Entrepreneurship involves taking risk,creating something which is valuable to others, working with people andconstantly learning new things.
In my experience as a part of the bootstrappingchallenge, I worked on developing these qualities. It took a long time to realisethat running a business is not a piece of cake, it involves uncertainty,decision making, team work, adaptability, creativity and many more factors.”learning through doing” also called trial and error was one of my main motowhile performing the tasks creating a learning perspective. Most people enterentrepreneurship “in a substantial learning situation” (Gibb and Ritchie, 1982;p35). From a dynamic learning perspective, there remains a pressing need tounderstand how individual people learn to work in entrepreneurial ways.
Asubstantial learning situation is assessed in this essay, through analysingevery detail of my business from an entrepreneurial mindset, from the startingtill the end. Some critical arguments are made to understand the importance ofthe business while reflecting on the mistakes made and final outcome. So, wasthere enough potential in the idea or it was just a flaw from the beginning?My team’s initial idea was to do somethingdifferent.
Something out of the box involving creativity, value, culture andcurrent market trends. I thought of opening a tea stall initially but thatdidn’t seem viable given out initial investment of 5 pounds only. We then cameup with an idea of promoting businesses on campus through our services ofdistributing flyers. Voila, we had a business idea.
It required no investmentor raw materials but networking with the business which everyone thought wouldbe easy. However, I didn’t know how our strategy will unfold. Firstly, myexpectations at that time were very high in terms of getting clients, money andthe whole idea in general.
While I wanted to get things done and implement thegoals set at the beginning and not changing them time to time. McGrath andMcMillan describe this as implemental mindset where everything is interpretedusing known patterns and the outcome is always some kind of action. In contrast,an elaborative mindset is concentrated on assessing the situation on obtaininginformation, when people are more open to new information and take betterdecision. But is elaborative mindset always producing good results? Orimplemental mindset can find a way to succeed in business. According to aStanford study, students tend to perform well in a growth mindset, improvingtheir self-efficacy than students with a fixed mindset who believe theirabilities are fixed to a certain extent. In a business context, elaborativemindset opens a much broader horizon of possibilities whereas implemental orfixed mindset keep a narrow approach and results in bad outcome. Due to myfixed mindset towards the business and ideas, our team didn’t acquire anyclients by the end of the challenge resulting in zero revenue.
But with this inview, is it necessary that our result was a cause of our actions or market playeda role in deciding the outcome?Entrepreneurial activities emerge within culturaland social contexts and through social interaction (Korsgaard and Anderson,2011). Through this quote, I can assess my social and cultural background, theenvironment I live in and what are the needs and demands of the people. With mybusiness, the social and cultural context was very simple; the need to promote”eating out” culture among the youth. The social space in Lancaster Universityconsists of various restaurants and bars where students can build a social lifeand have a good time. Looking through this hole, I improvised our idea,introducing online promotions on sites like Facebook, Instagram and WhatsApp. Moreover,personal branding like leaflets in student accommodation, bars and socialspaces like the learning zone. To affect the cognitive tuning of students ofhow they perceive or characterise the scenario is said to be most importantattribute to entrepreneurial mindset. By making students believe that “eatingout” in restaurants and bars is a normal thing and making them aware of theresources on campus was our business vision.
My beliefs and assumptions werehowever challenged when we approached the business with our idea containing aletter of proposal which had our pricing and what we can offer. Before moving on to the businesses, ourpricing strategy was based on how many leaflets can we distribute. According tomy intuition and assumption I came up to a figure of 1000 leaflets we candistribute within 2 hours.
My conscious awareness about this rapid decision wasprobably due to lack of experience or knowledge. Therefore, we came up tocharging 30 pounds for 1000 flyers giving 1 flyer as 3 pence which wasrelatively cheap for a service. On one hand, the service we offered couldpotentially benefit the businesses in a huge way, until I encountered theepisode of networking to the businesses. Entrepreneurial mindset consists ofattributes of doing things, two of them are alertness and prior knowledge.
Itmeans actively search for new information and opportunities as well ascombination of work experience, personal events and education (Shane, 2000).While we networked with business like Ketchap, Sultan of Lancaster, Lusuliving, Wibbly Wobbly, Subway and Costa our prior knowledge about the marketand their needs contradicted the reality. Lot of these businesses were notlooking to promote or have already done so through other means. However, we gottwo clients interested in the services: LUSU living and Ketchap. Afterrevaluating my current condition and ambitions for the business, I realisedthat I certainly overlooked the market and made serious mistakes at the bottomlevel which resonated in the outcome. Postle (1993) refers to this as the’affective’ mode of learning, which ‘refers to learning by encounter, by directexperience.
It finds expression through “being there”, through immersion in anexperience’ (p33). However, was our outcome really bad? Not exactly, to someextent the businesses showed interest but didn’t reply to our emails afterconstant try. But, they are not the one to be blamed, reflection involveslearning form mistakes and objectively improving as an entrepreneur. This wasjust the beginning of my challenge.The internet boom in early 2000srevolutionised the humankind forever. On the other hand, it made a lot ofbusinesses fail on a massive scale due to lack of adaptability andincompetency. Compaq became the worlds’ largest supplier of PC’s during the1990’s. In 1986, it had a record sales of $329 million.
After twenty years, thecompany had $2billion in short term debt and was acquired by Hewlett Peckard.Due to the boom, the technological stocks were heavily impacted driving marketforces. Compaq’s rapid growth merely affected the industry it was operating inand the global markets desire for improved technology. This example of failureshows typical factors defining changing needs of the market. But what couldCompaq had done differently which would prevent them to change their positionin the market? Factors like studying the emerging needs and spotting behavioursis an essential skill for entrepreneurship. It also comes down to the growth ofthe business which should be under conditions boundaries set. However, in mybusiness the growth was measured in terms of clients acquired and not in termsof work done.
Was that viable for the business strategy for long term growth? Growth mainly has five stages ofmeasurement: Existence, survival, success, take off and resource maturity.Existence occurs in start-ups, new entity in the market. Survival is to competewith the competitors offering unique product to the customer, which results in success when the revenue rises and investment inthe company increases triggering its growth and resource maturity is making useof financial and human resources of the company.
Our business’s ambition was togive the profit made to a charity for cancer research in the UK hence using ourfinancial resources for a cause. However, success is an essential component inobtaining the resource maturity. On one hand, Existence and survival played animportant role in forming our business strategy as well as defined our approachtowards our operations.
It required innovation, teamwork, learning andadapting, researching and networking to be successful. So, what was missing inour operations which created unimaginable outcome in the end?Single loop learning is essentially thebiggest driver of failure in a business. It triggers stagnancy, inability tocope up with the changing environment and obtaining new information.
It is amere repetition of past behaviour – usually short term, surface, temporary. Incontrast businesses need a higher-level learning called double loop learningwhich is development of complex rules and association regarding new actions. Developmentof an understanding of causation. While practicing single loop learning, Iexperienced inability to cope within the team, come up with new approach oreven obtain new information about the businesses. This in turn affecting thebusinesses ability to adapt to its environment through harming internalresources and capabilities and external strategic factors (Thornhill and Amit,2003). The second dimension consist of initial condition of the business andcreating a value depending on the strategy. We created the value through ourown assumptions, formed strategy through our knowledge and research, what canbe changed in the future?Analysing the main actions that went wrongin our business, the spectrum of reasons of failure starts with deviance thatis individual choices and practices.
My team consisted a great degree ofdeviance among the people affecting our decisions and practices on a minorlevel giving rise to incomplete process. Process inadequacy mean incomplete effort or process ofcommunication or interaction with the client. Our strategy consisted on processinadequacy to a high level making decisions more complex. Moreover, processcomplexity making process composed of many elements break when it encountersnovel interactions.
In turn giving rise to more uncertainty in the outcome dueto complex ideas and processes. A lack of clarity about the future eventscausing people to take reasonable actions and producing undesirable results. Ona lower level, our strategy lacked consistency in interaction with thebusinesses, uncertainty of outcomes and heterogeneous nature of individualtowards the business which gave rise to failure. However, Hedberg argues thatfailure stimulates typically involve adapting to new circumstances or newdifficulties that are suddenly realised (Hedberg, 1981). Implying the learningoccurred through failure is what makes a business success.
Researchers underline that the inability ofthe entrepreneur to correctly analyse the firm’s environment, to anticipatechanges and to adapt the firm to them can be at the origins of its failure(Hambrick and D’Aveni, 1988, Thornhill and Amit, 2003). Internal reasons likelack of motivation, misalignment with the external environment, loss of dynamismgives rise to unhealthy behaviour towards the goal and poor level ofinnovation. I learned to create motivation by posing questions aboutperformance, goals being met and innovation to the team as well as studying theexternal environment on regular basis involving discussing plans with thebusinesses, studying their needs and consumer opinions. Moreover, trying newthings to see the consumer reaction like online promotions, poles andinterviews. Therefore, to know how to take calculated risk and study the marketthrough networks is essential for an entrepreneur. It is a part ofentrepreneurial learning.
Another reason for failure that can be seenis a punctual managerial error. It is the inability of the entrepreneur toanticipate change and to adapt the firm to it. The firm expects to gainalliance depending on its current strategy and its expectations from futureenvironmental conditions. This means, that the clients in our business dependon the strategy we used to acquire them and the future environment condition wecreated for the business depended on the value we offered to the community andthe business.
In the last section of this paper I will discuss about the socialimpact of our business and the community value in entrepreneurship and beyond.