An important element of clarity when one decides to plunge into entrepreneurship is the mindset. In people moving away from the corporate, we find a deeply entrenched mindset of investment. It is essential to understand that entrepreneurship is not merely about generating returns on investment – entrepreneurship is about being enterprising in a resource-constrained environment. In addition to resource constraints, the uncertainty that you face in entrepreneurship is unparalleled to the dominant understanding of risk. A shift in mindset is essential if you want to leap into entrepreneurship.
The investment mindset believes in prediction; it assumes that the entrepreneurial act would be risky, and capturing more data and analyzing it is likely to ensure a return on investment. Contrary to this, an entrepreneurial journey would not be initiated if there was so much analysis of the risk. You do not have enough information to make a complete analysis. Such an analysis would lead to paralysis and no action being taken. Acting without complete information based on judgments is central to entrepreneurship.
If one is to continue to act based on judgments, the outcomes would likely be less adherent to the expectation. It is here that the act of creativity is necessary to make course corrections. The action is essentially the source of data, but there is no guarantee that the past trend is a lasting one. In such cases, if you intend to be part of the entrepreneurial journey not with an entrepreneurial mindset, but with an investor mindset, then think about it as an affordable loss. An option you are creating for yourself if it works out!
There are quite a few cases we have seen where entrepreneurs raise money from people who do not understand the context of the entrepreneurial decision-making process – the uncertainty involved in it. Raising money from someone who does not understand your business, nor the risk involved or the uncertain environment you work in is a definite recipe for disaster. You are more likely to shut the venture down due to investor misfit, rather than the lack of business!
Understand the difference in the mindset of the various stakeholders you get onboard your entrepreneurial journey. If you do not manage these mindset differences on an on-going basis, you are more likely to shut down your business.
Ask yourself:
What is my mindset in building this business? Am I thinking like an investor or an entrepreneur?
When should I get a person with a different mindset? What will I have to do to ensure that the person with the investor mindset plays the formalizing role needed in the venture? Am I seeking the services of an individual with the investor mindset sooner than I should? Can I hold on a bit longer? Have I managed the risk, and overcome the uncertainties?
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