CHAPTER 1: The Practice of Entrepreneurship

Learning Objectives:
The learners shall be able to:
 Combine the two views of entrepreneurship for new ventures;
 Relate the start of entrepreneurship in the Philippines;
 Develop the skills important in entrepreneurship; Express the truths about entrepreneurship;
 Distinguish each type of entrepreneurship;
 Adapt entrepreneurship as a method;
 Contrast between managerial and entrepreneurial thinking; and,
 Justify deliberate practice of entrepreneurship.

“You may have wondered why so many things seem to be harder and take longer to accomplish
than you would lie-and why both things seem to be increasing. We don't in every case, but there
is an explanation that probably covers the have the answer majority of situations; the way we
have been taught to solve problems was designed for a different world. To deal with uncertainly
today, we need a different approach.”

Leonard A. Schlesinger, Charles F. Kiefer and Paul B. Brown

Authors of "Own Your Future" (2014)

Traditionally, entrepreneurship has been related with launching new businesses. Today, however,
a lot of people and organizations has considered entrepreneurship as an important life skill that is beyond
just starting a venture. Entrepreneurship is a life skill that readies person to manage the vague and
undefined future particularly in the business environment. Entrepreneurship is composed of collective
mindsets and skillsets that can empower an individual to create and act on opportunities of any kind for
himself. Simply, there is no need to build a business in order to think and act like an entrepreneur.

Entrepreneurship Views
There are two ways of thinking about entrepreneurship, which is the older considers and the
newer views. The older view known as predictive approach entrepreneurship as a linear process where
there are steps to do and the results are usually predictable. On the other hand, the recent view identified
as creation approach sees entrepreneurship as a mindset and a method that needs used only when the
future is unpredictable and not certain.

Traditional entrepreneurship is supported by the predictive approach. Entrepreneurs using the

predictive approach, identify the goals they wanted to attain and search for available resources. This
approach works best during times of ambiguity and when there is enough information where to base
decisions. Most well-known and established companies make use of predictive approach. This is for the
reason that they have predetermined goals, their problems are clear and they are in possession of
dependable and accessible information. With these situations, big companies can be able to analyze their
current situations, identify problems, opportunities and even provide solutions. They can easily and
accurately predict any changes in the business environment because they make use of sophisticated tools
to assess historical and current data. However, this approach is not a guarantee to success as a lot of huge
companies planned but still failed.
 In contrast, entrepreneurs who use the creation approach define their goals based from the
resources available at hand. These entrepreneurs do not delay the action they wanted to take despite
scarcity of resources.

Often, small businesses always begin with creation. Nevertheless as these ventures progress they
need to gather information in the real business world in order to make predictions for analysis. Most
entrepreneurs start their ventures with a broad idea that they feel worth trying and most likely to succeed.
Just like the is Habi Footwear which started as a thesis project and grew into a real business later. part of
her thesis project at Ateneo de Manila University, Chiong and her two As teammates namely Paola
Savillo and Bernadee Uy visited a small community in Quezon City and that was how the Habi Footwear
got started.

Simply, in the initial phase of business, creation is vital over prediction. Obviously, it is difficult
to predict when a business still does not know its market nor its customers. Besides, the worth of a new
venture is still undetermined because it has only began lately. It is possible to collect data only through
using ones own resources, but the action must come from ones own initiatives as a new business.

The end goal of both approaches is similar though the means toward action is different. In fact,
entrepreneurs should be encouraged to use both standpoints. Definitely, entrepreneurs who would like to
use either prediction or creation must know under what situations each or the combination is applicable.
For new ventures it is still best to balancely combine the two approaches in order to get the best results.

The Start of Entrepreneurship in the Philippines

Known as developing country, the Philippines always challenged by a is has high poverty rate
compared against countries in Asia. Although the country growing average of 6% economic growth, still
poverty prevalence is beyond 20% of the total population. Entrepreneurship has become the solution to
poverty through job formation, wealth creation and social empowerment. For now, the Philippine
government sees entrepreneurship as the sole means to address the poverty problem.

Hence, entrepreneurial ventures are really being encouraged,

The 1987 Philippine Constitution identifies entrepreneurship as an instrument of economic

growth. The role of private enterprises in supporting fair distribution of income and wealth, satisfying
production of goods and services and escalating productivity is emphasized in Article XII Section 1. The
intention here is to raise the quality of Filipinos' lives.

The government's objective of economic development and job formation has been placed in the
supervision of the Philippine Development Plan (PDP) which strengthens the thrust on entrepreneurship
by way of trade and investment. The pursuit is on strengthening the Philippines's competitiveness and
contribute to job formation.

Over the years, the evolution of entrepreneurship has been influenced by fast integration of
economies and globalization of markets. Traditionally, the concept of entrepreneurship is just to support
the different factors of production. These days, entrepreneurship involves the capacity to see an
opportunity, come up with an idea and organize all the resources and skills and form business ventures
not just locally but internationally.
 In the Philippines, the Philippine Chamber of Commerce and Industry, the agency under the
Office of the President is an advocate of entrepreneurship which formed the Philippine Center for
Entrepreneurship (PCE). So far, PCE has created the "Go Negosyo Communities" everywhere. The
academic, business and government sectors have collaborated to form these communities. Professors,
entrepreneurs, industry experts and venture capitalists had joined hands to constantly network, mentor and
cooperate to support a feasible policy infrastructure. All "Go Negosyo" communities have their abilities
to continuously create start-up ventures.

Today, entrepreneurship lessons are embedded into the school curriculum to cultivate a culture of
enterprise and nurture tomorrow's competitive entrepreneurs. In the secondary particularly in the Senior
Level, values and mindset of entrepreneurs are taught. At the college level, Bachelor in Entrepreneurship
is now a complete curriculum offering.

The country has now regarded entrepreneurship as a way of thinking and not just an economic
term. These days, entrepreneurship has become a way of motivating innovative individuals to pursue
opportunities regardless of its risks. Although the challenge for the Philippines is to provide good
leadership that can help social reforms through entrepreneurship. With this leadership, entrepreneurs can
surely propel the economy and the society in progress.

The Skills Important in Entrepreneurship

In the creation approach, entrepreneurs are able to learn through action and manage uncertainty
by developing these five important skills. These skills could only work for those who are eager to take
action. In order to develop these skills, an entrepreneur needs to learn by doing. Putting an idea into
action is the most important thing to live a more entrepreneurial and influencing life. These skills are
explained here:

The Skill of Play

An entrepreneur with the skill of play usually allows his imagination to explore, exposes his mind
to a treasure of opportunities and potentials and is very innovative. It was Piaget, the well-known child
psychologist who had been commending the benefits of play for decades. Going back to those playing
moments during one's childhood days. Having fun and being playful makes a person more attentive,
involved, thrilled and excited. Entrepreneurship can be fun also. Entrepreneurs may benefit and enjoy as
if playing while doing creative things that can boost relations with others, solving problems, ideation and
other exercises. Entrepreneurs may try more serious educational games such as simulations, role playing
and reality games that may challenge their creativity.

The Skill of Experimentation

The skill of experimentation calls for entrepreneurs to act so as to learn. Acting to learn means
attempting to do something, learning from such attempls and structuring said learning when the next thing
similar happens. Experimentation in entrepreneurship refers to making action. Action could be in the
form of going out in the streets and gathering real time data instead of just using Google to find
information. This could be done by asking questions, confirming assumptions and noting every detail in
consideration.
 Most new products and/or services undergo experimentation. New products usually need to be
evaluated for viability. Before launching said products and/or services the company must know through
experimentation if there will be people who will really buy them. The company may also find information
on how to improve these offerings in order to avoid failures.

The Skill of Empathy

The skill of empathy means being sympathetic with the feeling, situation, purposes, opinions and
wants of other people. Empathy is putting ones' shoes in the shoes of others. Simply, it is relating to the
feelings of others when placed in a similar circumstance.

Empathy is so vital to an entrepreneur. It is significant in order to completely understand the

reality of becoming an entrepreneur. In addition, empathy is needed when evaluating oneself in terms of
the ability to be an entrepreneur. interviews with entrepreneurs, one may be able to see the difficulties
During they have gone through. Placing oneself to the shoes of these entrepreneurs, said person could
imagine himself being in their situation. Besides, empathy can help in having meaningful relationship
with stakeholders as their needs are determined SO that new products and services could be created.

The Skill of Creativity

The skill of creativity means being open-minded and letting loose ones ability to create, discover
opportunties and resolve problems. Based from researches, entrepreneur students are more creative
compared to students in other business courses. The intention in using the skill of creativity is not just to
discover or search for opportunities but to form them.

Creating opportunities depends on how much an entrepreneur desires to learn, how interested he
is and how much effort he would invest to apply his idea/s. Anyone may have ideas, but ideas could only
be great once executed and tested.

In addition, creating opportunities could only be successful based on the of resources at hand, the
capability to cooperate rather than compete, the amount determination to form relationships, the
understanding on how much one can afford to lose and the preparedness to use ones knowledge in case of
failure. With creativity, fear and apparent difficulties could be dismissed. The courage to take action
despite risky and uncertain situations would be possible with creativity in doing something of
significance.

The Skill of Reflection

In order to make sense of the previously discussed skills, an entrepreneur should develop the skill
of reflection. Reflection organizes all the four skills mentioned here. Taking time to reflect is the most
vital skill of all skills. The discomfort handled, the feelings felt and the knowledge possessed gives new
perspectives and allow for more assessment of the results and forming of conclusion, which can be done
through relfection.

Without doubt, reflection is essential and beneficial but not practiced very often. It seems only
few people do these, possibly because people do not really know how to reflect. There are several ways to
do reflection, namely:
 1. Narrative - It is describing what happened in terms of what took place, what was said and the
people involved.
2. Emotional - This centers on the feelings and the management of these feelings during a certain
situation. on ones insights and feedbacks as well the others in
3. Perceptive - It focuses as addition to how various views, needs or inclinations affected the
experience.
4. Analytical - It is rationalizing about skills and understanding obtained from an and relating what
has been learned to anything heard about before. experience
5. Evaluative - This concerns on what went well as well as what went bad or whether the experience
was useful or not.
6. Critical - This is considering the role played in a situation, the approach applied, what could still
might be done, the lessons from the experience, queries in mind and the anticipation of the
possible result.

When reflecting, an entrepreneur considers an experience that has transpired and attempts to
understand or explain it. This often leads to insight and deep learning or ideas to examine new
experiences.

The Truths about Entrepreneurship

There are really no shortcuts when it comes to entrepreneurship. Entrepreneurs must understand
that it is a hard commitment and there is no quick formula for success. Here are some truths about
entrepreneurship:

Entrepreneurship is Not Solely for Startups

A startup is a new company that is just starting to progress and looking for a feasible business
model. Startups are typically small and primarily funded and operated by few founders or one person.
Traditionally, when person starts a business, he IS called an entrepreneur. An entrepreneur forms a
business from research on the feasibility of a business idea or business model. The funding for the
business usually comes from the relatives or from the entrepreneur himself.

A business does not remain to be a startup, because it can always develop and progress into
something bigger. Being a startup is not the only track for entrepreneurs. Entrepreneurs can be all over,
from companies to franchises, to profit and non-profit organizations, to family-owned businesses.

Entrepreneurs Do Not Have Exceptional Personality Qualities

In reality, there is really no evidence to prove that entrepreneurs possess special personality
qualities above others. Although without scientific proof, traditionally there are four recognized qualities
of an entrepreneur which are being an achiever, an influencer, a risk-taker and open-minded for
uncertainty. Academicians are more fascinated with the qualities of an entrepreneur rather than what he
does.

These days, the focus of academicians and researchers is how entrepreneurs think and act. There
are discoveries lately that how entrepreneurs think follow certain patterns. Hence, everyone may act and
think like an Obviously, anybody may change his manner of thinking. entrepreneur.
Entrepreneurship can be Taught Yet Entails Practice
Nowadays, entrepreneurship is already taught in colleges and universities worldwide. However,
most schools teach entrepreneurship as a linear process just like in the manufacturing business. Linear
process consists of identification of opportunity, knowing resources needed, obtaining resources,
planning, implementing and harvesting once the business has been in place. Simply, the linear process
teach entrepreneurship as something predictable.

In reality, however, this is not the case, since entrepreneurship is unpredictable. Instead
entrepreneurship requires a person to possess a set of skills. These skills as discussed earlier should be
improved continuously through practice so that they can be used for entrepreneurial action, not just for
today but also for the future.

Entrepreneurs are Not So Much Risk-Takers

There has been an existing stereotype about entrepreneurs that they are "gamblers". Although
there is really no valid proof on this typecast about them, this suggests that entrepreneurs take more risks
compared to anyone. Gambling in its context is really risky, because everything is left to chance. In
reality, anything in life is risky because no one holds the future. Entrepreneurs are really risk-takers but
they normally would make calculations first prior to taking the next step. They usually measure every lose
they are willing to take on each step of what they do. They take every single step as lesson to learn and
make use of said lesson on the next level.

Entrepreneurs Work in Partnership More than They Compete

The community is vital partner of most entrepreneurs. Most entrepreneurs learn their lessons
from the shared experiences others had faced. The support of a community of entrepreneurs with similar
mindset and willing to support each other is important. This is for the reason that no one would know
about entrepreneurship unless it has been experienced.

Working in partnership not only works with the rest of the entrepreneurs but also with target
consumers, with prospective investors and with family and friends. Customer relationship is essential,
investment requires trust and relatives and friends are necessary as support groups. Partnership usually
brings about more efficiency, additional fresh ideas and produces ingenuity and innovation.

Entrepreneurs are More on Doing than Planning

Most people believe that any business to succeed requires a business plan. Based on researches,
not all successful companies had wrote formal business plan. Perhaps people would wonder how this
came about. Simply, these successful entrepreneurs had acted. They went our of the streets, talked to
people, relate with customers, buzz about their offerings whether product or service and most importantly
they form solid networking. These successful people had really practiced being real entrepreneurs.
Gathering timely data as guide for the next level decision is part of their action.
Investors are interested with the action of every entrepreneur such as the relationship he has with
his customers and how he has arouse the interest of these customers. While facts and numbers are
important, investors are more fascinated with the ability of an entrepreneur to deal with a series of
difficult situations, able to solve problems and take positive feedback as he is mentored.
Entrepreneurship is Truly a Life Skill
Before, entrepreneurship was only popular during creation of new businesses. Today,
entrepreneurship has gone far beyond the ability to start a business venture. A lot of people as well as
organizations these days consider entrepreneurship as a skill that is useful in every human's life. As a life
skill entrepreneurship can offer the methodological way of thinking, opportunity identification, specific
way of problem-solving, adapting to new situations and governing ones' goals and ambitions. Said life
skill is not only for entrepreneurs but also for other professions. Some of these life skills include:
1. Resilience - This is being able to deal with setbacks through bouncing back and refocus after
failure.
2. Agility - This is responding speedily and conclusively to adjust to dynamic changinng
environment and situations, competitive. grab new opportunities and be
3. Negotiating - This is about setting boundaries, ensuring for a good relationship and understanding
that a good rapport is necessary to give any business the best chance of success.
4. Problem solving - This concerns creating solutions from minor technical difficulties to major
financial headaches.
5. Relationship building This involves the give and take relationship of the entrepreneur with
supplier, investor or even his employee.
6. Mindfulness - This is the ability to disconnect from the pressure and focus on being in the
moment by techniques such as breathing and meditation to better manage ones thoughts and
feelings and escape from being burdened by them.

Types of Entrepreneurship
Entrepreneurship is very significant and also an innovative procedure that has a wide range of
activities offering new things to society as well as civilization. Due to all the different activities,
entrepreneurship is divided into various types and these are discussed below.

Intrapreneurship
Intrapreneurship refers to encouraging people to discover high-risk, high-reward concepts with
the support of big corporate organization. Google for instance is an example of a company that supports
its employees to provide the 20% of their time for innovative projects. This is the very reason why about
half of the company's new products come from intrapreneurship.

It was Paul Buchheit, who made the original template for Gmail specifically the search function.
The search function of Gmail was the first of its kind among Email service providers. The template has
also improved storage capacity. These days Gmail is the most popular used platforms on the Internet.
This creation of one of the employees of Google has now driven key traffic to Google's products.

Entrepreneurs Inside
Entrepreneurs inside is almost similar with intrapreneurship. The only difference between the two
is that entrepreneurs function inside any type of organizations such as government agencies, non-profit
organizations, religious entities, self-employed and even cooperatives, whether they are big or small .
These type of entrepreneurs must be supported by management. However, often it becomes difficult for
these entrepreneurs to practice entrepreneurship due to resistance of management to support novel ideas.
 Entrepreneurs inside just like any other entrepreneurs want to produce something of value.
Puregold is a popular trader of consumer products such as canned goods, housewares, toiletries, dry
goods, and food products, among others) on a wholesale and retail basis. It has popularized the "Palengke
Day" where fruits vegetables are sold on "everyday prices" for the budget-conscious customers. and
Although a bit unattractive looking from the outside still they are fresh inside This is a way of reaching
out to more market which is an example of entrepreneurs inside.

Buying Franchise
A franchise is a type of license bought by an entrepreneur as the franchisee from an existing
branded Business (franchisor) so that the may do business under the name of said brand. The license
serves as the right to open the business using the brand's proven business model and system, its proven
pricing, products and promotional tactics. For a franchisee, it is best to buy the right brand. A franchisee
has the complete access to the brand's logos, slogans, signages and other things related to it.

Much is the popularity of franchising these days because it is already a ready business. The
franchisee just needs to "turn key" the operation to start the business. A franchisee must pay a royalty or
share of the proceeds of the business to the franchisor based on the agreement of both parties. Many of
the stores and restaurants seen every day are franchises that include 7-11, Ace Hardware, Pizza Hut,
Jollibee, Mcdonalds and a lot more.

Buying a Small Business

Another way to enter the business world is buying a small business. In this manner, the
entrepreneur buys out the existing owner and takes the management and operations of the small business.
This normally involves more upfront cost and also presents less risk than starting from zero. In buying
small business, the new owner may be able to acquire valuable patents or copyrights, or have the
opportunity to drive an unprotective business in an exciting direction with his expertise.

Buying small business has numerous advantages. The new owner is able to a take over an
operation that has already making cash flow and profits. The small busines has an established customer
base, reputation and employees who are familiar with all aspects of the business.

Social Entrepreneurship
Social entrepreneurship means pursuing innovative applications that have the likelihood of
solving community-based problems. A lot of entrepreneurs are able to make solutions to social problems
such as water shortages, education, poverty and global warming.

Social entrepreneurs may try to produce environmentally-friendly products, serve an underserved

community, or focus on philanthropic activities. Social entrepreneurs though are forced to choose which
impact to pursue, the economic one. However, a social entrepreneur both. It is the social or can do
possible to solve social problems at the same time make profit to make the business economically stable.

In the Philippines, Bayani Brew is a good example of a social TO EVANE entrepreneurship.

Bayani Brew products are ice tea using indigeneous ingredients BREW such as lemongrass, pandan and
sweet potato tops. The local and indigenious ingredients are supplied by susbsticence farmers to help
them in their livelihood.

Family Business
A family business IS owned and managed by members of the family that is usually handed down
from generation to generation. Entreprenurship is practiced with this type of business through the
opportunity available for each generation to be innovative in their own way. is essential for business
survival to have an It entrepreneurial program done by each generation. Most family businesses stuck to
their old ways and are unwilling to embrace changes.

Family businesses are prevalent not just here in the Philippines but worldwide. ShoeMart,
Metrobank, the Aboitiz Group, and D.M. Consunji, Inc. (DMCI) are among the many owned and
managed brands by some of the most influential families in the Philippines. Based from Harvard Business
School, family firms account for two- thirds of all businesses around the world. In the Philippines, 80
percent of businesses are family-owned and -controlled.

Fu Pu Kuo San Tai is a famous Chinese saying which literally means "wealth does not pass three
generations." The Chinese saying, possibly from experiences says that the first-generation founder works
hard to construct the business. The second generation becomes heir to it and grows the family wealth,
while the third generation wastes it and puts an end to the business.

Serial Entrepreneurs
A serial entrepreneur is an entrepreneur who constantly crops up with fresh ideas and starts new
businesses. This is different from the classic entrepreneur who only have one idea to start with his
venture, then play an important role on its daily operations.

A serial entrepreneur is a habitual one who takes the challenge of repeatedly initiating on putting
up a business. This entrepreneur give the responsibility of running the operations of each business it
started once it is established and move on to other projects. Often a serial entrepreneur sell his businesses
earlier. When companies are sold especially at high premiums, it is bonus gains for the serial
entrepreneur. Sometimes a serial entrepreneur continuously able to make profits without much effort on
his part by partnership with new owner/s of his initiated companies.

Oprah Winfrey is an example of a serial entrepreneur. She is a famous American philanthropist,

media leader, and entrepreneur, best known for her award-winning talk show "The Oprah Winfrey
Show". She started her career as a local TV anchor. In 1986, she created the Harpo Productions, Inc. This
production company owned the rights to the "The Oprah Winfrey Show" from 1988 onwards. As part of
her entrepreneurial ventures she also established her own foundation known as the Oprah Winfrey
Leadership Academy Foundation. By the end of the 1990s, she was the wealthiest woman in show
business. In 2018 she had cable station. She net worth of $2.8 billion. She is also a co-founder of Oxygen,
launched the Oprah Winfrey Network (OWN) in 2011. She publishes the O, The Oprah Magazine, and
has written five books.

Entrepreneurship as a Method
 A method is a systematic way of doing a task, while a process is a sequence of steps to take to
attain something. Usually, entrepreneurship is considered a process with steps that could lead to a
successful business. Entrepreneurship as a process focuses on planning and making forecasts. It is said
that when the steps are followed correctly with a good business model, a new venture shall succeed.
Obviously, this process may work for big companies, however entrepreneurial ventures are just small
ones.

As had been discussed entrepreneurship is nonlinear, unpredictable, unstructured and complex.

The business environment of entrepreneurs is really dynamic, uncertain and ambiguous. Hence, the view
of entrepreneurship has been shifted as a method to manage the confusion, although this does not
guarantee success.

Scientists have already done quite a lot of research on entrepreneurship as method. Fortunately,
one concept that stands out is "The Entrepreneurial Method" by Professor Saras Sarasvathi). For her
entrepreneurial method describes logic of thinking that is usually used by some of the most successful
entrepreneurs to form their ventures.

The entrepreneurial method mainly consists of five effectual principles. Based on the works of
Sarasvathy, today, much is said about effectuation theory. Effectuation iS the idea in entrepreneurship
that the future is unpredictable yet controllable. Sarasvathy believes that the focus of effectual
entrepreneurs is to create a future instead of predicting it. There are five principles behind effectuation,
which are:
1. Bird in Hand - This principle of effectuation means creating solutions using the resources
available at the disposal of entrepreneurs instead of having goals in mind. If one is trying to build
a new venture he should start with his available means. Knowing who they are, what they know,
and who they know are three important things that could make possible the success of any
venture in this principle. It is significant to not just concentrate on one particular goal, but to be
exposed for fresh possibilities and opportunities. This is how Socorro C. Ramos got started. The
National Bookstore started in 1942 with only Php211 (equivalent to Php15,047 in 2015) as
starting capital. It just rented a small-corner space of a Haberdashery located at the foot of Escolta
Bridge in Santa Cruz, Manila.

2. Affordable Loss - In order to limit the disadvantage risk, an entrepreneur should define his
affordable loss. This means only investing much that an entrepreneur is willing and can afford to
lose. If it is an affordable loss and the possible gains are big then the decision can be
implemented. In this way failures could prevented earlier and only work for what possibly could
be controlled. be is Mariano Que, the owner of Mercury Drug first worked in a drugstore before
the war. When he was given the opportunity, he invested his Php100 in the sulfathiazole tablets.
He sold his products to the people by peddling using his wooden pushcart. His experience, his
Php 100 and a pushcart were the resources which Mr. Que was then willing and can afford to lose
at that time.

3. Crazy Quilt - This is about entering into new partnerships that can bring in new opportunities and
reduces uncertainty. Here the business shall become successful through cooperation with other
 people and companies and not by competition. Partnerships can help form new markets with
people who have corresponding skill set to the entrepreneur, which considerably lessens his own
risk. In addition, it is mostly more fun to work with others instead of trying to do it all by oneself.
Jollibee Foods Corporation (JFC), the largest fast-food chain in the Philippines, partnered with
Globe Business, the enterprise and information and communications technology (ICT) arm of
Globe Telecom, to centralize its express delivery service to one convenient number: #8-7000.
Using technology Jollibee was able to elevate its service delivery and able to adopt a customer-
centric focus in their operations.

4. Lemonade - When looking for new opportunities, it is possible that entrepreneurs shall encounter
mistakes and meet surprises. Apparently bad surprises and unexpected turns are not always
negative, entrepreneurs see them as new opportunities. Using this principle, entrepreneurs always
expect these surprises and must welcome contingencies. With this mindset, entrepreneurs see
opportunities arising in the midst of unforeseen consequences. This happened unforeseen
consequence was experienced by Dr. Cecilio Pedro. He was the owner of Aluminum Containers,
Inc., the main supplier of aluminum collapsible toothpaste tubes to Colgate-Palmolive Co. and
the Philippine Refining Company (PRC) now Unilever Group. However, in 1985 these
companies started to use plastic laminated tubes in replacement of aluminum collapsible tubes.
Mr. Pedro was left a stockpile of aluminum tubes with no use for them. He was hesitant to just
threw of the factory's equipment. Dr. Pedro decides to revive his factory, that time as Lamoiyan
Corporation, the first Filipino company to enter the toothpaste industry. With only less than 20
employees, the company manufactures world-class brands Hapee and Kutitap at reasonable
prices.

5. Pilot in The Plane - Entrepreneurs in this principle believe that the future is really something that
needs to be controlled and not try to predict. Hence, the focus should be on those entrepreneurial
activities that are within the bounds of one's the results they control. Expert entrepreneurs would
obviously accomplish wanted. Making processed meats products such as corned beef, hotdog,
meatloaf and hamburger patties was just hobby for Corazon D. Ong, the founder of of CDO
Foods. Using her profession as a dietician who understood the fondness Filipinos in processed
foods, she entered into the food process business. Hence, working mothers were thankful to CDO
Foods, because it became convenient on their part to have nutritious foods which can be cooked
easily.

Components of the Entrepreneurship Method

After understanding the entrepreneurship method, the next thing to know are the components of
this system.

Identify Desired Impact

In successfully forming a new venture, an entrepreneur must combine of his curiosity, drive and
motivation to achieve something beyond the bounds himself. Entrepreneurship is seldom about profit
concerns. Given that companies are formed with profit as motive, the main objective is primarily deeper
than Most entrepreneurs pursue what they wanted to do, some loves being money. autonomous and being
able to control their experiences at work. Others, usually have strong desire to create something new to
market. In the long run, profit motive is not sustainable because entrepreneurship calls for hard work and
the satisfaction and desire come from deep inside.

Begins with Means at Hand

The current resources at hand is an important component. These resources need to be ready for
use to accomplish immediate action. "who am I", "what do know" and "whom do know" are the three
essential questions that when answered correctly and honestly bring understanding about the resources at
hand.

Describe the Idea Today

The desired impact and the means at hand should be combined to fully describe the idea today.
Only then that an entrepreneur could start action today with the resources he has today.

Estimate Affordable Loss

Risk is apparently relative. High risk for one may not be the same for others. Therefore, risk is
difficult to calculate and be used as an effective criterion for decision-making. Instead of estimating risk,
entrepreneurs think about the things they are willing to lose. These things to lose include money,
reputation, time and opportunity cost. Once the entrepreneur is able to take control of these things, he is
also avoiding to make fear and failure control him.

Reflect and Be Honest

Sometimes, an entrepreneur may have thought of giving up the business. The question is what
shall be his considerations? Once the entrepreneur no longer has the desired impact or has exceeded his
affordable loss, that he may quit. Otherwise, the entrepreneur must think of the next step to do to sustain
his venture.

Take Small Action

The first action is just a small step to get going. Each step must not be extreme but still these can
be done. Once, every step is properly calculated and the affordable loss is estimated, the entrepreneur can
control his risk.

Network and Enjoin Others in the Journey

Rather than competition, the practice of entrepreneurship is about collaboration and co-creation.
Sharing ones' ideas and enjoining others to be part of the entrepreneurship bandwagon shall also increase
the entrepreneur's resources, expand the possibilities available as well as confirm his idea.

Build and Learn from What Has Been Learned

Every entrepreneur should evaluate his performance. Evaluating performance is improving ones'
idea. At this step, nothing is right or wrong, just making things better. It is always best to celebrate when
success comes. However, when failures happen, embrace them because of the learnings that comes from
them.

Managerial and Entrepreneurial Thinking

 Managerial thinking is usually best to apply during times of certainty. Managerial thinking uses
information and data as basis for decision-making. Managerial thinking is used primarily by big and well-
established companies, where goals are planned, problems are transparent and information is reliable and
reachable. With these situations, it is easier to analyze a situation, identify issues and opportunities,
diagnose and find solutions to these issues. Planning tools to assess historical and contemporary data for
forecasting are always available and being used by big companies.

Entrepreneurial thinking on the other hand, refer to the ability to identify opportunities in the
marketplace and discover the most fitting ways and time to take advantage of them. At times, it is
basically referred to as the ability to discover and pursue the problem-solution fits.

Seeing things in a different way than the rest of the world is entrepreneurial thinking.
Entrepreneurial thinking is not essentially an intrinsic trait but it can be effortlessly developed. It is more
like a mindset that opens ones eyes to fresh learning opportunities and helps entrepreneurs grow in their
roles. Here is the table that differentiates between thinking: managerial and entrepreneurial thinking:

Managerial Thinking Entrepreneurial Thinking

Manage and mitigate risk Evaluate and embrace risk
Safeguard inventions and insights Exchange ideas and share learnings
Avoid failing Fail fast and try again
Work within the confines of the current Think in terms of possibilities
environment
Increase the bottom line Create value and make a difference
Table 1 Managerial vs Entrepreneurial Thinking
Source: https://www.mbassett.com/blog/entrepreneurial-thinking-differs-traditional-business

Entrepreneurship Requires Deliberate Practice

Entrepreneurship method is both a mindset and a practice. There is a certain type of practice that
makes novice entrepreneur be an expert serial entrepreneur. Same thing with other professions. Practice is
usually linked with repetition and of course experience. Performance cannot be improved by plainly
having experience nor success could be attributed to genes. People spending lots of time repeating the
same action will end up to be experts on said act.

Based on the book of Malcolm Gladwell entitled "In Outliers: The Story of Success", he claims
that successful performers spent 10,000 hours in practicing their craft. It commands hard work, together
with unique opportunities to reach this big number. Although this number of hours will surely propel
success, expertise and achievement. For instance, Bill Gates, Microsoft co-founder started his access to a
computer laboratory since he was in Grade 8th. This made him to be master in programming even prior to
computers becoming ordinary things.

Repetition of a certain practice creates moderate outcomes. Once a basic competence is achieved
after progressing from constant practice, a person becomes expert of a particular field. Any basic abilities
that has been deliberately practiced turn to be spontaneous already. Said deliberate practice becomes a
discipline, been mastered. However, deliberate practice needs to be done every because it has day. Having
a milestone today should not keep anyone from becoming comfortable. Everyday should be set to be
tougher. This is a reality for anyone who wanted to succeed but much more for entrepreneurs.

CHAPTER 2: Entrepreneurial Mindset and Opportunity

Learning Objectives:
The learners shall be able to:
 Compare fixed and growth mindsets;
 Generalize characteristics and essentials of entrepreneurial mindset.;
 Assess entrepreneurship as a habit;
 Consider opportunity recognition using mindset;
 Integrate structured strategies of forming ideas;
 Propose pathways towards the identification of opportunity;
 Recommend ways on using information rightfully to create impact; and,
 Adapt the IDEATE model in opportunity recognition.

“I stand upon my desk to remind myself that we must constantly look at things in a different
way." John Keating
Lead Character in the 1989 Film "Dead Poets Society

For several decades now there has been a constant debate whether entrepreneurs are self-made or
they possess unique gifts. Sometimes, people have mistaken entrepreneurs as those born with exceptional
genes. Today, entrepreneurial mindset makes entrepreneurs move forward even during difficult situations.
Entrepreneurial mindset makes possible innovations and taking risks and the ability to accept failures.
Thus, entrepreneurial mindset is important for business.

Mindset its Characteristics and Essentials

A mindset is a belief that qualities like intelligence and talent are fixed changeable traits. The
word mindset was coined by Carol Dweck in her book "Mindset". It was based from her research about
personalities of successful people. She found out that successful people have different mindsets which are
a fixed versus growth mindset.

In reality, there are numerous mindsets, but fixed and growth mindsets are her important
discoveries for people living in today's fast changing and very complex world.

Take the example of abundance versus scarcity as an example of mindset. A of is plenty of

resources for everyone mindset abundance will consider that there and that resources will not run out
because they are replaceable. However, a mindset of scarcity shall think that there is inadequate amount
of things around, SO some people can either benefit or lose them.

People with fixed mindset perceive that their talents and abilities are set. They consider their
brains and talents are sufficient to become successful and endure life by becoming smart. They personally
take positive criticisms of their capabilities. A fixed mindset sees the world in an "either/or" perspective.
For people with fixed mindset success is based on luck or possibly from some sort of prejudicial
advantage. They always want to avoid challenge, failure and tell themselves they do not have expertise.
People with a fixed mindset believe that these qualities are inborn, fixed, and unchangeable.

On the other hand, people with growth mindset trusts that traits can be changed, developed and
strengthened by working on them. These people are certain that their abilities could be developed by
commitment, determination and obviously For them, brains and talent are simply the starting point of the
lifelong hard work. success of everyone. People with growth mindset see failure as an opportunity to
enhance their performance and take mistakes as lessons. Instead of giving up, they proceed to what they
wanted to do despite failures.

Fixed Mindset Growth Mindset

I'm either good at it, or I'm not. I can learn anything I want to
When I'm frustrated, I give up. When I'm frustrated, I persevere,
I don't like to be challenged. I want to challenge myself.
When I fail, I'm no good. When fail, learn
Tell me I'm smart Tell me I try hard.
If you succeed, I feel threatened If you succeed, I'm inspired
My abilities determine everything My effort and attitude determine everything
Table 2 Fixed vs. Growth Mindset
Source: https://www.brainpickings.org/2014/01/29/carol-dweck-mindset/

Characteristics of an Entrepreneurial Mindset

Entrepreneurship is a challenging and rewarding path. Based on research there is no distinct set of
traits signifying success. Although, there are several characteristics often common to successful
entrepreneurs.

1. Curiosity - Being curious is really shared among successful entrepreneurs. Curiosity leads to
questions, and questions lead to answers. This trait strengthens the ability to understand things
with a new standpoint. Nobody really knows everything, and curious people are conscious of this.
Being humble and open-minded lead to greater knowledge, and greater knowledge allows more
detailed reflection.

2. Commitment - This is continuing to keep going and persist amidst problems. Rejection and
disappointments are essential elements of an entrepreneur's life which needs to be endured.
Lessons must be taken from rejection and should not affect the confidence of an entrepreneur.
The focus should be on achievements, because it would motivate the entrepreneur to persevere as
he moves forward and continues to harvest good outcomes.

3. Optimism-Tough attitude towards challenges makes up successful entrepreneurs. Every time a

situation happens, the entrepreneur should be hopeful in exploring its many learning
opportunities. For a successful entrepreneur, there is always a solution to every problem.

4. Flexibility - Entrepreneurship is challenging field with its unpredicted demands and continuous
problems. It helps to be supple to deal with a series of difficult situations, solve problems easily
 and make progress from obstacles. A successful entrepreneur usually makes a journal and
timeline to overcome this difficulty.

5. Ownership - Successful entrepreneurs always trust that their success comes from their own
ability. Simply they have high internal locus of control. Whatever life throws at them, they will
be able to make or break them through their own actions, decisions and responses. It has always
been their attitude to be responsible for the things that they do. They are very confident that they
can always fulfill their dreams.

6. Leadership - A successful entrepreneur always guides, motivates and empowers usual for him to
share his vision with his team to inspire these his team. It is people. Through convincing
communication and involving his team, an effective entrepreneur is able to attain his visions. He
is able to create his own vision by constantly being the model of his team.

7. Connection - In entrepreneurship creating a network is very important. Entrepreneurs must

choose those people that would form his collective links so that he could breed his idea. There
should be both emotional and financial bonds. Investment is terms of relationship so that later this
bond could be used for support when needed.

8. Self-respect - In business, it is also vital to take care of both the body, mind and spirit. Taking
care of oneself daily through rest, exercise and diet is essential. Always have ample rest and sleep
for renewing ones' energy. Take time to exercise and do whatever one enjoys. Eating healthy
choices and a few treats to nourish the body is basic too.

The world very different on how entrepreneurs see it. These traits must be is developed in order
to be successful in going forward.

Essentials of the Entrepreneurial Mindset

Although living with entrepreneurial mindsets is really transformative, knowing them is amazing.
Entrepreneurial mindsets appear to be like common- really sense, yet they are not common practice.
There are essential things in order to employ and initiate successful mindsets.
1. Passion first - Real entrepreneurs look for what really are important to them, they truly wanted
to, and then bring together their business around those what things. Most of the times a company
has SO many problems. The best way to be involved and continue doing business during difficult
times is to have a sense of meaning and purpose. This is the intention for starting businesses
according to the entrepreneur's passion.

2. Everything is possible - This mindset is about believing that entrepreneurs are capable of
accomplishing unexpected results. They trust that an idea could be possible to turn into reality.
Usually entrepreneurs examine first their goals and set things bigger. Nothing could serve as
hindrance for an entrepreneur to realize his potentials.

3. 100% accountable - In life it is easier to blame others especially when things became out of hand.
Entrepreneurs always believe that they have the power to choose their responses to any
 circumstance because they have this 100% Accountable mindset. For entrepreneurs though they
cannot turn back the hands of time, they need to build a new start and form a different conclusion.

4. We are connected - Entrepreneurs believe they can achieve their dreams not by being alone
though they love to be independent. They wanted to lead by helping other people to do their tasks
and fulfill their dreams without seeking anything in return. This mindset is activated by synergies
in every relationship. Entrepreneurs take honor in competition because they believe that working
with, for and through others pushes their potentials

5. Live life to give - Most people now especially business people wanted to offer their time and
resources for a valuable cause. As people in business profit more, they tend to give more. This is
known today as corporate social responsibility. Embracing this mindset means incorporating the
daily works with the philosophy they believe in. Entrepreneurs believe that life is a cycle, hence
those people with so much need to give to people with less. Giving back assures entrepreneurs of
giving forward.

6. Attitude of gratefulness - Most people also focus much of their thoughts on what they do not
possess. Seldom do people give their attention to their accomplishments and their present
experiences except for entrepreneurs. This mindset provides the recognition of all positives in
every experience and be thankful for these. Even during problematic situations which
entrepreneurs recognized as opportunities to learn and grow, they are still gratefulness about
these situations.

7. The time is now - This mindset for entrepreneurs refers to recognizing that all their powers exist
in the moment. Entrepreneurs believe that they cannot history and the future is uncertain. Hence,
the important thing is to take action now. There should be purposeful action not just being busy.
It is best to take action than simply waiting on perfect plan which does not exist. Entrepreneurs
give their best effort and make their adjustments of their action as necessary.

Entrepreneurship as a Habit
A habit is an unconscious behavior done often and regularly. Good habits can brain makes be
acquired using "habit loop". This habit loop is a process wherein the decision whether to store or repeat
such behavior. Rewarded behavior is most likely repeated. There are three habits that required most to be
nurtured and be practiced for entrepreneurial mindset.

The Self-Leadership Habit

The book of authors Bryant and Kazan entitled "Self Leadership - How to Become a More
Effective, and Efficient Leader from the Inside Out" contains the definition of self-leadership. Self-
leadership from this book is the practice of purposely influencing and controlling ones' behavior, actions,
thinking and feeling. Self-leadership is related to optimism, happiness, consciousness and emotional
intelligence among others.

Self-leadership needs the implementation of three important strategies, namely:

 1. Behavior-focused This strategy concerns enhancing self-awareness to manage behaviors
especially when dealing with essential but not-so-good tasks. Here are the ways to accomplish
this strategy:
a. Self-Observation - This increases the consciousness of how, when and why entrepreneurs
behave the way they do in some situations. Most of the times entrepreneurs evaluate
themselves on their accomplishments, on what they have not accomplished, the situations at
hand and their feelings about these situations.
b. Self-goal Setting - This concerns the process of planning goals of entrepreneurs.
c. Self-Reward - This is about paying oneself after accomplishing the set goals with either
tangible or intangible rewards.
d. Self-Punishment - This is allowing entrepreneurs to evaluate their behaviors in order to
reform them. Entrepreneurs though make mistakes must make effort not t repeat these things
again.
e. Self-Cuing - This is making lists and notes or writing motivational posters as reminders of
the planned goals.

2. Natural Reward - This is about making every tasks enjoyable by emphasizing the positive aspects
of each task and its importance.

3. Constructive-Thought This means creating positive and productive means of thinking that are
advantageous to the performance of entrepreneurs. Identifying negative beliefs and assumptions
and reforming these are still part of constructive thought.

The Creativity Habit

Creativity is the capacity of turning fresh ideas, insights, inventions, products or artistic objects
that are considered to be unique, useful and of value to others into reality. It is the ability to observe the
world in different and novel ways, to discover unseen patterns, to make associations between apparently
unconnected phenomena, and to produce solutions.

A good example of creativity habit is the story of The Aristocrat, the famous restaurant for its
world-renowned Chicken BBQ & Java Rice combination. In the 1930s, Asiang Reyes started The
Aristocrat as a mobile canteen in Luneta, serving sandwiches filled with adobo and other Filipino viands.
Hotdog trucks were in vogue at that time. Reyes created her own version of merienda for park-goers.
Reyes was supposed to name the canteen "Andy" after her eldest son, but changed it to Aristocrat instead.
The canteen prospered, and Reyes and her husband decided to turn it into a full-time restaurant.

Creative people are open to experiments and do not fear to commit mistakes. Entrepreneurs are
said to be creative people because they are constantly in practice of creativeness. An in-depth observation
of the entrepreneurial process indicates that creative thinking is the essential "skill" of an entrepreneur for
the formation of fresh ideas.

Simply, creativity is the ability of imagination. Imagination makes somebody to reach unexplored
areas. In business, imagination is known as "thinking outside the box". Using imagination, an
entrepreneur can set aside the everyday norms and entertain in his mind something creative and
innovative.

However, there are certain problems in the practice of creativity which are:
1. Fear
2. No craving for disorder
3. Fondness for judging over making ideas
4. Distaste for nurturing ideas
5. Perceived shortage of challenge
6. Failure to differentiate reality from fantasy

The Improvisation Habit

Improvisation is the unstructured way of creating something in the absence of planning. It is the
rational ability to promptly sense, and change direction quickly. It requires improvisation to function in
the uncertain world of business. Entrepreneurs, though start with good ideas often times possess limited
resources, unpredicted market situations or conflicts inside the company that hinder them to realize their
initial plans. Hence, quickly entrepreneurs must adjust to any situation they are in to realize these plans.
Improvisation helps entrepreneurs outperform their competitors who do not possess this habit. People
with improvisation habit are always prepared to face failures. Self-doubt is the common barrier to
improvisation. Fear is part of self-doubt which comes from being unprepared.

Hailing from Iloilo City, Edgar Sia dropped out of college to pursue his own photo-developing
business at the age of 19. In 2003, 26-year old Sia laundry and decided to open the barbecue fast food
restaurant Mang Inasal. Mang Inasal is an Ilonggo version for "Mr. Barbecue." The first branch was built
at mall parking lot in his home city due to limited resources. The restaurant took off. When Tony
Caktiong about Sia's burgeoning business, he decided to buy Mang Inasal for a total heard of P5 billion.
Sia eventually put the sales of Mang Inasal to other investments like banking and healthcare. At 42, he's
considered the country's youngest billionaire.

Before any action is mindset. Self-leadership, creativity and improvisation are the habits essential
towards entrepreneurial actions, The best idea would be useless unless not leading to actions. There will
be no new business, no new product, no formed in the organization or anything else. However, self-
efficacy plays a significant role development of the intentions and of the entrepreneurial actions.
Entrepreneurial self- efficacy is the belief that entrepreneurs has the capability to start new businesses.
Self- efficacy is a vital element of the entrepreneurial mindset. It is also a sign of business intention in
moving towards an action, leading to realizable opportunities.

Opportunity Recognition Using Mindset

An opportunity is a means to generate profits by creating unique, innovative and desirable
products or services which are not being found in the market yet. In for an opportunity to be feasible, the
idea should be able to create value. The order most common form of value is economic or the ability to
make profit. However, nowadays it is also vital to consider social value and environmental value. Social
value addresses a social need or provides benefits to the society. Environmental value is the opportunity
to preserve the natural surroundings.
 Opportunity recognition is process by which individuals and businesses makes use their
entrepreneurial mindset in order to establish new business or ideas. This is done using continuous
brainstorming to find new and innovative ways of solving problems. Such opportunity could be a new
business concept or possibly new products or services to satisfy customers' needs and expectations.

In addition, a fresh and new idea that is open for opportunity should be different from the existing
products or services that the market is willing to accept adopt. These products or services should be able
to solve vital problems in the and society. Discovering solutions to problems and meeting customer needs
are the core of opportunity recognition.

Entrepreneurs are able to see problems as opportunities. They consider each problem, frustration,
or unmet need they face as a possible opportunity. They are able to understand the world using an
empathic viewpoint, rather than concentrating on their own needs. They change and focus their
consideration to the broader world around them to know the needs of others. They turn to be attentive,
enquiring about the process being done, the missing details and the improvement that needs to be done.
However, the right mindset is not utilized, then a missed opportunity is expected.

How to Start with Ideas

There are several approaches in forming ideas from the not-so-formal to more formal way of
creating ideas. Here are some structured strategies of forming ideas:
1. Analytical - This is about breaking a problem into details or looking at problem in a common way
to produce ideas on improving or innovating products or services. Only when thought analytically
that correlation of problems is seen.
2. Search - This involves linking personal experiences that are significant to the existing problem.
This also illustrates the ability to be resourceful in looking for connections between objects that at
first. appears to have no obvious relationship
3. Imagination-Based - This is interrupting doubts and dropping restrictions to produce fantasies or
make believe situations. Sometimes, entrepreneurs need to be playful in their minds SO that they
can think of ways that are impossible.
4. Habit-Breaking Sometimes, the human mind needs to depart from usual patterns to stimulate
creative insights. In order to explore a new perspective, entrepreneurs should think of the
opposite of something. The ideas of person not part of a situation could also be taken particularly
those admirable personalities.
5. Relationship-Seeking - This is establishing a link between concepts that are not usually
connected. The intention here is to fuel the mind into making connectivity that seems to be
unnoticed.
6. Development - This employs the modification of improved choices and existing concepts to make
new potentials. One way to do this is to brainstorm.,
7. Interpersonal This needs interaction with a group to generate ideas. Brainstorming is also
commonly used to highlight creativity towards new opportunities.

Four Pathways to Opportunity Identification

 An opportunity could be in the form of a new product and/or service, new found markets, newly
opened distribution channels, new ways of production or supply or new methods of organizing. Those
that fit the capabilities of an entrepreneur, valuable, rare, expensive to copy are promising opportunities.
Fit means the skills and knowledge of the entrepreneur match the current opportunities. Valuable
considers the need of the market. Rare considers the offer to be unique that it does not exist in the market.
Expensive to copy is an entry barrier for most who wanted to start a business.

Here are the pathways towards the identification of opportunity:

Find Pathway
This pathway assumes that opportunities exist independent of entrepreneurs and are waiting to be
found. Generally, an opportunity is found when the entrepreneur sees clear problem and develops a
solution. The problem is known to most, but the entrepreneur is "the one who acts on the potential
solution".

This is the experience of Socorro Ramos, the owner of National Bookstore. She opened National
Book Store in Escolta with her husband with a capital of P200, selling books and school supplies to
students. At that time, Manila was under the control of the Japanese, who imposed censorship on books

and periodicals. To augment their earnings, she and her husband resorted to selling other items like
candles and soaps.

Search Pathway
This is used when entrepreneurs are not quite definite what type of business they want to jump in.
Hence, they engage in an active search to discover new opportunities. Everyone has certain information
sets or knowledge bases. Through actively searching these sets, entrepreneurs are able to access a wealth
of information and discover new opportunities. Usually, entrepreneurs find an area that they are interested
in and then start searching for business opportunities.
 The story of Ragnarok by the company LevelUp! is a good example of this pathway. During a
business trip in Korea, Nonoy Colayco smelled the opportunity of online gaming in the Philippines. He
knew very well that Filipinos are fond gaming. Through the help of his son Ben Colayco, a person
passionate with of games, the father and son team brought gaming to a whole new level called Massively
Multiplier On-line Games (MMOG). The Internet and gaming was really progressing that time with
Counterstrike as the popular online game. They got the publishing rights with Oz World and 3D Chat, but
it was with Ragnarok from Korea that served as the accomplishment of LevelUp!

Effectuate Pathway
This is a pathway that uses the entrepreneur's skills, knowledge and abilities unearth an
opportunity that suits him. Such opportunity comes to from the experiences, abilities, networks and
entrepreneur's confidence to make action especially during times of uncertainty. Effectuate pathway is not
simply discovering opportunity but really creating it using "what you know", "whom you know" and
"who you are" as an entrepreneur.

With only two cake displays and ten employees, Milagros, Clarita, and Doris Leelin started
Goldilocks at a 70-sq-m building space in Makati. Sisters Milagros and Clarita loved baking and decided
to pursue their passion into business. With the help of their sister-in-law Doris, the Leelin's opened their
first branch.

In 1991, Goldilocks launched its franchising program. As of 2015, the bakeshop chain had almost
400 stores across the country, with other branches in the USA, Canada, and Southeast Asia. From a
modest capital of P66,000, Goldilocks is now a multi-million food enterprise with more than 4,000
employees.

Design Pathway
This is the most difficult yet the most-value creating pathway. By focusing on the unsatisfied
need of the market particulary the latent ones, the entrepreneur is able needs that to discover valuable
opportunities. Latent needs are those customers do have but do not know they have. This pathway is
considered most difficult because this needs practice and creative thinking before discovering real
unsatisfied needs. Here the entrepreneur is really creating a new market.

The craze for potato fries is everywhere now. Perhaps, this craze evolved from the Westernisation
of the Philippines through the entry of foreign companies in the country introducing American-style
meals such as burgers and fries. Seeing an opportunity for success, a local entrepreneur developed an idea
instead of competing against these much larger companies with the same product. An entrepreneur of
humble beginnings, Jose Magsaysay Jr., is the current president of Potato Corner. He worked at Wendy's
as a dishwasher, eventually climbing his way up to become a district manager of Wendy's before opening
his first Potato Corner stall in 1992.

A unique selling proposition is what makes a given product one of a kind like Potato Corners.
The factors inherent in Potato Corner's USP are low costs and high efficiency. What Potato Corner did in
order to increase sales and further expand the company was by introducing franchising to the company,
By means of franchising, interested partners could help expand the business by paying royalties, and this
in turn made Potato Corner an even more publicly-recognised company. As a result, Potato Corner
became a 75% publicly-owned company with franchisees from all over the globe.

Alertness, Prior Knowledge and Pattern Recognition

Right information is essential in opportunity identification. However, this information should be
rightfully used to create impact.

Alertness
In reality information is everywhere. Information are just waiting to be discovered. However,
only entrepreneurs that possess alertness could possibly the do this thing. Alertness refers to the ability to
easily pinpoint opportunities in environment. In fact, these entrepreneurs need not really search for
information around their environment methodically. With their usual activities every day, entrepreneurs
turn to be alert to existing opportunities. Sometimes, even themselves are surprise to what they notice
around. Some researches reveal that entrepreneurs' perseverance and positivity make them more alert and
prepared to identify and act on possible opportunities that others do not even see.

Like many travelers Mr. Jonathan Jay Aldeguer has a natural impulse to purchase souvenirs. With
his entrepreneurial eye, he spotted the universality and huge potential for a new business with souvenirs.
The souvenir industry from his entrepreneurial lenses could become multi-billion-dollar industry given
the twist. In the Philippines, the industry lacked creativity in design, visual merchandising, quality and
branding. Filipinos are used to the ethnic-looking designs which were the norm. He showcased his
products as a unique experience of a locality that highlighted his jump-off concept and his dynamic
personality, hence Island Souvenirs was born. Today he has more than 110 branches in the country.

Prior Knowledge
Prior knowledge is the information gathered from the combined life and work experiences.
Studies shown that entrepreneurs that have knowledge about the industry and market in combination with
broad network are able to recognize better the opportunities around them. Most entrepreneurs that had
knowledge and in a market, industry or customers can be able to these to their experiences apply
respective businesses.

Victoria Belo, more commonly known in the Philippines as Dra. Vicki Belo, was a victim of
bullying in her childhood years. She was usually pestered for being ugly and fat. This experience made
her all the more fascinated in the field of beauty. She imagined herself of becoming somebody who could
make people feel gorgeous and adored. This led her to be in the medical profession, particularly in the
field of dermatology. Diploma in Dermatology in Bangkok, Thailand in 1990. It was Hence, she obtained
a in 1990 when Dra. Belo established her first clinic at the Medical Towers in Makati. The clinic was the
first to make known liposuction and lasers in the Philippines. The Dra. Belo's Belo Medical Group was
also the first recognized "ambulatory cosmetic surgi-center in the Philippines" and certified by the
Department of Health (DOH). She is now the noted dermatologist and "Doctor to the Stars" In addition,
Dr. Belo was hailed "'Ambassadress of Beauty" for the Philippines and tasked to endorse the country as a
world-class cosmetic surgery destination.
Pattern Recognition
Pattern recognition refers to identifying relationships between seemingly isolated things or
occasions. This recognition happens when people make connections of dots to pinpoint and create
opportunities. Often, when "connecting dots" there are constraints that block the way. Real entrepreneurs
ignore these things and try to find ways to look beyond constraints.

Filipina scientist Aisa Mijeno is an example of an entrepreneur that knows pattern recognition.
After resigning from her job in the IT industry and volunteering with Greenpeace, Mijeno was exposed to
"off-grid" living conditions. Once she had seen the restrictions no electricity had on day-to-day living.
Hence, she decided to find a way to figure out how to produce a light source that did not depend on
electricity, batteries or fuel to work.

In partnership with Philippine incubator, Ideaspace Foundation, Mijeno was able to design and
create Sustainable Alternative Lighting or simply SALt. The SALt environment-friendly and viable
alternative light source that makes use Lamp is an of saltwater, making it appropriate to those residing in
coastline areas. It can also function well in far-flung barrios. Using only two table spoons of salt and one
glass of tap water, this ecologically designed lamp lights for eight hours.

The concept of the SALt lamp is the chemical conversion of energy. It uses the scientific process
behind the Galvanic cell. However, in place of electrolytes, the SALt lamp utilizes saline solution, thus it
is harmless and non-toxic.

From Idea Generation to Opportunity Recognition

In order for an idea to be feasible, it must be fresh or inimitable or at least a twist from an existing
concept that will be acceptable and adoptable in the market. The concept should be something of value to
consumers, because it is a need, a desire, useful and has the capacity to earn profit. Not all idea could be
an opportunity. The best ideas are those that could be transform into doable opportunity.

The IDEATE Method is an ideation process empirically proven to help budding entrepreneurs
recognize problems, cultivate innovative solutions, and choose the best creative entrepreneurial idea. This
model follows the process of Identify, Discover, Enhance, Anticipate, Target, and Evaluate.

Identify Identifying problems that After quitting his job, Brian

customers are trying to solve are Chesky drove to San Francisco
spending money to solve, but to crash with a college friend,
still unsolved to the satisfaction Joe Gebbia who also recently
of customers. This, is also about quit his job. They were both
identifying solutions to. this having trouble making the
problem. upcoming rent payment. Then
they realized that the 2007
Industrial Design Society of
America conference was coming
up and that hotel rooms would
be hard to get.
Discover Actively searching for ideas in Gebbia, who had three air
problem-rich environment mattresses suggested they turn
 where there is social and their apartment into an "air bed
demographics change, and breakfast."
technological change, political
and regulatory change and/ or
change in the industry structure.
Enhance Taking the ideas and expanding After setting up a simple
website to new applications or (airbedandbreakfast.com),
adding innovative they twists. managed to book out their whole
Or simply enhancing existing apartment in three days, solving
ideas. their rent problem.
Anticipate Studying change and analyzing The duo, who had met at college
future scenarios as they relate to at the Rhode Island thought
School social, technological, acting as tour guides to
and other of Design, global designers would be a fun way to
changes and trends. make money.
Target Defining and understanding A customer for Airbnb is the
particular target market, one who adds up to the
validating new ideas with early company's revenue. He can be a
adopters. host who offers his space for
rent and lists on the platform or
he can be a traveler who books a
space.

Table 3 The IDEATE Model for Opportunity Recognition with AIrBnB as Example Source: Adapted
from Neck, H. M., Neck, C. P., & Murray, E. L. (2019). Entrepreneurship: The Practice and Mindset
https://www.businessinsider.com/how-airbnb-was-founded-a-visual-history-2016-2

Suggested Readings Katie Benner. "Inside the Hotel Industry's Plan to Combat Airbnb." New York
Times. April 16, 2017. https://www.nytimes.com/2017/04/16/technology/ inside-the-hotel-industrys-plan-
to-combat-airbnb.html Emma Fleck. "Needed: Entrepreneurial Mindset." Central Penn Business Journal,
34(12), 10. http://pageturnpro2.com.s3-website-us-east-1.
amazonaws.com/Publications/201803/15/83956/PDF/131668002208352000_ CPBJ033018WEB.pdf

Suggested Videos Burke, M. (Director). (1999). Pirates of Silicon Valley [Motion Picture].
http://ma.online-movies.xyz/movie/3293/ Hancock, J. L. (Director). (2016 ). The Founder [Motion
Picture]. https://www.youtube.com/watch?v=VE7ICf19ANw Entrepreneurial Mindset and Opportunity
Recognition

CHAPTER 3: The Use of Design Thinking

Learning Objectives:
The learners shall be able to:
 Define design thinking;
 Illustrate the design thinking process.,
 Combine storytelling with the design thinking process;
 Adapt observation and insights in the design thinking process;
 Design interviews in the design thinking process; and,
  Prepare experiments in the design thinking process.

"The main tenet of design thinking is empathy for the people you're trying to design for.
Leadership is exactly the same thing - building empathy for the people that you're entrusted to
help.”
David Kelley,
Founder of IDEO

These few years, the design thinking process has increasingly become well- that known. Possibly,
this is due to the high success of big and global companies made use of this process. Known also as
"outside the box thinking" said process is not just merely a process, but completely opens a new way of
thinking. Said process provides a pool of practical means to help apply this new mindset. Design thinking
helps improve the world through the generation of innovative solutions from ordinary problems to the
most complicated ones being experienced every day. Hence, design thinking is now being taught in top
colleges and universities globally and being promoted in all business levels.

What is Design Thinking?

For the Chief Executive Officer, Tim Brown of IDEO, design thinking is "a discipline that uses
the designer's sensibility and methods to match people's needs with what is technologically feasible and
what a viable business strategy can convert into customer value and market opportunity ". IDEO is a
consulting company founded in California in 1991 that uses the design thinking approach to design
products, services, environments, and digital experiences. Therefore, design thinking is a combination of
desirability, feasibility and viability based from the definition of Brown.

Basically, design thinking is a constant process of trying to find innovative solutions to problems
through deep understanding and empathy of the target user. It seeks to develop complete understanding of
the people involved in the problem through solution-based approach and not those common problem-
solving methods. Design thinking offers a means of digging that bit deeper to disclose ways of improving
user experiences.

Usually, design thinking involves the process of questioning. Simply, said process involves
enquiring about the problem, enquiring on the assumptions, and enquiring on what the implications would
be. Ideas are usually formed by brainstorming sessions in order to re-structure the problem in human-
centric ways.

Solving problems requires performing the appropriate type of research, forming prototypes and
testing the products and/or services to discover new approaches in satisfying users' needs. This thinking
also involves experimentation and trying out concepts and ideas.

Airbnb made use of design thinking from the human insights that people wanted to share and
leverage their assets, hence the birth of "shared economy", Apple did design thinking and made the phone
a remote control of everyone's lives. Due to the fact that design thinking is problem-solving oriented, it
becomes striking not only for corporations but also to entrepreneurs, who want to run customer- oriented
businesses and provide the best products to their clients.

Here are some of the principles about design thinking to wit:

1. Human-centricity and Empathy - This is about providing solutions to problems that focuses fon
human needs and user response. In reality, the drivers of innovations are people and not merely
technology. Hence, the process should really contain a step that considers the shoes of users and
relate to them with genuine empathy.
 2. Collaboration - The purpose of design thinking is to form a pond of perspectives and ideas. These
ideas shall be used in innovation. Design thinking works well with diverse composition of teams
who would cooperate with each other.

3. Ideation - Ideation is the design thinking core design thinking principle at the same time a step in
process. The focus of design thinking is to come up with as many ideas and potential solutions as
possible. As a step, participants are encouraged to produce many ideas without first considering
the quality.

4. Experimentation and Iteration - Ideas are turned into prototypes. Said prototypes are tested and
feedback from users are taken. Design thinking is continuous and repetitive process to discover
mistakes and defects of the initial versions until getting the preferred form of the proposed
solution.

5. A bias towards Action - Design thinking is an applied and practical solution-based method that is
more focus on action rather than on discussion. This method favors a face-to-face engagement
through "going out in the field" Instead of discussing on the possible solutions, these solutions are
turned into concrete prototypes and tested out in the real world.

The Origins of Design Thinking

In the 50s and 60s onwards, design-thinking emerged because of the issues of collective problem
solving of significant societal changes by engineers, architects and industrial designers at that time. In his
1969 book entitled "The Sciences of the Artificial" Herbert A. Simon first mentioned about design
thinking as a way of thinking. A cognitive scientist and Nobel Prize laureate, Simon since then
contributed numerous ideas in the principles of design thinking.

Design thinking begun to combine the human, technological, strategic needs and innovation
technology in the 1970s. Across a wide range of industries, design thinking since then continues to be
explored and enhanced particularly in business. Simon outlined the first formal models of the design
thinking process consisting of seven major stages. In the 21st century, there are many variants of design
thinking that came out with different number of stages in the process.

Another famous design thinking model was that of the five-stage design thinking model
suggested by the Hasso-Plattner Institute of Design at Stanford. The design thinking process has become
popular because it was strategic to the success of many prominent, international companies such as
Google, Apple and Airbnb. These organizations have applied design thinking to remarkable effect. This
"outside the box thinking" is now taught at distinguished universities worldwide and is promoted not only
in business but to all types of organizations. The five-stage design thinking would be the model that will
be used in this book.

The Design Thinking Process

The Hasso Plattner Institute of Design at Stanford provides a five-step process in design thinking.
In reality, the process follows a flexible and non-linear fashion, rather than sequential steps. The process
often occurs in parallel and be repeated iteratively.
 I t c a n b e s e e n i n

continuously in order to have a deep knowledge of the problem and the solutions. There is an unending
loop so that the designer can gain insights constantly, produce new ways of seeing the product and its
likely uses and understand deeply the users and their problems.

The five phases of Design Thinking, according to d.school, are as follows:

Empathize: Research About Users' Needs

Using research, the first step in the design thinking process allows to obtain understanding of the
people who experience a problem before designing a solution to serve them. Empathy describes the
ability to put oneself in another person's shoes to really see the world through people's in a given context
or situation. It involves observing, engage to understand their experiences and motivations and immersing
in the physical environment of users who will be affected by the design. Since real design thinking is a
human-centered design process, it needs empathy to gain insight into users and their needs and the
problems that underlie the development of a particular product and/or service. During this phase, the
designer seeks to set aside their assumptions and gather genuine insights about the user. In building
empathy, designers can produce products which truly satisfy the users and make their lives easier.

Here are some key empathy-building methods to gain a deeper understanding of the users' pulse:
1. Empathy interviews - The objective of the interview is to find out as much insight possible using
an open conversation. The most effective way of an as interview is constantly asking "why?" even
if the answer has already been given. Storytelling is encouraged here and also be attentive to
nonverbal cues.

2. Immersion and Observation - Users should be observed in their natural environment or immersed
in a certain situation while they are in action. Photographing or videoing could be done in
observation to identify users' needs, motivations, or challenges that they are not conscious of and
which they could not express. Users could be observed here as they act naturally.
 3. Extreme Users - Usually the extreme users are the ones sought to re-structure the problem and
discover fresh insights. The reason is that the needs of extreme users are usually intensified that
could help solve the problem. Compared to average users, they find workarounds to existing
problems.

4. Ask what, how, and why in curiosity - The what, how, and why of users' behavior
must always be considered. This line of questioning can lead the observation into more abstract
user motivations. The "what" question shall give details of what action has taken place. The
"how" question considers the manner of completion of the action that happened in the "what".
With the "why", emotions educated guesses could be formed about the user's motivations and as
he completes the action.

One method that can be used to record efficiently the information from the interview is the
empathy map.

The empathy map helps gather and organize the data from the interview that could lead to
surprising insights. There would be lots of discoveries once the empathy map has collated the unmet
needs, frustrations, improvement areas, perspectives, assumptions and beliefs coming from someone's
head. There are four main components of the empathy map namely:

Source: www.tutorialspoint.com

1. Say - This quadrant covers what the user says loudly in an interview or some other usability
study. Ideally, it contains precise and direct quotes from research. An example is "I am loyal to
Jollibee because I never have bad experience.'

2. Think This quadrant captures what the user is thinking throughout the experience. Here, there
should be special attention paid to what users think, but may not be eager to articulate. Often,
they are hesitant to share their thoughts because they are uncertain, uncomfortable, well-
mannered, or scared to tell others something. For instance, a user's thought could be expressed as
"This is really frustrating."

3. Do - This quadrant encompasses the actions the user undergoes. This could be what the user
physically does and how the user goes about doing it. Possibly the user "Shops around to compare
prices"

4. Feel This quadrant contains user's emotional state such as his worries, excitement about a certain
experience. This is often represented by an adjective such as "confused of too many contradictory
prices".

Define: State Users' Needs and Problems

The first step towards defining a problem is to find who the user is, what is his needs and then
develop insights from the answers. Said step has been done the Empathize Stage. Then the is defined in
actionable design problem statement human-centered manner to club all the answers together in in a the
Empathize The purpose of statement is to establish the core Stage. this problem problems and generate
tangible and actionable ideas to solve the problems.

Here are some guidelines in generating the question under the design thinking process:
 1. Strengthen the good - In design thinking, all the positive aspects of the customers' needs are
intensified.
2. Eliminate the bad - With design thinking, all the bad components witnessed in the problem are
taken out.
3. Search the opposite - Using design thinking, the problem needs to be transformed into
opportunity.
4. Enquiry of the Assumptions - This step in design thinking consists of enquiring about the
assumption at hand.
5. Pinpoint the Unanticipated Resources - Having design thinking, some other resources not stated
by the customer can be sought on how they can be controlled.
6. Form an Analogy - Design thinking also includes the manner of creating relationships between
the problem at hand and unconnected images.
7. Breakdown the Problem into Pieces This is where again analysis comes into picture for a short
while before the problem definition can be synthesized. The points discussed from 'empathize'
section can be broken down into elementary fragments to make the work easier.

Ideate: Challenge Assumptions and Construct Ideas

In this stage, designers are prepared to start generating ideas. The concrete background of
knowledge from the first two stages means anyone can begin to "think outside the box". Here
entrepreneurs may now look for alternate ways to view the problem and pinpoint innovative solutions to
the problem statement created.

There are numerous ideation techniques such as Brainstorm, Brainwrite, Worst Possible Idea, and
SCAMPER. In order to encourage free thinking and to magnify the problem space, Brainstorm and Worst
Possible Idea sessions are normally used.

1. Brainstorm - This is a more relaxed and informal way of solving a problem using imaginative
thinking. Often times, these thoughts and ideas seem a bit crazy. These ideas are original and
creative solutions to a problem. Some of these ideas may even trigger more ideas. Brainstorming
gets people released their ideas by shaking their heads without the usual way of thinking.

2. Brainwrite - This IS serial process of asking participants to write down their ideas about specific
question or problem on sheets of paper. Each participant passes his ideas on to someone else, who
reads the ideas and adds new ideas. The process repeats that would last from 10 to 15 minutes.
Once the sheets are collected, they are posted for discussion.

3. Worst Possible Idea - This is a technique where members of the team look for the worst solutions
in ideation periods. This is a reverse way of examining their ideas, contest assumptions and
obtain insights in discovering great ideas. In this way it would strengthens creativity and boosts
the confidence of team members.

4. SCAMPER - The SCAMPER method is a concept that aims to look for solutions to problems.
The SCAMPER technique is more engrossed on the process of discovering unfamiliar and
innovative solutions to problems. The goal of also is improving a product or service. Actually,
SCAMPER stands for an acronym and each letter stands for one thinking technique:

a. Substitute - A designer may look for something to replace that will result in improvements of
concept, product, service or process. Possibly, this could be a trial and error process to test
which among the alternative works better or could be best.
 b. Combine - Sometimes, the solutions are already at hand and not really something new. An
idea might not work alone, but a combination of some ideas, processes or products could
work best.
c. Adapt - Often, there is already the right solution to a problem, but still unknown yet.
Sometimes, an idea could solve one or more problems.
d. Modify - At times, exaggerating : situation or problem could offer a new insight added value.
This could help isolate which among the part of or process or concept is vital.
e. Put to another use - This is making the idea or concept works into a different use compared
to what is originally planned.
f. Eliminate - In the same process like the Lean Six Sigma, this concerns eliminating waste due
to inefficient processes. Removing ineffective procedures could reform them.
g. Reverse -This is doing things that are completely against, the original purpose in order to see
something from a different angle.

Prototype: Start to Form Solutions

A prototype is a low-cost, scaled-down quick working sample of entrepreneurial ideas for new
products or particular features found in these products. It is a taster of what will ultimately become a
finished product. A prototype shows how a product will work and look like. Though, not all prototypes
will develop into a final product. Prototypes can be in different shapes and sizes from paper to sketches
all the way to completely well-designed interactive prototypes.

This stage is an experimental one to validate ideas and to develop reaction to form more and more
prototypes for interaction. The purpose here is identifying the best likely solution for each of the problems
identified from the first three stages. The solutions are applied within the prototypes. One by one, they are
examined. After examination they are either accepted, enhanced and re-inspected, or rejected depending
on the users' experiences. At the end of this step, most likely the designer has a better idea of the product's
limitations and problems.

Here the designer will also have the big picture of how the actual users shall interrelate with the finished
product. Here are some of the benefits about prototyping:

1. Timely feedback - Collecting feedback is an important feature of the product building

process. Reviews at every step of the product development such as adding new features or
designing parts of the product can be collected using prototyping. Feedback could reveal
what works for the market or what could not.

2. Prompt changes save time and cost - At the end, changes could be in the form of drastic
restructuring, assumption and revision. Essentially, having an initial model prepared makes
possible the preferred changes promptly. This way early changes may reach the designer's
goals earlier with less or no investment or effort at all.

3. Validation prior to development - Before getting into final development, there would be
several discussions in between repetitive changes using prototyping. Said repetitive process
ensures to build easier what in reality is needed.

4. User research and user testing - It is vital to identify potential user and gather ideas to serve
them best. This could only be attained using prototyping. Actually, the crucial intention of
constructing a prototype is user testing. User testing shall reveal how the product would
become functional and valued by the final user. Ideas and insights can be gained concerning
how actual users would use the product and make improvements of the pain points.
 There are numerous types to prototyping. It is always essential to choose the right type to a
product which suits into some constraints such as time and resource.

1. Low fidelity - This consists of paper prototypes that are used in the early stages that are
constantly improved during the process. This prototyping makes improvements easy and
fast. The focus here is the system not the outer appearance which makes it more open to
improvements depending on the user feedback. However, as the product becomes
complex, these low fidelity prototypes become ineffective in keeping up with these
design complexities.

2. Medium fidelity - This prototype concerns the product that is made with practical
functionalities based on storyboard and user situations.

3. High fidelity - Often, these prototypes are mistaken for the final product, because they
look closely like the would-be actual end product. These prototypes may provide the
most convincing experience of the product having the real functionalities. This is perfect
for discussing the complex components of a product but expensive and time consuming.

Essentially, a prototype is the foundation for what will become the minimum viable product
(MVP). An MVP is a minimum viable product that was born out of the lean mentality pioneered by Eric
Ries from his book "The Lean Startup". After any hypotheses have been tested using prototyping and
acquired evidence of a concept, an MVP can be created. Before promoting the MVP, review again and
again the created prototypes to address those biggest product assumptions. An MVP is also a better way
to present a product to potential investors. It will give them a better impression of the product than a
prototype.

Test: Try Solutions Out

The complete product is tested in real life environment using the best solutions in the previous
step. The results that are produced out of the test are normally use to redefine one or identify further
problems. Designers can g0 back to the previous step to make repetitions, adjustments and improvements
to consider alternative solutions. Here a deeper understanding of the product and its users could be
possible.

Here the stakes are high. If the final users are contented with the product, then it will go into
production. While if the end users are not happy, then the process is reiterated in addition to integrating
the feedback and then reframe the problem. Testing is the opportunity for users to try out the prototype. It
is the chance for the designer to observe on purpose and gather finale process data.

The Power of Storytelling

Stories are about specific events of real people and their respective lives that inspire
opportunities, ideas and solutions. These stories offer actual details to can be used in picturing solutions
to certain problems. Storytelling is the core of the structure and functions of every human being to
connect events as a complete experience through time. Hence, storytelling makes it an important and
effective tool in the course of the design process of both products and services.

Actually storytelling is a vital instrument for feedback. Feedback is the foundation of the
repetitive process of prototyping that may lead to solving the problem. Stories and prototypes are usually
interwoven. Explanation and repositioning of experiences could bring a host of possible analyses and
interpretations that may bring to test fresh solutions prior to completely committing to a specific policy,
program, or service.

At each steps in the design process, the events and lessons experienced are described through
storytelling. Storytelling offers the opportunity of hearing feedback about the product from the
consumers' mouth or see how the product could be used in real life. In the design process, the essential
problems that consumers face when using a product or a service are known through storytelling. This
knowledge about the problems are reflected in the formulation of the solution based from the test made by
the consumers.

Usually, every story has the following elements:

1. Domain/What - This is the definition of the topic that is the concern of the story. In the
design process, it can be the problem of a consumer that should be resolved.
2. Players/Who - These are the people involved in a story. In the design process, the main
player is the persona who represents the demographic information of the consumer who
faces the experiences. There could be other players involve in the story such as those who
are part of the support groups or those employees that directly communicate with the
customers.
3. Story flow/How - There are three main chapters for each story namely the beginning,
middle, and end. In every story there is problem that could be part of the middle stage
which is the target in the design process. Issues may arise that may be found before the
main event in the story.

Storytelling in the Design Process

In order to form solution that is human and user-centered, there must be a user involvement in the
design thinking process. Hence, all throughout the process, storytelling is used with distinct usage goal
for each stage. Storytelling can be a applied using the following steps:

The Double Diamond is a process that use both the divergent and convergent thinking The two
diamonds represent a process of exploring an issue more widely or deeply (divergent think- ing) and then
taking focused action (convergent thinking). Divergent thinking solves problem by proposing multiple
possible solutions to identify the one that is best. While convergent thinking concentrates on finding the
single best solution to a problem. So here in Double Diamond many ideas are generated, then refine and
confine to the best idea. In this model the process happens two times, when the problem is defined and
when the solution is formed.

1. Understand -The first diamond helps people define what the problem i and involves talking to and
spending time with people who are part of the issues.
2. Define -The understanding from the discovery phase can help describe the challenge in a different
manner.
3. Develop - The second diamond inspires people to offer multiple answers to the well-defined
problem, trying to find motivation from elsewhere and co-designing with a variety of diverse
people.
4. Deliver - Delivery includes experimenting different solutions in a limited way, discarding those
that are not feasible and refining the ones that will work.
Problem Framing
Basically, this step comes early in the design process that deals with exploring the problem to
know exactly the concern that needs a solution. Here storytelling used to identify the problem using
qualitative data from the consumers. is Several session using storytelling can be scheduled together with
consumers who possess the persona characteristics. The data gathered from these sessions need to be
analyzed to form a comprehensive knowledge, concerning the problem. Storytelling is very vital to
empathize with consumers with their problems as they relate their pain points. Here the persona empathy
map could be constructed to reveal the feelings and experience of the consumers.

Solution Framing
In the solution definition and prototyping stages, the designer need to test on and evaluate a
number of possible solutions to obtain the best solution based the standpoint of the user. Storytelling is
used in this stage to confirm the efficiency of the solution by creating a two-way communication with the
consumer. Here the designer must know if the solution really works best for the consumer.

In the prototyping step, consumers after trying the solution may be able to In provide feedback to
the designer using storytelling. The designer is able to witness how the consumers make use of the
prototype solution. In this way, he can create a practical analysis of the recommended solutions to the
problem.

Solution Implementation
 Practically speaking, in the design thinking process the consumer feedback about the product or
the service can be collected as basis for improvement. Storytelling can be used as an instrument to
discover how the end product IS used by consumers in their everyday lives. From the feedback sessions,
the information gathered could become useful in enhancing a better version of the product in the future.

A good example of the use of storytelling happened with the Coca-Cola's Happiness Machine
campaign. It featured a Coca-Cola vending machine converted to deliver astonishing "doses" of happiness
to unsuspicious college students. The machine was placed in the center of the student cafeteria at the
Queens, NY, campus of St. John's University. The apparently typical Coke machine, something very
familiar to most people was in complete sight of five intentionally positioned unseen cameras. The candid
camera angles capture the joy and happiness of those in the video. The video revealed unpretentious
surprise and delight on the students' faces when they interacted with the Coca-Cola 'Happiness Machine.
One can also observe the generosity that arises as they gathered together to be part in that moments of
happiness. There was really something very human and realistic about it. It was such a simple yet
convincing concept. Coca Cola was able to portray what is really important and that is "life's simple
pleasures".

Observation and Insights

Collecting information about the target consumer is a vital part of the design thinking approach.
Knowing what customers think or feel is the initial step towards making innovative products and services
that they want and need.

Once faced with a problem, the first thing to do is not to discover a solution immediately. Instead,
the mindset must be to ask a question that might get closer to the cause of the problem or back-up an
advancement. There are several research techniques to gather insights about the needs of people and the
most popular of which are observation and interview.

In research, there are three types of research that can be use which are generative research,
evaluative research, and validating research. In generative research, new opportunities are identified and
the needs are discovered. In evaluative research, feedback on experiments are collected and these are
applied in repetitive ways in to progress. The focus of both generative and evaluative researches are new
order ideas and more on the future. While validating research also known as traditional market research is
purposely for understanding what is presently happening.

Curiosity is the core element in digging deeper into design thinking. Being a keen observer is
vital to be curious on knowing why things are the way they are, why things seem not to work or why
people act the way they do. Being curious is a mindset that help in better understanding of the things
around through observation. Observation makes a person look into the finer points. Curiosity and
observation must work hand-in-hand by inquiring about assumptions to understand what is unknown.
With curiosity, empathy for both the people and systems in place can be obtained. Curiosity helps in
making connections and deepen relationships with people to see problems from different angles.

On the other hand, insight development is a very challenging one. The focus of observation and
insights is quite different. Observation centers on raw data that are purposely gathered from what has
been heard and seen excluding interpretation. After observation comes insight. Insight is not an idea but it
helps to produce new idea. Insight is an interpretation of an interesting information resulting from
interview and observation data that offers new understanding of a human behavior or attitude that could
initiates opportunities. Such insight reveals a pattern that identifies the needs of those people being
observed.
 Take for instance, the everyday task of floor mopping. Procter & Gamble made observations of
people cleaning floors. From the observation, generated Swiffer insights such as people do not like
washing floor with water using mop and water does not help in eliminating Stop Cleaning. Stert
Swiffering, dirt. Hence, from these insights a new product with the brand name Swiffer was born. The
Swiffer brand is a waterless mop that cleans surfaces easier and conveniently. The researchers here were
able to identify Source: https://swiffer.com/ the unexpected pattern the troublesome mopping with water
and a product that makes mopping easier. From different angle, coming from those meanignful insights
given the primary need of avoiding messy and dirty water was resolved because of Swiffer mop.

Developing observation as a skill needs a lot of practice. The more observation practices are
made, the most likely that more meaningful new insights could be developed to create innovative
solutions to problems.

Observation Techniques
Based from the perspective of Spradley, here are the nine dimensions for observational purposes:

DIMENSIONS DESCRIPTOR
1. Space the physical lay-out of the place/s
2. Actor the range of people involved
3. Activity set of related acts people do/or activities that happen
4. Object the physical things that are present
5. Act single actions that people do
6. Event a set of related activities that people carry out
7. Time the sequencing of events that takes place
8. Goal the things people are trying to accomplish
9. Feeling the emotions felt and expressed

Table 4 Dimensions for Observation

Source: https://www.researchgate.net/figure/Nine-observational-dimensions-Spradley-
1979_tbl1_243964702/download

An important and helpful tool to use for classifying and construing observations collected during
user research field studies and usability testing efforts is the AEIOU. 1991 that Rick Robinson and his
team developed AEIOU at the Doblin It was in Group. This was done while making a study of the large
data about the over-the- counter interaction at McDonald's restaurants. The group ended up with the A
EIOU framework after clustering and categorizing these data.

It stands for the five dimensions namely:

1. Activity - This comprises actions and behaviors with specific goals in mind and the
processes executed to accomplish them.
2. Environment - It details the overall context and characteristics of the space where
activities are being observed.
3. Interaction - It consists of both interpersonal and person-artifact interactions.
Proximity and space may also play a significant role within these relationship.
4. Object - This sets the items within the environment and how they are used. It is
essential to note both the fundamental and minor uses of objects and how people
connect them to their activities.
 5. User - This includes the people within the environment that are being . observed.
The key information comprises their values and biases, behaviors, needs and
relationships

Interview
Interviewing is an important tool to identify and emphatize with customers' needs, form fresh
ideas and find out new opportunities. This is another way of designer. This approach could support to
gathering data by the be a substitute or observation. An expert interviewer should be open-minded, skilled
listener, a keen observant, flexxible and exhibits patience.

Most business owners interview their customers right after purchase for feedback. However,
entrepreneurs also interview people for ideas and insights in addition to the identifiaction of needs during
the design thinking process. Interviewing during this time ensures that the product and/or service being
created is really the need of the customers.

Interview Techniques
Interviews are used to get information about user experiences. Said interviews are inexpensive
and easy to conduct by anyone by just asking questions and recording the answers. An interviewer may
prepare a script or make a list of questions that he will ask. Here are some reminders to have a successful
and informative interview:
1. Make the interviewee relaxed - The interviewer must dress in a manner similar to the
customerss being interviewed. He may offer some drinks and have a little talk prior to the
start of the interview.

2. The interview should be on time and heading in the right direction - The interviewer scripts
as reference which can be useful to provide focus should prepare some when asking
questions. With prepared scripts it will mean less time to conduct the interview.

3. Concentrate on the customer and not on documentation - The interviewer must always focus
on the conversation with the customers to make the discussion flowing. He may bring with
him a recorder, so that all things could be documented.

4. Ask open ended questions - The interviewer must not ask questions answerable by "yes" or
"no". Open-ended questions are those which require more thought and more than a simple
one-word answer.

5. Listen, refrain from talking - The interviewer ought to be attentive to what is being said by
the customers. He needs to keep his questions short and impartial. Do not fill the space during
the pauses made by the customers.

6. Encourage but not influence - The interviewer should avoid saying things that may direct the
customers into something. He must only show little signs of encouragement such nodding his
head or merely smiling.
 7. Follow ones feelings and drill down - Sometimes there is a need to make clarifications in
order to examine something in depth. The interviewer may ask follow-up questions such as
why and what else.

8. Repeat to confirm For very significant topics, the interviewer should try reiterating back what
the person said. He can occasionally get two interesting results through this. Firstly any
misinterpretation could be corrected. Secondly, any slight difference with the. true opinion
can be realized and changed into a more refined answer

9. Thank the customer at the end of the process - Politely, the interviewer should show
appreciation for the time and effort given by the customers. This is also the chance for the
customers to ask questions of their own.

Effective Interview Questions for Designers

A good questions provides the type, quality and quantity of information needed. A designer may
opt to decide to use the type of questions that he will use and how he will formulate those questions. Here
are some basic but very effective types:

1. Open-ended questions boost people to mirror and disclose what is essential for them. These type
of questions consent people to expand on what is comfortable for them with restrictions, instead
of qualifying their thoughts. Open-ended questions can be used to discover opportunities,
outlooks, and the causes. Here are some types of open-ended questions according to Michael J.
Marquardt, author of Leading with Questions, which are:
b. Explorative - This type of question tries to compel opening out new viewpoints and
disclosing other areas. (How do you find....?)
c. Affective - This way of questioning could make known people's feelings around something.
(How is your impression of....2)
d. Reflective' This manner of asking question boosts further explanation. (What in your opinion
causes...?)
e. Probing - This means of asking question calls for deeper analysis. (Can you explain how...?)
f. Analytical - This a kind of question that searches for the (What are the reasons for...?) origins
of a problem.
g. Clarifying- This question aids in supporting and preventing misinterpretations. (So, that
means ..?)

2. Closed questions demand for exact answers. Most of the times it is a yes or no questions.
Sometimes, they oblige the respondent to choose an answer from a given set, or to agree or
disagree with a certain statement. Closed questions are likely to center on facts or the what, when,
where questions that are typically easy to respond to.

Experiments
Experiment is an approach of approving or disproving the soundness of an idea or hypothesis.
Certainly, there must be a clear objective that is doable and the outcomes from this experiment ought to
be reliable. On the other hand, a hypothesis is a statement of assumption that is tested using research and
experiments.

In field of entrepreneurship, experimentation is In the trying something new, observing the

results, getting lessons from the results and trying it over again. For majority of entrepreneurs, it is
through experimentation that new innovations, initiatives, ideas and opportunities are revealed.
Entrepreneurs in the food venture may experiment with recipes and flavors to come up with new menus.
Those in the fashion industry may possibly experiment with designs, fabrics and distributions to create a
stylish brand. A concept prototype may perhaps be a good experiment for a technology company.

In the real world, it is always a practice to do experiments and it is always being done. Basically
there are three types of experiments, which are:
1. Trying out new experiences - Here entrepreneurs try new experiences like going to other
countries, working for several businesses or learning new skills in order to create new business
ideas.
2. Taking apart products, processes and ideas - In this type of experiment entrepreneurs try taking
things apart and then later place them back together. This represents inquisitive, creative and
disruptive entrepreneurial mindset.
3. Testing ideas through pilots and prototypes - Pilot experiment is a small-scale study directed
towards evaluating the viability of a product or service. A prototype has been discussed as an
unpolished version of a product or concept that is made before the pilot testing.

Art and Science Applied to Entrepreneurship

Entrepreneurship is both an art and a science. The fact that entrepreneurs come up with new ideas
that most often are worthless to others makes entrepreneurship an art. Entrepreneurs imagine and create
something that no one else did. As an art, an entrepreneur must have a creative thinking skill to make
some ingenious ideas and make the entrepreneurial process a great success. Creativity is the indispensable
foundation of ingenuity and can be the prime means to the founding of new firms and to create
enhancements in current products of the company for more efficiency and competitiveness in the market.
With creativity a business could plan some interesting strategies that offer gain to the entrepreneurs.

Science, on the other hand, calls for combining new information into prevailing models, or
adding new models to a superior body of knowledge. An entrepreneur continually challenging his
assumptions, construct on what he already knows and constantly makes adjustments to stay relevant in his
environment.

A combination of creativity and technology in the activities of entrepreneurship to commercialize

the idea associated to products and services is useful to make stronger the entrepreneurship. The scientific
element of entrepreneurship may make or break the foundation of any company.

The scientific method was used by tech giants such as Uber or Facebook. Facebook, for example,
originally released their site only with Harvard students. Later it was opened for students from all
universities. After two years, Facebook was available to everyone else. Likewise, Uber did the same
thing. The service was tested initially with the founders' friends. After a few months, the app was
launched in San Francisco then later to other large cities in the United States. After three years, the startup
raised enough money to grow globally. Today it is present in more than 600 cities in 80 countries.

Here is the proper way to make use of the scientific method so that an entrepreneur can ensure his
success.
1. Ask a question - An entrepreneur when trying to create a product must know his customers. The
main aspect of any business is to solve the problem of his customers. Though often times he
already has the idea, but he needs to know exactly what problem he is solving. Hence, the
 entrepreneur should ask his customers if they would be interested to buy his particular product
and/or service.

2. Research about subject - After knowing the problem, the entrepreneur must source out
information through research from potential customers and competitors. The entrepreneur must
find his target audience and discover what makes them tick using survey, focus group discussion
(FGD) or look for existing market research. He needs also to make research about his competitors
to know how he can differentiate himself from them with his unique value proposition.

3. Create a hypothesis - An entrepreneur form hypotheses to formalize his assumptions. Heneeds to

repetitively test, challenge and improve his hypotheses to come up with an accurate and
functional business model.

4. Experiment to test hypothesis- Here the idea is tested, possibly using simple survey or it could be
presented to a group of beta testers.

5. Assess data and conclude - The results of experiments should be concretely and objectively
measured. There should be a solid conclusion of the hypothesis. The data obtained from the
experiments ought to be reviewed create a final conclusion that answers the original question or
problem.

6. Publish results and call others to expand - For an entrepreneur, it is nice to receive feedback on
what he has discovered. Customers could be invited to know what they think and use their
criticism to make a product better. There is no perfect product or service. An entrepreneur can
achieve closer to perfection by reviewing and refining his business.