How to Think Like an Entrepreneur

Every great entrepreneur, from Musk to Bezos, from Zuckerberg to Jobs, has a thinking framework that allowed them to formulate decisions differently from the masses. You may wonder, why to use a thinking framework in the first place?

On Human Fallibility

Humans share their origins with other living beings, in particular with chimpanzees. Although it may be hard to admit, we are still very related to our cousins, more than we think we are. In fact, before the 1980s many evolutionary biologists were convinced of the fact that chimpanzees were closer to gorillas than humans.

But the new technologies and the ability to compare the DNA of different species proved that belief to be flawed. Indeed, as it turned out humans and chimpanzees are more related to each other than chimpanzees to gorillas. In other words, 98% of our DNA is shared with our cousins, the chimpanzees. What does this imply? As much as we loved to believe, humans are not that different from other living creatures. In other words, our biological constraints make us fallible beings.

How to hack our biology? Successful entrepreneurs largely understood this principle, and that is why they developed the thinking framework that allows them to be shrewd decision-makers. In fact, while the majority of us tend to make important life decisions, based on the mood of the moment; successful entrepreneurs, use a thinking framework that keeps them on track. How does this work?

Signal to Noise Ratio

This is a sort of model that allows entrepreneurs to make wise decisions. In fact, the only way to be consistent and avoid bad decisions it to have a simple and clear framework that makes you immune to noise. In other words, while most humans minds are like candle swayed by the wind; entrepreneurs’ minds are more like magnets.

They work with a very simple mechanism of positive and negative charges. In short, like a positive magnet repels another positive magnet; entrepreneurs are able more than others to detect noise and let it go; while keeping the signal strength constant in time. In conclusion, the main difference between entrepreneurs and the rest is not about their genes, intelligence or wealth. Instead, it is all about mindset, which is the result of the thinking framework we are going to see next.

How to Think Like an Entrepreneur

 Since thousands of years ago, the “Homo Entrepreneurus” has been the innovator, the game changer, and the risk-taker. He built tools to hunt; he tamed the fire to cook, and he eventually brought us to the moon. What makes the “homo Enrepreneurus” think like he does? Could a bigger and larger brain be the answer? Not at all.

Entrepreneurs have learned to use a thinking habit that keeps their emotions in check and allow them to think differently from the rest of humanity. In modern times, we see more of these “super-humans,” leading our species forward and getting where none has been able to do so before. Entrepreneurs like Musk want to lead us to Mars. Others like Bezos want to deliver happiness around the world.

Others yet, like Zuckerberg, want to create a community that anyone can bring in his/her pocket. All those entrepreneurs share the same thinking framework, which we baptized “the M.T.P. framework.” Although it may sound like a sandwich name, it is a powerful framework to make any kind of entrepreneurial decision. But how does it work?

The M.T.P. Works Like a Building Project

Like a construction, where you build the foundation first, this framework needs to be built one layer over the other. In short, if you miss the “M block” the whole edifice will fall. On the other hand, if you have the M block in place, but miss the T and P blocks you won’t go far. Let’s see this framework more in detail.

M Stands for Mission

 If you ask Mark Zuckerberg what is the most important aspect any entrepreneurs has to consider before starting a venture, he will swiftly say, “Mission.” But what does it mean? Do you really need a mission statement to start your own business? Yes and not. In short, there is no need of a written mission statement. On the other hand, you have to keep in mind the kind of change you want to bring to humanity. For instance, Ford, with his Model T, wanted to change the way transportation worked. Nowadays Elon Musk is doing the same, with his Model S. Therefore, the mission translates into the level of change and impact that as an entrepreneur you want to bring to the world. Although it sounds ambitious, this doesn’t have to be necessarily a change that involves the whole humanity. For instance, your aim may be to change the way people sleep on an airplane. Therefore, you will come up with a product like “Woollip Travel Pillow,” which will change the way people around the world travel. This is the foundation.

T Stands for Team: Debunking the Founder Myth

One of the greatest myths of modern times is the fact that entrepreneurs did it all on their own. In other words, most people tend to identify the company with its founder. Therefore, Facebook = Zuckerberg, Amazon = Bezos, SpaceX (or Tesla) = Musk.

Even though founders played a great role in setting up the initial organization; the truth is that most of the work is done by teams of very talented and smart people. If you asked Ford about anything he didn’t know, he would have picked up the phone and asked one of his most talented people.

This tendency to identify companies with its founders is due to our biological need to anthropomorphize companies. We want companies to personify someone so that we can better relate to them. For instance, people who don’t like Zuckerberg may think of Facebook like an unpleasant company. Psychologists call this bias “halo effect.”

Therefore we mistake the personal features of the founder with that of the company. This happens because we often forget that companies are the only imaginary construct that exists in our shared imagination. But what really a company is? It is a set of assets and people, working together for a common objective.

Today more than ever (even truer for Hi-Tech companies), the real assets are people’s minds and how they intertwine to create a huge collective intelligence. Therefore, even if we love to think of entrepreneurs as geniuses, they often are people that had the ability to choose the right team.

P Stands for Persistence

Starting an enterprise is not an easy job. You have the odds stacked against you. Many believe that entrepreneurs are only “lucky dudes” that made it through thanks to the kiss of “Lady Fortuna.” No doubt, “Lady Fortuna” plays a crucial role in the success of any enterprise. Yet, how much of this is true?

It is undeniable that some entrepreneurs take huge risks without being aware of them. But can we really define those people, entrepreneurs? For instance, when Richard Branson adventures in one of his crazy explorations, he knows the risks he is going thru. In his mind, he knows that he is putting his life at stake. This is called calculated risk.

In other words, he is not facing adversity; thinking that he is an invincible being. Rather, he is taking the risk knowing how fallible he is. Therefore, shrewd and resilient entrepreneurs are aware of the risk they are taking. In this scenario where odds are stacked against you, the only way to improve your chances of success is to persevere. Like a man flipping a coin and getting tail ten times in a row, the entrepreneur is aware of the “law of large numbers.”

In short, you know that by flipping the coin time and time again, you will eventually get “head.” To become a successful entrepreneur you only need one “head” against the multiple “tails” you encounter throughout your path. Therefore perseverance is the key.

M.T.P. Framework. The Questions to Answer

In conclusion, the M.T.P. Framework is the real driver of success for any entrepreneur. You can start using this framework right now by answering the following three questions:

Mission: what change/impact am I going to create?

Team: which competencies I lack that need to be filled by a team of smart and cooperative people?

Perseverance: how can I minimize the financial risk, so that I will be able to start multiple ventures, in case the next won’t succeed?

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Credit photo: stock unlimited

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thefourweekmbateam

Gennaro Cuofano, International MBA. Author of "The Enlightened Accountant," and "The Art of Mentorship."

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