1. Entrepreneurship
Boot Camp Mindset

2. Question for today Do entrepreneurs think differently?
What is this “outside the box” all about?
Is outside the box for real?

3. Start at any of the nine dots and draw four straight lines that go through all nine dots without lifting your pencil and no tracing over an existing line.
I start out with this silly exercise to show them how they think

4. Four straight without connecting all nine dots w\o lifting your pencil, no tracing over an existing line.
You have to go outside the box twice 4

5. Reading What makes entrepreneurs entrepreneurial? Saras Sarasvathy
We seeks to answer the question – is there such a think as entrepreneurial thinking?
If there is, is it applicable only to entrepreneurs?
How is it different from the thinking process of managers?
The conclusion is Effectual vs. Causal reasoning, but can it be learned?

6. Causal Thinking = Managerial Thinking
Setting the framework How Entrepreneurs Think Causal vs. Effectual Thinking
Causal Thinking = Managerial Thinking
Choosing best means to achieve a predetermined goal
Saras Sarasvathy, Harvard Business Review

7. Managerial Thinking – Causal Reasoning
Distinguishing Characteristic:
Selecting between given means to achieve a pre-determined goal M1 M2
Given
Goal M3 M4 M5
Given Means

8. Causal Thinking = Managerial Thinking
Setting the framework How Entrepreneurs Think Strategic vs. Effectual Thinking
Causal Thinking = Managerial Thinking
Choosing best means to achieve a predetermined goal
Strategic Thinking = Creative Thinking
Generating new means to reach predetermined goal

9. Strategic Thinking – Creative Causal Reasoning
Distinguishing Characteristic:
Generating new means to achieve pre-determined goals M1 M2
Given
Goals M3 M4
New means are generated M5

10. Setting the framework How Entrepreneurs Think Effectual Thinking
Causal Thinking = Managerial Thinking
Choosing best means to achieve a predetermined goal
Strategic Thinking = Creative Causal Thinking
Generating new means to reach predetermined goal
Effectual Thinking = Entrepreneurial Thinking
Imagining possible new ends using a given set of means
Saras Sarasvathy, Harvard Business Review

11. Entrepreneurial Thinking – Effectual Reasoning
Distinguishing Characteristic:
Imagining possible new ends using a given set of means M1 E1 M2
Imagine New Ends E2 M3 E3
Could argue that this is limiting because you are in your core competenices. M5 E4 M4 E5
Given Means
Saras Sarasvathy, Harvard Business Review

12. Market Definition Classic Causation Model from Marketing Textbooks
Segmentation (using relevant variables such as age, income, etc.)
Targeting (based on evaluation criteria such as expected return)
Positioning (through market strategies)
THE CUSTOMER
Customer Identification (through Who am I? What do I know? Whom do I know?)
Customer Definition (through strategic partnerships & “selling”)
Adding Segments/Strategic Partners
Definition of one of several possible markets
Process of Effectuation Used by Expert Entrepreneurs

13. Customer Initial cost $ 11.6MM
Classic Causation Model from Marketing Textbooks
Preliminary Prototype $ 250M
Initial Focus Group Study $ 250M
Market Segment Study $ 100 M
Gets you to the start line
Advertising & PR $ 11MM
Customer
Gets you to the market
Sale often ”pull through” to get to customer
Initial cost $ 11.6MM

14. Introduction of new means to reach goal
Strategic, Creative Thinking Generating new means to reach customer
Preliminary Prototype $ 250K
Initial Focus Group Study $ 250K
Market Segment Study $ 100K
Gets you to the start line
Advertising & PR $ 11M
Gets you to the market
Customer
Introduction of new means to reach goal
Partnerships
New outlets
MLM Channel
eCommerce
Initial cost $ 11.6MM + or -

15. Customer Initial cost $ 19.61 Pain Identification
Efficacious Thinking Entrepreneurial Thinking Imagining new ends, new means
Industry Knowledge
Patterns of Change
Skill Sets
Social Networks
Pain Identification
Phantom Sale against defined pain \ cure
Customer
Customer benefit need
Customer in Hand Initial customer acquisition on special terms (early adopter, point of sale, etc.)
Initial cost $ 19.61

16. Pure Entrepreneurial Thinking – Efficacy
Distinguishing Characteristic:
Imagining possible new ends using new means M1 M2
Imagine New Ends M3 M5 M4
Create New Means
Apologies to Saras Sarasvathy
Harvard Business Review

17. Thinking like an entrepreneur
Causal Thinking
Strategic Thinking
Effectual Thinking
USC Entrepreneurial Thinking
Efficacy

18. The USC thinking
Efficacy
Imagine the end,
Create the means

19. Types of Thinking Ends Means Causal (Linear) Given Given
Strategic (Creative) Given Create some new
Effectual Create Given
new
Efficacy Imagine Create New New Ends Means

20. Entrepreneurial Thinking
Imagine the end,
Create the means

21. Tom O’Malia. Orfalea Chair for Entrepreneurial Studies. 213. 821. 0917
Tom O’Malia Orfalea Chair for Entrepreneurial Studies
Lloyd Greif Center Marshall School of Business University of Southern California Bridge Hall One Los Angeles, CA