Prescriptive Entrepreneurship

Prescriptive Entrepreneurship

James O. Fiet

In the only known programme of prescriptive entrepreneurship, James Fiet provides a marked contrast to the standard descriptive focus of entrepreneurship studies. Instead of the anecdotally based pedagogies that have dominated the teaching of entrepreneurship (and which do not control for luck-based success), the author lays out a programme of research to develop and test theoretically derived guidelines for how to improve the success rate and performance of aspiring entrepreneurs. Rather than describing what entrepreneurs do, he prescribes and tests what they ought to do.

Chapter 8: Forgiving Business Models

James O. Fiet

Subjects: business and management, entrepreneurship

Extract

Key ideas Although constrained, systematic search is very effective in discovering ideas with wealth-creating potential; the most that it can accomplish is to improve an entrepreneur’s odds of success. Its use cannot rule out failure. This chapter sets forth the attributes of forgiving business models that entrepreneurs can use to minimize losses while exploiting ideas to launch new ventures. Thus, I introduce forgiving business models here so that they can be used in combination with constrained, systematic search. Forgiving business models are based on the situational attributes of a venture idea, which can impact the associated level of risk that an entrepreneur must bear to exploit it. I explain how entrepreneurs in acknowledging these attributes can use them to shift risk to willing resource providers. In addition, I will show how the success of a venture partially depends on the market conditions for others, which affect how an opportunity can be exploited. I emphasize combinations of outside options for resource providers, together with their market interaction costs. Finally, I discuss impediments to using these models, their pedagogical and ethical implications, and directions for future research. We put this page in the back of my book that said, “Introducing absolute reference for Journal 123 users” . . . you send us $60 and we’ll send you this newsletter. You know, horrible, just did everything possible wrong . . . in terms of promoting a newsletter. . . . Before the year was over, this book [was] published in October, we’d sold 3,000 subscriptions. We had 3,000...

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