How to Think Like An Entrepreneur

Talking with team member Mackenzie DeWitt.

My first time as an entrepreneur the internet was my teacher. The world wide web was full of fluffy advice — get passionate, play to win, be resolved to succeed — or information on financial projections and company incorporation documents that was so obtuse I felt utterly overwhelmed.

My second entrepreneurial attempt I realized it was not quite information that I had been missing at all. It was habits and mindsets. Mindsets are so important because there is no one single spreadsheet or article to memorize to get entrepreneurship “right”. Entrepreneurs are less like treasure-hunters that can follow one map to success, and more information-gatherers that constantly assess and react to problems in a shifting sea of competitors and market forces.

But teaching habits and mindsets are hard because they are built over time through hundreds of different conversations; they are often taught so casually that people do not even realize that they are learning. The fact that mindsets and habits are so infrequently written down leaves entrepreneurs who live outside of tech-centered coastal cities simultaneously left without access to vital information and unaware of what they miss.

Throughout my time at the University of Michigan, I kept track of how my mindsets about entrepreneurship changed as I became more involved with the school’s entrepreneurial community. I broke down some of the changes in my own head into lessens that I hope can help you develop successful strategies to tackle building a company.

Step 1: Break Your Reality

One of the great human fallacies is to think that others work from the same information and circumstances that we ourselves experience. The very first step to be an entrepreneur is to understand that people work off of different information than we ourselves do. The reason why you need to understand this is because a lot of entrepreneurs build products they love, only to find out no one else likes what they made. When people say “get out of the building and talk to your customers” they are saying “you need to make sure the assumptions of how the world works are true to anyone but yourself.” This is also why you are more likely to be successful if you make a product for people like yourself: you and your customer probably have similar views of reality.

Take a deep breath and say “the company I wanted to make and the world I thought I knew might change on this journey. And I’m ready for that.”

Step 2: See in Systems

To think like an entrepreneur, you have to look at problems as the result of larger underlying systems. When you see problems systemically, you can begin to imagine systemic solutions. You can imagine real-time analytics companies for city transportation. You can build architectural companies that integrate vertical farms into the cityscape to create greater fresh food access even in the middle of urban areas. You can think of re-training software that combines one company’s severance pay with another company’s hiring needs to create a smooth transition between employment periods. All of these ideas begin by looking at the world around you and seeing past its problems to the complex structures beneath.

To practice seeing in systems, look at things around you. Your chair, your cell phone, your notebook. That simple pencil on your desk is dependent on a system of wood production in forests half a world away, on transport systems of roads and rail cars, relationships between manufacturing plants and packaging suppliers, marketing firms and retail stores that stock office supplies, and design firms that craft how it looks.

Focus in on one object. Write down every different system that you think went in to making that object. Get as small and as detailed as possible.

Step 3: Solutions That Scale

When you build a start-up, you need to find a solution that solves a problem for a market bigger than yourself, repeatable over time, and changes some underlying dynamic of a system.

A system that is bigger than yourself means that you are solving a problem for more than just you. Bigger can be on many different scales. You might choose to tackle this problem for your neighborhood, specific groups of women in your city, women who are a part of the company you work at, women in your state, or women around the globe. While many entrepreneurs want to immediately solve problems globally, remember Section 1? The bigger the market you tackle, the more diverse your audience, and in turn the less you know.

Start-ups also need to develop repeatable solutions. A solution that has scale but is not repeatable is a specific GoFundMe campaign, or a march to raise awareness for a state-wide issue that politicians are about to vote on. Charitable giving, marches, and flyers are tools to help people solve immediate short-term problems that might reach a large scale but are strategies that do not tend to have long-term impacts. There is a limit to how much people can donate or how much time they have to march.

To create a repeatable solution, your solution also needs to be systemic. This could be a website that stores a database of flexible jobs for new mothers. It could be a change to the employer’s guidelines for leave. It could be a zoning change that makes it so every corporate building needs to have a daycare. Websites, laws, policies, are all examples of repeated system structures.

Solutions are most powerful when they change a dynamic of a system. A website that contains flexible work for mothers is a repeatable system. When you begin to include a review and ranking system, you impact the larger workforce by adding a new factor into parents’ decision of where they should work.

Choose a system you have a problem with. This could be your walk to school, the lack of good ramen in your neighborhood, or deforestation. Then answer the questions below.

  • What systems are in place that contribute to this problem at the the individual level, the neighborhood level, the regional level, the national level, and the global level?
  • How would you solve the problem you have chosen a single time at each scale?
  • How would you change your solution to make it repeatable at each scale?
  • Who is losing power with your solution? Who is gaining power? Does the five different solutions you have identified alter the dynamics of any ecosystem?

Step 4: Tactical Listening

The problem with explicit advice on “talking to customers” is that it does not convey the most important part— understanding how to listen. Tactical listening can help you ask the right questions when you need to, and understand how to analyze the information that you get back.

The most open-minded you will be when talking to customers is before you build any product because you have not lost anything yet. Use this to your advantage to brainstorm many different solutions without getting stuck on one.

Your first discussions should be highly hypothetical and collaborative. Say that you are curious about the space. Do not even say that you are building a product. As soon as people know that you are making something you want to sell, some will be too nice to not hurt your feelings. Others will get defensive in fear that you are stealing their jobs. Others will nit-pick your solution because they really want to be an entrepreneur.

Find ways to communicate with people in places they feel at ease instead of setting up official phone calls. When you become a part of the community, you become a trusted entity.

For the problem you have identified, what communities are your users a part of? How can you become a part of these communities?

Step 5: Draw New Lines

To fully listen to your customer, you need to understand who they are and what their values are, and build towards that. This does not mean building every feature your user wants. If you build exactly what is said you will build many pieces of other companies, but never something truly your own. People are necessary to help you deeply understand the problem, but you alone are in charge of imagining the solution.

You should have many different conversations with your users. Find repeated patterns of where many people constantly find problems. Highlight where people make assumptions about the “way things are.” You have the power to change what people think of as normal.

For the problem you are working on, what company comparisons can you draw? Are you “Uber for X” or “Tinder for Y”? How is your potential company similar and different?

Step 6: Tackle Your Bias

Write out all of the places you have worked. In a second column, write out what kind of biases these experience have given you. The more explicit your biases are to yourself, the larger chance you have to look past them.

Step 7: When to Wait

There is no exact formula to this, but I will point out three factors. One is your proposed user group that you plan to sell to. If you are selling $1.99 games to young gamers versus $200/month security cameras to older home owners, there is a lower expectation with young gamers that everything should be thought out and working correctly.

You also need to understand the stakes involved. If there is a glitch in a computer game, people will be annoyed. If there is a problem with a security camera, people’s lives might be in danger. Be mindful of the emotions involved in what you are creating and the brand you want to display. When you have a highly emotional target area — -people’s homes, bodies, health, death — you should wait longer to present a prototype. This does not mean stop talking to your customer all together. But when you do present them with a solution, make sure that it is a prototype that aligns with the brand that you want to display with your final product.

Understand the perceptual distance of your product between current reality versus the potential future with your product. The more different your product is from what exists now, the longer you will want to wait before showing your product to people. People have a really hard time imagining their lives being completely different. If you create something that might endanger the power someone holds, or the job they have, you will get loud and vehement push back that your idea is terrible and will never work. If you are presenting your idea to people who complain loudly, take a step back and think of how their position is impacted by your product’s place in the market.

If you are making a new cookie recipe, you can put it into people’s hands out of the oven. If you are making a hover board, you will not get good feedback by putting people on skateboards and having them imagine they are flying.

Step 8: Places of Kairos

  • There has to be an internet that connects many servers before platforms like Facebook, LinkedIn, or the blockchain can exist.
  • There has to be high-quality recording on phones before Vine and Tik-Tok can be created.
  • There has to be technical training programs in place for high-skilled 3D printing technicians before there can be local custom clothing creation companies.
  • There has to be a cultural perception of contract work as acceptable before there can be companies like Uber and Lyft.

Shifts in climate, forestation, water levels all impact the potential niches that animals can fill. The same is true for human-made markets. You need to develop a habit for seeing shifts in the systems around you to find when systems change enough to support a new company.

For the solution you identified, answer these questions about potential competitors:

  • What underlying physical infrastructure, laws, tech, and cultural norms are these companies dependent on?
  • When did all of these companies start? Was it close to the same time?
  • Is there a “linchpin” system that shifted in some way to allow numerous types of similar companies to start at the same time?
  • Are the companies in your market seem to be growing slowly or quickly? Is there a bottleneck they all face?

Interaction Writer and CEO of Adjacent