
status quo and are restless initiators. 1950s and 1960s. Seeking out the challenge
The entrepreneur has historically been viewed inherent in a start-up and responding in a positive
as an independent, highly self-reliant innovator and way, noted by the distinguished entrepreneurs men-
the champion (and occasional villain) of the free tioned earlier, is achievement motivation in action.
enter- prise economy. More modern research and Conversely, these entrepreneurs have a low
investiga- tion have refined the agreement among need for status and power, and they derive personal
researchers and practitioners alike that effective motiva- tion from the challenge and excitement of
entrepreneurs actively seek and take initiative. creating and building enterprises. They are driven
They willingly put themselves in situations where by a thirst for achievement, rather than by status
they are personally re- sponsible for the success or and power. Ironically, their accomplishments,
failure of the operation. They like to take the especially if they are very successful, give them
initiative to solve a problem or fill a vacuum where power. But it is impor- tant to recognize that power
no leadership exists. They also like situations and status are a result of their activities. Setting
where personal impact on problems can be high but attainable goals enables entrepreneurs to
measured. Again, this is the action-oriented nature focus their energies, be se- lective in sorting out
of the entrepreneur expressing itself. opportunities, and know what to say no to. Having
Successful entrepreneurs are adaptive and re- goals and direction also helps define priorities and
silient. They have an insatiable desire to know provides measures of how well they are performing.
how well they are performing. They realize that to Possessing an objective way of keeping score, such
know as changes in profits, sales, or stock price,

15
E. A. Fagonson, “Personal Value Systems of Men and Women Entrepreneurs versus Managers,” Journal of Business Venturing, 1993.
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16
Cited in R. Little, How to Lose $100,000,000 and Other Valuable Advice (Boston: Little, Brown, 1979), p. 72.
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Chapter 2 The Entrepreneurial Mind: Crafting a Personal Entrepreneurial Strategy 47

is also important. Thus money is seen as a tool and failure of their ventures. They believe they personally
a way of keeping score, rather than the object of can affect the outcome. This attribute is also
the game by itself. consis- tent with achievement motivation, which is
Successful entrepreneurs insist on the highest per- the desire to take personal responsibility, and self-
sonal standards of integrity and reliability. They confidence.
do what they say they are going to do, and they This veridical awareness often is accompanied by
pull for the long haul. These high personal other valuable entrepreneurial traits—perspective
standards are the glue and fiber that bind successful and a sense of humor. The ability to retain a sense
personal and busi- ness relationships and make of perspective, and to “know thyself ” in both
them endure. strengths and weaknesses, makes it possible for an
A study involving 130 members of the Small entrepre- neur to laugh, to ease tensions, and to get
Company Management Program at Harvard Busi- an unfavor- able situation set in a more profitable
ness School confirmed how important this issue is. direction.
Most simply said it was the single most important
factor in their long-term success.17
The best entrepreneurs have a keen awareness Entrepreneurial Reasoning: The
of their own strengths and weaknesses and those of Entrepreneurial Mind in Action
their partners and of the competitive and other
environ- ments surrounding and influencing them. How do successful entrepreneurs think, what actions
They are coldly realistic about what they can and do they initiate, and how do they start and build busi-
cannot do and do not delude themselves; that is, they nesses? By understanding the attitudes, behaviors,
have “veridical awareness” or “optimistic realism.” management competencies, experience, and know-
It also is worth noting that successful entrepreneurs how that contribute to entrepreneurial success, one
believe in them- selves. They do not believe that has some useful benchmarks for gauging what to
fate, luck, or other powerful, external forces will do. Exhibit 2.7 examines the role of opportunity in
govern the success or entre- preneurship.

EXHIBIT 2.7
Opportunity Knocks—Or Does It Hide? An Examination
of the Role of Opportunity Recognition in Entrepreneurship
Number (and Proportion) of Opportunities of Various Sources and Types
Sources of Opportunities Entrepreneurs Nonentrepreneurs

Prior work 67 (58.3%) 13 (48.2%)

Prior employment 36 6
Prior consulting work 11 4
Prior business 20 2
Network 25 (21.7%) 8 (29.6%)
Social contact 7 6
Business contact 18 2
Thinking by analogy 13 (11.3%) 6 (22.2%)
Partner 10 (8.7%) —

Types of Opportunities Entrepreneurs Nonentrepreneurs

Niche expansion/ 29 (25.2%) 7 (29.2%)
underserved niche
Customer need 34 (29.6%) 6 (25.0%)
Own firm’s need 6 (5.2%) 1 (4.2%)
Better technology 46 (40.0%) 10 (41.7%)

Source: Charlene, Zeitsma, “Opportunity Knocks—Or Does it Hide? An Examination of the Role of
Opportunity Recognition in Entrepreneurship.” In P. D. Reynolds, et al., eds., Frontiers of Entrepre-
neurship Research: 1999, Babson Park, MA: Babson College. Used by permission of the author.
Note: Numbers equal total people in the sample allocated to each category. Numbers in
parentheses equal percentage of total surveyed.

17
W. H. Stewart, Jr., W. E. Watson, J. C. Carland, and J. W. Carland, “A Comparison of Entrepreneurs, Small Business Owners, and Corporate Managers,”
Journal of Business Venturing 14, no. 2 (1999).
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48 Part I The Entrepreneurial Mind for an Entrepreneurial World

EXHIBIT 2.8
Who Is the Entrepreneur?
High

Inventor Entrepreneur
Creativit
y and
innovatio
n Manager,
Promoter
administrator

Low High
General management skills, business know-how, and
networks

Successful entrepreneurs have a wide range of of Ebony) expressed it this way: “You need to think
per- sonality types. Most research about yourself out of a corner, meet needs, and never, never
entrepreneurs has focused on the influences of genes, accept no for an answer.”23
family, education, career experience, and so forth, Successful entrepreneurs possess not only a
but no psychological model has been supported. cre- ative and innovative flair, but also solid
Studies have shown that an entrepreneur does not management skills, business know-how, and
need specific inherent traits, but rather a set of sufficient contacts. Exhibit 2.8 demonstrates this
acquired skills.18 Perhaps one Price-Babson College relationship.
fellow phrased it best when he said, “One does not Inventors, noted for their creativity, often lack the
want to overdo the personality stuff, but there is a necessary management skills and business know-how.
certain ring to it.”19 Promoters usually lack serious general management
“There is no evidence of an ideal and business skills and true creativity. Managers gov-
entrepreneurial personality. Great entrepreneurs can ern, police, and ensure the smooth operation of the
be either gregar- ious or low-key, analytical or status quo; their management skills, while high,
intuitive, charismatic or boring, good with details or are tuned to efficiency as well, and creativity is
terrible, delegators or control freaks. What you need usually not required. Although the management
is a capacity to execute in certain key ways.”20 skills of the manager and the entrepreneur overlap,
Successful entrepreneurs share common attitudes and the manager is more driven by conservation of
behaviors. They work hard and are driven by an resources and the entrepreneur is more
intense commitment and determined perseverance; opportunity-driven.24
they see the cup half full, rather than half empty;
they strive for integrity; they thrive on the
competitive desire to excel and win; they are dissatis- The Concept of Apprenticeship
fied with the status quo and seek opportunities to im-
prove almost any situation they encounter; they Shaping and Managing an
use failure as a tool for learning and eschew Apprenticeship
perfection in favor of effectiveness; and they believe
they can per- sonally make an enormous difference When one looks at successful entrepreneurs, one
in the final out- come of their ventures and their sees profiles of careers rich in experience. Time and
lives. again there is a pattern among successful entrepre-
neurs. They have all acquired 10 or more years
Those who have succeeded speak of these atti-
of substantial experience, built contacts, garnered
tudes and behaviors time and again.21 For example,
the know-how, and established a track record in
two famous entrepreneurs have captured the intense
the industry, market, and technology niche within
commitment and perseverance of entrepreneurs.
which they eventually launch, acquire, or build a
Wally Amos, famous for his chocolate chip cookies,
business. Frequently they have acquired intimate
said, “You can do anything you want to do.”22 John
knowledge of the customer, distribution channels,
Johnson of Johnson Publishing Company (publisher

18
W. Lee, “What Successful Entrepreneurs Really Do,” Lee Communications, 2001.
19
Comment made during a presentation at the June 1987 Price-Babson College Fellows Program by Jerry W. Gustafson, Coleman-Fannie May Candies Profes-
sor of Entrepreneurship, Beloit College, at Babson College.
20
Lee, “What Successful Entrepreneurs Really Do,” Lee Communications, 2001.
21
See the excellent summary of a study of the first 21 inductees into Babson College’s Academy of Distinguished Entrepreneurs by J. A. Hornaday and
N. Tieken, “Capturing Twenty-One Heffalumps,” in Frontiers of Entrepreneurship Research: 1983, pp. 23, 50.
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22
Made during a speech at his induction in 1982 into the Academy of Distinguished Entrepreneurs, Babson College.
23
Made during a speech at his induction in 1979 into the Academy of Distinguished Entrepreneurs, Babson College.
24
Timmons, Muzyka, Stevenson, and Bygrave, “Opportunity Recognition: The Core of Entrepreneurship,” pp. 42–49.
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Chapter 2 The Entrepreneurial Mind: Crafting a Personal Entrepreneurial Strategy 49

and market through direct sales and marketing ex- neuring. Evidence suggests that the most durable en-
perience. The more successful ones have made trepreneurial careers, those found to last 25 years or
money for their employer before doing it for them- more, were begun across a broad age spectrum,
selves. Consider the following examples: but after the person selected prior work or a
career to prepare specifically for an
Ren Zhengfei joined the People’s Liberation
entrepreneurial career.
Army of China to work as a military technolo-
Having relevant experience, know-how, attitudes,
gist upon graduation. Ren was an eager learner,
behaviors, and skills appropriate for a particular ven-
and he became a specialist in the field of
ture opportunity can dramatically improve the
telecommunications. In 1978, after leading sev-
odds for success. The other side of the coin is that if
eral successful telecommunications projects, he
an en- trepreneur does not have these, then he or
was elected as the military delegate to attend
she will have to learn them while launching and
the National Science Conference. Ren left the
growing the business. The tuition for such an
army after a 14-year career. In 1988, Ren
approach is often greater than most entrepreneurs
founded Hwawei Technologies. In 1992, he
can afford.
in- vented the first domestic PBX exchanger.
Since entrepreneurs frequently evolve from an en-
Hwawei Technologies is known for its strong
trepreneurial heritage or are shaped and nurtured by
R&D department, and that, together with
their closeness to entrepreneurs and others, the con-
Ren’s military-style management, helped the
cept of an apprenticeship can be a useful one.
com- pany grow to become the global power
Much of what an entrepreneur needs to know about
in telecommunications infrastructure it is
entre- preneuring comes from learning by doing.
today.
Knowing what to prepare for, where the windows for
Robin Li, founder of Baidu, graduated from acquiring the relevant exposure lie, how to
the State University of New York at Buffalo in anticipate these, where to position oneself, and
1994 with a master degree in computer when to move on can be quite useful.
science. He then joined Dow Jones and As Howard Stevenson of the Harvard Business
Company, and de- veloped a real-time School has often reminded us when teaching in the
financial information sys- tem for the online Price-Babson College Fellows Program, and else-
edition of The Wall Street Journal. During this where:
time, he also designed a page-ranking
algorithm which was awarded a You have to approach the world as an equal. There is no
U.S. patent. In 1997, Li joined the pioneer such thing as being supplicant. You are trying to
search engine company Infoseek, and developed work and create a better solution by creating action
a picture algorithm for Go.com. Armed with among a series of people who are relatively equal.
We destroy potential entrepreneurs by putting them
the experience and knowledge gained from
in a velvet- lined rut, by giving them jobs that pay too
his previous jobs, Li went back to China and much, and by telling them they are too good, before they
founded Baidu with his venture capitalist friend get adequate intelligence, experience, and
Eric Xu in 1999. The company has been listed responsibility.
on the NASDAQ since 2005, and is now the
most widely used search engine in China.
Windows of Apprenticeship
Tens of thousands of similar examples exist. There
are always exceptions to any such pattern, but if Exhibit 2.9 summarizes the key elements of an ap-
you want the odds in your favor, get the experience prenticeship and experience curve and relates
first. Successful entrepreneurs are likely to be older these to age windows.25 Age windows are especially
and to have at least 8 to 10 years of experience. impor- tant because of the inevitable time it takes
They are likely to have accumulated enough net to create and build a successful activity, whether it
worth to con- tribute to funding the venture or to is a new venture or within another organization.
have a track record impressive enough to give There is a saying in the venture capital business
investors and cred- itors the necessary confidence. that the “lemons,” or losers, in a portfolio ripen in
Finally, they usually have found and nurtured about two and one-half years and that the “pearls,” or
relevant business and other contacts and networks winners, usually take seven or eight years to come to
that ultimately contribute to the success of their fruition. Therefore, seven years is a realistic time
ventures. frame to expect to grow a higher-potential business
The first 10 or so years after leaving school can to a point where a capital gain can be realized.
make or break an entrepreneur’s career in terms Interest- ingly, presidents of large corporations,
of how well he or she is prepared for serious presidents of colleges, and self-employed
entrepre- professionals often de-

25
The authors wish to acknowledge the contributions to this thinking by Harvey “Chet” Krentzman, entrepreneur, lecturer, author, and nurturer of at least three
dozen growth-minded ventures over the past 20 years.
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50 Part I The Entrepreneurial Mind for an Entrepreneurial World

EXHIBIT 2.9
Windows of Entrepreneurial
Apprenticeship
Age

Elements of the Apprenticeship

and Experience Curve 20s 30s 40s 50s
1. Relevant business experience Low Moderate to high Higher Highest
2. Management skills and Low to moderate Moderate to high High High
know-how
3. Entrepreneurial Varies widely Focused high High High
goals and
commitment
4. Drive and energy Highest High Moderate Lowest
5. Wisdom and judgment Lowest Higher Higher Highest
6. Focus of apprenticeship Discussing what you General management Growing and Reinvesting
enjoy; key is Division management harvesting
learning business, Founder
sales, marketing;
profit and loss
responsibility
7. Dominant life-stage issues* Realizing your dream Personal growth and Renewal,
of adolescence and new directions and regeneration,
young adulthood ventures reinvesting
in the system

*From The Seasons of a Man’s Life by Daniel Levinson, copyright © 1978 by Daniel J. Levinson. Used by permission of Alfred A. Knopf, a division
of Random House, Inc.

scribe years as the time it takes to do something judgment, age begins to take its toll. Also, patience
sig- nificant. and perseverance to relentlessly pursue a long-term
The implications of this are quite provocative. vision need to be balanced with the urgency and real-
First, time is precious. Assume an entrepreneur ism to make it happen. Flexibility to stick with the
spends the first five years after college or graduate moving opportunity targets and to abandon some
school gaining relevant experience. He or she will and shift to others is also required. However,
be 25 to 30 years of age (or maybe as old as 35) flexibility and the ability to act with urgency
when launching a new venture. By the age of 50, disappear as the other commitments of life are
there will have been time for starting, at most, assumed.
three successful new ventures. What’s more,
entrepreneurs commonly go through false starts or
even a failure at first in the trial-and-error process of The Concept of Apprenticeship:
learning the entrepreneurial ropes. As a result, the Acquiring the 50,000 Chunks
first venture may not be launched until later (i.e., in During the past several years, studies about entre-
the entrepreneur’s mid- to late 30s). This would preneurs have tended to confirm what
leave time to grow the current venture and maybe practitioners have known all along: that some
one more. (There is always the possibility of staying attitudes, behaviors, and know-how can be
with a venture and growing it to a larger company of acquired and that some of these attributes are
$50 million or more in sales.) more desirable than others. It is also clear that
Reflecting on Exhibit 2.9 will reveal some other apprenticeship is a vital aspect of en-
paradoxes and dilemmas. For one thing, just when an trepreneurial education.
entrepreneur’s drive, energy, and ambition are at a Increasingly, research studies on the career
peak, the necessary relevant business experience and paths of entrepreneurs and the self-employed
management skills are least developed, and those suggest that the role of experience and know-how is
critical elements, wisdom and judgment, are in central in suc- cessful venture creation. Many
their infancy. Later, when an entrepreneur has successful entrepre- neurs do not have prior
gained the necessary experience in the “deep, dark industry experience. More critical to the
canyons of uncertainty” and has thereby gained entrepreneur is the ability to gain infor- mation and
wisdom and act on it.26 Evidence also suggests that success is
linked to preparation and planning.27 This is
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26
K. H. Vesper, “New Venture Ideas: Don’t Overlook the Experience Factor,” Harvard Business Review, reprinted in Growing Concerns: Building and Manag-
ing the Smaller Business, ed. D. E. Gumpert (New York: John Wiley & Sons, 1984), pp. 28–55.
27
See R. Ronstadt’s and H. Stevenson’s studies reported in Frontiers of Entrepreneurship Research: 1983.
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Chapter 2 The Entrepreneurial Mind: Crafting a Personal Entrepreneurial Strategy 51

what getting 50,000 chunks of experience is all Metal Industrial Co. Ltd., Applied Nano Technology
about. Science, Inc., Great Sequoia Corp., Taiwanabrator
Although formal market research may provide Co. Ltd., and Taiwan Sintong Machinery Co. Ltd.
useful information, it is also important to “When I started my trading business in New York
recognize the entrepreneur’s collective, qualitative City at the age of 34, I had two things going for me.
judgment must be weighted most heavily in One, I was brought up in a business environment
evaluating oppor- tunities. One study found that which instilled in me a longstanding interest in
entrepreneurs view believing in the idea, and busi- ness management. Two, I have an innate
experimenting with new venture ideas that result comfort in risk taking,”
in both failures and suc- cesses, as the most Yen’s father once told him that a businessman had
important components of oppor- tunity to adapt to the changing times, and Yen manages
recognition.28 his family business with that advice in mind. Like
Most successful entrepreneurs follow a pattern Yen, his granduncle is known for his successful
of apprenticeship, where they prepare for becoming high-risk ventures in the business world. On one
en- trepreneurs by gaining the relevant business occasion, af- ter he offered to buy out the
experi- ences from parents who are self-employed or unprofitable Far East- ern Department of a large
through job experiences. They do not leave American trading com- pany, Yen realized that he
acquisition of experience to accident or osmosis. was essentially following in the footsteps of his
As entrepreneur Harvey “Chet” Krentzman has granduncle. The authors summa- rized it this way:
said, “Know what you know and what you don’t
Family firms spawn entrepreneurs. Older
know.”
generations provide leadership and role modeling.
This phenome- non cuts across industries, firm size,
and gender.
Role Models
Numerous studies show a strong connection between The Babson College Historically Black Colleges and
the presence of role models and the emergence of Universities Case Writing Consortium write teaching
entrepreneurs. For instance, an early study cases featuring African American entrepreneurs.
showed that more than half of those starting new The experiences of these black entrepreneurs are
businesses had parents who owned businesses.29 exactly the role modeling that inspires students.
Likewise, 70 percent of MIT graduates who started
technology businesses had entrepreneurial
parents.30 In Asia, we also see the importance of role Myths and Realities
models. We highlight two examples here.
Dr. Wilber Huang, MD, founder and general Folklore and stereotypes about entrepreneurs and
manager of Abnova, one of Taiwan’s most prominent entrepreneurial success are remarkably durable,
biotech companies, was heavily influenced by his IT- even in these informed and sophisticated times.
savvy family in his career choices—even though More is known about the founders and the process of
he was specializing in the vastly different field of entrepreneurship than ever before.
medi- cine. During his clinical training, Huang was However, certain myths enjoy recurring attention
struck by the length of time it took to manufacture and popularity, in part because while generalities
a new drug, especially when he compared this with may apply to certain types of entrepreneurs and
how fast new computer applications and models particular situations, the great variety of founders
were hitting the market. His family would share tends to defy generalization. Exhibit 2.10 lists myths
with him ideas and concepts of running successful about entre- preneurs that have persisted and
IT firms, and this got him thinking about creating a realities that are supported by research.
platform for effi- cient, large-scale proteins-related Studies have indicated that 90 percent or more
applications manu- facturing. of founders start their companies in the same
The roots of entrepreneurship in Taiwan reach market- place, technology, or industry they have
back well over a century. “As a third generation been working in.31 Others have found that
en- trepreneur, I am the beneficiary of this special entrepreneurs are likely to have role models, have 8
her- itage,” said George Yen, one of Taiwan’s most to 10 years of experience, and be well educated. It
famous management gurus. Yen is the chairman of also appears that successful
San Yang

28
“Successful Entrepreneurs’ Insights into Opportunity Recognition,” G. Hills and R. Shrader, University of Illinois, Chicago, 2000.
29
A. Cooper and W. Dunkelberg, A New Look at Business Entry (San Mateo, CA: National Federation of Independent Businesses, March 1984).
30
Fortune, June 7, 1999.
31
A good summary of some of these studies is provided by R. H. Brockhaus, “The Psychology of the Entrepreneur,” in Encyclopedia of Entrepreneurship, ed.
C. Kent, D. Sexton, and K. Vesper (Englewood Cliffs, NJ: Prentice-Hall, 1982), pp. 50, 55.
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52 Part I The Entrepreneurial Mind for an Entrepreneurial World

EXHIBIT 2.10
Myths and Realities about Entrepreneurs
Myth 1—Entrepreneurs are born, not made.
Reality—While entrepreneurs are born with certain native intelligence, a flair for creating, and energy, these talents by themselves
are like unmolded clay or an unpainted canvas. The making of an entrepreneur occurs by accumulating the relevant skills,
know- how, experiences, and contacts over a period of years and includes large doses of self-development. The creative
capacity to envision and then pursue an opportunity is a direct descendant of at least 10 or more years of experience that
lead to pattern recognition.
Myth 2—Anyone can start a business.
Reality—Entrepreneurs who recognize the difference between an idea and an opportunity, and who think big enough, start
businesses that have a better chance of succeeding. Luck, to the extent it is involved, requires good preparation. And the
easiest part is starting. What is hardest is surviving, sustaining, and building a venture so its founders can realize a harvest.
Perhaps only one in 10 to 20 new businesses that survive five years or more results in a capital gain for the founders.
Myth 3—Entrepreneurs are gamblers.
Reality—Successful entrepreneurs take very careful, calculated risks. They try to influence the odds, often by getting others to share
risk with them and by avoiding or minimizing risks if they have the choice. Often they slice up the risk into smaller, quite
digestible pieces; only then do they commit the time or resources to determine if that piece will work. They do not deliberately
seek to take more risk or to take unnecessary risk, nor do they shy away from unavoidable risk.
Myth 4—Entrepreneurs want the whole show to themselves.
Reality—Owning and running the whole show effectively puts a ceiling on growth. Solo entrepreneurs usually make a living. It is
extremely difficult to grow a higher-potential venture by working single-handedly. Higher potential entrepreneurs build a
team, an organization, and a company. Besides, 100 percent of nothing is nothing, so rather than taking a large piece of
the pie, they work to make the pie bigger.
Myth 5—Entrepreneurs are their own bosses and completely independent.
Reality—Entrepreneurs are far from independent and have to serve many masters and constituencies, including partners, investors,
customers, suppliers, creditors, employees, families, and those involved in social and community obligations. Entrepreneurs,
however, can make free choices of whether, when, and what they care to respond to. Moreover, it is extremely difficult, and
rare, to build a business beyond $1 million to $2 million in sales single-handedly.
Myth 6—Entrepreneurs work longer and harder than managers in big companies.
Reality—There is no evidence that all entrepreneurs work more than their corporate counterparts. Some do, some do not. Some actually
report that they work less.
Myth 7—Entrepreneurs experience a great deal of stress and pay a high price.
Reality—Being an entrepreneur is stressful and demanding. But there is no evidence that it is any more stressful than numerous other
highly demanding professional roles, and entrepreneurs find their jobs very satisfying. They have a high sense of
accomplishment, are healthier, and are much less likely to retire than those who work for others. Three times as many
entrepreneurs as corporate managers say they plan to never retire.
Myth 8—Start a business and fail and you’ll never raise money again.
Reality—Talented and experienced entrepreneurs—because they pursue attractive opportunities and are able to attract the right
people and necessary financial and other resources to make the venture work—often head successful ventures. Further,
businesses fail, but entrepreneurs do not. Failure is often the fire that tempers the steel of an entrepreneur’s learning
experience and street savvy.
Myth 9—Money is the most important start-up ingredient.
Reality—If the other pieces and talents are there, the money will follow, but it does not follow that an entrepreneur will succeed if
he or she has enough money. Money is one of the least important ingredients in new venture success. Money is to the
entrepreneur what the paint and brush are to the artist—an inert tool that in the right hands can create marvels.
Myth 10—Entrepreneurs should be young and energetic.
Reality—While these qualities may help, age is no barrier. The average age of entrepreneurs starting high-potential businesses is
in the mid-30s, and there are numerous examples of entrepreneurs starting businesses in their 60s. What is critical is
possessing the relevant know-how, experience, and contacts that greatly facilitate recognizing and pursuing an opportunity.
Myth 11—Entrepreneurs are motivated solely by the quest for the almighty dollar.
Reality—Entrepreneurs seeking high-potential ventures are more driven by building enterprises and realizing long-term capital gains than
by instant gratification through high salaries and perks. A sense of personal achievement and accomplishment, feeling in
control of their own destinies, and realizing their vision and dreams are also powerful motivators. Money is viewed as a tool
and a way of keeping score, rather than an end in itself. Entrepreneurs thrive on the thrill of the chase; and, time and again,
even after an entrepreneur has made a few million dollars or more, he or she will work on a new vision to build another
company.
(continued)
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Chapter 2 The Entrepreneurial Mind: Crafting a Personal Entrepreneurial Strategy 53

EXHIBIT 2.10 (concluded)

Myths and Realities about Entrepreneurs
Myth 12—Entrepreneurs seek power and control over others.
Reality—Successful entrepreneurs are driven by the quest for responsibility, achievement, and results, rather than for power for its own
sake. They thrive on a sense of accomplishment and of outperforming the competition, rather than a personal need for
power expressed by dominating and controlling others. By virtue of their accomplishments, they may be powerful and
influential, but these are more the by-products of the entrepreneurial process than a driving force behind it.
Myth 13—If an entrepreneur is talented, success will happen in a year or two.
Reality—An old maxim among venture capitalists says it all: The lemons ripen in two and a half years, but the pearls take seven or eight.
Rarely is a new business established solidly in less than three or four years.
Myth 14—Any entrepreneur with a good idea can raise venture capital.
Reality—Of the ventures of entrepreneurs with good ideas who seek out venture capital, only 1 to 3 out of 100 are funded.
Myth 15—If an entrepreneur has enough start-up capital, he or she can’t miss.
Reality—The opposite is often true; that is, too much money at the outset often creates euphoria and a spoiled-child syndrome. The
accompanying lack of discipline and impulsive spending usually lead to serious problems and failure.
Myth 16—Entrepreneurs are lone wolves and cannot work with others.
Reality—The most successful entrepreneurs are leaders who build great teams and effective relationships working with peers, directors,
investors, key customers, key suppliers, and the like.
Myth 17—Unless you attained 600+ on your SATs or GMATs, you’ll never be a successful entrepreneur.
Reality—Entrepreneurial IQ is a unique combination of creativity, motivation, integrity, leadership, team building, analytical ability,
and ability to deal with ambiguity and adversity.

entrepreneurs have a wide range of experiences in bined with other online resources, will enable you
products/markets and across functional areas.32 Stud- to grapple with all of the conceptual, practical,
ies also have shown that most successful entrepreneurs financial, and personal issues entrepreneurs
start companies in their 30s. Statistics of companies encounter. This book will help you get the odds of
listed on the ChiNext (the Growth Enterprise success in your favor. It will focus your attention
Market Board in China) show that the average age on developing answers for the most important of
of 92 shareholders whose equity value exceeds these questions, including these:
RMB 1 billion is 46.
It has been found that entrepreneurs work both What does an entrepreneurial career take?
more and less than their counterparts in large organ- What is the difference between a good oppor-
izations, that they have high degrees of satisfaction tunity and just another idea?
with their jobs, and that they are healthier. 33 Another Is the opportunity I am considering the right
study showed that nearly 21 percent of the founders opportunity for me now?
were over 40 when they embarked on their entrepre- Why do some firms grow quickly to several mil-
neurial career, the majority were in their 30s, and lion dollars in sales but then stumble, never
just over one-fourth did so by the time they were growing beyond a single-product firm?
25.
What are the critical tasks and hurdles in seiz-
ing an opportunity and building the business?
How much money do I need and when, where,
What Can Be Learned? and how can I get it—on acceptable terms?
What financing sources, strategies, and mecha-
For over 30 years, the authors have been engaged nisms can I use from prestart, through meaning-
as educators, cofounders, investors, advisors, and ful careers in new and growing firms, and
direc- tors of new, higher-potential ventures. in the early growth stage to the harvest of my
Throughout the text are multipart cases about venture?
real, young entre- preneurs, including some of our
What are the minimum resources I need to
former college and graduate students. You will
gain control over the opportunity, and how can
face the same situations these aspiring
I do this?
entrepreneurs faced as they sought to turn dreams
into reality. The cases and text, com-

32
Over 80 studies in this area have been reported in Frontiers of Entrepreneurship Research (Babson Park, MA: Babson College) for the years 1981 through 1997.
33
Stevenson, “Who Are the Harvard Self-Employed?” p. 233.
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54 Part I The Entrepreneurial Mind for an Entrepreneurial World

Is a business plan needed? If so, what kind investment banks, commercial banks, consulting, ac-
is needed and how and when should I
counting, and the like.
develop one?
Our view of entrepreneurship is that it need not be
Who are the constituents for whom I must an end in itself. Rather, it is a pathway that leads to
cre- ate or add value to achieve a positive in- numerable ideas and opportunities, and opens
cash flow and to develop harvest options? visions of what young people can become. You will
What is my venture worth and how do I negoti- learn skills, and how to use those skills
ate what to give up? appropriately. You will learn how to tap your own
What are the critical transitions in and others’ creativity, and to apply your new
entrepre- neurial management as a firm energy. You will learn the dif- ference between
grows from $1 million to $5 million to $25 another good idea and a serious op- portunity. You
million in sales? will learn the power and potential of the
What is it that entrepreneurial leaders do dif- entrepreneurial team. You will learn how entre-
ferently that enables them to achieve such com- preneurs finance and grow their companies, often
petitive breakthroughs and advantages, with ingenious bootstrapping strategies that get big
particularly over conventional practices, but results with minimal resources. You will learn the joy
also so-called best practices? of self-sufficiency and independence. You will
What are the opportunities and implications for learn how entrepreneurial leaders make this
21st century entrepreneurs and the Internet, happen, and give back to society. You will discover
clean tech, and nanosciences? How can these anew what it is about entrepreneurship that gives
be seized and financed? you sustaining en- trepreneurial reasoning and
What do I need to know and practice in thinking in order to fuel your dreams. One of the
entre- preneurial reasoning and thinking to best perspectives on this comes from Jerry
have a competitive edge? Gustafson, Coleman-Fannie May Candies Professor
What are some of the pitfalls, minefields, of Entrepreneurship and Chair, Beloit College,
and hazards I need to anticipate, prepare Beloit, Wisconsin, who was probably the first
for, and respond to? professor at a liberal arts college to create an
What are the contacts and networks I need to entrepreneurship course:
access and to develop?
Entrepreneurship is important for its own sake. The
Do I know what I do and do not know, and do subject frames an ideal context for students to address
I know what to do about it? perennial questions concerning their identity, objec-
How can I develop a personal “entrepreneurial tives, hopes, relation to society, and the tension be-
game plan” to acquire the experience I need tween thought and action. Entrepreneurship concerns
to succeed? thinking of what we are as persons. Furthermore,
of
How critical and sensitive is the timing in each its nature, entrepreneurship is about process. One can-
of these areas? not discuss entrepreneurship without encountering
Why do entrepreneurs who succeed in the long the importance of goal setting, information
term seek to maintain reputations for integrity gathering, persistence, resourcefulness, and
and ethical business practices? resiliency. It is not lost on students that the
behaviors and styles of entre- preneurs tend to be
We believe that we can significantly improve socially rewarded, and these are precisely the
the quality of decisions students make about behaviors we wish to see the students ex- hibit in the
entrepre- neurship and thereby also improve the classroom.34
fit between what they aspire to do and the
requirements of the particular opportunity. In
many cases, those choices lead to self-employment A Word of Caution: What SATs, IQ Tests,
or meaningful careers in new and growing firms GMATs, and Others Don’t Measure
and, increasingly, in large firms that “get it.” In other
cases, students join larger firms whose customer Nothing in the world can take the place of persistence.
base and/or suppliers are principally the Talent will not; nothing is more common than
entrepreneurial sector. Still others seek careers in unsuccessful men with talent. Genius will not;
unrewarded genius is almost a proverb. Education will
the financial institutions and profes- sional services not; the world is full of educated derelicts. Persistence
firms that are at the vortex of the entre- preneurial and determination alone are omnipotent. The slogan
economy: venture capital, private equity, “Press on” has solved and solved and always will solve
the problems of the human race.
President Calvin Coolidge

34
J. Gustafson, “SEEing Is Not Only about Business,” PULSE, 1988 (Babson Park, MA: Price-Babson College Fellows Program).
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Chapter 2 The Entrepreneurial Mind: Crafting a Personal Entrepreneurial Strategy 55

The following data about alumni whose careers IQ tests, SATs, GMATs, and the like that grade and
were followed for nearly 25 years has always shocked sort young applicants with such imprecision. Con-
second- year Harvard MBA students. Regardless of sider the skills and capacities not measured by these
the meas- ure one applies, among the very top of the tests:
class were graduates who were both highly
successful and not very successful. At the bottom ✓ Leadership skills.
of the class were alumni who became outrageously ✓ Interpersonal skills.
successful, and others who accomplished little with ✓ Team building and team playing.
their lives and ex- ceptional education. The middle of ✓ Creativity and ingenuity.
the class achieved all points on the continuum of ✓ Motivation.
success. How could this be? ✓ Learning skills (versus knowledge).
America’s brightest fared poorly in the Third In- ✓ Persistence and determination.
ternational Mathematics and Science Study compar- ✓ Values, ethics, honesty, and integrity.
ing high school seniors from 20 nations, according to ✓ Goal-setting orientation.
The New York Times. In a competition between the ✓ Self-discipline.
world’s most precocious seniors, those taking physics ✓ Frugality.
and advanced math, the Americans performed at the ✓ Resourcefulness.
bottom. The article noted, ✓ Resiliency and capacity to handle adversity.
After decades of agonizing over the fairness of SAT
✓ Ability to seek, listen, and use feedback.
scores, the differences between male and female math- ✓ Reliability.
ematical skills, and gaps in IQ between various racial ✓ Dependability.
and ethnic groups, the notion of intelligence and how to ✓ Sense of humor.
measure it remains more political than scientific, and as
maddenly elusive as ever.35 It is no wonder that a number of excellent col-
leges and universities eliminated these measures or
In ancient China, the top scholar in the Imperial placed them in a proper perspective. Obviously
Examination is called a zhuangyuan ( ), and this should not be construed to mean
zhuangyuan are highly admired throughout Chi- entrepreneurship is for dummies. Quite the
nese history. Today, people refer to students who opposite is true. Indeed, intelligence is a very
scored the highest points in their provincial college valuable and important asset for entrepreneurs,
entrance examinations as zhuangyuan. Being called but by itself is woefully inade- quate.
a zhuangyuan is still the ultimate badge of honor Clearly just being very smart won’t help much if
for many students in China. However, results from one doesn’t possess numerous other qualities (see
a study of 1,120 zhuangyuan who graduated be- Chapter 9, The Entrepreneurial Manager and the
tween 1977 and 2008 were shocking; most of Team and Chapter 10, Ethical Decision Making, for
these top scholars perform far below expectation in an elaboration on these other qualities). A fascinat-
their careers. Conversely, a study on a high-ranking ing article by Chris Argyris, “Teaching Smart People
Chinese university’s outstanding alumni showed How to Learn,” is well worth reading to get some
that none of these former students were zhangyuan. powerful insights into why it is often not the class
In short, there are many different kinds of intelli- genius who becomes most successful.36
gence—a much greater bandwidth than most re-
searchers and test architects ever imagined. The
dynamic and subtle complexities of the entrepre-
neurial task require its own special intelligences. A Personal Strategy
How else would one explain the enormous contra-
diction inherent in business and financially failed An apprenticeship can be an integral part of the
geniuses? process of shaping an entrepreneurial career. One
One only need consider the critical skills and ca- principal task is to determine what kind of entrepre-
pacities that are at the heart of entrepreneurial lead-
ership and achievement, yet are not measured by the

35
“Tests Show Nobody’s Smart about Intelligence,” The New York Times, March 1, 1998, p. 4–1.
36
C. Argyris, “Teaching Smart People How to Learn,” Harvard Business Review, May–June 1991.
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56 Part I The Entrepreneurial Mind for an Entrepreneurial World

neur a person is likely to become, based on back- Do what gives you energy—have fun.
ground, experience, and drive. Through an appren-
Figure out what can go right and make it.
ticeship, an entrepreneur can shape a strategy and
action plan to make it happen. The Crafting a Per- Say “can do” rather than “cannot” or
sonal Entrepreneurship Strategy exercise at the end “maybe.” Illegitimi non carborundum:
of this chapter addresses this issue more fully. For tenacity and cre- ativity will triumph.
a quick inventory of your entrepreneurial Anything is possible if you believe you can do
attributes, do the second exercise, Personal it. If you don’t know it can’t be done, then
Entrepreneurial Strategy. you’ll go ahead and do it.
Despite all the work involved in becoming an The cup is half-full, not half-empty.
en- trepreneur, the bottom line is revealing. Be dissatisfied with the way things are—and
Evidence about careers and job satisfaction of look for improvement.
entrepreneurs all points to the same conclusion: If Do things differently.
they had to do it over again, not only would more of Don’t take a risk if you don’t have to—but take a
them become en- trepreneurs again, but also they calculated risk if it’s the right opportunity for you.
would do it sooner.37 They report higher personal
Businesses fail; successful entrepreneurs learn
satisfaction with their lives and their careers than
—but keep the tuition low.
their managerial coun- terparts. Nearly three
times as many say they plan never to retire, It is easier to beg for forgiveness than to ask for
permission in the first place.
according to Stevenson. Numerous other studies
show that the satisfaction from inde- pendence Make opportunity and results your obsession—
and living and working where and how they want not money.
to is a source of great satisfaction.38 Fi- nancially, Money is a tool and a scorecard available to the
successful entrepreneurs enjoy higher in- comes and right people with the right opportunity at the
a higher net worth than career managers in large right time.
companies. In addition, the successful har- vest of a Making money is even more fun than spending
company usually means a capital gain of sev- eral it.
million dollars or more and, with it, a new array of Make heroes out of others—a team builds a
very attractive options and opportunities to do business; an individual makes a living.
whatever they choose to do with the rest of their Take pride in your accomplishments—it’s con-
lives. tagious!
Sweat the details that are critical to success.
Integrity and reliability equal long-run oil and
Entrepreneur’s Creed glue.
Accept the responsibility, less than half the
So much time and space would not be spent on the credit, and more than half the blame.
entrepreneurial mind if it were just of academic Make the pie bigger—don’t waste time trying
in- terest. But they are, entrepreneurs themselves to cut smaller slices.
be- lieve, in large part responsible for success. Play for the long haul—it is rarely possible to
When asked an open-ended question about what get rich quickly.
entrepre- neurs believed are the most critical Don’t pay too much—but don’t lose it!
concepts, skills, and know-how for running a Only the lead dog gets a change of view.
business—today and five years hence—their
Success is getting what you want: Happiness is
answers were very revealing. Most mentioned
wanting what you get.
mental attitudes and philosophies based on
entrepreneurial attributes, rather than spe- cific skills Give back.
or organizational concepts. These answers are Embrace sustainability.
gathered together in what might be called an en- • Never give up.
trepreneur’s creed:

37
Stevenson, “Who Are the Harvard Self-Employed?” pp. 233–54.
38
R. C. Ronstadt, “The Decision Not to Become an Entrepreneur,” in Frontiers of Entrepreneurship Research: 1983, ed. J. A. Hornaday et al. (Babson Park,
MA: Babson College, 1983), pp. 192–212; and R. C. Ronstadt, “Ex-Entrepreneurs and the Decision to Start an Entrepreneurial Career,” in Frontiers of
Entrepreneurship Research: 1983, pp. 437–60.
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Chapter 2 The Entrepreneurial Mind: Crafting a Personal Entrepreneurial Strategy 57

Chapter Summary
Entrepreneurs are men and women of all sizes, ages, The entrepreneurial mind-set can benefit large, es-
shapes, religions, colors, and backgrounds. There is tablished companies today just as much as smaller
no single profile or psychological template. firms.
Successful entrepreneurs share seven common Many myths and realities about entrepreneurship
themes that describe their attitudes and ways of provide insights for aspiring entrepreneurs.
thinking and acting. A word of caution: IQ tests, SATs, GMATs, LSATs,
Rather than being inborn, the behaviors inherent in and others do not measure some of the most impor-
these seven attributes can be nurtured, learned, and tant entrepreneurial abilities and aptitudes.
encouraged, which successful entrepreneurs model Most successful entrepreneurs have had a personal
for themselves and those with whom they work. strategy to help them achieve their dreams and goals,
Entrepreneurs love competition and actually avoid risks both implicitly and explicitly.
when they can, preferring carefully calculated risks. The principal task for the entrepreneur is to deter-
Entrepreneurship can be learned; it requires an ap- mine what kind of entrepreneur he or she wants to
prenticeship. become based on his or her attitudes, behaviors,
Most entrepreneurs gain the apprenticeship over 10 management competencies, experience, and so forth.
years or more after the age of 21 and acquire net- Self-assessment is the hardest thing for entrepre-
works, skills, and the ability to recognize business neurs to do; but if you don’t do it, you will really get
patterns. into trouble. If you don’t do it, who will?

Study Questions
1. What is the difference between a manager and 4. Explain what is meant by the apprenticeship concept.
a leader? Why is it so important to young entrepreneurs?
2. Define the seven major themes that characterize 5. What is your personal entrepreneurial strategy? How
the mind-sets, attitudes, and actions of a successful should it change?
entrepreneur. Which are most important, and
why? How can they be encouraged and 6. “What is one person’s ham is another person’s poi-
developed? son.” What does this mean?
3. Entrepreneurs are made, not born. Why is this 7. Can you evaluate thoroughly your attraction to entre-
so? Do you agree, and why or why not? preneurship?
8. Who should be an entrepreneur and who should not?

Internet Resources for Chapter 2

http://en.wikipedia.org/w/index.php?title=Robin_Li&oldid
=421692294 Wikipedia article on Robin Li, written on , written on June 29, 2009 (retrieved on
March 31, 2011 (retrieved on April 8, 2011). April 8, 2011).
http://home.baidu.com/about/management.html http://edu.qq.com/a/20090514/000341.htm
,
(retrieved on April 8, 2011). written on May 14, 2009 (retrieved on April 8, 2008).
www.benlore.com The Entrepreneur’s Mind is a
www.chinanews.com/cj/2010/11-16/2657828.shtml
Web resource that presents an array of real-life
stories and
, written on November 16, 2010 (retrieved on advice from successful entrepreneurs and industry experts
April 8, 2011). on the many different facets of entrepreneurship and
http://edu.sina.com.cn/gaokao/2009-05-14/1644199853. emerging business.
shtml www.entrepreneurs.about.com Comprehensive
media-sponsored Web sites on small business and
, written on May 14, 2009 (retrieved on entrepreneurs.
April 8, 2011).
9558186.html www.blackenterprise.com Black Enterprise is a business
news and investment resource aimed at African American
entrepreneurs and business owners.
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58 Part I The Entrepreneurial Mind for an Entrepreneurial World

MIND STRETCHERS

Have You Considered?

1. Who can be an entrepreneur, and who 6. Is Bill Gates an entrepreneur, a leader, a
cannot? Why? manager? How can we know?
2. What do you think are the factors which have resulted 7. How will you personally define success in 5, 10, and
in entrepreneurship flourishing in Asia? 25 years? Why?
3. How do you personally stack up against the seven en- 8. Assume that at age 40 to 50 years, you have achieved
trepreneurial mind-sets? What do you need to de- a net worth of $25 million to $50 million in today’s
velop and improve? dollars. So what? Then what?
4. If you work for a larger company, what is it doing 9. Shi Yuzu is a serial entrepreneur. Highlight what you
to attract and keep the best entrepreneurial feel are the attributes which have contributed to
talent? his success.
5. How would you describe and evaluate your own ap- 10. Great athletic talent is not equal to a great
prenticeship? What else has to happen? athlete. Why? How does this apply to
entrepreneurship?

Exercise 1
Crafting a Personal
Entrepreneurial Strategy
If you don’t know where you’re going, any path will take you there.
From The Wizard of Oz

Planning helps an entre- preneur to manage the risks and

uncertainties of the future; helps him or her to work smarter,
Crafting a personal entrepreneurial strategy can be
rather than simply harder;
viewed as the personal equivalent of developing a
business plan. As with planning in other
situations, the process itself is more important
than the plan.
The key is the process and discipline that put
an indi- vidual in charge of evaluating and shaping
choices and ini- tiating action that makes sense,
rather than letting things just happen. Having a
longer-term sense of direction can be highly
motivating. It also can be extremely helpful in de-
termining when to say no (which is much harder
than say- ing yes) and can temper impulsive
hunches with a more thoughtful strategic purpose.
This is important because to- day’s choices, whether
or not they are thought out, become tomorrow’s
track record. They may end up shaping an en-
trepreneur in ways that he or she may not find so
attractive 10 years hence and, worse, may also
result in failure to ob- tain just those experiences
needed in order to have high- quality
opportunities later on.
Therefore, a personal strategy can be invaluable,
but it need not be a prison sentence. It is a point
of departure, rather than a contract of indenture,
and it can and will change over time. This process
of developing a personal strategy for an
entrepreneurial career is a very individual one
and, in a sense, one of self-selection.
Reasons for planning are similar to those for
developing a business plan (see Chapter 7).
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keeps him or her in a future-oriented

frame of mind; helps him or her to
develop and update a keener strategy by
test- ing the sensibility of his or her
ideas and approaches with others; helps
motivate; gives him or her a “results
orienta- tion”; helps make him or her
effective in managing and coping with
what is by nature a stressful role; and so
forth. Rationalizations and reasons
given for not planning, like those that
will be covered in Chapter 7, are that
plans are out of date as soon as they
are finished and that no one knows
what tomorrow will bring and,
therefore, it is dangerous to commit to
uncertainty. Further, the cautious,
anxious person may find that setting
personal goals cre- ates a further source
of tension and pressure and a height-
ened fear of failure. There is also the
possibility that future or yet unknown
options, which actually might be more at-
tractive than the one chosen, may
become lost or be ex-
cluded.
Commitment to a career-oriented
goal, particularly for an entrepreneur
who is younger and lacks much real-
world experience, can be premature. For
the person who is inclined to be a
compulsive and obsessive competitor
and achiever, goal setting may add
gasoline to the fire. And, invariably,
some events and environmental
factors beyond one’s control may
boost or sink the best-laid plans.
Personal plans fail for the same
reasons as business plans, including
frustration when the plan appears not
to work immediately and problems of
changing behavior from
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Chapter 2 The Entrepreneurial Mind: Crafting a Personal Entrepreneurial Strategy 59

an activity-oriented routine to one that is goal-oriented.

Other problems are developing plans that are based on
Crafting an Entrepreneurial Strategy
ad- mirable missions, such as improving performance,
rather than goals, and developing plans that fail to Profiling the Past
anticipate ob- stacles, and those that lack progress One useful way to begin the process of self-assessment and
milestones, reviews, and so forth. planning is for an individual to think about his or her entre-
preneurial roots (what he or she has done, his or her pref-
erences in terms of lifestyle and work style, etc.) and couple
A Conceptual Scheme for Self-Assessment this with a look into the future and what he or she would
like most to be doing and how he or she would like to live.
In this regard, everyone has a personal history that has
Exhibit 2.11 shows one conceptual scheme for thinking played and will continue to play a significant role in influ-
about the self-assessment process called the Johari Window. encing his or her values, motivations, attitudes, and behav-
According to this scheme, there are two sources of informa- iors. Some of this history may provide useful insight into
tion about the self: the individual and others. According to prior entrepreneurial inclinations, as well as into his or her
the Johari Window, there are three areas in which future potential fit with an entrepreneurial role. Unless an
individuals can learn about themselves. entrepreneur is enjoying what he or she is doing for work
There are two potential obstacles to self-assessment ef- most of the time, when in his or her 30s, 40s, or 50s, hav-
forts. First, it is hard to obtain feedback; second, it is ing a great deal of money without enjoying the journey will
hard to receive and benefit from it. Everyone possesses be a very hollow success.
a per- sonal frame of reference, values, and so forth,
which influ- ence first impressions. It is, therefore, almost
impossible for an individual to obtain an unbiased view of Profiling the Present
himself or her- self from someone else. Further, in most
social situations, people usually present self-images that It is useful to profile the present. Possession of certain
they want to pre- serve, protect, and defend; and per- sonal entrepreneurial attitudes and behaviors (i.e.,
behavioral norms usually exist that prohibit people from an “en- trepreneurial mind”) has been linked to
telling a person that he or she is presenting a face or successful careers in entrepreneurship. These attitudes
impression that differs from what the person thinks is and behaviors deal with such factors as commitment,
being presented. For example, most people will not point determination, and per- severance; the drive to achieve
out to a stranger during a conversa- tion that a piece of and grow; an orientation toward goals; the taking of
spinach is prominently dangling from between his or her initiative and personal respon- sibility; and so forth.
front teeth. In addition, various role demands result from the
The first step for an individual in self-assessment is to pursuit of opportunities. These role demands are external
generate data through observation of his or her thoughts in the sense that they are imposed upon every
and actions and by getting feedback from others for the entrepreneur by the nature of entrepreneurship. As will
purposes of (1) becoming aware of blind spots and (2) be discussed in Chapter 7, the external business
re- inforcing or changing existing perceptions of both environment is given, the demands of a higher-potential
strengths and weaknesses. business in terms of stress and commitment are given,
Once an individual has generated the necessary data, and the ethical values and in- tegrity of key actors are
the next steps in the self-assessment process are to study given. Required as a result of the demands, pressures,
the data generated, develop insights, and then establish and realities of starting, owning, and operating a
ap- prenticeship goals to gain any learning, experience, substantial business are such factors as ac-
and so forth. commodation to the venture, toleration of stress, and so
Finally, choices can be made in terms of goals and forth. A realistic appraisal of entrepreneurial attitudes and
op- portunities to be created or seized.

EXHIBIT 2.11
Peeling the Onion

Known to Entrepreneur and Team Not Known to Entrepreneur and

Team
Known to Prospective Area 1 Known area: Area 2 Blind area: (we do not know what
Investors and Stakeholders (what you see is what you get) we do not know, but you do)

Not Known to Prospective Area 3 Hidden area: (unshared—you do Area 4 Unknown area: (no venture is
Investors and Stakeholders not know what we do, but the deal does certain or risk free)
not get done until we find out)

Source: J. McIntyre, I. M. Rubin, and D. A. Kolb, Organizational Psychology: Experiential Approach, 2nd ed., © 1974. Adapted by permission of
Pearson Education, Inc., Upper Saddle River, NJ.
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60 Part I The Entrepreneurial Mind for an Entrepreneurial World

behaviors in light of the requirements of the entrepreneurial

back needs to avoid becoming defensive and taking
role is useful as part of the self-assessment process.
negative comments personally.
Also, part of any self-assessment is an assessment of
management competencies and what “chunks” of experi- It is important to listen carefully to what is being said
ence, know-how, and contacts need to be developed. and think about it. Answering, debating, or rationaliz-
ing should be avoided.

Getting Constructive Feedback An assessment of whether the person soliciting feed-

back has considered all important information and has
A Scottish proverb says, “The greatest gift that God hath been realistic in his or her inferences and conclusions
given us is to see ourselves as others see us.” One needs to be made.
common denominator among successful entrepreneurs is a
desire to know how they are doing and where they stand. Help needs to be requested in identifying common
They have an uncanny knack for asking the right threads or patterns, possible implications of self-assess-
questions about their performance at the right time. This ment data and certain weaknesses (including alterna-
thirst to know is driven by a keen awareness that such tive inferences or conclusions), and other relevant
feedback is vital to improv- ing their performance and information that is missing.
their odds for success. Additional feedback from others needs to be sought to
Receiving feedback from others can be a most demand- verify feedback and to supplement the data.
ing experience. The following list of guidelines in
receiving feedback can help: Reaching final conclusions or decisions needs to be left
until a later time.
Feedback needs to be solicited, ideally, from those
who know the individual well (e.g., someone he or she
has worked with or for) and who can be trusted. The
con- text in which the person is known needs to be
consid- ered. For example, a business colleague may
Putting It All Together
be better able to comment upon an individual’s
Exhibit 2.12 shows the relative fit of an entrepreneur with
managerial skills than a friend. Or a personal friend
a venture opportunity, given his or her relevant attitudes
may be able to comment on motivation or on the
and behaviors and relevant general management skills,
possible effects on the family situation. It is helpful to
experi- ence, know-how, and contacts, and given the role
chat with the person be- fore asking him or her to
de- mands of the venture opportunity. A clean appraisal
provide any specific written impressions and to
is al- most impossible. Self-assessment just is not that
indicate the specific areas he or she can best
simple. The process is cumulative, and what an
comment upon. One way to do this is to for- mulate
entrepreneur does about weaknesses, for example, is far
questions first. For example, the person could be told,
more important than what the particular weaknesses
“I’ve been asking myself the following question . . .
might be. After all, every- one has weaknesses.
and I would really like your impressions in that
regard.”

Specific comments in areas that are particularly

impor- tant either personally or to the success of the Thinking Ahead
venture need to be solicited and more detail probed if
the per- son giving feedback is not clear. A good way As it is in developing business plans, goal setting is
to check if a statement is being understood correctly impor- tant in personal planning. Few people are
is to para- phrase the statement. The person needs effective goal setters. Perhaps fewer than 5 percent have
to be encour- aged to describe and give examples of ever committed their goals to writing, and perhaps fewer
specific situations or behaviors that have influenced the than 25 percent of adults even set goals mentally.
impres- sions he or she has developed. Again, goal setting is a process, a way of dealing
with the world. Effective goal setting demands time, self-
Feedback is most helpful if it is neither all positive nor discipline, commitment and dedication, and practice.
all negative, but it should be actionable. Goals, once set, do not become static targets.
A number of distinct steps are involved in goal setting,
Feedback needs to be obtained in writing so that the
steps that are repeated over and over as conditions change:
per- son can take some time to think about the issues,
and so feedback from various sources can be pulled Establishment of goals that are specific and concrete
together. (rather than abstract and out of focus), measurable, re-
lated to time (i.e., specific about what will be accom-
The person asking for feedback needs to be honest and
plished over a certain time period), realistic, and
straightforward with himself or herself and with others.
attainable.
Time is too precious and the road to new venture suc-
cess too treacherous to clutter this activity with game
playing or hidden agendas. The person receiving
feed-
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Chapter 2 The Entrepreneurial Mind: Crafting a Personal Entrepreneurial Strategy 61

EXHIBIT 2.12
Fit of the Entrepreneur and the Venture Opportunity

High

Potential for
Potential for
singles or

Attractiveness of venture
triples and
doubles, but may
home runs
strike out

No hat and no cattle Big hat, no cattle

Low High
Entrepreneur's requisites
(mind-set, know-how, and
experience)

Establishment of priorities, including the identification

Indication of how results will be measured.
of conflicts and trade-offs and how these can be re-
solved. Establishment of milestones for reviewing progress and
tying these to specific dates on a calendar.
Identification of potential problems and obstacles that
could prevent goals from being attained. Identification of risks involved in meeting the goals.
Specification of action steps that are to be Identification of help and other resources that may be
performed to accomplish the goal. needed to obtain goals.
Periodic review of progress and revision of goals.

Exercise 2
Personal Entrepreneurial
Strategy
The exercise that follows will help you gather data, both
choose to share with others is your decision. The
from yourself and from others; evaluate the data you
exercise will be of value only to the extent that you are
have collected; and craft a personal entrepreneurial
honest and realistic in your approach.
strategy.
A complex set of factors clearly goes into making
The exercise requires active participation on your
some- one a successful entrepreneur. No individual has all
part. The estimated time to complete the exercise is 1.5
the per- sonal qualities, managerial skills, and the like,
to 3 hours. Those who have completed the exercise—
indicated in the exercise. And, even if an individual did
students, practicing entrepreneurs, and others—report
possess most of these, his or her values, preferences,
that the self- assessment process was worthwhile and it
and such may make him or her a very poor risk to
was also de- manding. Issues addressed will require a
succeed as an entrepreneur.
great deal of thought, and there are, of course, no wrong
The presence or absence of any single factor does not
answers.
guar- antee success or failure as an entrepreneur. Before
Although this is a self-assessment exercise, it is useful
proceed- ing, remember, it is no embarrassment to reach
to receive feedback. Whether you choose to solicit
for the stars and fail to reach them. It is a failure not to
feedback and how much, if any, of the data you have
reach for the stars.
collected you
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62 Part I The Entrepreneurial Mind for an Entrepreneurial World

Part I: Profile of the Past: Tear Name:

Out and Complete Date:

STEP 1
Examine Your Personal
Preferences.
What gives you energy, and why? These are things from either work or leisure, or both, that give you the greatest amount of
personal satisfaction, sense of enjoyment, and energy.

Activities/Situations That Give You Energy Reasons for Your Joy and Satisfaction

What takes away your energy, and why? These create for you the greatest amount of personal dissatisfaction, anxiety, or
discontent and take away your energy and motivation.

Activities/Situations That Sap Your Energy Reasons for This

Rank (from the most to the least) the items you have just listed:

Gives Energy Takes Energy

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Chapter 2 The Entrepreneurial Mind: Crafting a Personal Entrepreneurial Strategy 63

In 20 to 30 years, how would you like to spend an ideal month? Include in your description your desired lifestyle, work
style, income, friends, and so forth, and a comment about what attracts you to, and what repels you about, this ideal
existence.

Complete the idea generation guide in Chapter 5 and list the common attributes of the 10 businesses you wanted to
enter and the 10 businesses you did not:

Attributes—Would Energize Attributes—Would Turn Off

Which of these attributes would give you energy and which would take it away, and why?

Attribute Give or Take Energy Reason

Complete this sentence: “I would/would not like to start/acquire my own business someday because . . .”
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64 Part I The Entrepreneurial Mind for an Entrepreneurial World

Discuss any patterns, issues, insights, and conclusions that have emerged:

Rank the following in terms of importance to you:

Importan    Irrelevan

t t
Location 5 4 3 2 1
Geography (particular area) 5 4 3 2 1
Community size and nature 5 4 3 2 1
Community involvement 5 4 3 2 1
Commuting distance (one way):
20 minutes or less 5 4 3 2 1
30 minutes or less 5 4 3 2 1
60 minutes or less 5 4 3 2 1
More than 60 minutes 5 4 3 2 1
Lifestyle and Work Style
Size of business:
Less than $2 million sales or under 5–10 employees 5 4 3 2 1
More than $2 million sales or 5–10 employees 5 4 3 2 1
More than $10 million sales and 40–50 employees 5 4 3 2 1
Rate of real growth:
Fast (over 25%/year) 5 4 3 2 1
Moderate (10% to 15%/year) 5 4 3 2 1
Slow (less than 5%/year) 5 4 3 2 1
Workload (weekly):
Over 70 hours 5 4 3 2 1
55 to 60 hours 5 4 3 2 1
40 hours or less 5 4 3 2 1
Marriage 5 4 3 2 1
Family 5 4 3 2 1
Travel away from home:
More than 60% 5 4 3 2 1
30% to 60% 5 4 3 2 1
Less than 30% 5 4 3 2 1
None 5 4 3 2 1
Standard of Living
Tight belt/later capital gains 5 4 3 2 1
Average/limited capital gains 5 4 3 2 1
High/no capital gains 5 4 3 2 1
Become very rich 5 4 3 2 1
Personal Development
Utilization of skill and education 5 4 3 2 1
Opportunity for personal growth 5 4 3 2 1
Contribution to society 5 4 3 2 1
Positioning for opportunities 5 4 3 2 1
Generation of significant contacts, experience, and know-how 5 4 3 2 1
Status and Prestige 5 4 3 2 1
Impact on Ecology and Environment: Sustainability 5 4 3 2 1
Capital Required
From you 5 4 3 2 1
From others 5 4 3 2 1
Other Considerations 5 4 3 2 1
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Chapter 2 The Entrepreneurial Mind: Crafting a Personal Entrepreneurial Strategy 65

Imagine you had $1,000 with which to buy the items you ranked on the previous page. Indicate below how you would al-
locate the money. For example, the item that is most important should receive the greatest amount. You may spend
nothing on some items, you may spend equal amounts on some, and so forth. Once you have allocated the $1,000, rank
the items in order of importance, the most important being number 1.

Item Share of $1,000 Rank

Location
Lifestyle and work style Standard of living Personal development Status and prestige Ecology and environment Capital required

What are the implications of these rankings?

STEP 2
Examine Your Personal History.
List activities (1) that have provided you financial support in the past (e.g., a part-time or full-time job or your own business),
(2) that have contributed to your well-being (e.g., financing your education or a hobby), and (3) that you have done on
your own (e.g., building something).

Discuss why you became involved in each of the activities just listed and what specifically influenced each of your
decisions. Which were driven by financial necessity and which by opportunity?

Discuss what you learned about yourself, about self-employment, about managing people, and about working for money and
someone else, versus creating or seizing an opportunity, and building something from scratch.
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66 Part I The Entrepreneurial Mind for an Entrepreneurial World

List and discuss your full-time work experience, including descriptions of specific tasks in which you innovated and led some-
thing, the number of people you led, whether you were successful, and so forth.

Discuss why you became involved in each of the employment situations just listed and what specifically influenced each
of your decisions.

Discuss what you learned about yourself; about creating, innovating, or originating a project, club, or business; and about
making money.

List and discuss other activities, such as sports, in which you have participated; indicate whether each activity was individ-
ual (e.g., chess or tennis) or team (e.g., football). Did you have a leadership role?

What lessons and insights emerged, and how will these apply to life as an entrepreneur?
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Chapter 2 The Entrepreneurial Mind: Crafting a Personal Entrepreneurial Strategy 67

If you have ever been fired from or quit either a full-time or part-time job, indicate the job, why you were fired or quit, the
cir- cumstances, and what you have learned and what difference this has made regarding working for yourself or someone
else.

If you changed jobs or relocated, indicate the job, why the change occurred, the circumstances, and what you have
learned from those experiences.

Among those individuals who have mentored and influenced you most, do any own and operate their own businesses or
en- gage independently in a profession (e.g., certified public accountant)? How have these people influenced you? How
do you view them and their roles? What have you learned from them about self-employment? Include a discussion of the
things that attract or repel you, the trade-offs they have had to consider, the risks they have faced and rewards they have
enjoyed, and entry strategies that have worked for them.

If you have ever started a business of any kind or worked in a small company, list the things you liked most and those
you liked least, and why:

Like Most Reason Like Least Reason

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68 Part I The Entrepreneurial Mind for an Entrepreneurial World

If you have ever worked for a larger company (over 500 employees or over $50 million in sales), list the things you liked
most and those you liked least about your work, and why.

Like Most Reason Like Least Reason

Part II: Profile of the Present:

Where You Are
STEP 1
Examine Your “Entrepreneurial Mind.”
Examine your attitudes, behaviors, and know-how. Rank yourself (on a scale of 5 to 1).

Strongest    Weakes

t
Commitment and Determination
Decisiveness 5 4 3 2 1
Tenacity 5 4 3 2 1
Discipline 5 4 3 2 1
Persistence in solving problems 5 4 3 2 1
Willingness to sacrifice 5 4 3 2 1
Total immersion in the mission 5 4 3 2 1
Courage
Moral strength 5 4 3 2 1
Fearless experimentation 5 4 3 2 1
Not afraid of conflicts, failure 5 4 3 2 1
Intense curiosity in the face of risk 5 4 3 2 1
Opportunity Obsession
Leadership in shaping the opportunity
Having knowledge of customers’ needs 5 4 3 2 1
Being market driven 5 4 3 2 1
Obsession with value creation and enhancement 5 4 3 2 1
Tolerance of Risk, Ambiguity, and Uncertainty
Calculated risk taker 5 4 3 2 1
Risk minimizer 5 4 3 2 1
Risk sharer
Tolerance of uncertainty and lack of structure 5 4 3 2 1
Tolerance of stress and conflict 5 4 3 2 1
Ability to resolve problems and integrate solutions 5 4 3 2 1
Creativity, Self-Reliance, and Ability to
Adapt
Nonconventional, open-minded, lateral thinker (helicopter mind) 5 4 3 2 1
Restlessness with status quo 5 4 3 2 1
Ability to adapt 5 4 3 2 1
Lack of fear of failure 5 4 3 2 1
Ability to conceptualize and to “sweat details” 5 4 3 2 1
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Chapter 2 The Entrepreneurial Mind: Crafting a Personal Entrepreneurial Strategy 69

Strongest    Weakes

t
Motivation to Excel
Goal and results orientation 5 4 3 2 1
Drive to achieve and grow (self-imposed) 5 4 3 2 1
Low need for status and power 5 4 3 2 1
Ability to be interpersonally supporting (versus competitive) 5 4 3 2 1
Awareness of weaknesses (and strengths) 5 4 3 2 1
Having perspective and sense of humor 5 4 3 2 1
Leadership
Being self-starter 5 4 3 2 1
Having internal locus of control 5 4 3 2 1
Having integrity and reliability 5 4 3 2 1
Having patience 5 4 3 2 1
Being team builder and hero maker 5 4 3 2 1

Summarize your entrepreneurial strengths.

Summarize your entrepreneurial weaknesses.

STEP 2
Examine Entrepreneurial Role
Requirements.
Rank where you fit in the following roles:
Strongest    Weakes
t
Accommodation to Venture
Extent to which career and venture are no. 1 priority 5 4 3 2 1
Stress
The cost of accommodation 5 4 3 2 1
Values
Extent to which conventional values are held 5 4 3 2 1
Ethics and Integrity 5 4 3 2 1
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70 Part I The Entrepreneurial Mind for an Entrepreneurial World

Summarize your strengths and weaknesses.

STEP 3
Examine Your Management
Competencies.
Rank your skills and competencies below:
Strongest    Weakes
t
Marketing
Market research and evaluation 5 4 3 2 1
Marketing planning 5 4 3 2 1
Product pricing 5 4 3 2 1
Sales management 5 4 3 2 1
Direct mail/catalog selling 5 4 3 2 1
Telemarketing 5 4 3 2 1
Search engine optimization 5 4 3 2 1
Customer service 5 4 3 2 1
Distribution management 5 4 3 2 1
Product management 5 4 3 2 1
New product planning 5 4 3 2 1
Operations/Production
Manufacturing management 5 4 3 2 1
Inventory control 5 4 3 2 1
Cost analysis and control 5 4 3 2 1
Quality control 5 4 3 2 1
Production scheduling and flow 5 4 3 2 1
Purchasing 5 4 3 2 1
Job evaluation 5 4 3 2 1
Finance
Accounting 5 4 3 2 1
Capital budgeting 5 4 3 2 1
Cash flow management 5 4 3 2 1
Credit and collection management 5 4 3 2 1
Managing relations with financial sources 5 4 3 2 1
Short-term financing 5 4 3 2 1
Public and private offerings 5 4 3 2 1
Administration
Problem solving 5 4 3 2 1
Communications 5 4 3 2 1
Planning 5 4 3 2 1
Decision making 5 4 3 2 1
Project management 5 4 3 2 1
Negotiating 5 4 3 2 1
Personnel administration 5 4 3 2 1
Management information systems 5 4 3 2 1
Computer/IT/Internet 5 4 3 2 1
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Chapter 2 The Entrepreneurial Mind: Crafting a Personal Entrepreneurial Strategy 71

Strongest    Weakest

Interpersonal/Team
Leadership/vision/influence 5 4 3 2 1
Helping and coaching 5 4 3 2 1
Feedback 5 4 3 2 1
Conflict management 5 4 3 2 1
Teamwork and people management 5 4 3 2 1
Law
Corporations and LLCs 5 4 3 2 1
Contracts 5 4 3 2 1
Taxes 5 4 3 2 1
Securities and private placements 5 4 3 2 1
Intellectual property rights and patents 5 4 3 2 1
Real estate law 5 4 3 2 1
Bankruptcy 5 4 3 2 1
Unique Skills 5 4 3 2 1

STEP 4
Based on an Analysis of the Information Given in Steps 1–3, Indicate the Items You Would
Add to a “Do” List, Including (1) Need for External Brain Trust Advisors; (2) Board
Composition; (3) Additional Team Members; and (4) Additional
Knowledge/Skills/Experience.
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72 Part I The Entrepreneurial Mind for an Entrepreneurial World

Part III: Getting Constructive Feedback

Part III is an organized way for you to gather constructive feedback.

STEP 1
(Optional) Give a Copy of Your Answers to Parts I and II to the Person Designated to Evaluate
Your Re- sponses. Ask Him or Her to Answer the Following:
Have you been honest, objective, hard-nosed, and complete in evaluating your skills?

Are there any strengths and weaknesses you have inventoried incorrectly?

Are there other events or past actions that might affect this analysis and that have not been addressed?

STEP 2
Solicit Feedback.
Give one copy of the feedback form (begins on the next page) to each person who has been asked to evaluate your
responses.
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Chapter 2 The Entrepreneurial Mind: Crafting a Personal Entrepreneurial Strategy 73

Feedback Form
Feedback for:
Prepared by:

STEP 1
Please Check the Appropriate Column Next to the Statements about the Entrepreneurial
Attributes, and Add Any Additional Comments You May Have.

Stron Adequat Wea No

g e k Comment
Commitment and Determination
Decisiveness S A W NC
Tenacity S A W NC
Discipline S A W NC
Persistence in solving problems S A W NC
Willingness to sacrifice S A W NC
Total immersion in the mission S A W NC
Courage
Moral strength S A W NC
Fearless experimentation S A W NC
Not afraid of conflicts, failure S A W NC
Intense curiosity in the face of risk S A W NC
Opportunity Obsession
Leadership in shaping the opportunity
Having knowledge of customers’ needs S A W NC
Being market driven S A W NC
Obsession with value creation and enhancement S A W NC
Tolerance of Risk, Ambiguity, and Uncertainty
Calculated risk taker S A W NC
Risk minimizer S A W NC
Risk sharer S A W NC
Tolerance of uncertainty and lack of structure S A W NC
Tolerance of stress and conflict S A W NC
Ability to resolve problems and integrate solutions S A W NC
Creativity, Self-Reliance, and Ability to Adapt
Nonconventional, open-minded, lateral thinker (helicopter mind) S A W NC
Restlessness with status quo S A W NC
Ability to adapt S A W NC
Lack of fear of failure S A W NC
Ability to conceptualize and to “sweat details” S A W NC
Motivation to Excel
Goal and results orientation S A W NC
Drive to achieve and grow (self-imposed standards) S A W NC
Low need for status and power S A W NC
Ability to be interpersonally supportive (versus competitive) S A W NC
Awareness of weaknesses (and strengths) S A W NC
Having perspective and sense of humor S A W NC
Leadership
Being self-starter S A W NC
Having internal locus of control S A W NC
Having integrity and reliability S A W NC
Having patience S A W NC
Being
Please maketeam
anybuilder and hero
comments that maker
you can on such additional matters as S A Wstability; my
my energy, health, and emotional NC
creativity and innovativeness; my intelligence; my capacity to inspire; my values; and so forth.
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74 Part I The Entrepreneurial Mind for an Entrepreneurial World

STEP 2
Please Check the Appropriate Column Next to the Statements about Entrepreneurial Role
Requirements to Indicate My Fit and Add Any Additional Comments You May Have.
Stron Adequat Wea No
g e k Comment
Accommodation to venture S A W NC
Stress (cost of accommodation) S A W NC
Values (conventional economic and professional values of free S A W NC
enterprise system)
Ethics and integrity S A W NC
Additional Comments:

STEP 3
Please Check the Appropriate Column Next to the Statements about Management
Competencies, and Add Any Additional Comments You May Have.
Stron Adequat Wea No
g e k Comment
Marketing
Market research and evaluation S A W NC
Marketing planning S A W NC
Product pricing S A W NC
Sales management S A W NC
Direct mail/catalog selling S A W NC
Telemarketing S A W NC
Search engine optimization
Customer service S A W NC
Distribution management S A W NC
Product management S A W NC
New product planning S A W NC
Operations/Production
Manufacturing management S A W NC
Inventory control S A W NC
Cost analysis and control S A W NC
Quality control S A W NC
Production scheduling and flow S A W NC
Purchasing S A W NC
Job evaluation S A W NC
Finance
Accounting S A W NC
Capital budgeting S A W NC
Cash flow management S A W NC
Credit and collection management S A W NC
Managing relations with financial sources S A W NC
Short-term financing S A W NC
Public and private offerings S A W NC
Administration
Problem solving S A W NC
Communications S A W NC
Planning S A W NC
Decision making S A W NC
Project management S A W NC
Negotiating S A W NC
Personnel administration S A W NC
Management information systems S A W NC
Computer/IT/Internet S A W NC
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Chapter 2 The Entrepreneurial Mind: Crafting a Personal Entrepreneurial Strategy 75

Strong Adequate Weak No Comment

Interpersonal/Team
Leadership/vision/influence S A W NC
Helping and coaching S A W NC
Feedback S A W NC
Conflict management S A W NC
Teamwork and people management S A W NC
Law
Corporations and LLCs S A W NC
Contracts S A W NC
Taxes S A W NC
Securities and private placements S A W NC
Intellectual property rights and patents S A W NC
Real estate law S A W NC
Bankruptcy S A W NC
Unique Skills S A W NC

Additional Comments:

STEP 4
Please Evaluate My Strengths and Weaknesses.
In what area or areas do you see my greatest potential or existing strengths in terms of the venture opportunity we have dis-
cussed, and why?

Area of Strength Reason

In what area or areas do you see my greatest potential or existing weaknesses in terms of the venture opportunity we
have discussed, and why?

Area of Weakness Reason

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76 Part I The Entrepreneurial Mind for an Entrepreneurial World

If you know my partners and the venture opportunity, what is your evaluation of their fit with me and the fit among them?

Given the venture opportunity, what you know of my partners, and your evaluation of my weaknesses, should I consider
any additional members for my management team, my board, and my brain trust of advisors? If so, what should be their
strengths and relevant experience? Can you suggest someone?

Please make any other suggestions that would be helpful for me to consider (e.g., comments about what you see that I
like to do, my lifestyle, work style, patterns evident in my skills inventory, the implications of my particular constellation of
man- agement strengths and weaknesses and background, the time implications of an apprenticeship, or key people
you think I should meet).
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Chapter 2 The Entrepreneurial Mind: Crafting a Personal Entrepreneurial Strategy 77

Part IV: Putting It All Together

STEP 1
Reflect on Your Previous Responses and the Feedback You Have Solicited or Have Received
Informally (from Class Discussion or from Discussions with Friends, Parents, Etc.).

STEP 2
Assess Your Entrepreneurial Strategy.
What have you concluded at this point about entrepreneurship and you?

How do the requirements of entrepreneurship—especially the sacrifices, total immersion, heavy workload, and long-term
commitment—fit with your own aims, values, and motivations?

What specific conflicts do you anticipate between your aims and values, and the demands of entrepreneurship?

How would you compare your entrepreneurial mind, your fit with entrepreneurial role demands, your management
compe- tencies, and so forth, with those of other people you know who have pursued or are pursuing an entrepreneurial
career?
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78 Part I The Entrepreneurial Mind for an Entrepreneurial World

Think ahead 5 to 10 years or more, and assume that you would want to launch or acquire a higher-potential venture. What
“chunks” of experience and know-how do you need to accumulate?

What are the implications of this assessment of your entrepreneurial strategy in terms of whether you should proceed with
your current venture opportunity?

What is it about the specific opportunity you want to pursue that will provide you with sustained energy and motivation?
How do you know this?

At this time, given your major entrepreneurial strengths and weaknesses and your specific venture opportunity, are there other
“chunks” of experience and know-how you need to acquire or attract to your team? (Be specific!)

Who are the people you need to get involved with you?

What other issues or questions have been raised for you at this point that you would like answered?

What opportunities would you most want to be in a position to create/pursue in 5 to 10 years? What are the implications
for new skills, know-how, mentors, team members, and resources?
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Chapter 2 The Entrepreneurial Mind: Crafting a Personal Entrepreneurial Strategy 79

Part V: Thinking Ahead

Part V considers the crafting of your personal entrepreneurial strategy. Remember, goals should be specific and concrete,
measurable, and, except where indicated below, realistic and attainable.

STEP 1
List, in Three Minutes, Your Goals to Be Accomplished by the Time You Are 70.

STEP 2
List, in Three Minutes, Your Goals to Be Accomplished over the Next Seven Years. (If You
Are an Un- dergraduate, Use the Next Four Years.)

STEP 3
List, in Three Minutes, the Goals You Would Like to Accomplish If You Have Exactly One Year
from To- day to Live. Assume You Would Enjoy Good Health in the Interim but Would Not Be
Able to Acquire Any More Life Insurance or Borrow an Additional Large Sum of Money for
a “Final Fling.” Assume Further That You Could Spend That Last Year of Your Life Doing
Whatever You Want to Do.

STEP 4
List, in Six Minutes, Your Real Goals and the Goals You Would Like to Accomplish over Your Lifetime.
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80 Part I The Entrepreneurial Mind for an Entrepreneurial World

STEP 5
Discuss the List from Step 4 with Another Person and Then Refine and Clarify Your Goal Statements.

STEP 6
Rank Your Goals According to Priority.

STEP 7
Concentrate on the Top Three Goals and Make a List of Problems, Obstacles, Inconsistencies,
and So Forth That You Will Encounter in Trying to Reach Each of These Goals.

STEP 8
Decide and State How You Will Eliminate Any Important Problems, Obstacles,
Inconsistencies, and So Forth.

STEP 9
For Your Top Three Goals, Write Down All the Tasks or Action Steps You Need to Take to
Help You Attain Each Goal and Indicate How Results Will Be Measured.
It is helpful to organize the goals in order of priority.

Goal Task/Action Step Measurement Rank

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Chapter 2 The Entrepreneurial Mind: Crafting a Personal Entrepreneurial Strategy 81

STEP 10
Rank Tasks/Action Steps in Terms of Priority.
To identify high-priority items, it is helpful to make a copy of your list and cross off any activities or task that cannot be
com- pleted, or at least begun, in the next seven days, and then identify the single most important goal, the next most
important, and so forth.

STEP 11
Establish Dates and Durations (and, If Possible, a Place) for Tasks/Action Steps to Begin.
Organize tasks/action steps according to priority. If possible, the date should be during the next seven days.

Goal Task/Action Step Measurement Rank

STEP 12
Make a List of Problems, Obstacles, Inconsistencies, and So Forth.

STEP 13
Decide How You Will Eliminate Any Important Problems, Obstacles, Inconsistencies, and So
Forth, and Adjust the List in Step 12.

STEP 14
Identify Risks Involved and Resources and Other Help Needed.

Note on setting goals: Tear out Part V, keep a copy on file, and repeat the exercise at least once a year, or when a critical
event occurs (job change, marriage, child, death in the family).
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82 Part I The Entrepreneurial Mind for an Entrepreneurial World

Case
oneworld
Preparation Questions ■
Iberia, the top carrier between Europe and Latin
1. Describe the nature of the challenge the America.
team faces as they seek to build a global
company. What are the strengths and ■
Japan Airlines, the largest airline in the
weaknesses of their model? Asia-Pacific region.
2. Describe the sale cycle of the aviation ■
LAN Airlines, the leading Latin American airline.
industry. What differentiating factors can
oneworld focus on? ■
Malév Hungarian Airlines, one of the highest
3. Discuss a marketing strategy for oneworld. quality carriers in Central and Eastern
Europe.
■
Mexicana, the leading airline in Mexico
and Cen- tral America.
The World’s Leading Quality Global
Qantas, one of the world’s top long-distance
Alliance
■

airlines and among Australia’s strongest

brands.
1. Bringing together 11 of the world’s biggest
and best airlines—and 20 affiliates—with
■
Royal Jordanian, the first Middle East airline
more signed up to join in the next two to find a home with one of the global
years. alliances.
2. Providing its customers and carriers with Another 20 or so airlines are affiliate members,
services and value no airline can deliver includ- ing:
on its own.
3. Offering the market-leading range of
■
American Eagle, one of the leading
alliance fare and sales products. regional carri- ers in the USA.
4. Committed to innovation to improve ■
Comair and Sun-Air, British Airways
customer service. franchisees in South Africa and Denmark.
5. Winner of more international awards for ■
Dragonair, named the Best Airline China
airline alliances than either of its
for the past seven years running by
competitors.
SkyTrax.
6. Serving an unrivalled international route
net- work—the only alliance with a ■
LAN Argentina, LAN Ecuador and LAN
member in South America, Australia or Peru, ex- panding coverage in South
Asia’s Middle East. America.
7. The alliance with the strongest collective ■
S7 Airlines, Russia’s leading domestic
profitabil- ity record.
carrier, joined in 2010, expanding
oneworld’s network con- siderably in the
Commonwealth of Independent States.
Eleven of the World’s Biggest and Best ■
Kingfisher Airlines, Indian’s leading domestic
Airlines opera- tor and only five-star airline, is on
track to board in 2011.
oneworld brings together some of the largest
airlines in the world, all of which have high-
flying reputations for quality service: Sharing One Vision
■
American Airlines, one of the biggest
airlines in the world. To generate more value for customers,
shareholders and employees than any airline
■
British Airways, one of the leading can achieve by itself, by:
international air- lines.
■
Making global travel smoother, easier,
■
Cathay Pacific Airways, one of the most better value and more rewarding.
highly re- garded Asian airlines.
■
Offering travel solutions beyond the reach
■
Finnair, a major Nordic European airline. of any airline’s individual network.
This case was written by Daryl Tan of Singapore Management Univer- ■
Providing a common commitment to high
sity, under the supervision of Yinglan Tan. Research assistance by Mike standards of quality, service and safety.
Lee, with the kind sponsorship of Tan Wah Yuan.
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Chapter 2 The Entrepreneurial Mind: Crafting a Personal Entrepreneurial Strategy 83

■
Creating a world where customers always feel
at home, wherever their journey may take them.
A World of Difference for Customers
■
Delivering its airlines with savings and benefits oneworld enables its member airlines to offer services
greater than any can achieve by itself. beyond what any individual carrier can provide by
itself or bilaterally with another partner.
Global coverage: oneworld has an incomparable
Some Vital Statistics
■

route network, serving 800 destinations in nearly

150 countries. oneworld is the only alliance with a
oneworld airlines (including membership candidates member in South America, in Australia or in
S7 and Kingfisher): Asia’s Middle East. The alliance’s airlines operate
more than 8,750 flights every day: that averages
■
Serve 800 destinations in almost 150 countries.
out at one departure or arrival every five seconds
■
Carried more than 340 million passengers last around the clock.
year.
■
Better value: oneworld is the market leader for al-
■
Operate combined fleets totalling more than 2,300 liance fares and sales products, pioneering some
aircraft. of the most innovative, flexible and attractively-
priced alliance fares available—and the first to sell
■
Offer more than 8,750 flights a day—an average
any of them online.
of one oneworld airline departure or arrival some-
where around the world every five seconds ■
More rewards and recognition: Top-tier frequent
around the clock. fly- ers enjoy all of the privileges that their status
■
Generate some US$100 billion in annual revenues. entitles them to, across all oneworld airlines.
■
More miles and points: Members of any oneworld
airline’s frequent flyer programs can earn miles
Why Alliances? and tier status points on eligible flights marketed
and op- erated by any of the alliance’s carriers,
The three main airline alliances, including oneworld, and redeem rewards across that wider network.
now account for around two-thirds of the total world ■
More lounges: Frequent flyers, depending on status,
air- line capacity (ASKs), with all but two of the world’s have access to some 550 airport lounges world-
20 biggest airlines signed up. Unaligned legacy wide.
carriers account for around a quarter of world
capacity, with low-cost carriers accounting for the ■
Smoother transfers: Wherever possible, passengers
rest. are checked right through to their final destination,
There are a number of reasons for the emergence with oneworld staff and airport signs providing as-
of alliances: sistance in unfamiliar airports.
■
More people want to fly to more places more ■
Superior quality: oneworld member airlines have
easily and for greater value—but government strong reputations for customer service excellence
restrictions and business economics make it and innovation. The quality of the oneworld cus-
impossible for any one airline to serve all these tomer journey, from lounges to in-flight products,
markets by itself. will help passengers arrive at their destinations
fresh, well rested, and ready to do business.
■
In the drive to reduce costs, particularly, in the
re- cent financially difficult times for the industry, ■
Greater support: Our airlines employ a quarter of a
air- lines can achieve substantial efficiencies million people across the globe to ensure
through working more closely together. oneworld customers travel safely, securely and
comfortably every step of their journey.
■
Alliances help boost airlines’ revenues and
provide opportunities to maintain more routes and
frequen- cies and for growth, by feeding
passengers be- tween members’ networks. An Unrivalled International Network
■
Individual passengers and corporate customers are
increasingly recognizing the value and benefits From Adelaide to Zurich, from Argentina to
which alliance can offer them. Zimbabwe, oneworld’s network reaches out to the four
corners of the earth, making it easier for travelers to
■
It will become increasingly difficult for airlines to
reach more places. Our member airlines together
maintain their global market share unless they
serve almost 150 countries with flights to 800
are allied to one of the global groupings.
destinations, many more
Competition in this industry is increasing between
al- liances, besides individual airlines.
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84 Part I The Entrepreneurial Mind for an Entrepreneurial World

than any individual airline can offer itself. oneworld is

planet (for example, London-Hong Kong-Sydney-Jo-
the only alliance with a full network in Australia and the
hannesburg-London).
only alliance with any member airline in South America
or Asia’s Middle East. ■
Circle Pacific: Another Explorer variant, this time for
trips around the Pacific Ocean, covering Australia
and New Zealand, Asia and North and South
America (for example, Los Angeles-Tokyo-Sydney-
An Extensive Range of Great Value Los Angeles).
Fares ■
Circle Asia and South West Pacific: Covering North
East and South East Asia and the South West Pa-
oneworld is the market leader for alliance fares and cific.
sales products, pioneering some of the most innovative,
flexible and attractively priced alliance fares available, ■
Circle Atlantic: Covering Europe and the Middle
and the first to sell any of them online. There’s something East, North and South America.
for anyone interested in making an extensive journey— ■
businessflyer™: Offering medium- and small-sized
from captains of industry on a trip right around the
corporate customers discounted fares in return for
world to the student backpacker exploring one continent
a more regular relationship with the alliance and its
or more.
airlines. Available in Germany, France, Nether-
■
oneworld Explorer: One of the most popular, sim- lands, Switzerland, Belgium, and now also Italy,
ple, flexible, and attractively priced round-the-world with more than 7,000 companies signed up
fares available in the market. Prices are based on so far.
class of travel (Economy, Premium Economy where
oneworld fares earn frequent flyer points and miles,
available, Business, or First) and, uniquely, the num-
and oneworld Explorer and the Circle fares are
ber of continents visited—rather than mileage of
available for group travel. Lead-in prices from most
the overall trip. This keeps journey planning as
countries, a travel planning tool, a booking facility for
simple and flexible as possible, providing excellent
oneworld Explorer fares, and other useful information
value. Flights can be on any of the oneworld
about all these fares is available at
carriers. oneworld Explorer is the obvious choice for
www.oneworld.com/ow/ air-travel-options.
anyone planning a global journey including sectors
“Down- under” with oneworld’s Qantas the only
member of a global alliance operating a full
domestic network within Australia, or in South More Recognition for Frequent Flyers
America, with oneworld the only alliance with a
member airline from that region. It was the first
oneworld offers more opportunities to earn and redeem
multi-airline round- the-world fare bookable online.
frequent flyer rewards as well as more airport lounges to
■
Global Explorer: Another round-the-world fare, but use on your travels.
this time based on the distance flown—and includ- ■
Earning miles: Members of any of the oneworld air-
ing some airlines which are not members of oneworld
lines’ frequent flyer programs can earn miles or
—including Aer Lingus, Air Pacific, Alaska Airlines,
points on eligible fares and flights marketed and op-
Gulf Air, and some flights operated by Air Tahiti Nui,
erated by any oneworld airline. Eligible flights also
Jetstar, South African Airlines, and Viet- nam Airlines,
count towards their tier status.
extending the destinations covered still further.
■
Visit Passes: Offering multi-sector flights on any
■
Redeeming miles: Frequent flyers can also redeem
oneworld carrier in a specific continent and also their miles or points on any flights operated by
within Mexico and Central America, and Japan. oneworld airlines. They can be used for flights on
They offer a great value way to travel around a any individual airline in the alliance, or for journeys
region. oneworld is the only alliance to offer this involving sectors on any number of oneworld carri-
sort of pass covering all six continents. Prices are ers, including round-the-world journeys. oneworld
based on the number of sectors selected and their is aiming to be the first alliance to enable members
length. of any of its frequent flyer programs to book
online reward flights throughout the alliance net-
■
Circle Explorer: Similar to oneworld Explorer, but work.
does not require travel to North or South America,
so you can fly halfway around the globe and then ■
Privileges: Top-tier members of oneworld airlines’
back again, without actually circumnavigating the frequent flyer programs (Emerald and Sapphire
card holders, see below) are eligible to use any of
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Chapter 2 The Entrepreneurial Mind: Crafting a Personal Entrepreneurial Strategy 85

the almost 550 airport lounges offered by our Cathay Pacific and its Dragonair affiliate carried
mem- ber airlines before their oneworld flights. At 25 million people last year on a fleet of some 150
many lounges, passengers are offered aircraft, serving more than 70 destinations in 30
refreshments, tele- phones and computer facilities. countries.
At some locations, there are showers, a wider ■
Finnair, the national carrier of Finland, serves
range of business serv- ices and meeting facilities.
more than 60 cities and 30 countries with more
Because oneworld’s airlines all have different names than 250 daily flights. The airline is currently
for the top three membership tiers in their frequent undergoing sub- stantial expansion in Asia, with its
flyer programs, the alliance has created a tier of Helsinki hub an ideal gateway for travel between
names, based on gemstones, that are common right Europe and Asia.
across oneworld: ■
Iberia, the leading carrier between Europe and
■
Emerald denotes the top tier in any program. Latin America. Worldwide, the Spanish
flagcarrier serves some 125 cities in 50
■
Sapphire denotes the second tier. countries, with its main hub at Madrid, carrying
32 million passen- gers in 2008.
■
Ruby denotes the third tier.
■
Japan Airlines, the biggest carrier in the Asia-
Membership cards issued by all oneworld airlines
Pacific region, and one of the top airlines in the
carry a oneworld symbol in the appropriate colour, to
world on any count. From the group’s main hubs of
ensure these most frequent flyers always receive the
Tokyo (Narita and Haneda), Osaka (Kansai and
recognition and privileges to which they are entitled,
Itami), Nagoya (Chubu and Komaki) and Okinawa
no matter which oneworld airline they are flying.
(Naha), Japan Airlines and its oneworld affiliates
operate flights to more than 80 destinations in
some 25 countries and territories. JAL and its four
High Flying Service Standards oneworld affiliates carried more than 52 million
passengers in the year to end March 2009.
All members of oneworld are proud of their reputation ■
LAN Airlines, widely recognized as Latin America’s
for high quality service and for setting standards for leading airline, serves some 70 cities in 20 coun-
the rest of the industry to follow. To ensure a consis- tries, carrying more than 15 million passengers in
tently high level of customer service across all member 2009. LAN has as its main hubs Santiago de
airlines, oneworld has established a set of quality Chile, Buenos Aires, Lima, Quito and Guayaquil.
standards which are monitored regularly. They cover LAN Air- lines is a oneworld member, and LAN
areas such as check-in, lounges, boarding experi- Argentina, LAN Ecuador, LAN Express and LAN
ence, cabin crew, meals, seat comfort, punctuality, in- Peru are all oneworld affiliates.
flight entertainment, aircraft cleanliness, and baggage
handling. ■
Malév Hungarian Airlines, one of the highest
Members of oneworld comprise: quality carriers in Central and Eastern Europe,
whose Bu- dapest base provides the alliance with
■
American Airlines, one of the world's largest carri- one of the best hubs in that region. It serves more
ers. Together with its regional affiliates, American than 50 des- tinations in 35 countries. Malév
Eagle and AmericanConnection, it serves more carried three million passengers in 2008.
than 250 cities and 50 countries, carrying 112
million passengers in 2009 on almost 900 aircraft.
■
Mexicana, oneworld’s latest recruit, which joined
It oper- ates major hubs at Dallas/Fort Worth, in November 2009, is the leading airline in Mexico
Chicago O’Hare, Los Angeles, Miami, and New and Central America. Together with its oneworld
York JFK and LaGuardia. af- filiates MexicanaClick and MexicanaLink, it
serves nearly 70 destinations in 15 countries,
■
British Airways, one of the world’s leading interna- carrying al- most 12 million passengers in 2008.
tional airlines, and currently Business Traveler mag-
azine’s Best Airline worldwide. With its affiliates, it ■
Qantas, the world’s most experienced airline and
serves almost 170 airports and 80 territories, with one of Australia’s strongest brands. It offers an
its main hub London Heathrow, the world’s un- paralleled network in its home continent.
busiest international airport. It carried almost 35 World- wide, it serves more than 70 destinations
million people in its latest full year. and 15 countries. With its main base in Sydney,
it carried 28 million passengers in 2008.
■
Cathay Pacific, one of the most highly regarded
Asian airlines and current holder of the Airline of ■
Royal Jordanian, the first airline from the Middle
the Year award from SkyTrax, the independent East to find a home with any of the global airline
air- line quality organization. Based in Hong alliances and the first in the region to be
Kong, privatised. Its Amman base provides the alliance
with one of
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86 Part I The Entrepreneurial Mind for an Entrepreneurial World

the best hubs for traveling around the region—the

able brochures on key aspects of its services and
world’s fastest growing for air travel—where it
products in many languages, as well as an interac-
serves more destinations than any other carrier. RJ
tive map showing every destination and route served
flies to more than 50 destinations in nearly 40
by the alliance’s member airlines and their code-
coun- tries, carrying almost three million
share partners.
passengers in 2008.
In December 2008, oneworld became the first al-
oneworld also has some 20 affiliate members, airlines liance to sell any of its consumer fares online,
who provide regional services in association with the through the booking tool for oneworld Explorer
alliance’s members. They include American Airlines’ round-the-world fares. Surf its pages, and you can
regional affiliates American Eagle and AmericanCon- check out:
nection; British Airways franchisees Comair (of South
Africa) and Sun-Air (Denmark); Iberia Regional Air
■
Flight schedules for all oneworld member airlines,
Nostrum; Cathay Pacific sister Dragonair; JAL group including a full alliance timetable that is
subsidiaries JALways, JAL Express, J-AIR and Japan download- able to PCs, PDAs or for printing.
Transocean Air; LAN affiliates LAN Argentina, LAN ■
Details on the alliance’s innovative and attractively
Ecuador, LAN Express and LAN Peru; Mexicana’s priced fare products, including lead-in prices
MexicanaClick and MexicanaLink; and QantasLink and a tool for helping plan oneworld Explorer
carriers Airlink, Eastern Australia Airlines and Sunstate round-the-world journeys, along with the booking
Airlines. tool.
S7 Airlines, Russia’s leading domestic airline, is a
member elect and became part of oneworld in 2010. ■
Frequent flyer benefits.
It serves 75 destinations in more than 35 countries.
■
Real-time arrival and departure information for
Kingfisher Airlines, Indian’s leading domestic
all flights by oneworld member airlines.
opera- tor and only five-star airline, is on track to
board in 2011. It serves 70 destinations in eight ■
Local city information for many major
countries. destinations, along with visa and health
requirements for every country in the world.
How to transfer between oneworld airlines at
Award Winners
■

key connecting hub airports.

oneworld and its member airlines are among the most ■
Press releases, images and other media
frequent award winners in the airline industry. informa- tion as well as a downloadable
oneworld itself has won more international awards for oneworld screen- saver.
airline al- liances than any of its competitors.
oneworld was named the World’s Leading Airline
Al- liance for the seventh year running in the 2009
World Travel Awards, which describes itself as the Offering Better Facilities on the
travel in- dustry’s Number One awards scheme,
based on votes cast by more than 100,000 travel
Ground
agencies profession- als from 200 countries. oneworld
has retained this award since it was first presented. It oneworld member airlines operate from some of the
has also been twice named the World’s Best Alliance best airports in the world.
by Business Traveler magazine. By working together on joint ground facilities, they
oneworld also took the best alliance title in the are able to create far better facilities than any of them
2009 Cellars in the Sky awards, for wines served in could justify on their own, and at better unit costs.
flight. oneworld members have combined ticket offices, check-
Its partner airlines regularly gain more accolades in facilities and lounges at some 50 airports
than members of both its competitor alliances in the worldwide. In October 2009, member airlines
in- dustry’s key award schemes. Cathay Pacific is serving London Heathrow completed the alliance’s
current holder of the Airline of the Year title awarded biggest yet co- location project, consolidating from
by Sky- Trax, the independent airline quality across all five of the airport’s terminals into just two
organization, while British Airways is Business —the GBP4.2 billion (UD$7.6 billion) new Terminal 5
Traveler magazine’s Best Airline worldwide. and the adjacent exist- ing Terminal 3, which is now
undergoing a massive up-
grading programme.
In Madrid, all online member airlines moved into
oneworld Online the EUR6 billion, new Terminal 4 at the Spanish
capital in February 2006.
The alliance’s Web site, www.oneworld.com, offers These two initiatives provide oneworld with world-
a wealth of useful tools, information and download- class, state-of-the-art facilities at the alliance’s two
main
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Chapter 2 The Entrepreneurial Mind: Crafting a Personal Entrepreneurial Strategy 87

European hubs. At its other main hub in the continent, Revenues from oneworld alliance activities are grow-
the new Helsinki airport, home of Finnair, is regularly ing at a faster rate than revenues earned by its
voted the world’s best airport for its size. member airlines from their overall passenger
In Asia, the existing member airlines operating at activities.
oneworld hub Tokyo Narita consolidated operations in In 2008, oneworld earned revenues totalling some
January 2007 alongside Japan Airlines in Terminal 2, US$850 million for its member airlines through its fare
which has undergone a multimillion-dollar improvement and sales products, up 25 percent year-on-year, with
program. yields remaining strong.
The alliance’s existing main Asian hub, Hong The eight million passengers transferring in 2008
Kong, home to Cathay Pacific and Dragonair, is from flights by one alliance partner to another gener-
regularly voted the world’s best airport. ated revenues totalling US$2.4 billion.
In early 2008, oneworld’s member airlines serving oneworld activities now account for one in every
Beijing and Shanghai consolidated operations in the US$30 of revenue earned by the alliance’s airlines
airports’ new terminals. from passenger services, and for one customer in 30
At oneworld’s main North American hub, Dallas/ to board their flights.
Fort Worth, the new US$1.2 billion international These efforts helped oneworld maintain its position
Termi- nal D opened in October 2006. Elsewhere, as the airline grouping with the best financial track
American Airlines is virtually rebuilding its New York record. oneworld is the only alliance whose mem-
JFK and Mi- ami terminals. LAN’s Santiago base is ber airlines have collectively achieved net profits in
widely recog- nized as the best airport in South decade since it was launched—with oneworld
America. carriers’ combined net profits since 1999 totalling
In November 2007, the first airport lounges in US$8.3 billion, compared with cumulative losses by
the world developed as a oneworld project opened Star members of US$3.4 billion and by SkyTeam of
US$32.6 billion.
their doors at Los Angeles International Airport’s Tom
oneworld is also the only alliance without a
Bradley International Terminal. British Airways,
member airline having to resort to court bankruptcy
Cathay Pacific, and Qantas collaborated to design and
protection.
develop the facility, which includes separate lounges for
First and Business Class passengers. The lounges are
also avail- able to premium passengers flying with the
alliance’s other two carriers operating from the Managing the Alliance
terminal— Japan Airlines and LAN—and oneworld
Emerald or Sapphire tier frequent flyer cardholders
oneworld was the first of the global airline alliances to
from any oneworld member airline when flying on any
establish a central unit to drive the management of
of the al- liance’s carriers. the alliance, its future growth and customer offerings.
The oneworld Management Company (oMC) was
estab- lished in Vancouver, Canada, in May 2000.
It is headed by John McCulloch, former senior
Delivering Benefits To Shareholders exec- utive with Cathay Pacific, reporting to the
oneworld Governing Board, comprising the chief
oneworld gives its members an additional competitive executives of each of the oneworld member airlines,
edge, beyond what any airline can achieve who meet regu- larly to set strategic directions and
individually or bilaterally by: review progress. The board is currently chaired by
Gerard Arpey, chairman and chief executive of
■
Building revenue American Airlines.
Reporting to the managing partner are function
■
Reducing costs
heads for Commercial, IT and Cost Reduction,
■
Adding shareholder value Airports and Customer Experience, Membership and
Opera- tions, and Corporate Communications.
■
Providing additional customer services and benefits Activity across the alliance is managed by the
oMC, in liaison with working groups drawn from
■
Spreading a member’s brand name—and
executives across all member airlines.
distribu- tion—further
To help them work across their many different time
■
Sharing best practice zones, they make widespread use of technology, such
as email, eRooms, and a dedicated Intranet.
oneworld’s members have benefited by billions of dol- Vancouver was selected as base for the team be-
lars through revenue generation and feed flowing cause it is possible to “do business” with all oneworld
from their various multi-lateral and bilateral members during the same working day, because it is
agreements, and from cost-saving initiatives like “independent” as far as oneworld carriers are con-
airport co-location and joint procurement. cerned, because it is a handy crossover point
between Asia, North America, and Europe, and
because it is a highly cost effective city in which to
operate.
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88 Part I The Entrepreneurial Mind for an Entrepreneurial World

oneworld’s History

2010 February Kingfisher Airlines signs a memorandum of understanding with oneworld as its first step towards mem-
bership, subject to Indian regulatory approval.
American Airlines and Japan Airlines apply for anti-trust immunity for a joint business agreement be-
tween North America and Asia.
Japan Airlines reaffirms its membership of oneworld and its commitment to expand cooperation with
its alliance partners, after a review of its alliance strategy prompted by its overall business
restructuring.

2009 December oneworld becomes the first global airline alliance to enable corporate customers to complete contracts
electronically.
November Mexicana joins oneworld, along with affiliates MexicanaClick and MexicanaLink—adding Mexico
and Central America’s leading airline to the world’s leading quality airline alliance.
Visit Mexico and Central America pass launched as oneworld’s latest consumer fare.
A Spanish version of its popular round-the-world booking tool is launched, making oneworld the only
alliance offering an online booking facility in any language besides English.
oneworld is named the World's Leading Airline Alliance for the seventh year running in the World's
Travel Awards—retaining the award every year since this category was introduced.
All oneworld member airlines serving Stockholm co-locate to the airport’s newly expanded Terminal 5.
October oneworld’s biggest airport co-location project to date is completed, with Qantas and British Airways’
Australian routes transferring from Terminal 4 to Terminal 3, to operate alongside all the other
alliance carriers serving its biggest European hub, with the remainder of BA’s services in the brand
new Termi- nal 5. It brings the alliance’s operations together from across all five of the airport’s
terminals into just two.
September All oneworld member airlines serving Barcelona co-locate to the airport’s new Terminal 1.
All oneworld member airlines serving Helsinki co-locate in the airport’s Terminal 2, following the
open- ing of its extension.
July Iberia and Qantas are the latest oneworld partners to code-share.
May S7 Airlines, Russia’s leading domestic carrier, elected on board as a oneworld member designate,
to join the alliance in 2010. At the same time, the airline’s network is covered by the Global
Explorer round-the-fare that features all oneworld member airlines and some selected airlines not
part of the al- liance.
India’s leading carrier Kingfisher Airlines starts participating in Global Explorer, the round-the-fare
that features all oneworld member airlines and some selected airlines not part of the alliance.
February oneworld marks its tenth birthday with a host of initiatives:
The unveiling of a standard oneworld livery that all member airlines will adopt on a proportion of their
fleets as a symbol of their renewed commitment to the alliance.
A 10 percent cut in the price of all of oneworld consumer fares for ten weeks—repeated later in the
year. It is the first time any of the global alliances has offered this kind of special promotion across
its full range of consumer fares.
The launch of its latest consumer fare—Circle Atlantic.
Online enhancements to make booking flights on all of its member airlines easier than ever before—
whether they are frequent flyer award redemption flights or regular tickets. This puts oneworld on
track to be the first alliance:
To enable its airlines’ frequent flyer program members to book online award flights on all oneworld
air- lines.
With every member airline selling through its own Web site flights operated by all its global alliance
partners in conjunction with its own flights.
A chance for customers to win a pair of Business Class tickets for travel all the way around the
world on oneworld’s airline members, simply by saying what services and benefits they would
most like the alliance to offer in the future.

2008 December oneworld becomes the first in the travel industry to sell multi-airline round-the-world fares online
with the launch of its Internet booking engine for oneworld Explorer. This is also the first time any
alliance fare has been sold online.
oneworld named World’s Leading Alliance for the sixth year running in the World Travel Awards.
Affiliate LAN Ecuador gains rights to launch a domestic network within Ecuador.
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Chapter 2 The Entrepreneurial Mind: Crafting a Personal Entrepreneurial Strategy 89

November American Airlines’ chairman and chief executive Gerard Arpey succeeds his Qantas counterpart
Geoff Dixon as chairman of the oneworld Governing Board.
oneworld links with WestJet to launch a joint corporate sales program in Canada.
October Alaska Airlines and its regional affiliate Horizon Air start participating in Global Explorer, the round-
the-world fare that features all oneworld partners and selected other airlines.
August American Airlines, British Airways, Finnair, Iberia and Royal Jordanian apply for anti-trust
immunity, enabling them to work more closely together. American, British Airways and Iberia also
announce plans for a joint business agreement covering their flights between North America and
Europe.
Finnair becomes the first oneworld member in Europe to decorate aircraft in a special oneworld
livery to mark the tenth anniversary of its invitation to join.
Mexicana elected a member designate, to join oneworld in 2009 along with affiliate Click
Mexicana.
LAN Argentina becomes the second airline in the alliance to decorate an aircraft in a special
oneworld livery, to mark the first anniversary of its joining.
March oneworld’s biggest yet airport co-location project begins with British Airways beginning its move
into the new Terminal 5 at its London Heathrow base.

2007 December oneworld voted World’s Leading Airline Alliance for fifth year running in World Travel Awards.
November Dragonair joins as an affiliate member.
First airport lounges in the world developed as a oneworld project opened their doors at Los
Angeles.
September businessflyer extended to Italy, as it becomes a key target market for the alliance.
April Japan Airlines, Malév and Royal Jordanian start offering oneworld services and benefits in the
alliance’s biggest expansion since its launch in 1999.
LAN Argentina and LAN Ecuador join as affiliates.
Aer Lingus withdraws from oneworld with its new focus on the low fare, point-to-point market no
longer in line with the alliance’s strategy of serving the multi-sector, premium, frequent international
traveler.
Visit Japan and Circle Asia and South West Pacific fares launched.
March To mark Japan Airlines’ impending accession, oneworld links with the Visit Japan Campaign to
support its drive to boost tourism to Japan—and JAL reveals a special oneworld livery that it will
paint on a number of its aircraft.
February oneworld becomes the only alliance with a member airline in South America, as Varig leaves Star.
January oneworld’s member airlines consolidate operations alongside recruit Japan Airlines at its biggest
international hub Tokyo Narita in the alliance’s biggest co-location project to date in the Asia
Pacific region.

2006 December Dragonair elected on board as an affliate, to join in 2007.

October LAN Argentina and LAN Ecuador elected on board as affiliates, to join in early 2007.
Qantas group chief executive officer Geoff Dixon becomes chairman of oneworld’s Governing Board.
oneworld launches its first external advertising campaign for five years, in the key target markets
of France and Germany.
oneworld's businessflyer corporate sales product extended to Belgium.
September oneworld member airlines serving Bangkok co-locate their operations at the city’s new Suvarnabhumi
airport as it opens for business.
oneworld named World’s Leading Airline Alliance for the fourth year running in the World Travel
Awards, which describes itself as the industry’s biggest award scheme.
August oneworld launches its new Web site—featuring an interactive map showing all the destinations
and routes its members serve.
July Three of oneworld’s most popular consumer fares—the round-the-world oneworld Explorer and two
Circle passes—are opened up for group travel.
June Japan Airlines elected on board. It is expected to start offering the alliance’s services and benefits
in early 2007.
Three of the alliance’s most popular fares—oneworld Explorer and its two Circle tickets—are
opened up to group travel.
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90 Part I The Entrepreneurial Mind for an Entrepreneurial World

February All oneworld airlines serving Madrid move into the airport's new EUR6 billion Terminal 4 in the al-
liance’s biggest co-location activity to date.
2005 November Malév elected on board. It is expected to start offering the alliance’s services and benefits in early
2007.
oneworld named the world’s leading airline alliance for the third year running in the World Travel
Awards.
businessflyer extended to the Netherlands.
October Japan Airlines announces it is seeking membership.
Royal Jordanian elected on board. It is expected to start offering the alliance’s services and benefits
at around the turn of 2006/2007.
businessflyer extended to Switzerland.
September oneworld is named the world’s Best Airline Alliance for the second year running in the 2005
Business Traveler awards.
May oneworld launches a new downloadable timetable showing schedules for all its members and
their code-share partners.
April oneworld becomes the only global alliance to enable customers to fly throughout its network, with
mul- tiple connections, on electronic tickets only, with the completion of interline e-ticketing links
between all its member airlines.
March oneworld launches a special Web site for its Japanese-speaking customers. oneworld-jp.com is a
com- plete replica of the alliance’s main Web site, but in Japanese.
Travel agents in France are the first to be offered their own dedicated oneworld Web site, supporting
the alliance’s sales activities in the country.

2004 December British Airways and Iberia confirm they will increase their cooperation by operating their services be-
tween London and both Madrid and Barcelona as a joint business from 1 January 2005.
oneworld named the world’s leading airline alliance for the second year running in the World’s
Travel Awards.
Connecting between oneworld member airlines at London Heathrow, the alliance’s main European
hub, is made smoother and easier with the grouping co-locating facilities at the airport’s Flight
Connec- tions Centre.
September British Airways sells its 18.25 shareholding in Qantas, but the two airlines stress their alliance
remains unaffected, with the joint services agreement governing their cooperation between Australia
and Eu- rope recently approved by the Australian regulators approved for a further five years.
oneworld launches a global frequent flyer promotion, offering up to 15,000 bonus miles—its first
such promotion in five years.
The alliance’s Latin American partner completes the change of its name from LanChile to LAN Airlines.
July British Airways and Cathay Pacific combine arrivals’ desks at London Heathrow Terminal 3.
June American Airlines is the first airline in the world to offer interline electronic ticketing with all its global
alliance partners when Aer Lingus and Iberia are the final oneworld partners to start offering this
serv- ice with the U.S. carrier.
Iberia President Fernando Conte succeeds his Finnair counterpart Keijo Suila as chairman of
oneworld’s Governing Board.
Swiss International Air Lines released from its commitment to join oneworld after an agreement be-
tween the airline and established oneworld partner British Airways to drop the bilateral commercial
agreement they signed in October 2003, which was a fundamental condition of it becoming a mem-
ber of the global alliance.
March businessflyer extended to France.
January American Airlines and British Airways extend their code-sharing to their first transatlantic routes, be-
tween the USA and the U.K. regions.

2003 December British Airways and Iberia granted the European equivalent of anti-trust immunity, enabling the partners
to deepen their cooperation.
October oneworld named the World’s Leading Airline Alliance at the tenth World Travel Awards.
American Airlines, British Airways and Cathay Pacific open a shared transfer facility at London
Heathrow Terminal 3.
September American Airlines and British Airways launch code-sharing.
Cathay Pacific and Qantas launch code-sharing.
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Chapter 2 The Entrepreneurial Mind: Crafting a Personal Entrepreneurial Strategy 91

June businessflyer sales product launched, initially in Germany, offering small- and medium-sized
companies fare discounts in return for a regular relationship with the alliance’s carriers.
John McCulloch succeeds Peter Buecking as oneworld managing partner.
March The four oneworld airlines operating at Zurich—American Airlines, British Airways, Finnair, and Iberia
—move their passenger facilities into new amenities at the airport developed specially for them.
The two-letter code used to search in the travel industry’s computer reservations systems for flights oper-
ated by any airline member of the oneworld alliance changes, to *O.
January American Airlines and Cathay Pacific launch code-sharing.

2002 December oneworld calls for the development of a third runway at London’s Heathrow Airport in response to the
British government’s request for views on the future development of air transport in the U.K.
November Heads of the Engineering and Maintenance functions at each oneworld member airline agree to de-
velop common specifications as widely as possible across their engineering and maintenance activi-
ties, to align their policies and procedures, to work together to develop and support solutions that can
be applied throughout the industry and to share best practice, enabling them to reduce costs through
bulk buying and by sharing parts between one another.
Finnair President Keijo Suila appointed chairman of oneworld’s Governing Board.
October British Airways and Iberia expand their code-sharing arrangements to cover their services between
their London Heathrow and Madrid and Barcelona hubs in the first phase of a wider commercial
agreement between the two airlines. This will also see them carrying out joint network planning,
coor- dinating capacity and pricing and sharing more airport facilities to improve transfer services at
Madrid, Barcelona and London.
Qantas starts moving alongside American Airlines at Los Angeles, smoothing transfers for passengers
flying between Australia and the USA.
LanChile and Qantas link their Santiago and Sydney home bases by direct flights for the first time,
with the South American carrier flying the route three times a week, via Auckland, with its services
also car- rying the QF code.
September oneworld named the world’s Best Airline Alliance in what is believed to be the first major award
recog- nizing this sector of the travel industry—the 2002 Business Traveler Awards, based on a poll
among some of the world’s most frequent flyers.
Content in Spanish, Chinese, Germany, French and Portuguese added to the established English at
www.oneworld.com.
August American Airlines and Finnair granted anti-trust immunity.
June A series of key initiatives launched to deepen working relationships between member airlines,
includ- ing a major extension of alliance activity, beyond the traditional passenger business, into
the areas of cargo, engineering and maintenance, flight operations training and revenue
accounting.
Circle Explorer and Circle Trip Explorer launched.
American Airlines and Finnair become the first airlines from different continents to introduce e-ticket in-
terlining, as oneworld becomes the first of the global alliances to commit to introducing the system
across its members.
April American Airlines and LanChile expand code-sharing to another five U.S. routes.
American Airlines and Qantas expand code-sharing activities, with the number of U.S. destinations
served by AA flights with QF codes increased by around 50 percent.
Finnair and Qantas link their Helsinki and Sydney hubs with a daily code-share service over Bangkok.
March Cathay Pacific’s Hong Kong hub and Finnair’s Helsinki base are linked for the first time, with Finnair
flights.
February Chief executives of all member airlines agree to accelerate plans for deepening working relationships
between oneworld carriers.
January Cathay Pacific deputy chairman and chief executive David Turnbull becomes chairman of the
oneworld Governing Board.

2001 November oneworld’s network expands with the integration of the former TWA operation into American Airlines.
September
World airline industry crisis leads to a change of focus—onto helping members achieve cost savings
and build revenues beyond what they could accomplish individually.
April Visit Asia pass launched.
March Visit Africa, Australia/New Zealand, North and South Americas passes launched.
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92 Part I The Entrepreneurial Mind for an Entrepreneurial World

2000 August Visit Europe pass launched.

June Aer Lingus and LanChile start offering oneworld services and benefits.
Canadian withdraws following its purchase by Air Canada.
May Central management team starts work, based in Vancouver.

1999 December oneworld adopts UNICEF as its charitable cause.

September Finnair and Iberia start offering oneworld services and benefits.
1 February oneworld is born. Founding members start offering oneworld services and benefits.

1998 September American Airlines, British Airways, Cathay Pacific, Canadian Airlines and Qantas announce their
intention to form oneworld and launch an intensive employee communication and training program.

NOTES:
■
oneworld benefits are available only to passengers on scheduled flights that are both operated and marketed by a oneworld
member airline or on a oneworld member airline affiliate. Marketed means there must be a oneworld airline flight number on the
ticket.
■
At peak periods, access to certain lounges may be restricted due to capacity constraints. Access is available on the day of
departure when the next onward flight is with a oneworld airline. Access may not apply at a limited number of lounges operated by
third parties. Access is not available to AAdvantage members travelling on solely North American itineraries.
■
American Airlines AAdvantage and British Airways Executive Club members can earn and redeem miles, and earn tier status credit,
on all eligible flights except:
• American Airlines AAdvantage members will not earn or redeem miles or earn tier status credit on British Airways transatlantic
flights between the USA and U.K. AAdvantage miles and top-tier status credit may be earned though miles may not be
redeemed on all American Airlines code-share services operated by British Airways when the booking is made under the AA
code.
• British Airways Executive Club members will not earn or redeem miles or earn tier status credit on American Airlines
transatlantic flights. BA miles and tier points may be earned though miles may not be redeemed on all British Airways code-
share services oper- ated by American Airlines when the booking is made under the BA code.
• Each oneworld alliance airline reserves the right to change its frequent flyer program rules, regulations, travel awards and
special offers, and to end its frequent flyer program, in accordance with its relevant frequent flyer program rules. Miles/points
may be earned only on purchased, published fares.
• American Eagle, AAdvantage, AAdvantage Executive Platinum, AAdvantage Platinum and AAdvantage Gold are marks of
Ameri- can Airlines Inc. American Eagle is American’s regional airline affiliate.
• All data in this document covers all oneworld members and members elect.
• All information contained in this document is correct at time of going to press but is subject to change without notice.