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In this section

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we are going to
talk about a new perspective

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Let's begin by exploring
the behavioral perspective

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This view also recognizes that

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people are different

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But what makes them different?

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It is their actions that differ

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The behavioral perspective focused on

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what entrepreneurs actually do

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Why is the behavioral perspective important?

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Because it explains

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how entrepreneurs cope, adopt, and behave

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in uncertain, resource poor,
and ambiguous situations

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Also, observable actions

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can be taught in the classroom

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Last but not least, people are not static

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They grow

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The behavioral perspective embraces

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this nonlinear personal growth

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and evolution

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Let's take a look at a card news I prepared

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This is the story of BrewDog

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Did you find James Walt 
and Martin Dickey's behavior insightful?

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If you find yourself
in a similar situation and act similarly,

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I strongly believe that you, too,

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could lead a high-growth company like theirs

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So, now let's turn to
the behavioral perspective

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The behavioral perspective

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focused on entrepreneurs' action itself

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In this perspective,
entrepreneurs are seen as

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the people who continuously learn

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and adapt to their environment

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This perspective analyze

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how entrepreneurs act at any given time

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rather than genes or personalities

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or ways of thinking or incentive

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For example

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What about the pivoting?

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When your business changes
your product or service,

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we call it pivoting

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This pivoting behavior
is a typical behavior,

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examined from the behavioral perspective

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When or how to pivot?

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This is the question

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and this is the example of the concept

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Let's watch a very famous
1980s drama for a moment

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It is a show called MacGyver,

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which is very interesting though

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As seen in the video,

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MacGyver fixed a broken fuse

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But he had no proper tools or materials

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Yet, he fixed it using a gum wrapper

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Such behavior,

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which is using what people
have at hand to solve a problem,

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is academically termed bricolage

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Bricolage is defined as follows

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The practice of making do by applying

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combination of the resources at hand

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to new problem and opportunities

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The bricolage concept was suggested by

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the professor Ted Baker and Nelson

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This concept offers an answer to

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how we can act
in the lack of the resources

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Startups,
I think startups

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frequently face this kind of situation

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You don't have any proper resources

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What are you going to do?

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Let's compare

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MacGyver and BrewDog founders
from the card news

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Both practiced the bricolage behavior

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First, MacGyver

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lacked the tools and materials
to fix the fuse

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Same happened to BrewDog founders

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BrewDog founders lacked 
the capital and access to the retailers

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Again, both created something
from limited resources

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As a result,

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MacGyver fixed the fuse

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Although it is temporary

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And BrewDog founders
created the value of the company

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This is one of the key behaviors

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often mentioned from
the behavioral perspective

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Which is what?

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Which is bricolage

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I hope you guys remember the term

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and put it into your real action

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Next, let's watch an interview clip

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of the YouTube co-founder, Chad Hurley

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What about it?

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When asked by the host,

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Chad Hurley said that

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he didn't expect YouTube
to become so big

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And he just focused on a short term goal

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He tried to control for daily operations

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In fact, the YouTube startup story

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is kind of a legend story
in the startup world

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There were three founders,
as you may know

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Chad Hurley, from this video, 
Steve Chen, and Jawed Karim

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All three had worked at PayPal,

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and they knew each other very well

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In late 2004

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Jawed Karim found it kind of troublesome

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to send a party video to multiple people

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So that three founders thought that

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Why not?

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Why not create a platform
for video sharing?

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All three were engineers

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So they didn't need to hire others

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And they had a great network,

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which allowed them to quickly build

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a simple video sharing platform

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within a few months

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And they built the company and technology

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without very expensive equipment
or large investment

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They just used their
personal gears and prototypes

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They had nothing to lose

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And they leveraged PayPal network

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and got angel investors and VC investors

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This partnership helped them

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eventually sell their company
to Google very quickly

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Originally, they thought
it might be used for dating

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But people started uploading
and sharing funny videos

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So the founders pivoted in this direction

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They also formed unofficial partnership

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with early contents creators,

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supporting popular uploaders

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with featured exposures and traffic

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creating a win-win system together

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What kind of behavior are they?

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These behaviors, I think,

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go beyond just the resources usage

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While it resembles bricolage previously,

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dealing with the lack of the resources

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Entrepreneurship requires more than that

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Entrepreneurs should minimize loss

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and should form the network

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and should make a win-win system

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between stakeholders

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And they should be flexible

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Because they should meet unexpected situation

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And probably they focused on

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a controllable and immediate problem

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rather than detailed future plan

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It's pretty complicated, right?

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These all behaviors are called

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Effectuation

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Please remember the term of Effectuation

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because it is very useful

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Effectuation is
a logical behavior or thinking

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on how expert entrepreneurs
build successful companies

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This concept was proposed by

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Professor Sarasvathy
at the University of Virginia

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Unlike conventional thinking,

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successful entrepreneurs started with

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what they have, 
who they knew

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 and what their knowledge is

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They try to co-create 
opportunities with the stakeholders

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They try to create value together

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It's a little bit complicated

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So, Sarasvathy provided us
five kind of principles

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The Effectuation includes five principles

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Let's look at the principles

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First principle,
which is a Bird-in-Hand principle

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Bird-in-Hand principle argues that

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the expert entrepreneurs start with

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who you are, what you know,
and whom you know

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This is very similar to
the bricolage concept, right?

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What about the second principle?

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The second principle is Affordable loss

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Affordable loss focuse on

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what you can afford to lose,

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not expected return

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Sometimes, novice entrepreneurs

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just focus on a rosy-pictured futures

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and they just think about expected return

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But, expert entrepreneurs act opposite

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Such as,
they just think about affordable loss

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How much can I lose?

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They just focus on
what you can afford to lose

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Let's move on to the third principle,

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which is Crazy Quilt

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Crazy quilt is about connection

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Crazy Quilt argues that

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expert entrepreneurs
build partnership quickly

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with self-selected stakeholders

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Then, the fourth principle is Lemonade

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Lemonade principle argues that

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expert entrepreneurs 
leverage surprises and contingencies

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They embrace and leverage

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surprises and threat with flexibility

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So, in order to leverage
your surprise and threat,

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you should be kind of flexible

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The last principle

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Last principle is Pilot-in-the-Plane

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Suppose that you are a pilot in the airplane

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You don't have to focus on

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a tomorrow flight
or one month later flight

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You should focus on

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what you can control right now

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rather than predicting the future

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This is natural

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Think about the YouTube case

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You can reflect on
the YouTube example again

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and you match YouTube story
with the Effectuation

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For example,
the interview from Chad Hurley

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He said that,
I just focus on what I control for

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This is a kind of principle of Pilot-in-the-Plane

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Also, YouTube founders started
what they knew,

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what they are,

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who they are,

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and what they know, right?

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This is a kind of a Bird-in-Hand principle

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And they didn't use a bunch of capital,

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they didn't use a bunch of
expensive equipment

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They just started very humble,
which is nothing to lose

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This is Affordable loss principle

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Next is the recently spotlighted
entrepreneurial behavior

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It is called, hustle

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Before we go into 
the concept of entrepreneurial hustle,

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let's watch a lecture clip
by Airbnb founder

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Who is Brian Chesky,
at Stanford University

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What about his lecture?

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Interesting, isn't it?

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Airbnb was started by
Brian and Joe Gebbia

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Even before the business began,

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they could not afford rent fee

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So they quickly offer

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a temporary and unlicensed
bed and breakfast

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using their air mattress

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So they didn't make much

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But they came up with the idea

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to connect with those with extra space

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and travelers seeking affordable space

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So, that's why they launched Airbnb

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and also they launched
additional website too

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And then, as shown in the video,

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they sold Obama and McCain cereal

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during the Democratic National Convention

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to pay off their credit card debt

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You can see their desperate

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and this responsive struggle to survive

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This kind of urgent,

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not traditional,

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improvisational,

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resourceful, or a tactical action

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is called as Entrepreneurial Hustle,
as I mentioned before

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This concept is proposed by

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the professor Fisher

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and other colleagues at Indiana University

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The Entrepreneurial Hustle 
is not just about working hard

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It's about responding very quickly
in a right direction

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Entrepreneurial Hustle
has four sub-components

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Let's take a look at it

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First component would be Urgency

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Urgency argues that

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entrepreneurs should move fast

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Also they conduct immediate actions

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in response to a dynamic environment

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Second element

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Second element is Unorthodoxy

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Unorthodoxy means

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the action that deviates from

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the formal strategy, norms,
or industry conventions

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It is a kind of a non-traditional actions

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Third element

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Third element is Intended Usefulness

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Intended Usefulness is

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actions are not just symbolic

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These actions should provide real value

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For example, remember the Airbnb case?

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The founders of Airbnb tried to
create new types of the cereal,

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which is Barack Obama and McCain cereal

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Why they created this cereal
and sold this cereal?

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Their actions, not because of symbolic actions

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Their actions are
real value generating action

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They tried to sell this cereal

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in order to pay off
with their credit card debt

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Last one

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Last component would be

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Addressing Immediate 
Challenges or Opportunities

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Entrepreneurs should tackle problems

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or seize chances in the near term,

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not abstract goals

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These four subsets

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combine and define Entrepreneurial Hustle

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Let me summarize

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The behavioral perspective focused on

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what entrepreneurs really do

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Not just who they are or what they think

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We looked at the three 
representative entrepreneurial behaviors

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The first one is Bricolage

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Bricolage is making do 
with available resources

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to solve problems

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Second one is Effectuation

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Effectuation emphasized on starting with

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existing means to create new opportunities

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There are five principles

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Do you remember that?

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Such as, Bird-in-Hand, Affordable loss,

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and what about Crazy Quilt?

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And Lemonade, and Pilot-in-the-Plane

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Third concept is Entrepreneurial Hustle

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Entrepreneurial Hustle is about

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urgent, non-traditional
and resourceful actions

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Again, it has four subcomponents

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Please remember the important behaviors

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Why is it important?

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If you follow these behaviors
in your real situation,

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and you can be a real 
and successful entrepreneur like them

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Thank you for staying focused
throughout these sessions

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Thank you very much