book reference:Neck, H. M., Neck, C. P., & Murray, E. L. (2021). Entrepreneurship: The practice and mindset (2nd ed). SAGE. htt

ACTIVATING AN ENTREPRENEURIAL MINDSET

©iStockphoto.com/yipengge

“If you want something you’ve never had, you must be willing to do something you’ve never done.”

—Thomas Jefferson

CHAPTER OUTLINE

· 2.1  The Power of Mindset

· 2.2  What Is Mindset?

· 2.3  The Self-Leadership Habit

· 2.4  The Creativity Habit

· 2.5  The Improvisation Habit

· 2.6  The Mindset as the Pathway to Action

Learning Objectives

· 2.1 Appraise the effectiveness of mindset in entrepreneurship.

· 2.2 Define “entrepreneurial mindset” and explain its importance to entrepreneurs.

· 2.3  Explain how to develop the habit of self-leadership.

· 2.4 Explain how to develop the habit of creativity.

· 2.5 Explain how to develop the habit of improvisation.

· 2.6 Relate the mindset for entrepreneurship to entrepreneurial action.

THE POWER OF MINDSET

>> LO 2.1 Appraise the effectiveness of mindset in entrepreneurship.

In  Chapter 1 , we learned about the Entrepreneurship Method. Part of the Method is being in the right mindset to start and grow a business. The words from “Rise and Shine” in  Figure 2.1  have been transcribed from an athlete motivation video on YouTube. It is a good description of how our mindset operates. When we wake up in the morning we have a choice between the “easy” way and the “right” way. Depending on our mindset, we will choose one path or the other. In this chapter’s Entrepreneurship in Action feature, we describe how Franklin Yancey’s entrepreneurial mindset encouraged him to start his own business selling comfortable stadium seats for sporting events. Yancey credits his early entrepreneurial experiences, his college education, and supportive family for his success.

But what motivated Yancey to start his own business? After all, he was still in college and had plenty of time to think about what he wanted to do afterward. We could say that Yancey was in the right mindset to start a business. He saw a problem that needed to be fixed and he was curious about finding solutions. Thanks to prior experiences, he had the confidence to take action by knocking on doors and gaining support for his idea. He also believed enough to persist with his idea, even in the face of high financial risk. It was Yancey’s entrepreneurial mindset that kept him on the right track and ultimately led to success in multiple businesses.

WHAT IS MINDSET?

>> LO 2.2 Define “entrepreneurial mindset” and explain its importance to entrepreneurs.

We emphasized mindset in  Chapter 1  and it’s also in the subtitle of this text, so perhaps it is time we stopped to examine what it actually means. It has traditionally been defined as “the established set of attitudes held by someone.” 1  It’s really our lens for viewing the world, interpreting what we see, and reacting or responding to what we hear. Our mindset subconsciously guides our reactions and decisions. Sometimes it’s really hard to define mindset, so perhaps a quick story will better illustrate. 2 , 3  Corey Booker, a U.S. senator for the state of New Jersey, was a law student in 1997. He had great passion for the city of Newark, which at the time was one of the most economically depressed cities in the country. In his final year of Yale law school, he began working as a tenants’ rights advocate in Newark—even moving to the harshest area of the city called the Central Ward. There he met Virginia Jones, the president of the Brick Towers tenants’ association—a slum in the Central Ward. Corey expressed to Virginia his interest in helping the community. As the story goes, Virginia took Corey to the middle of the busy street outside of the Brick Towers. She told Corey to look around and describe what he saw. Corey looked around and responded with such things as, “I see a playground overgrown with weeds and the equipment is rusty. I see trash on the sides of the road. I see houses with their windows boarded up. I saw a drug deal happening on that corner last night. I see so many people out of work.” The list could go on but Virginia Jones stopped Corey Booker and simply said, “You can’t help this area.” She paused. The petite Virginia Jones looked up at the broad-shouldered and tall young Corey Booker and said, “Boy, you need to understand that the world outside of you is a reflection of what you have inside of you, and if you’re one of those people who only sees darkness, despair, that’s all there’s ever gonna be.” This is an example of mindset—the mindset Corey had but also the mindset Corey needed. His life and mindset forever changed on that day.

Master the content  edge.sagepub.com/neckentrepreneurship2e

Entrepreneurship in ActionFranklin Yancey, WME Entertainment and Yancey Realty

Franklin Yancey, Founder of College Comfort and Yancey Realty

Photo courtesy of Franklin Yancey

As a young child growing up in Blackstone, Virginia, Franklin Yancey used to go out to the woods, dig up trees, pot them, and sell them to neighborhood families. He also sold stickers by cutting pictures out of skateboard magazines. You could say that Franklin developed an entrepreneurial mindset very early on. His father certainly helped. As Franklin said, “My father was a hard worker who came up from little means working in tobacco fields at a very early age. Later he started his own pharmacy. My strong work ethic comes from both of my parents.” You could also say that athletics also contributed to his mindset. From a young age, Franklin, his brother, and his sister played sports at competitive levels and they all were inducted into their high school hall of fame. His brother even played golf on the PGA Tour.

While in college at Virginia Tech University in the mid-1990s, Franklin enrolled in a management course, which jumpstarted his interest in entrepreneurship. “I realized that I didn’t want to work for someone else,” Franklin said. While walking to the Virginia Tech football stadium for a game, Franklin noticed a pile of portable, dilapidated stadium seats. These were seat cushions with a back support that fans could rent for a sporting event to make sitting in the stadium more comfortable. “They were made from cheap material and had been badly maintained,” recalled Franklin. Teaming up with his roommate, John Hite, he decided to make a better product to rent to the university. And so the two became the founders of College Comfort: a company that manufactured and rented comfortable stadium seats for sporting events and large stadium events.

To produce the seats, they found a local former Levi’s plant and asked for quotes to stitch high-quality material with school colors onto the rental stadium seats. Their first high-stakes deal came shortly after when Franklin pitched contracts with both East Carolina University and Virginia Tech for stadium seat cushion rentals. It was essential to get both schools to sign on, in order to get cash to produce the product and build credibility for College Comfort. Luckily, they both signed.

Franklin worked hard to market the product in new places. The next year they signed eight additional customers. Thanks to friends and family, they didn’t have lodging expenses while they traveled around the country sourcing more customers. In their third year of business, College Comfort signed on 12 more schools and the business has continued to grow ever since.

In early 2008, a large privately owned, multibillion-dollar entertainment company called WME-IMG Entertainment acquired College Comfort. Today, Franklin still works on this part of the business as a vice-president with WME-IMG. He leads a team of 10 people and has contracts with more than 100 universities, NASCAR, Major League Baseball, and others to provide thousands of rental stadium seat attachments for events.

While truly enjoying his work with WME-IMG, he still felt the entrepreneurship “itch” to start something else from scratch. So in 2016, he created a real estate company in Charlotte, N.C., called Yancey Realty that focuses on commercial real estate, residential real estate, and property management. He now has more than 30 agents in three locations. Franklin feels the autonomous nature of his WME-IMG job, combined with the use of technology, allows him to do both “jobs” well. He feels the secret sauce in his real estate business is his ability to empower his agents to get the job done by providing them with the resources they need to perform.

Franklin credits his entrepreneurial mindset for his ability to work hard. “I hear ‘work smart, not hard,’ and I understand the logic behind it. But the real mission is to work smart and to work longer and harder than others. You have to lead yourself before you can lead others, too!” Even after all of his success and at the age of 42, he still works many long nights, but it is all worth it to him. As he sees it, “There is only one title that matters: owner. Being an entrepreneur is about being an owner.”

Critical Thinking Questions

1. In what ways does his mindset play a role in Franklin’s success?

2. What is the one key trait that all entrepreneurs must possess, according to Franklin?

3. Have you considered any products or services as solutions to problems while walking through your own college campus? If so, describe them. •

Source: Franklin Yancey (interview with author, December 31, 2018)

Source: Franklin Yancey (interview with author, December 31, 2018)

Figure 2.1 Rise and Shine

Source: Red Productions. (2012, February 16). TCU baseball 2012—The grind [Video file]. Retrieved from  https://www.youtube.com/watch?v=MNL_DAI19_I

Fortunately our mindset is not static; it can change, as evidenced by the Corey Booker story above. Research has shown that our mindset needn’t be “set” at all. Stanford University psychologist Carol Dweck proposes that there are two different types of mindset: a fixed mindset and a growth mindset (see  Figure 2.2 ). 4

Description

Figure 2.2 What Kind of Mindset Do You Have?

Source: Created by Reid Wilson @wayfaringpath.

In a  fixed mindset , people perceive their talents and abilities as set traits. They believe that brains and talent alone are enough for success, and they go through life with the goal of looking smart all the time. They take any constructive criticism of their capabilities very personally and tend to attribute others’ success to luck (see Research at Work, below, for a study about luck) or some sort of unfair advantage. People with a fixed mindset will tell themselves they are no good at something to avoid challenge, failure, or looking dumb.

Fixed mindset: the assumptions held by people who perceive their talents and abilities as set traits.

On the other hand, in a  growth mindset , people believe that their abilities can be developed through dedication, effort, and hard work. They think brains and talent are not the key to lifelong success, but merely the starting point. People with a growth mindset are eager to enhance their qualities through lifelong learning, training, and practice. Unlike people with fixed mindsets, they see failure as an opportunity to improve their performance and to learn from their mistakes. Despite setbacks, they tend to persevere rather than give up.

Growth mindset: the assumptions held by people who believe that their abilities can be developed through dedication, effort, and hard work.

Recent studies have found that being praised simply for our intelligence can create a fixed mindset. For example, using a series of puzzle tests, Dweck discovered that 5th-grade children who were praised for their hard work and effort on the first test were far more likely to choose the more difficult puzzle the next time. In contrast, children who were praised for being smart or intelligent after the first test chose the easy test the second time around. 5

It seems that the children who had been praised for being smart wanted to keep their reputation for being smart and tended to avoid any challenge that would jeopardize this belief. Yet the children who had been praised for how hard they had worked on the first test had more confidence in their abilities to tackle a more challenging test and to learn from whatever mistakes they might make. 6

Dweck observes the growth mindset in successful athletes, business people, writers, musicians—in fact, anyone who commits to a goal and puts in the hard work and practice to attain it. She believes that people with growth mindsets tend to be more successful and happier than those with fixed mindsets. 7

Although many of us tend to exhibit one mindset or the other, it is important to recognize that mindsets can be changed. Even if your mindset is a fixed one, it is possible to learn a growth mindset and thereby boost your chances for happiness and success. How can you do this? By becoming aware of that “voice” in your head that questions your ability to take on a new challenge, by recognizing that you have a choice in how you interpret what that voice is telling you, by responding to that voice, and by taking action.

For example, say you want to start a new business, but you’re a little unsure of your accounting skills. Following are some messages you might hear from the “voice” in your head and some responses you might make based on a growth mindset. 8

FIXED MINDSET: “Why do you want to start up a business? You need accounting skills. You were always terrible at math at school. Are you sure you can do it?”

GROWTH MINDSET: “I might not be any good at accounting at first, but I think I can learn to be good at it if I commit to it and put in the time and effort.”

FIXED MINDSET: “If you fail, people will laugh at you.”

GROWTH MINDSET: “Give me the name of one successful person who never experienced failure at one time or another.”

FIXED MINDSET: “Do yourself a favor; forget the idea and hang on to your dignity.”

GROWTH MINDSET: “If I don’t try, I’ll fail anyway. Where’s the dignity in that?”

Next, suppose that you enroll in an accounting course, but you score very low marks on your first exam. Once again, you’re likely to hear messages from the “voice” in your head and respond to them as follows.

FIXED MINDSET: “Dude! This wouldn’t have happened if you were actually good at accounting in the first place. Time to throw in the towel.”

GROWTH MINDSET: “Not so fast. Look at Oprah Winfrey and Jack Ma—they suffered lots of setback along the way, yet they still persevered.”

Now suppose that a friend who hears about your low exam score makes a joke about your performance.

FIXED MINDSET: “Why am I being criticized for doing badly in the accounting exam? It’s not my fault. I’m just not cut out for accounting, that’s all.”

GROWTH MINDSET: “I can own this setback and learn from it. I need to do more practicing, and next time, I will do better.”

If you listen to the fixed mindset voice, the chances are you will never persevere with the accounting process. If you pay attention to the growth mindset voice instead, the likelihood is that you will pick yourself up, dust yourself off, start practicing again, and put the effort in before the next exam.

Over time, the voice you listen to most becomes your choice. The decisions you make are now in your hands. By practicing listening and responding to each of these voices, you can build your willingness to take on new challenges, learn from your mistakes, accept criticism, and take action.

As we have explored, our mindset is not dependent on luck, nor is it fixed: We each have the capability to adjust our mindset to recognize and seize opportunities and take action, even under the most unlikely or uncertain circumstances, but it takes practice. This is why the mindset is essential to entrepreneurship.

Research at WorkStudy on Luck

In the early 1990s, British psychologist and researcher Richard Wiseman carried out an experiment on luck to determine what defines a lucky or unlucky person. Over several years, using advertisements in newspapers and magazines, Wiseman sought out people who felt consistently lucky or unlucky. He interviewed them and identified 400 volunteers whom he asked to participate in the following experiment.

The 400 participants were divided into two groups: those who considered themselves lucky and those who considered themselves unlucky. Both groups were given a newspaper and asked to count how many photographs it contained.

In took approximately 2 minutes, on average, for the unlucky people to count all the photos, but it only took a few seconds for the lucky people. Why? Because the lucky people spotted a large message occupying more than half of the newspaper’s second page that stated, “Stop counting. There are 43 photographs in this newspaper.” The unlucky people had missed this instruction because they were too focused on what they thought they were supposed to look for.

Wiseman concluded that unlucky people tend to miss opportunities because they are too focused on something else, whereas lucky people tend to be more open to recognizing opportunities.

Wiseman’s overall findings have revealed that “although unlucky people have almost no insight into the real causes of their good and bad luck, their thoughts and behaviors are responsible for much of their fortune” (or misfortune).

Critical Thinking Questions

1. Identify a successful entrepreneur. Do you believe luck played a role in their success? Why or why not?

2. Do you consider yourself a particularly lucky or unlucky person? Or do you fall somewhere in the middle? Give some reasons to support your answer.

3. Can you think of an opportunity that came your way because you were open to it? How might you make yourself more open to “lucky” opportunities in the future? •

Sources

Wiseman, R. (2003, January 9). Be lucky—it’s an easy skill to learn. The Telegraph. Retrieved from  https://www.telegraph.co.uk/technology/3304496/Be-lucky-its-an-easy-skill-to-learn.html

Wiseman, R. (2003). The luck factor: The four essential principles. New York, NY: Hyperion.

The Entrepreneurial Mindset

The growth mindset is essential to a mindset for entrepreneurship. In  Chapter 1 , we discussed the Entrepreneurship Method and how it requires a specific mindset so that entrepreneurs have the ability to see the endless possibilities in the world. Although there is no single definition of mindset and how it relates to entrepreneurs, we believe the most accurate meaning of an  entrepreneurial mindset  is the ability to quickly sense opportunities, take action, and get organized under uncertain conditions. 9  This also includes the ability to persevere, accept and learn from failure, and get comfortable with a high level of discomfort!

Entrepreneurial mindset: the ability to quickly sense, take action, and get organized under uncertain conditions.

Many successful entrepreneurs appear to be very smart, but it is often the way they use their intelligence that counts. Cognitive strategies are the techniques people use to solve problems, such as reasoning, analyzing, experimenting, and so forth. The entrepreneurial mindset employs various cognitive strategies to identify opportunities, consider alternatives, and take action. Because working in uncertain environments “goes with the territory” in entrepreneurship, the entrepreneurial mindset requires constant thinking and rethinking, adaptability, and self-regulation—the capacity to control our emotions and impulses.

In  Chapter 1  we touched on the concept of  metacognition , which is our ability to understand and be aware of how we think and the processes we use to think (see  Figure 2.3 ). For example, say you are reading through a complex legal document; you might notice that you don’t understand some of it. You might go back and re-read it, pause to think it through, note the elements that don’t make sense to you, and then either come back to it later or find a way to clarify the parts you don’t understand. In this example, you are using your metacognitive skills to monitor your own understanding of the text, rather than simply plowing through the document without having much comprehension at all.

Metacognition: our ability to understand and be aware of how we think and the processes we use to think.

Description

Figure 2.3 Metacognition

Entrepreneurs regularly engage in metacognitive processes to adapt to changing circumstances by thinking about alternative routes to take and choosing one or more strategies based on these options. Metacognitive awareness is part of the mindset, and it is not something that we are born with. It can be developed over time through continuous practice.

Passion and Entrepreneurship

Among many elements of the entrepreneurial mindset, one of the most talked about is the element of passion. The entrepreneurial mindset is about understanding who you are and how you view the world. It deeply connects to your desired impact (described in  Chapter 1 ), which some people equate with passion. In the past, researchers tended to use passion as a reason to explain certain behaviors displayed by entrepreneurs that were thought to be unconventional, such as perceived high risk taking, intense focus and commitment, and a dogged determination to fulfill a dream. 10  Indeed, many well-known entrepreneurs, such as Mark Zuckerberg (Facebook founder), Jeff Bezos (Amazon founder), and Pierre Omidyar (eBay founder), credit passion for their success. 11

MindshiftWhat Does Your Mindset Say About You?

Visit a place that you are unfamiliar with. It can be a park, somewhere on campus you haven’t explored, a neighborhood, a new restaurant—really just about anywhere, provided you are not already familiar with the place. Bring with you a paper notepad and pen. Yes, real paper!

For 10 minutes, just look around and write down a description of what you observe. Make sure that when you write your observations, you use adjectives to describe what you see. For example, you may see a swing set in a park, but you need to describe that swing set. The swing set may be rusty, shiny, empty, broken, vibrant, or dull. A dog you see in the park may be big, cute, dirty, ugly, friendly, or hostile.

You must record your notes in writing, and you must observe for 10 minutes.

After you’ve finished, sit down and look at the list of words you’ve written. Circle all words that have a positive connotation. Using the park example above, you would circle shiny, vibrant, cute, and friendly. Now place a square around all words that have a negative connotation. In our park example, this could be rusty, broken, dull, dirty, ugly, and hostile.

What’s the point of all of this? Remember the Corey Booker story! What you see on the outside is a reflection of your mindset on the inside. If what you see in the world is predominantly negative, then your mindset for entrepreneurship needs to be further developed. If what you see in the world is more positive, it will be much easier for you to identify opportunities and make a difference.

Critical Thinking Questions

1. In what ways did this 10-minute observation exercise confirm your existing assumptions and beliefs about your way of looking at the world? In what ways did it change them?

2. Did you learn anything about yourself that was unexpected or surprising?

3. What do you think would happen if you repeated this exercise in a different location? •

Pierre Omidyar, founder of eBay

© Bloomberg/Bloomberg/Getty Images

But what is passion, and is it really that important to entrepreneurial success? In the context of entrepreneurship,  passion  can be defined as an intense positive emotion, which is usually related to entrepreneurs who are engaged in meaningful ventures, or tasks and activities, and which has the effect of motivating and stimulating entrepreneurs to overcome obstacles and remain focused on their goals.12 This type of passion is aroused by the pleasure of engaging in activities we enjoy. Studies have found that passion can also “enhance mental activity and provide meaning to everyday work,”13as well as fostering “creativity and recognition of new patterns that are critical in opportunity exploration and exploitation in uncertain and risky environments.”14

Passion: an intense positive emotion, which is usually related to entrepreneurs who are engaged in meaningful ventures, or tasks and activities, and which has the effect of motivating and stimulating entrepreneurs to overcome obstacles and remain focused on their

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