How to Think Like an Entrepreneur by Philip Delves Broughton

Introduction. Most entrepreneurs fail. However, it is a good learning experience nonetheless. The main reason why people fail is that they become demoralized. Yet, the start-up scene is thriving and buzzing. However, one tends to only hear of the successful stories. This is a case of WYSIATI – What You See is All There Is. Optimism can be costly indeed. To succeed is a great achievement in itself. It is a way out of the corporate life. You are doing it for yourself. It allows you to innovate and to challenge what is already out there in the market. It gives emotion its proper place. Before starting, optimism might not be as useful as compared to when the business has been established. There will be ups and downs, successes and despairs. This book is a guide for those who want to take this path. You can also be entrepreneurial as an employee. Learn to pursuit a path of your own. Obama had his doubts before running for President. This book will describe the ways you need to think as you first decide whether to be one. There is a link between economies which thrive and the freedom of individuals to flourish. People must be free to use their knowledge and talents in order for society to grow. A modern economy can produce dreams into reality. There needs to be a balance between satisfying the corporatists and the individualists. We need to think about what is means to be an entrepreneur.

Entrepreneurship offers a way out of corporate life, out of a system of task-and-reward allocation run by others, to one run by you. You get to decide how to work, what to work on, and how to divide the rewards. – Philip Delves Broughton

If you are a chef chafing on the line, yearning to create dishes which exist only in your imagination, finding investors and opening your own restaurant is a way to turn that yearning into action. – Philip Delves Broughton

People with so much to protect are not always inclined to support those agitating for change. Yet to think like an entrepreneur is to be modern. To want change, to search for opportunity and then be willing to pursue it. – Philip Delves Broughton

The Entrepreneurial Mind. The Material Question. George Gurdjieff was the founder of Institute for the Harmonious Development of Man. He was taught to create new stuff since young. Through this, he was able to surmount many difficulties. He was tricky and pretended to repair other people’s goods for a fee. As a result, he became rich. This experience fortified him.

If you can find your customers’ pain and heal it, how you do it and how much you charge will scarcely matter. – Philip Delves Broughton

Cognitive Complexity. Some people say entrepreneurs are control freaks, risk addicts etc. The only common trait they all share is that they choose to be entrepreneurs. The two habits of mind is cognitive complexity and greed. You must be tolerant of new ideas and curious about the experiences which challenge you. You must trust that the world will take care of you. There is also a need to internalize different cultures. Your upbringing also plays a part. One way to learn is to be marginalized and to be forced into awkward social positions. Usually, difficult times will toughen you up for the subsequent challenges in life. Sometimes, over-specialization can cause you to lose sight of how to make connections between diverse fields. It would be good to have a mentally intensive hobby like music, painters, writers etc.

Wanting It. Entrepreneurs can have different attitudes to money. Some show them off and flaunt their wealth. Mark Zuckerberg wears the same T-shirt all the time. Bill Gates and Mark Zuckerberg all do something they are nuts about. Would you want to be ‘rich or king’? Would you want to be rich and cash out? Or retain control and manage a growing enterprise? Do you want to be a king over a smaller domain? There are 4 types of people: 1) Work for themselves and for no one else; 2) Join businesses and reach senior positions; 3) Work for others but unspectacularly; 4) Work for others but are not motivated to work hard or improve the organization. The first 2 possess the Millionaire Mentality. They know the value of a dollar and the importance of not to squander it. Some people only think of excess profits earned should be reinvested in the business. A greed for improvement and for success is nothing to be ashamed about.

An independent spirit and an appetite for success, of which money can be a significant market, is what sets the flywheel of entrepreneurial achievement in motion. – Philip Delves Broughton

Age vs Experience. Some of the tech geniuses are still in their 20s. Younger people have more resilience. They invest in the young. The average age of American entrepreneurs which started their first company is 40. VCs love younger people. The best time to start when you the right energy and competence. As you age, your energy level drops. Good businesses require credibility to attract investors and employees and managerial experience.

The Old Man and the Fish. One can get inspiration from old objects, like the oldest life forms. For instance, a designer got inspiration from the body of a fish to create a fish-inspired design. It was a unique architectural vision. Gehry was 69.

Closing the Experience Gap. You have to think of the inverted U of productivity and where you currently fall along the curve. Larry Page and Sergey Brin were young when they started their first search engine. Being ambitious is important. Eric Schmidt was hired as the Google CEO. In 2011, he stepped aside to let Page be CEO. Sheryl Sandberg agreed to be Facebook CEO. In 2012, it went IPO. Both these companies realized that they needed to move up the inverted U curve of productivity and age by hiring. Sometimes, you can’t do it alone.

A Brief History of an Idea. What does entrepreneurship mean? It was associated with being a merchant. They were also innovators who struck out on their own. Ralph Waldo Emerson encouraged people to look inwards for inspiration. One has to be comfortable with solitude. The entrepreneur was more than just a manager of risk. John Rockefeller was the first billionaire. Business was about ‘survival of the fittest’. Schumpeter was an economist. He understood the importance of economics. Later, he lectured in Harvard. He was a very ambitious man indeed. He knew that growth in an economy was dependent on entrepreneurs. Because of them, entrepreneurship would be revolutionized. Change was the only constant. Peter Drucker had a similar career path to Schumpeter. To him, it was possible to learn entrepreneurship. He also identified entrepreneurship in other fields.

The entrepreneur always searches for change, responds to it, and exploits it as an opportunity. – Peter Drucker

Searching for Opportunity. The Adjacent Possible. Chris Blackwell was fascinated by Jamaicans after they took care of him. Later, he got inspired to write music. The Jamaica’s Rastafarians music became popular throughout the world. Sometimes, you might find ideas in areas which you might least expect. This is known as the ‘adjacent possible’, which is discovering opportunities in the work that surrounds them. Gillette the shaver was a great idea and created a near monopoly effect for years.

Nearly 75% of entrepreneurs find their ideas while in their current job. A fifth find them by chance and fewer than 5% by systematically searching for new opportunities. – Philip Delves Broughton

The Gossip Test. Francis Crick wondered what he should do after WWII. He didn’t know what to do with life. However, he realized the lack of qualifications could be an advantage. He knew a bit about physics and mathematics. Later he saw Kreisel. Later, he discovered his love for antibiotics. Later, he chose molecular biology. Later, he went on to win the Nobel Prize, for the discovery of the double-helical structure of DNA.

I had discovered the gossip test – what you are really interested in is what you gossip about. – Philip Delves Broughton

A bug Named Jim. Jim Collins often filled his notebook with observations of the world. He felt dissatisfied at HP. He observed bugs in a jar. Through time, he realized that he preferred academia and he eventually work many books on management and business success. Self-observation and self-awareness are very important indeed.

Shifts and Disruptions. Thomas Kuhn was a professor and a historian. To him, both Aristotle and Newton were right, just that they were in different paradigms. How do you figure out which paradigm is good for you. For instance, in sports, the paradigm might be discipline, strength and hard work. If you are not that fit, you could use another paradigm, this could be strategizing more on the field. This tactic might work over time as well. Disruption is a term which often means paradigm shift too. Not every star-ups need to disrupt in order to success. However, the start-up should understand the theory before you launch in practice. Too many layers in a company became self-reinforcing. This is why big companies are less creative and less nimble. IBM dominated in the 1965s but the mainframes were gradually less popular. The mainframe companies failed. Most companies who get disrupted could see it coming but didn’t do anything about it. Kodak was a failure who went bankrupt. Newspaper businesses suffered the similar fate. One needs to try to attack the prevailing mode of doing business. Even in surgery, balloon angioplasty revolutionized heart surgery. Now, the costs are lower as well. Disruption can occur in any field and we must be prepared for it.

The Slow Hunch. Inventions emerge from the mass of human experience. Every generation after should be better than the previous one. Someone figured out that freezing food fast could preserve the condition and taste of food. One’s curiosity of nature is important. Ideas packaged together in a new configuration is crucial.

Responding to Opportunity. Assembling Complementary Assets. You must consider which assets to keep in-house and which to outsource. You can self-publish or go via a publisher. In entrepreneurship, you will be involved in a lot of decision making.

People. Corporate executives spend days trying to manage volume. As entrepreneurs, you have to come up with your own options. Decision making is crucial as you must make decisions that also are in-line with the long term goal of the company. People are a huge factor. They may be difficult to fire if they turn out poor. Agents are employees but whose loyalty might be limited and be non-committed. You might issue some equity to employees so that they can work harder. You must also be able to be brutally honest to people. You cannot put off decision making as it is painful. Some things have to be done no matter what.

Loneliness can kill a start-up and the enthusiasm and presence of friends is reassuring in those early, uncertain days. But unless there is a sound business logic for their presence, you could be in for trouble. – Philip Delves Broughton

Entrepreneurs get to see their decision bear fruit. What they say goes, and that freedom, that actualization through action, is the thrill of what they do. – Philip Delves Broughton

Context. You must have a relationship with your landscape. Your success might not be easily measured.

It’s not about going where everyone else is going, where the contest will be fiercest and the rivalries intense. It is about going to the place where you will have a natural edge over every other sucker who rolls into town, where you can take the risk that others never could. – Philip Delves Broughton

Planning. You will constantly grapple between the questions of ‘how’ and ‘what’. It is like building the plane at the same time as your hurtle towards take-off. Your business plan that you created is unlikely to suit the market. Plans need to be adapted to suit circumstance. The aim of the business plan is to get the entrepreneur to think. You must think both short and long-term for your business.

The business plan can be an invaluable checkpoint for the rational entrepreneur. It allows you to think about what you might need before you actually need it. – Philip Delves Broughton

Exploiting Opportunity. The Struggle. Elon Musk was in bad financial shape in the end of 2008. He had ventured into SpaceX and Tesla. At that time, he thought he was doomed. Thankfully, his investors bailed him out at the last minute. Then SpaceX won a billion dollar contract with NASA. He managed to pull it off. Musk has a tremendous ability to take pain and be hyper-rational about decision making. Failure might inevitably set it for an entrepreneur. Most people are not strong enough to overcome their struggle.

Being and Becoming. Those who have followed Elon would have earned rewards. His engineers would work all day and night. The work culture was addictive. They also were ingenious and could improvise at rates inconceivable at larger companies. They managed to build engine within 3 days. They built rockets from scratch. Falcon 1 failed in 2006. Musk painted them an image that their work was worthwhile.

SpaceX is in this for the long haul and, come hell or high water, we are going to make this work. – Elon Musk

It is the difficulty of entrepreneurship that leads to the fullest imaginable life. Work provides the framework for self-discovery, for finding out who we can be when we meet great challenges. – Philip Delves Broughton

Failure 1 and Failure 2. There are two types of failures, there are trivial failures and soul-shaking ones. Failure 1 are failures intrinsic to the scientific method. However, this eliminates one possibility. This is like one of the materials that won’t cause the lightbulb to light. Nowadays, you can start something off as a prototype and gain traction. However, iteration is important and iteration is a form of beauty in itself. Failure 2 are those that tests you as a person. An example of this is being on the verge of bankruptcy and emerging from the abyss. You don’t want to mess around with Failure 2s.

Most attempts fail not because of lack of brains but because the investigator gets stuck in a cul-de-sac or gives up too soon – Francis Crick

Indifference and Lightness. Stoics recommend we contemplate the worst possible experiences in life. Always anticipate the worst. Seneca was a famous stoic. Zen is a form of emotional therapy which is useful too. Steve Jobs established Apple University. It was a leadership programme. Steve Jobs’ character defined Apple. They were focused on good design. Jobs was fascinated with Zen Buddhism. For people to practice this, the past does not matter. Building a business was for the passionate and persistent. Learn to trust your gut. Value your loss as it gives you time to work on your work and family. Sometimes, you will meet success along unconventional paths. The rewards of the work matter little to the work itself.

To think like an entrepreneur is to think in terms of change, often dramatic change. And to change anything, one must move lightly, unburdened by the drab expectations of others. – Philip Delves Broughton

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