The Multi-Dimensional Nature

Entrepreneurship isn't just about finance or marketing; it’s a collision of different worlds.
According to Blackburn, an entrepreneur doesn't operate in a vacuum. They are constantly
reacting to:
 Social Context: What do people need or want?
 Economic Trends: Where is the money moving?
 Legal/Policy Frameworks: What are the "rules of the game"?
Embracing the Chaos
The quote from Neck and Greene is a favorite among modern educators because it rejects the old
idea that you can just write a 40-page business plan and succeed.
 Non-Linearity:
o It’s not "Step A leads to Step B." It’s "Step A leads to a wall, so you pivot to Step
C."
 The Entrepreneurial Mindset:
o Because the environment is uncertain, the focus shifts from prediction (trying to
guess the future) to creation (taking action to shape the future).
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Key Skills for the Modern Entrepreneur
There are the three pillars students need to master to survive that "chaotic" environment:

Skill Definition

The ability to spot opportunities where others

Discovery
see problems.

Critical thinking and the ability to navigate

Reasoning
complex "what-if" scenarios.

The "bias toward action"—actually getting

Implementation
things done despite the mess.

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The Spectrum of Entrepreneurial Identity

1. Ownership vs. Mindset

 Intrapreneurship: Can you be an entrepreneur in a large corporation? Yes.
o This is "intrapreneurship," where employees use entrepreneurial skills to innovate
within an existing system.
 The "Hired Gun":
o If you buy a business but let others run it, you are likely an investor rather than an
entrepreneur.

. Innovation vs. Replication

 The Franchisee:
o Does following a "formula" count? A franchisee takes financial risk they aren't
"discovering" a new model. Many scholars call this small business ownership rather
than pure entrepreneurship.

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 The Lifestyle Business:
o If you never hire employees (a "solopreneur"), you are still an entrepreneur, though
economists often distinguish between "lifestyle businesses" and "high-growth
ventures.“

3. Creation vs. Succession

 The Inheritor: Taking over a family business counts if the individual innovates or
expands the legacy. If they simply maintain the status quo, they are acting as a
manager/custodian.

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Scenario Entrepreneurial? Why / Why Not?

High risk, high innovation,

Starting from scratch Yes
creating something from nothing.

Low innovation, but involves risk

Buying a franchise Debatable
and management.

High innovation and "thinking,"

Intrapreneurship Yes
but low personal financial risk.

Involves the "discovery" and

Solopreneur Yes
"implementation" of a new idea.

Lacks the "active" and "chaotic"

Passive Investor No
interaction with the environment.

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 The "Thinking vs. Doing" Conclusion
Is someone an entrepreneur because of what they do or how they think?
• A person who thinks like an entrepreneur but never acts is a dreamer.
• A person who acts without thinking entrepreneurially is a manager.
True entrepreneurship happens at the intersection of an entrepreneurial mindset and risk-taking
action.

 Innovation – Does a person need to be innovative to be considered an entrepreneur? Can an

activity be considered to be entrepreneurial if it is not innovative?
o Activities – What activities does a person need to do to be considered an entrepreneur?
o Creation of a new business – Does someone need to start a new business to be considered to
be an entrepreneur, or can someone who buys a business, buys into a franchise, or takes
over an existing family business be considered an entrepreneur?

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o Starts an innovative venture within an established organization – Can someone who
works within an existing organization that they don’t own be considered an
entrepreneur if they start an innovative venture for their organization?
o Creation of a not-for-profit business – Can a venture be considered to be
entrepreneurial if it is a not-for-profit, or should only for-profit businesses be
considered entrepreneurial?

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 Entrepreneurship themes
Gartner (1990) identified 90 attributes that showed up in definitions of entrepreneurs and
entrepreneurship provided by entrepreneurs and other experts in the field.
After identifying the 90 attributes, Gartner (1990) went back to the entrepreneurs and other experts
for help in clustering the attributes into themes that would help summarize what people concerned
with entrepreneurship thought about the concept. He ended up with the following eight
entrepreneurship themes:

1. The Entrepreneur – The entrepreneur theme is the idea that entrepreneurship involves individuals
with unique personality characteristics and abilities (e.g., risk-taking, locus of control, autonomy,
perseverance, commitment, vision, creativity). Almost 50% of the respondents rated these
characteristics as not important to a definition of entrepreneurship (Gartner, 1990, p. 21, 24).
 “The question that needs to be addressed is: Does entrepreneurship involve entrepreneurs
(individuals with unique characteristics)?” (Gartner, 1990, p. 25).

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2. Innovation – The innovation theme is characterized as doing something new as an idea,
product, service, market, or technology in a new or established organization. The innovation
theme suggests that innovation is not limited to new ventures, but recognized as something which
older and/or larger organizations may undertake as well (Gartner, 1990, p. 25). Some of the
experts Gartner questioned believed that it was important to include innovation in definitions of
entrepreneurship and others did not think it was as important.
 “Does entrepreneurship involve innovation?” (Gartner, 1990, p. 25).

3. Organization Creation – The organization creation theme describes the behaviors involved in
creating organizations. This theme described acquiring and integrating resource attributes (e.g.,
Brings resources to bear, integrates opportunities with resources, mobilizes resources, gathers
resources) and attributes that described creating organizations (new venture development and the
creation of a business that adds value). (Gartner, 1990, p. 25)
 “Does entrepreneurship involve resource acquisition and integration (new venture creation
activities)?” (Gartner, 1990, p. 25)

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4. Creating Value – This theme articulated the idea that entrepreneurship creates
value. The attributes in this factor indicated that value creation might be represented
by transforming a business, creating a new business growing a business, creating
wealth, or destroying the status quo.
 “Does entrepreneurship involve creating value?” (Gartner, 1990, p. 25).

5. Profit or Nonprofit
 “Does entrepreneurship involve profit-making organizations only” (Gartner, 1990, p. 25)?

6. Growth
 Should a focus on growth be a characteristic of entrepreneurship?
7. Uniqueness – This theme suggested that entrepreneurship must involve
uniqueness. Uniqueness was characterized by attributes such as a special way of
thinking, a vision of accomplishment, ability to see situations in terms of unmet
needs, and creates a unique combination.
 “Does entrepreneurship involve uniqueness?” (Gartner, 1990, p. 26).

8. The Owner-Manager – Some of the respondents questioned by Gartner

(1990) did not believe that small mom-and-pop types of businesses should be
considered to be entrepreneurial. Some respondents felt that an important element
of a definition of entrepreneurship was that a venture be owner-managed.
 To be entrepreneurial, does a venture need to be owner-managed?

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# Theme Core Concept The Key Tension/Question

Focus on traits (risk-taking, Is it about who you are or what you do? (50% say
1 The Entrepreneur
autonomy, vision). traits don't matter).

Doing something new Can you be an entrepreneur without being an

2 Innovation
(product, market, or tech). innovator?

Acquiring and mobilizing Is the "act" of building the structure the defining
3 Organization Creation
resources. moment?

Transforming a business or Does it count if it doesn't create wealth or social

4 Creating Value
destroying the status quo. value?

The nature of the Is it still entrepreneurship if the goal is social

5 Profit / Non-Profit
organization's goal. impact?

The trajectory of the Is a business that stays small (lifestyle) truly

6 Growth
venture. entrepreneurial?

Special ways of thinking or Does it require a "unique combination" of factors

7 Uniqueness
seeing unmet needs. to qualify?

The level of personal Can you be an entrepreneur if you hire someone

8 Owner-Manager
involvement. else to run it?

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Examples of Definitions of Entrepreneur

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Development of Entrepreneurship as a Concept
Risk vs. Uncertainty: A Comparison
In entrepreneurial theory, there is often a subtle distinction between these two terms:

Concept Definition Entrepreneur's Role

Probabilities can be calculated (like Managing known variables

Risk
insurance or gambling). and costs.

Exercising "Business
The future is unknown and probabilities
Uncertainty Judgment" to navigate the
cannot be calculated.
unknown.

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Entrepreneurship and Innovation
1. Jeremy Bentham: The Departure from Routine
Bentham was one of the first to suggest that entrepreneurs are defined by their
restlessness.
 The "Routine" vs. The "New": To Bentham, anyone can manage a
routine. The entrepreneur is the one who actively seeks to improve it.
 Cost Reduction: He highlighted that innovation isn't just about "new
gadgets"—lowering the cost of production is an entrepreneurial act
because it changes the market dynamics.
2. Joseph Schumpeter: The Five Cases of Innovation
Schumpeter is the "father" of modern entrepreneurship theory. He famously
coined the term "Creative Destruction," describing how entrepreneurs
destroy old ways of doing things to make room for the new.
He broke down innovation into five specific "New Combinations":

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Type Action Example

Introducing a product consumers The first smartphone or VR

 New Good
don't know yet. headset.

A new way of producing or Using 3D printing for car

 New Method
handling a product. parts; the assembly line.

Entering a geography or A Western brand opening its

 New Market
demographic not served before. first store in a remote region.

Finding a new source of raw Shifting from oil to lithium

 New Supply
materials. for energy; recycled plastics.

Changing the industry structure Uber disrupting the taxi

 New Organization
(Monopolies). monopoly; a massive merger.

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The "Big Three" Classic Traits

Historically, research focused on three specific internal drivers that push an individual toward

entrepreneurship:

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The "Big Five" and Entrepreneurial Entry
Caliendo, Fossen, and Kritikos (2014) used the Big Five Personality Traits model to predict who
actually starts a business. Their findings suggest that personality influences different stages of the
business lifecycle:

Personality and the Business Lifecycle

Impact on
Trait Why?
Entrepreneurship

Leads to "Discovery" and seeking

Openness to Experience Increases Entry
new combinations (Schumpeter).

Helps in gathering resources and

Extraversion Increases Entry
networking (Gartner).

Helps handle the "chaos" and

Emotional Stability Increases Entry
uncertainty (Neck & Greene).

Being "too nice" may make tough

Agreeableness Increases Exit negotiations or competitive survival
difficult.

Those with an External locus tend to

Internal Locus of Control Increases Longevity
quit sooner when things get tough.

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3. Personality vs. Behavior vs. Cognition

•Personality (Traits): Who you are (e.g.,

Risk-tolerant, Extraverted). These are
relatively stable over time.
•Behavior (Traits): What you do (e.g.,
Networking, resource gathering,
mobilizing).
•Cognitive Skills: How you think (e.g.,
Recognizing patterns, making decisions
under pressure).

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What are Entrepreneurial Cognitions?
Think of cognitions as mental shortcuts. Because entrepreneurs operate in "highly
uncertain environments," they don't have time to analyze every single piece of data
perfectly. Instead, they use "simplifying mental models" to:
 Connect the dots between unrelated pieces of information.
 Make fast assessments of whether an opportunity is worth pursuing.
 Assemble resources efficiently.
2. The Mitchell & Smith Model (2002)
Mitchell, Smith, and their colleagues identified three specific "scripts" or knowledge
structures that lead to the decision to start a business. They treat these as independent
variables that cause the dependent variable (the venture creation).

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Cognition Type Definition The Entrepreneur's Thought Process

Arrangements Mental maps of "Who do I know? Where can I get funding?

Cognitions resources. Do I have the legal/physical assets?"

Willingness Mental maps of "Am I ready to do this? Is this the right time to
Cognitions commitment. dive in? Do I want to take this risk?"

Ability Knowledge "Do I have the skills/know-how to actually

Cognitions structures or scripts. execute this plan?"

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Comparison: Personality vs. Cognition
General Venturing Script

Personality
Feature Cognition (Knowledge Structures)
(Traits)

Nature Internal and stable. Dynamic and learned.

Example "I am a risk-taker." "I know how to evaluate a risky market."

Changeability Hard to change. Can be developed through experience/education.

Generally, entrepreneurship is considered to consist of the following elements, or subscripts

(Brooks, 2009; Mitchell, 2000).
[Link] Screening
[Link] and Financing
[Link]
[Link]-Up
[Link]-Up
[Link] Operations
[Link]
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Searching (also called idea formulation or opportunity recognition)
 This script begins when a person decides they might be a potential entrepreneur (or when an
existing entrepreneur decides they need more ideas in their idea pool).

 This script ends when there are a sufficient number of ideas in the idea pool.

 The scripting process involves a logical flow of steps (including feedback loops, actions
which must occur in sequence, and actions which can be implemented at the same time as
other actions) designed to:
 overcome mental blockages to creativity which might hinder this person’s ability
to identify viable ideas;

 implement steps to identify a sufficient number of ideas (most likely 5 or more)

which the person is interested in investigating to determine whether they might be
viable given general criteria such as this person’s personal interests and
capabilities;

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Idea Screening (also called concept development)
 This script begins when the person with the idea pool is no longer focusing on adding
new ideas to it; but is instead taking steps to choose the best idea for them given a full
range of specific criteria.
 This script ends when one idea is chosen from among those in the idea pool.

 The scripting process involves a logical flow of steps to assess the current
situation and the trends in the following areas. The right tools must be used for each level
of analysis.
 Do the current societal-level factors indicate that a particular idea should be
considered for implementation? Do the trends in these societal-level factors
indicate that the idea will be viable and sustainable into the future?
 Evaluate the political, economic, social, technological, environmental, and legal
climates

 Do the current industry/market-level factors indicate an idea is viable? Are the

trends in these factors supportive of the idea?
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 Evaluate the degree of competitiveness in the industry, the threat of substitutes
emerging, the threat of new entrants to the industry, the degree of bargaining
power of buyers, and the degree of bargaining power of suppliers.

 Do a market profile analysis to assess the attractiveness of the position within

the industry that the potential venture will occupy.

 Do the current firm-level factors support the pursuit of the idea?

 Formulate and evaluate potential strategies to leverage organizational strengths,
overcome/minimize weaknesses, take advantage of opportunities, and
overcome/minimize threats;

 Complete financial projections and analyze them to evaluate financial

attractiveness

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 Planning and Financing (also called resource determination and
acquisition)
 This script begins when the idea screening script ends and when the person
begins making the plans to implement the single idea chosen from the idea
pool, which is done in concert with securing financing to implement the
venture idea.
 This script ends when sufficient business planning has been done and when
adequate financing has been arranged.

 The scripting process involves a logical flow of steps to develop a business

plan and secure adequate financing to start the business.

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Set-Up (also called launch)
 This script begins when the planning and financing script ends and when the person
begins implementing the plans needed to start the business.
 This script ends when the business is ready to start-up.
 The scripting process involves a logical flow of steps, including purchasing and
installing equipment, securing the venture location and finishing all the needed
renovations, recruiting and hiring any staff needed for start-up, and the many other
steps needed to prepare for start-up.
Start-Up (also called launch)
 This script begins when the set-up script ends and when the business opens and begins
making sales.
 This script ends when the business has moved beyond the point where the entrepreneur
must continually fight for the business’s survival and persistence. It ends when the
entrepreneur can instead shift emphasis toward business growth or maintaining the
venture’s stability.
 The scripting process involves a logical flow of steps needed to establish a new
venture.

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Ongoing Operations (also called venture growth)
 This script begins when the start-up script ends and when the
business has established persistence and is implementing growth
(or maintenance) strategies.
 This script ends when the entrepreneur chooses to harvest the
value they generated with the venture.
 The scripting process involves a logical flow of steps needed to
grow (or maintain) a venture

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 Action Script
Stage

1. Searching Idea Formulation

2. Screening Concept Development

3. Planning Resource Acquisition

4. Set-Up The Build-Out

5. Start-Up The Launch

6. Operations Venture Growth

7. Harvest Value Extraction

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