3 Biases That Prevent You From Thinking Like an Entrepreneur

Who doesn’t dream about being an entrepreneur? Who doesn’t wish they could discover and build the next big thing?

If you are reading this – then it probably isn’t you.

Whether you aspire to build your own product or services from scratch, or the opportunity to build a new product or business unit within your current company, many will agree that the hardest part is being able to crystalize what that product or service is – not to suggest that the steps of building and scaling from the ground up are easy tasks.

Some fortunate entrepreneurs are able to leverage their existing knowledge or products, strike out on their own, and proceed to build a better mouse trap.

Others discover opportunity.

Discovering an opportunity is no easy task, as Professor Peter Bryant of IE Business School explained in a recent online class: “Developing the Entrepreneurial Mindset“.

According to Bryant, there are five critical elements that define the entrepreneurial mindset:

1. Being open to fresh ideas
2. Creative and exploratory
3. Always seeking new opportunities
4. Embrace uncertainty and Risk
5. Organizing and Action oriented, drawing resources and people together to put their ideas to work

Sounds simple enough, right? Well, nothing is ever that easy. And for entrepreneurs, there is one big, ugly, roadblock between freely exercising these elements and being able to capitalize on them: biases.

Biases are what inhibit entrepreneurs and executives from seeing and processing anything outside of their own world view. In particular, there are three main biases identified by Bryant that block the entrepreneurial mindset: perception biases, interpretation biases, and reasoning biases.

• Perception Biases

Perception is not just about seeing the glass half empty or half full, “perception biases influence what we see, or don’t see” said Bryant, “especially in situations with strong beliefs or emotions.” Being risk averse, or having a strong belief that something is impossible is a common manifestation of this bias. The result is that the person will be more inclined to say “no” to an opportunity at first blush.

Part of the downfall of Kodak, for example, was perception bias. “The irony is…they had the opportunity to develop digital cameras…but they couldn’t see beyond their limitations and constraints of their existing business models,products, (and) assumptions about what customers needed” said Bryant. As a result, the likes of Sony, Canon, Nikon, and others quickly captured the market share.

Also Read: The 6 Top Motivational Factors that Drive the Best Entrepreneurs

• Interpretive Biases

Next is interpretive biases, and these are largely dominated by one’s own worldview. “We interpret information in a context, and we are often unaware of the context” said Bryant. It becomes the entrepreneur’s responsibility to investigate and interpret a problem from a diverse set of perspectives, or else they will be limited and informed only by their own context.

Bryant suggests that entrepreneurs challenge their assumptions, and “build your own personal portfolio of diversity.” This can be accomplished by learning from others. An IT person talking to a Marketing person can get a completely different view of their company and how to solve problems based off of their interpretation.

• Reasoning Biases

Once information has been perceived and interpreted, the entrepreneur needs to process, make sense of the information, find order or a pattern. According to Bryant, reasoning for the entrepreneur means being open and prepared to take an unusual conclusion based off what is set in front of them. For example, Henry Ford said “If I had asked my customers what they wanted, they would have said a faster horse.” Ford saw the need, challenged the obvious conclusion, then shaped the product.

How to Break Free from Biases

Build your own personal portfolio of diversity and put yourself into new situations. By learning from others and getting different perspectives on the business, you acquire different points of view. Being able to view every situation and opportunity through a diverse set of lenses or world views will help you break down your biases and expand the way you think.

Also view: Do Good, Have Fun, Make Money: The Ethics of Entrepreneurship