Business Lessons From “The Entrepreneurial Mindset”
New entrepreneurs can learn much from habitual entrepreneurs. That’s the premise of Rita Gunther McGrath and Ian MacMillan, authors of The Entrepreneurial Mindset: Strategies for Continuously Creating Opportunity in an Age of Uncertainty.McGrath and MacMillan define “habitual entrepreneurs” as those who have made a career out of starting new businesses and launching new products. Habitual entrepreneurs find opportunities while others fail to act during times of uncertainty.
“In a world of uncertainty, our guiding philosophy is: Take Charge. If nobody knows what the future will hold, your vision of how to navigate it is as good as anyone’s. The future may as well belong to you,” write McGrath and MacMillan.
Successful habitual entrepreneurs experiment intelligently. They don’t view every business move as a do-or-die endeavor for their company. Habitual entrepreneurs focus ruthlessly upon priorities and ruthlessly weed out unprofitable endeavors. They balance current, profitable, business operations with an eye to future opportunities.
Because the endeavors of start-ups are fraught with uncertainly and, thus, are not well-suited to Net Present Value Calculations (where estimates of future cash flows are made and these estimated cash flows are discounted back to the present to determine the worth of the venture), McGrath and MacMillan suggest entrepreneurs view their endeavors as a portfolio of options. Entrepreneurs create “opportunity portfolios.” Each option is pursued or abandoned as conditions warrant.
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