- Distinguish between entrepreneurship as a method and a process


[SLIDE 1]

The process approach to entrepreneurship considers entrepreneurship as a planned, linear approach, beginning with thinking of an idea and ending with firm exit. It suggests that by following a planned approach, such as the 10 steps displayed here, the venture is more likely to be successful. In contrast, failure to adopt a planned approach increases the risk of failure.

There are many problems with the assumptions. First, the approach relies too much on past history to predict the future, but a new entrepreneurial venture does not have any history to draw on. Second, entrepreneurship is neither linear nor predictable. It is in fact, ill-defined, unstructured and complex.

Research shows that 8 out of 10 new businesses started in the United States fail within the first 18 months of operation. One of the reasons for this is lack of entrepreneurial practice. We know this because entrepreneurs that have failed that try again are much more likely to succeed the second time around, even if they start the new business in a different industry.


[SLIDE 2]

So, entrepreneurship is messy, chaotic and complex. The Method or Practice of Entrepreneurship helps entrepreneurs to manage this complexity. First, let's watch Saras Sarasvathy explain the entrepreneurial method. 


[SLIDE 3]

When implementing The Practice of Entrepreneurship, it is important to note the following four points. 

First, the Practice applies to novices and experts regardless of experience levels.
Second, it is inclusive, which means it includes any organization at any stage of business.
Third, it requires continuous practice with a focus on doing, then learning.
Finally, it is designed for an unpredictable environment.


[SLIDE 4]

Let's compare entrepreneurship as a method and as a process. Entrepreneurship as a method caters to the uncertainty and unpredictability of entrepreneurship. It is a set of skills that comprise a toolkit for action, rather than a set of known inputs and predicted outputs. The emphasis is on phases of learning, rather than steps to complete, and entrepreneurship is iterative and creative, rather than being linear and predictive.

Entrepreneurship as a method requires the entrepreneur to get up, go out and take action!  Action is an investment for learning, and a collaborative exercise. The process view, on the other hand, focuses on planning for expected returns -- it is more competitive and used to help the entrepreneur get ahead. 

Approaching entrepreneurship as a method gives us comfort, but it is not a recipe for action. Part of the method is learning and practicing as you go, and consciously reflecting on events as and when they take place.