The Three Hedgehogs of Entrepreneurship © Kevin Hindle 2008.

The Three Hedgehogs of The Three Hedgehogs of EntrepreneurshipEntrepreneurship

© Kevin Hindle 2008

Multa novit vulpes, verum echinus unum magnum

Erasmus of Rotterdam(after Archilochus)

The three hedgehogs of entrepreneurship are

evaluation, environment and education

Hindle of Bondi

(after a few nice glasses of wine)

Predicate bestiary

The hedgehog and the fox

• Sir Isaiah Berlin• Archilochus’ saying• Ambiguous but the

words may …• ‘…mark one of the

deepest differences which divide writers and thinkers, and, it may be, human beings in general.’

‘For there exists a great chasm …’

• between those … who relate everything to a single central vision, one system … and …

• those who pursue many ends, often unrelated and even contradictory …

• these last … entertain ideas that are centrifugal rather than centripetal … diffused, moving on many levels, seizing upon the essence of a vast variety of experiences … without seeking to fit them into, or exclude them from, any one … all-embracing, unitary … vision.

Examples from the Western canon

• Berlin develops the idea, dividing writers and thinkers into two categories:

• Hedgehogs, view the world through the lens of a single defining idea (examples include Dante, Plato, Lucretius, Pascal, Hegel, Dostoevsky, Nietzsche, Ibsen, and Proust)

• Foxes draw on a wide variety of experiences and for whom the world cannot be boiled down to a single idea (examples include Shakespeare, Herodotus, Aristotle, Montaigne, Erasmus, Molière, Goethe, Pushkin, Balzac, Joyce, Anderson).

Examples from the Entrepreneurship canon?• Schumpeter, of course, was both H & F• Maybe McClellan is a hedgehog?• Nearly everyone else is a fox: maybe a very territorial

fox, but a fox nevertheless• I have been a fox more than most: knowing lots of

little things about this gigantic phenomenon• One day, I decided I’d like to be a hedgehog: I was

sick of running around chasing my tail through a trail of marginal footnotes

Overview

• Three hedgehogs• Most time spent on one: the community

diagnostic process• Implications and examples

Quick predicate:entrepreneurship?

Emergence and OpportunityTwo schools of thought: emergence and opportunity.

PRINCIPAL ACTION FOCUSCreation of new means and ends relationships

Maximizing existing means and ends relationships

Organizational Context

New Organizations

A) Innovation oriented venture creation

B) Non-innovation oriented venture creation

Existing Settings C) Innovation orientated venturing in existing contexts

D) Traditional Management

Where do you focus?

• The three ‘hedgehogs’ of entrepreneurship:• Evaluation

– Entrepreneurial capacity• Environment

– Community context• Education

– Curriculum character

Hedgehog 1EVALUATION

The essence of entrepreneurial capacity

What to put at the centre of your thinking, acting and teaching: focus on evaluation

• First among equals• I have a general theory• I have a set of strategic guidelines• And a very specific tactical toolkit• The VIQtm evaluation regime

Why evaluate? Because it is the star of the show

Hedgehog one: capacity

• QUESTION: what is both unique and generic about entrepreneurship?

• ANSWER: Entrepreneurial capacity is the ability of individual or grouped human actors (entrepreneurial protagonists) to evaluate the economic potential latent in a selected item of new knowledge, and to design ways to transform that potential into realizable economic value for intended stakeholders.

Entrepreneurial process model

New knowledge

with economic potential

The existence of productive opportunity

?

Generic Opportunity Processes

Opportunity Discovery

Opportunity Exploitation

Opportunity EvaluationApplied entrepreneurial

capacity

Entrepreneurial resources

Entrepreneurial conviction

Entrepreneurial alignment

Contextual factors

Specific Constraints

Value for intended

stakeholders

The Innovation Process Function• V = k (n En)•

Where:• ‘V’ is the net present value of a completed, multi-period, innovation process.• ‘n’ is the number of periods in the entrepreneurial opportunity cycle.• ‘f’ is the number of the final period of the entrepreneurial opportunity cycle.• ‘k’ is the estimated net present value of the total productive potential of the new

knowledge (invention, intellectual property, etc, as discussed above).• ‘n’ is the proportion of all the productive opportunity available to the

entrepreneurial protagonist(s) that is potentially realisable in period n.[1]• ‘En’ is an estimate of the proportion the firm can actually achieve of all the

entrepreneurial capacity required for full realisation of n in period n.

∑=

f

n 1

Implications for Entrepreneurship Education

• In getting at the entrepreneurial essence, it matters less who you are; or where you are (in a ‘firm’, in solo circumstances etc); or what you ultimately do (i.e. what implementation/exploitation path, such as new venturing, is eventually adopted).

• The distinctive, generic attribute of entrepreneurial capacity is how you conceive of what to do. That is what ‘evaluation’ means.

• In a highly reductionist sense this indicates that the essential entrepreneurial capacity lies in the ability to design a business model and conceive of an efficacious plan for implementing it.

Who is an entrepreneur: what does she do?• An entrepreneur is a person who knows how to

transform new knowledge into new dollars by designing a business model and conceiving of an efficacious plan for implementing it.

• A business model is a well-articulated plan for turning effort into profit using identified resources and stakeholders.

What to evaluate: the 4-10 strategy

Research reveals four core attributes of entrepreneurial opportunity

• Existence• Discovery• Evaluation• Exploitation

Linked like this

• EXISTENCE depends on economic disequilibria and asymmetries of information

• DISCOVERY results from a combination of prior knowledge and differences in the way individuals think and act

• EVALUATION is a function of the nature of the opportunity and differences in the way individuals think & act (cognitive properties)

• The mode of EXPLOITATION can be rejection, new venturing or through existing entities

Ask 10 questions

• TWO ON EXISTENCE• TWO ON DISCOVERY • TWO ON EVALUATION • FOUR ON

EXPLOITATION

How to evaluate: the VIQtm system

Basis of V I QVenture Evaluation Philosophy and System

Entrepreneurswriting plans

Well written plan or not

Investor rating EntrepreneurialBusiness Plans

Selected for funding or not

Venture successful

or not

Evaluated viability of opportunity using

15 variables

Evaluated quality of plans using 10

variables

Validated principles for writing and rating Entrepreneurial Business Plans:

Venture Intelligence Quotient

89%79%79%

A useful toolkit: how to get the VIQtm

• Here’s the book• Here’s the short book• Here’s the really short book• Here’s the guy you need

– Jacob Thomsen: Projektleder – Mobile: 60 11 19 16 – Website: http://www.idea-viq.dk – Email: [email protected]

http://www.idea-viq.dk/

Hedgehog 2:ENVIRONMENTCommunity diagnosis

is the key to contextual understanding

What’s the point?

• Sweden is different• So is everywhere else, within

and beyond

What’s the level?

• Macro - the climate• Intermediate - the garden

–Various definitions• I use ‘community’

Definition

• A ‘community’ can be any context where a self-defined group of people see their mutual belonging to the community as distinguishing them (but not excluding them) from all other members of society at large and where continued membership of the community is valued highly enough to impose some constraints on behaviour.

Issues in the concept of community• Particular definitions will always be

challenged• Ranges in scale• Conflict or handshake?• ‘Us’ and ‘them’• Integrity factors: what makes us, us?• Where ‘heritage’, ‘tradition’ and allegedly

‘backward looking’ factors are important, do they conflict with the allegedly ‘forward looking’ agenda of innovation and entrepreneurship.

Aim?

• To find a GENERIC diagnostic regime capable of assessing the contextual influence that SPECIFIC community factors will have on the feasibility of any proposed entrepreneurial process

Methodology?

• There’s lots of it

Findings: the argument

World Views and

Social Networks

GE

NE

RIC

HU

MA

N F

AC

TO

RS

GE

NE

RIC

ST

RU

CT

UR

AL

FA

CT

OR

S

Baseline Physical Resources

Land and Infrastructure

Baseline Human Resources

Demographics and Human Capital

Boundary SpanningMandates & PossibilitiesGovernance

and Institutions

Property Rights and

Capital Management

COMMUNITY CONTEXT

Diagnostic Framework

Task

Spe

cific

Too

ls

Facilitation & Program

s

COMMUNITY CONTEXT

Specific Factor Blend

GE

NE

RIC

HU

MA

N F

AC

TO

RS

GE

NE

RIC

ST

RU

CT

UR

AL

FA

CT

OR

S

Property Rights and

Capital Management

ENTREPRENEURIAL

PROCESS

Boundary SpanningMandates & Possibilities

World Viewsand

Social Networks

Governance and

Institutions


Demographics & Human Capital



ANALYTICAL FRAMEWORK

Task

Spe

cific

Too

ls

Facilitation and Programs

COMMUNITY CONTEXT

Specific Factor Blend

GE

NE

RIC

HU

MA

N F

AC

TO

RS

GE

NE

RIC

ST

RU

CT

UR

AL

FA

CT

OR

S

Property Rights and

Capital Management

ENTREPRENEURIAL

PROCESS

Boundary Spanning

Mandates and PossibilitiesWorld Views

and Social Networks

Governance and

Institutions





Contextualized


Different Travelers

Task

Spe

cific

Too

ls

Facilitation and Programs

COMMUNITY CONTEXT

Specific Factor BlendMultiple Pathways

GE

NE

RIC

HU

MA

N F

AC

TO

RS

GE

NE

RIC

ST

RU

CT

UR

AL

FA

CT

OR

S

Property Rights and

Capital Management

ENTREPRENEURIAL

PROCESS(ES)

Boundary SpanningMandates & PossibilitiesWorld Views

and Social Networks

Governance and

Institutions





Contextualized

Different Travelers


Hedgehog 3:EDUCATION

Curricula must have contextual character

What not to do

The Pyramid Approach to Business Education

ELECTIVE

ACCOUNTING

CORPORATESTRATEGY

MARKETING

ELECTIVE

ORGANISATIONALBEHAVIOUR

FINANCE

LAW

ELECTIVEELECTIVE

The solution which I am urging, is to eradicate the fatal disconnection of subjects which kills the vitality of our modern curriculum.

(Alfred North Whitehead 1929/1967: 6)

The Wheel Template for Building an Entrepreneurship Curriculum

+Organisational

Behaviour

Marketing

Creativity

Sales

Plan

Business

Accounting andFinance

OpportunityEvaluation

Strategy

CommercialDevelopment

?

Synthesis and implications: so what?

Virtues of contextually relevant entrepreneurship education

• An antidote to teaching entrepreneurship using un-adapted programs and tools

• The failure recipe looks like this:

Non-contextual entrepreneurship programs

Entrepreneurship education needs context

Examples of relevance

Teaching entrepreneurship in developing countries and contexts

• The Moremong-Nganunu thesis

Teaching entrepreneurship in developed countries

• Denmark and IDEA• The ‘Plus Zone Challenge’ and university

entrepreneurship curricula design (Hindle [in Fayolle] 2007.

• Karin’s example• Cases and teaching tools

Understanding entrepreneurship in ‘challenged’ mainstream organisations

• University: the Moroz thesis• ‘Stalled’ corporations• A potential re-thinking of the whole field

of corporate entrepreneurship• Government and policy-making agencies

Understanding and practicing entrepreneurship in Indigenous contexts

• The Kayseas thesis• The Pasco thesis• The Koori Business Network partnership

and ARC research grant• The Nisga’a consultancy

Broad range of the community diagnostic process

• From all of Oman - the Al Shanfari thesis

• To bits of Snake Valley - the Harfield et al. ARC project

Conclusion

Summary

• Entrepreneurial context– The intermediate environment really matters– What is/are the relevant COMMUNITY factors?– How do they affect entrepreneurial process?

• Entrepreneurial curriculum design principles– The wheel, not the pyramid

• Focus on evaluation skills

Questions?

References - evaluation

• Hindle, K. (????). First among equals: the primacy of evaluation skills in the entrepreneurial process. WIP

• Hindle, K. 2004. A Practical Strategy for Discovering, Evaluating and Exploiting Entrepreneurial Opportunity: Research Based Action Guidelines. Journal of Small Business and Entrepreneurship. Volume 17, Number 4, 267-276. [Simultaneously published in Small Enterprise Research. Volume 12(1)].

• Hindle, Mainprize and Dorofeeva (2008). Venture Intelligence.

References - community

• Hindle, Kevin 2009. How community factors affect entrepreneurial process: a diagnostic framework for theory and practice. Entrepreneurship and Regional Development. (Forthcoming).

• Hindle, Kevin (Date?) How community factors affect entrepreneurial education: issues and remedies. Journal of Small Business and Enterprise Development. Forthcoming.

References - education

• Hindle, Kevin 2007. Chapter 5: Teaching entrepreneurship at university: from the wrong building to the right philosophy. In Fayolle, A., (Editor), Handbook of Research in Entrepreneurship Education. Cheltenham (UK): Edward Elgar, Vol 1, 104-126.

• Hindle, Kevin 2005. The wheel and the pyramid: using Whitetead's philosophy of education to design entrepreneurship curricula at university. In Søgaard, V., Svendsen, S.G., Bruun, S.B. & Høyer, C. (eds.) CESFO Årsrapport 2004/2005. Tema: Teaching Entrepreneurship (CESFO Yearbook 2004/2005. Issue: Teaching Entrepreneurship). Kolding, Denmark: University of Southern Denmark CESFO report series IX, (ISBN 87-91070-16-3),11-16.

The Three Hedgehogs of Entrepreneurship © Kevin Hindle 2008.

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