Optional: Business plans and market research

Inc. has a great article concerning the differences in thought processes between big corporate leaders and entrepreneurs.

Corporate leaders, dealing with known markets, and incremental innovation – are much more plan-focused and step through more solid, mathematical, logical process. Innovative entrepreneurs – working with a lot of unknowns in customers, markets, designs – and seeking ground-breaking innovation – seek immediacy and flexibility. Less time is invested in the academic exercises like market research and business plans – more time is invested in building stuff.

Sarasvathy likes to compare expert entrepreneurs to Iron Chefs: at their best when presented with an assortment of motley ingredients and challenged to whip up whatever dish expediency and imagination suggest. Corporate leaders, by contrast, decide they are going to make Swedish meatballs. They then proceed to shop, measure, mix, and cook Swedish meatballs in the most efficient, cost-effective manner possible.

That is not to say entrepreneurs don’t have goals, only that those goals are broad and—like luggage—may shift during flight. Rather than meticulously segment customers according to potential return, they itch to get to market as quickly and cheaply as possible, a principle Sarasvathy calls affordable loss. Repeatedly, the entrepreneurs in her study expressed impatience with anything that smacked of extensive planning, particularly traditional market research. (Inc.’s own research backs this up. One survey of Inc. 500 CEOs found that 60 percent had not written business plans before launching their companies. Just 12 percent had done market research.)

How Great Entrepreneurs Think

4 Types of Entrepreneurship

Steve Blank has a good breakdown of the 4 types of entrepreneurship in one of his posts. It’s important to remember that there are several types of entrepreneurship. Many may think that “entrepreneurs” are only people that start venture funded, fast growing companies.

Below is the list:

1. Small Business Entrepreneurship
Today, the overwhelming number of entrepreneurs and startups in the United States are still small businesses. There are 5.7 million small businesses in the U.S. They make up 99.7% of all companies and employ 50% of all non-governmental workers.

2. Scalable Startup Entrepreneurship

Unlike small businesses, scalable startups are what Silicon Valley entrepreneurs and their venture investors do. These entrepreneurs start a company knowing from day one that their vision could change the world. They attract investment from equally crazy financial investors – venture capitalists.

3. Large Company Entrepreneurship

Large companies have finite life cycles. Most grow through sustaining innovation, offering new products that are variants around their core products. Changes in customer tastes, new technologies, legislation, new competitors, etc. can create pressure for moredisruptive innovation – requiring large companies to create entirely new products sold into new customers in new markets. Existing companies do this by either acquiring innovative companies or attempting to build a disruptive product inside. Ironically, large company size and culture make disruptive innovation extremely difficult to execute.

4. Social Entrepreneurship
Social entrepreneurs are innovators who focus on creating products and services that solve social needs and problems.

Steve Blank

Optional: Business plans and market research

Inc. has a great article concerning the differences in thought processes between big corporate leaders and entrepreneurs.

Corporate leaders, dealing with known markets, and incremental innovation – are much more plan-focused and step through more solid, mathematical, logical process. Innovative entrepreneurs – working with a lot of unknowns in customers, markets, designs – and seeking ground-breaking innovation – seek immediacy and flexibility. Less time is invested in the academic exercises like market research and business plans – more time is invested in building stuff.

Sarasvathy likes to compare expert entrepreneurs to Iron Chefs: at their best when presented with an assortment of motley ingredients and challenged to whip up whatever dish expediency and imagination suggest. Corporate leaders, by contrast, decide they are going to make Swedish meatballs. They then proceed to shop, measure, mix, and cook Swedish meatballs in the most efficient, cost-effective manner possible.

That is not to say entrepreneurs don’t have goals, only that those goals are broad and—like luggage—may shift during flight. Rather than meticulously segment customers according to potential return, they itch to get to market as quickly and cheaply as possible, a principle Sarasvathy calls affordable loss. Repeatedly, the entrepreneurs in her study expressed impatience with anything that smacked of extensive planning, particularly traditional market research. (Inc.’s own research backs this up. One survey of Inc. 500 CEOs found that 60 percent had not written business plans before launching their companies. Just 12 percent had done market research.)

How Great Entrepreneurs Think

4 Types of Entrepreneurship

Steve Blank has a good breakdown of the 4 types of entrepreneurship in one of his posts. It’s important to remember that there are several types of entrepreneurship. Many may think that “entrepreneurs” are only people that start venture funded, fast growing companies.

Below is the list:

1. Small Business Entrepreneurship
Today, the overwhelming number of entrepreneurs and startups in the United States are still small businesses. There are 5.7 million small businesses in the U.S. They make up 99.7% of all companies and employ 50% of all non-governmental workers.

2. Scalable Startup Entrepreneurship

Unlike small businesses, scalable startups are what Silicon Valley entrepreneurs and their venture investors do. These entrepreneurs start a company knowing from day one that their vision could change the world. They attract investment from equally crazy financial investors – venture capitalists.

3. Large Company Entrepreneurship

Large companies have finite life cycles. Most grow through sustaining innovation, offering new products that are variants around their core products. Changes in customer tastes, new technologies, legislation, new competitors, etc. can create pressure for moredisruptive innovation – requiring large companies to create entirely new products sold into new customers in new markets. Existing companies do this by either acquiring innovative companies or attempting to build a disruptive product inside. Ironically, large company size and culture make disruptive innovation extremely difficult to execute.

4. Social Entrepreneurship
Social entrepreneurs are innovators who focus on creating products and services that solve social needs and problems.

Steve Blank