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The Three Hedgehogs of Entrepreneurship. © Kevin Hindle 2008. Multa novit vulpes, verum echinus unum magnum Erasmus of Rotterdam (after Archilochus). The three hedgehogs of entrepreneurship are evaluation, environment and education Hindle of Bondi (after a few nice glasses of wine).
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The Three Hedgehogs of Entrepreneurship © Kevin Hindle 2008
Multa novit vulpes, verum echinus unum magnumErasmus of Rotterdam(after Archilochus)
The three hedgehogs of entrepreneurship are evaluation, environment and educationHindle of Bondi(after a few nice glasses of wine)
The hedgehog and the fox • Sir Isaiah Berlin • Archilochus’ saying • Ambiguous but the words may … • ‘…mark one of the deepest differences which divide writers and thinkers, and, it may be, human beings in general.’
‘For there exists a great chasm …’ • between those … who relate everything to a single central vision, one system … and … • those who pursue many ends, often unrelated and even contradictory … • these last … entertain ideas that are centrifugal rather than centripetal … diffused, moving on many levels, seizing upon the essence of a vast variety of experiences … without seeking to fit them into, or exclude them from, any one … all-embracing, unitary … vision.
Examples from the Western canon • Berlin develops the idea, dividing writers and thinkers into two categories: • Hedgehogs, view the world through the lens of a single defining idea (examples include Dante, Plato, Lucretius, Pascal, Hegel, Dostoevsky, Nietzsche, Ibsen, and Proust) • Foxes draw on a wide variety of experiences and for whom the world cannot be boiled down to a single idea (examples include Shakespeare, Herodotus, Aristotle, Montaigne, Erasmus, Molière, Goethe, Pushkin, Balzac, Joyce, Anderson).
Examples from the Entrepreneurship canon? • Schumpeter, of course, was both H & F • Maybe McClellan is a hedgehog? • Nearly everyone else is a fox: maybe a very territorial fox, but a fox nevertheless • I have been a fox more than most: knowing lots of little things about this gigantic phenomenon • One day, I decided I’d like to be a hedgehog: I was sick of running around chasing my tail through a trail of marginal footnotes
Overview Three hedgehogs Most time spent on one: the community diagnostic process Implications and examples
Where do you focus? • The three ‘hedgehogs’ of entrepreneurship: • Evaluation • Entrepreneurial capacity • Environment • Community context • Education • Curriculum character
What to put at the centre of your thinking, acting and teaching: focus on evaluation First among equals I have a general theory I have a set of strategic guidelines And a very specific tactical toolkit The VIQtm evaluation regime
Hedgehog one: capacity • QUESTION: what is both unique and generic about entrepreneurship? • ANSWER: Entrepreneurial capacity is the ability of individual or grouped human actors (entrepreneurial protagonists) to evaluate the economic potential latent in a selected item of new knowledge, and to design ways to transform that potential into realizable economic value for intended stakeholders.
Opportunity Discovery Opportunity Evaluation Applied entrepreneurial capacity Opportunity Exploitation Entrepreneurial resources Entrepreneurial conviction Entrepreneurial alignment Contextual factors Entrepreneurial process model Generic Opportunity Processes New knowledge with economic potential ? Value for intended stakeholders Specific Constraints The existence of productive opportunity
The Innovation Process Function • V = k(n En) • Where: • ‘V’ is the net present value of a completed, multi-period, innovation process. • ‘n’ is the number of periods in the entrepreneurial opportunity cycle. • ‘f’ is the number of the final period of the entrepreneurial opportunity cycle. • ‘k’ is the estimatednet present value of the total productive potential of the new knowledge (invention, intellectual property, etc, as discussed above). • ‘n’ is the proportion of all the productive opportunity available to the entrepreneurial protagonist(s) that is potentially realisable in period n.[1] • ‘En’ is an estimate of the proportion the firm can actually achieve of all the entrepreneurial capacity required for full realisation of n in period n.
Implications for Entrepreneurship Education • In getting at the entrepreneurial essence, it matters less who you are; or where you are (in a ‘firm’, in solo circumstances etc); or what you ultimately do (i.e. what implementation/exploitation path, such as new venturing, is eventually adopted). • The distinctive, generic attribute of entrepreneurial capacity is howyou conceive of what to do. That is what ‘evaluation’ means. • In a highly reductionist sense this indicates that the essential entrepreneurial capacity lies in the ability to design a business model and conceive of an efficacious plan for implementing it.
Who is an entrepreneur: what does she do? • An entrepreneur is a person who knows how to transform new knowledge into new dollars by designing a business model and conceiving of an efficacious plan for implementing it. • A business model is a well-articulated plan for turning effort into profit using identified resources and stakeholders.
Research reveals four core attributes of entrepreneurial opportunity • Existence • Discovery • Evaluation • Exploitation
Linked like this • EXISTENCE depends on economic disequilibria and asymmetries of information • DISCOVERY results from a combination of prior knowledge and differences in the way individuals think and act • EVALUATION is a function of the nature of the opportunity and differences in the way individuals think & act (cognitive properties) • The mode of EXPLOITATION can be rejection, new venturing or through existing entities
Ask 10 questions • TWO ON EXISTENCE • TWO ON DISCOVERY • TWO ON EVALUATION • FOUR ON EXPLOITATION
Entrepreneurs writing plans Well written plan or not Investor rating Entrepreneurial Business Plans Selected for funding or not Venture successful or not 89% Validated principles for writing and rating Entrepreneurial Business Plans: Venture Intelligence Quotient 79% 79% Basis of V I QVenture Evaluation Philosophy and System Evaluated quality of plans using 10 variables Evaluated viability of opportunity using 15 variables
A useful toolkit: how to get the VIQtm • Here’s the book • Here’s the short book • Here’s the really short book • Here’s the guy you need • Jacob Thomsen: Projektleder • Mobile: 60 11 19 16 • Website: http://www.idea-viq.dk • Email: jath@idea.sdu.dk
Hedgehog 2:ENVIRONMENTCommunity diagnosis is the key to contextual understanding
What’s the point? • Sweden is different • So is everywhere else, within and beyond
What’s the level? • Macro - the climate • Intermediate - the garden • Various definitions • I use ‘community’
Definition • A ‘community’ can be any context where a self-defined group of people see their mutual belonging to the community as distinguishing them (but not excluding them) from all other members of society at large and where continued membership of the community is valued highly enough to impose some constraints on behaviour.
Issues in the concept of community Particular definitions will always be challenged Ranges in scale Conflict or handshake? ‘Us’ and ‘them’ Integrity factors: what makes us, us? Where ‘heritage’, ‘tradition’ and allegedly ‘backward looking’ factors are important, do they conflict with the allegedly ‘forward looking’ agenda of innovation and entrepreneurship.
Aim? To find a GENERIC diagnostic regime capable of assessing the contextual influence that SPECIFIC community factors will have on the feasibility of any proposed entrepreneurial process
Methodology? There’s lots of it
Diagnostic Framework COMMUNITY CONTEXT Property Rights and Capital Management Boundary Spanning Mandates & Possibilities GENERIC HUMAN FACTORS Governance and Institutions World Views and Social Networks GENERIC STRUCTURAL FACTORS Baseline Physical Resources Land and Infrastructure Baseline Human Resources Demographics and Human Capital
ANALYTICAL FRAMEWORK COMMUNITY CONTEXT ENTREPRENEURIAL PROCESS Specific Factor Blend Property Rights and Capital Management Boundary Spanning Mandates & Possibilities Task Specific Tools GENERIC HUMAN FACTORS Governance and Institutions World Views and Social Networks GENERIC STRUCTURAL FACTORS Facilitation & Programs Baseline Physical Resources Land and Infrastructure Baseline Human Resources Demographics & Human Capital
ANALYTICAL FRAMEWORK COMMUNITY CONTEXT Different Travelers ENTREPRENEURIAL PROCESS Specific Factor Blend Contextualized Property Rights and Capital Management Boundary Spanning Mandates and Possibilities Task Specific Tools GENERIC HUMAN FACTORS Governance and Institutions World Views and Social Networks GENERIC STRUCTURAL FACTORS Facilitation and Programs Baseline Physical Resources Land and Infrastructure Baseline Human Resources Demographics and Human Capital
ANALYTICAL FRAMEWORK COMMUNITY CONTEXT Different Travelers ENTREPRENEURIAL PROCESS(ES) Specific Factor Blend Multiple Pathways Contextualized Property Rights and Capital Management Boundary Spanning Mandates & Possibilities Task Specific Tools GENERIC HUMAN FACTORS Governance and Institutions World Views and Social Networks GENERIC STRUCTURAL FACTORS Facilitation and Programs Baseline Physical Resources Land and Infrastructure Baseline Human Resources Demographics and Human Capital
Hedgehog 3:EDUCATIONCurricula must have contextual character
The solution which I am urging, is to eradicate the fatal disconnection of subjects which kills the vitality of our modern curriculum. (Alfred North Whitehead 1929/1967: 6)
The Wheel Template for Building an Entrepreneurship Curriculum
Virtues of contextually relevant entrepreneurship education • An antidote to teaching entrepreneurship using un-adapted programs and tools • The failure recipe looks like this:
