In this section
we are going to talk about a new perspective
Let's begin by exploring the behavioral perspective
This view also recognizes that
people are different
But what makes them different?
It is their actions that differ
The behavioral perspective focused on
what entrepreneurs actually do
Why is the behavioral perspective important?
Because it explains
how entrepreneurs cope, adopt, and behave
in uncertain, resource poor, and ambiguous situations
Also, observable actions
can be taught in the classroom
Last but not least, people are not static
They grow
The behavioral perspective embraces
this nonlinear personal growth
and evolution
Let's take a look at a card news I prepared
This is the story of BrewDog
Did you find James Walt and Martin Dickey's behavior insightful?
If you find yourself in a similar situation and act similarly,
I strongly believe that you, too,
could lead a high-growth company like theirs
So, now let's turn to the behavioral perspective
The behavioral perspective
focused on entrepreneurs' action itself
In this perspective, entrepreneurs are seen as
the people who continuously learn
and adapt to their environment
This perspective analyze
how entrepreneurs act at any given time
rather than genes or personalities
or ways of thinking or incentive
For example
What about the pivoting?
When your business changes your product or service,
we call it pivoting
This pivoting behavior is a typical behavior,
examined from the behavioral perspective
When or how to pivot?
This is the question
and this is the example of the concept
Let's watch a very famous 1980s drama for a moment
It is a show called MacGyver,
which is very interesting though
As seen in the video,
MacGyver fixed a broken fuse
But he had no proper tools or materials
Yet, he fixed it using a gum wrapper
Such behavior,
which is using what people have at hand to solve a problem,
is academically termed bricolage
Bricolage is defined as follows
The practice of making do by applying
combination of the resources at hand
to new problem and opportunities
The bricolage concept was suggested by
the professor Ted Baker and Nelson
This concept offers an answer to
how we can act in the lack of the resources
Startups, I think startups
frequently face this kind of situation
You don't have any proper resources
What are you going to do?
Let's compare
MacGyver and BrewDog founders from the card news
Both practiced the bricolage behavior
First, MacGyver
lacked the tools and materials to fix the fuse
Same happened to BrewDog founders
BrewDog founders lacked the capital and access to the retailers
Again, both created something from limited resources
As a result,
MacGyver fixed the fuse
Although it is temporary
And BrewDog founders created the value of the company
This is one of the key behaviors
often mentioned from the behavioral perspective
Which is what?
Which is bricolage
I hope you guys remember the term
and put it into your real action
Next, let's watch an interview clip
of the YouTube co-founder, Chad Hurley
What about it?
When asked by the host,
Chad Hurley said that
he didn't expect YouTube to become so big
And he just focused on a short term goal
He tried to control for daily operations
In fact, the YouTube startup story
is kind of a legend story in the startup world
There were three founders, as you may know
Chad Hurley, from this video, Steve Chen, and Jawed Karim
All three had worked at PayPal,
and they knew each other very well
In late 2004
Jawed Karim found it kind of troublesome
to send a party video to multiple people
So that three founders thought that
Why not?
Why not create a platform for video sharing?
All three were engineers
So they didn't need to hire others
And they had a great network,
which allowed them to quickly build
a simple video sharing platform
within a few months
And they built the company and technology
without very expensive equipment or large investment
They just used their personal gears and prototypes
They had nothing to lose
And they leveraged PayPal network
and got angel investors and VC investors
This partnership helped them
eventually sell their company to Google very quickly
Originally, they thought it might be used for dating
But people started uploading and sharing funny videos
So the founders pivoted in this direction
They also formed unofficial partnership
with early contents creators,
supporting popular uploaders
with featured exposures and traffic
creating a win-win system together
What kind of behavior are they?
These behaviors, I think,
go beyond just the resources usage
While it resembles bricolage previously,
dealing with the lack of the resources
Entrepreneurship requires more than that
Entrepreneurs should minimize loss
and should form the network
and should make a win-win system
between stakeholders
And they should be flexible
Because they should meet unexpected situation
And probably they focused on
a controllable and immediate problem
rather than detailed future plan
It's pretty complicated, right?
These all behaviors are called
Effectuation
Please remember the term of Effectuation
because it is very useful
Effectuation is a logical behavior or thinking
on how expert entrepreneurs build successful companies
This concept was proposed by
Professor Sarasvathy at the University of Virginia
Unlike conventional thinking,
successful entrepreneurs started with
what they have, who they knew
and what their knowledge is
They try to co-create opportunities with the stakeholders
They try to create value together
It's a little bit complicated
So, Sarasvathy provided us five kind of principles
The Effectuation includes five principles
Let's look at the principles
First principle, which is a Bird-in-Hand principle
Bird-in-Hand principle argues that
the expert entrepreneurs start with
who you are, what you know, and whom you know
This is very similar to the bricolage concept, right?
What about the second principle?
The second principle is Affordable loss
Affordable loss focuse on
what you can afford to lose,
not expected return
Sometimes, novice entrepreneurs
just focus on a rosy-pictured futures
and they just think about expected return
But, expert entrepreneurs act opposite
Such as, they just think about affordable loss
How much can I lose?
They just focus on what you can afford to lose
Let's move on to the third principle,
which is Crazy Quilt
Crazy quilt is about connection
Crazy Quilt argues that
expert entrepreneurs build partnership quickly
with self-selected stakeholders
Then, the fourth principle is Lemonade
Lemonade principle argues that
expert entrepreneurs leverage surprises and contingencies
They embrace and leverage
surprises and threat with flexibility
So, in order to leverage your surprise and threat,
you should be kind of flexible
The last principle
Last principle is Pilot-in-the-Plane
Suppose that you are a pilot in the airplane
You don't have to focus on
a tomorrow flight or one month later flight
You should focus on
what you can control right now
rather than predicting the future
This is natural
Think about the YouTube case
You can reflect on the YouTube example again
and you match YouTube story with the Effectuation
For example, the interview from Chad Hurley
He said that, I just focus on what I control for
This is a kind of principle of Pilot-in-the-Plane
Also, YouTube founders started what they knew,
what they are,
who they are,
and what they know, right?
This is a kind of a Bird-in-Hand principle
And they didn't use a bunch of capital,
they didn't use a bunch of expensive equipment
They just started very humble, which is nothing to lose
This is Affordable loss principle
Next is the recently spotlighted entrepreneurial behavior
It is called, hustle
Before we go into the concept of entrepreneurial hustle,
let's watch a lecture clip by Airbnb founder
Who is Brian Chesky, at Stanford University
What about his lecture?
Interesting, isn't it?
Airbnb was started by Brian and Joe Gebbia
Even before the business began,
they could not afford rent fee
So they quickly offer
a temporary and unlicensed bed and breakfast
using their air mattress
So they didn't make much
But they came up with the idea
to connect with those with extra space
and travelers seeking affordable space
So, that's why they launched Airbnb
and also they launched additional website too
And then, as shown in the video,
they sold Obama and McCain cereal
during the Democratic National Convention
to pay off their credit card debt
You can see their desperate
and this responsive struggle to survive
This kind of urgent,
not traditional,
improvisational,
resourceful, or a tactical action
is called as Entrepreneurial Hustle, as I mentioned before
This concept is proposed by
the professor Fisher
and other colleagues at Indiana University
The Entrepreneurial Hustle is not just about working hard
It's about responding very quickly in a right direction
Entrepreneurial Hustle has four sub-components
Let's take a look at it
First component would be Urgency
Urgency argues that
entrepreneurs should move fast
Also they conduct immediate actions
in response to a dynamic environment
Second element
Second element is Unorthodoxy
Unorthodoxy means
the action that deviates from
the formal strategy, norms, or industry conventions
It is a kind of a non-traditional actions
Third element
Third element is Intended Usefulness
Intended Usefulness is
actions are not just symbolic
These actions should provide real value
For example, remember the Airbnb case?
The founders of Airbnb tried to create new types of the cereal,
which is Barack Obama and McCain cereal
Why they created this cereal and sold this cereal?
Their actions, not because of symbolic actions
Their actions are real value generating action
They tried to sell this cereal
in order to pay off with their credit card debt
Last one
Last component would be
Addressing Immediate Challenges or Opportunities
Entrepreneurs should tackle problems
or seize chances in the near term,
not abstract goals
These four subsets
combine and define Entrepreneurial Hustle
Let me summarize
The behavioral perspective focused on
what entrepreneurs really do
Not just who they are or what they think
We looked at the three representative entrepreneurial behaviors
The first one is Bricolage
Bricolage is making do with available resources
to solve problems
Second one is Effectuation
Effectuation emphasized on starting with
existing means to create new opportunities
There are five principles
Do you remember that?
Such as, Bird-in-Hand, Affordable loss,
and what about Crazy Quilt?
And Lemonade, and Pilot-in-the-Plane
Third concept is Entrepreneurial Hustle
Entrepreneurial Hustle is about
urgent, non-traditional and resourceful actions
Again, it has four subcomponents
Please remember the important behaviors
Why is it important?
If you follow these behaviors in your real situation,
and you can be a real and successful entrepreneur like them
Thank you for staying focused throughout these sessions
Thank you very much