🏎️ The Art of Growing Fast: How the Entrepreneurial Mindset Differs from a Manager Mindset
Key Insights from Roll-Right-In Academy Podcast
Hello, budding entrepreneurs and future industry leaders! Welcome back to our latest blog post where we decipher insights from the newest episode of the Roll Right In Academy Podcast, aptly named "How to Turbocharge Your Growth". Your guides on this entrepreneurial journey are none other than Fabian and our resident expert, Professor Andy.
This blog is a 5-minute read.
In the exciting yet challenging landscape of startups, turbulence is a part and parcel of the journey. This episode, therefore, highlights the crucial role of flexibility, adaptability, and the art of strategic pivoting – the secret ingredients to navigate the startup storm: Who is an entrepreneur and who is not.
We illustrates the differences of the two mindsets manager vs. entrepreneur, how the ability to pivot forms the bedrock of an entrepreneur's success. When a particular strategy fails to yield desired results, they adapt and chart a new course - a true embodiment of the pivot principle.
Case Studies in Pivoting - The Journeys of Beecom AG and Pixar: We at Beecom AG originally embarked on our journey with the objective of crafting a niche industry solution for the pharmaceutical sector. Our course was abruptly altered when our chosen ERP software provider unexpectedly declared bankruptcy. Navigating through this unanticipated storm, we deftly tacked our sails and began constructing custom applications rooted in J2EE. As these tailored projects started to expand in size and complexity, we hit a realization - the different aspects of these projects were in a state of disarray, resembling a ship where the left hand didn't know what the right hand was doing. This led to us creating an online platform to foster efficient communication and task tracking amongst project team members.
Pic: Beecom founders Prof Andy (left), Homy and me with moderator Tama, 2020
During our search for open-source code snippets to support this initiative, we stumbled upon Jira by Atlassian in 2004. This discovery charted the course for a strategic pivot that saw us becoming the first official Atlassian partner in 2006. We built a service company focused on customizing Jira for businesses. As our expertise in the platform grew, we took advantage of a significant opportunity when Atlassian launched their marketplace. We developed an app that swiftly gained traction, eventually reaching an impressive count of 15 million users.
Pic: Beecom office, 2020
In 2020, we successfully sold Beecom Products, and a year later, we sold Beecom Services as well. Looking back, our journey with Beecom AG serves as a vibrant illustration of how the art of pivoting, adaptability, and seizing new opportunities can lead to sustained success in the ever-evolving landscape of tech entrepreneurship.
On the other side of the spectrum is the story of Pixar. Founded by Ed Catmull, Alvy Ray Smith and the visionary entrepreneur Steve Jobs, Pixar Animation Studios originally began as the Graphics Group, a part of Lucasfilm's computer division in 1979. They were driven by a shared vision of revolutionizing the world of graphics, animation, and image rendering with their cutting-edge computer hardware. Their first product, the Pixar Image Computer, was targeted at government agencies and the medical community, but unfortunately, the sales didn't take off as expected.
However, the team had also been working on a few side projects involving computer animation. They created several short films to demonstrate the prowess of the Pixar Image Computer. One of these short films, "Luxo Jr." about a little desk lamp, caught the eye of the public and critics at the SIGGRAPH conference in 1986, and later even snagged an Academy Award nomination.
This reaction was a lightbulb moment for the team. It became apparent that the real value of their technology was not in selling computer hardware to a niche market, but in leveraging it for storytelling in the realm of animation. Taking a bold leap of faith, they pivoted from being a hardware company to a full-fledged animation studio.
Their first feature film, "Toy Story," was released in 1995 and was a groundbreaking success, not just for its engaging storyline and memorable characters, but also for being the first ever feature-length film to be entirely computer-animated. Pixar has since produced numerous successful films that are loved by audiences of all ages, including classics like "Finding Nemo," "The Incredibles," "Up," and "Inside Out."
The rest, as they say, is history. The narrative of Pixar serves as an inspiring case study of how understanding the audience's needs, willingness to iterate, and resilience to adapt and change direction can help a company redefine an industry and attain phenomenal success.
Entrepreneur vs. Non-Entrepreneur Mindset: Saras Sarasvathy's seminal paper "What Makes Entrepreneurs Entrepreneurial?" elegantly demystifies the differentiating mindsets between entrepreneurs and non-entrepreneurs using the terms effectual and causal reasoning. To put it in simple terms, causal reasoning is like following a pre-determined recipe, while effectual reasoning is akin to the approach of a master chef, guided by the ingredients on hand and an intuitive understanding of what they can become.
Non-entrepreneurs, akin to managers, often follow a causal reasoning model. They start with a predefined goal, gather the necessary resources, devise a plan and then execute it. Like following a map, it's about traveling a well-defined path from point A to point B. Managers excel in this approach when steering large organizations, focusing on optimization and efficiency.
Pic: What Makes Entrepreneurs Entrepreneurial?, Saras Sarasvathy, 2005
Entrepreneurs, on the other hand, exhibit effectual reasoning. They begin with a set of means (who they are, what they know, and whom they know), and then focus on selecting and achieving potential new ends. It's less about following a map and more about exploring uncharted territories, ready to pivot and adjust the course as new opportunities or challenges arise. This mindset celebrates uncertainty and views it as an opportunity rather than a threat.
Pic: What Makes Entrepreneurs Entrepreneurial?, Saras Sarasvathy, 2005
The story of Beecom AG and Pixar underscore this entrepreneurial mindset - navigating the unknown, seizing new opportunities, and transforming challenges into game-changing pivots. It's the difference between seeing a dead-end versus an alternate path, a characteristic that separates successful entrepreneurs from the crowd.
The Golden Rules of Pivoting: These fascinating stories underline Professor Andy's three principles of successful pivoting. First, a deep understanding of the audience's needs. Second, a commitment to continuous iteration and refinement. And third, the resilience to adapt and alter strategies when the current ones aren't working.
Beyond Conventional Models - A Fresh Approach to Startup Success: Traditional waterfall or stage gate models, with their stringent structures, are less favorable for the dynamic world of startups. Instead, we emphasizes an iterative process model, inspired by Design Thinking. This model allows entrepreneurs to test, learn, and iterate swiftly, enabling timely pivots and ongoing learning from low-cost failures.
Wrapping Up: In conclusion, "How to Turbocharge Your Growth" reiterates the paramount importance of having an entrepreneurial mindset, characterized by effectual reasoning, in a startup's journey to success. This mindset, the ability to embrace change, continuously iterate, and focus on the audience, serves as the foundation of strategic pivoting that fuels a startup's growth trajectory. Without it, the chances of success significantly diminish. Therefore, as a founder, ensure that you and your co-founders cultivate this mindset as a crucial first step towards making your entrepreneurial dreams a reality. And don’t forget to fail early.
📺 As always, we appreciate your feedback and encourage you to share our podcast with your peers. Looking forward to seeing you in the next episode of Roll Right In Academy!
Keep learning, keep iterating, the sooner or later the money will roll right in.
Well, that’s it for now. See you again next week. Thank you for reading and posting your questions and feedback!
Your are the best,
Fabian
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PS:
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For an engaging deep dive into Pixar's pivot story, check out this link: