What is an “Entrepreneurial Mindset”?
I asked some startup founders and VC’s and got some great answers.
I was recently asked to give a lecture on “Entrepreneurial Mindset”. Hmmm. Great question. I had my own thoughts on the topic, but I wondered whether there was some sort of accepted definition.
So I did a little research, beginning with Google (since that’s where all research begins these days).
The definition that Google gave me was:
“Entrepreneurial mindset refers to a specific state of mind which orients human conduct toward entrepreneurial activities.”
Boring, and not very helpful (plus, it’s kinda recursive).
Next I decided to turn to some friends of mine who are very successful Silicon Valley startup founders and venture capitalists. I figured maybe they’d give me some interesting definitions of an entrepreneurial mindset.
Here’s what they said (emphasis in bold is mine):
- Olivia (VC): “An entrepreneurial mindset includes excitement around building something new, and perseverance to navigate the many obstacles that come up in that process.”
- David (Founder): “An understanding that the world is both mutable and imperfect coupled with the resolve to improve it”.
- Tim (VC): “Folks with outsized smarts, goodness, and grit who can’t imagine not spending their life solving the unmet need about which they care most deeply”.
- Kent (Founder): “It never occurs to me that I might fail at starting a company, which is kind of crazy given the low probability of success of biotech companies. Perhaps obvious, but you cannot have any fear. It doesn’t mean you are oblivious to what can go wrong, but you have confidence that you will find a solution”.
- Jeremy (Founder): “A relentless dissatisfaction with the status quo that drives you to build novel solutions that others will value”.
- Bob (VC): “An entrepreneurial mindset is one which takes risks others won’t take to achieve a vision others don’t share.”
- Jason (Founder): “Seeing what others don’t, and having an unstoppable will”.
- Danielle (VC): “The entrepreneurial mindset is one consisting of grit and perseverance, while being realistic enough to know when to adapt and change course”.
- Chris (Founder): “Entrepreneurial mindset is all about efficient hypothesis testing and grit”.
- Thane (Founder): “I believe there is an entrepreneurial mindset or spirit: creating shared value”.
Now we’re getting somewhere! There’s some good stuff in there — let’s take a look at some of the patterns in these answers:
- Grit, Perseverance, Unstoppable Will, Relentless:
This is pretty obvious — being an entrepreneur is hard. The successful ones have a mindset that makes them relentless at pursuing passions. In fact, Steve Jobs himself said “I’m convinced that about half of what separates the successful entrepreneurs from the non-successful ones is pure perseverance.”
- Hypothesis testing, a willingness to adapt and change course:
This is a key point because the reality is that for most startups, the original idea fails. But great entrepreneurs are always testing their assumptions and pivoting their way to success, even when the original idea fails. YouTube thought their main use case would be video dating, Instagram began as a mobile check-in app called Burbn, Slack began as a video game studio, and Uber’s original idea was a fleet of company-owned cars called “UberTaxi”. In all of these cases, the original idea failed but the team was agile enough to test their assumptions, realize where they were wrong, and pivot to success.
- Driven by a desire to solve problems worth solving.
A Paul Graham wrote, the best way to get startup ideas is to look for problems. Great entrepreneurs fall in love with a problem worth solving, and that passion then creates the unstoppable will that drives a startup to success.
- Creating shared value.
Being an entrepreneur is a team sport. Successful entrepreneurs are great at recruiting team members, customers, and investors to join their valuation-creation mission. Not everybody is passionate about creating shared value — but every single great entrepreneur I know is.
So now I felt like I was making progress on my lecture. But I still needed to weave this into a concise definition of entrepreneurial mindset. The definition of “Entrepreneurship” that I like to use is from Howard Stevenson at Harvard Business School, who defines it as “The pursuit of opportunity without regard for resources currently controlled”. I love this definition because when successful entrepreneurs see opportunity and decide to pursue it, they are never deterred by a lack of resources — they know they can put the resources together.
So if we use that definition for Entrepreneurship, then the definition of an Entrepreneurial Mindset must be something like “A set of mental habits that optimize the successful pursuit of opportunity”.
Now, by adding the input I got from my smart friends, we can expand this to:
An entrepreneurial mindset is a set of mental habits that tend to optimize the successful pursuit of opportunity. These include a passion for solving problems worth solving, a willingness to test assumptions and change course, and a relentless desire to create shared value.
There you go. There’s my new definition of an Entrepreneurial Mindset. OK now I gotta go finish my lecture…