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hello my name is Teresa land I'm a
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professor of management at the lubin
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School of Business at Pace University
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for most of my professional career I've
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been studying how people make sense of
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their world and how this influences the
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way in which they pursue their goals
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since you're watching this video I
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assume you are interested in
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entrepreneurship so I'd like to present
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you with four ideas that will help you
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understand how entrepreneurs make sense
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of their world how they pursue their
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goals and how they can influence others
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to invest in their ideas the question
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that we're going to be addressing
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primarily is why are some people and not
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others able to discover and exploit
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particular entrepreneurial opportunities
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the bottom line it's all about cognition
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and interpretation let me first provide
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you with a definition of entrepreneurial
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cognition we define it as follows the
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knowledge structures that people use to
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make assessments judgments or decisions
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involving opportunity evaluation venture
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creation and growth this can include how
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the entrepreneur or herself views an
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opportunity and makes judgments and also
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how potential stakeholders view the
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viability of her idea the four key ideas
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i'll be speaking about our number one
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opportunity recognition and evaluation
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the concepts of noticing who notices an
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opportunity and who doesn't are
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important here interpreting and framing
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how does the entrepreneur interpret what
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they have noticed number two is since
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making that is how do I make meaning out
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of what I have noticed going on out
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there in the world number three since
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giving this is essentially how do I make
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sense of what's happening and what my
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idea is to others who might invest in my
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idea and we'll see that a very important
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skill to have is storytelling you're
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telling stories to stakeholders so that
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they understand why your idea is a good
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one and forth we'll move beyond just the
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individual entrepreneur to talk about
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collective cognition that is how do we
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make connections with others who could
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provide resources provide knowledge
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provide ideas and how do we help others
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see what we see as an entrepreneur as
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wave background I'm going to provide you
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with some illustrations of these four
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key ideas by referring to the evolution
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of an entrepreneurial hotspot in pace
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universities backyard you might be old
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enough to remember when we did not have
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the internet but you might not just for
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background the World Wide Web became a
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reality in 1994 as often happens new
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technology Spurs entrepreneurial
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activity do you think New York City
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would be a hotbed of Internet
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entrepreneurship maybe not however in
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about nineteen ninety-six two years
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after the world wide web was available
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we saw media and tech startups based on
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using the internet using the World Wide
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Web emerged quite rapidly here in the
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new york city metropolitan area you're
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probably familiar with Silicon Valley in
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California well here in New York City
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the term was coined Silicon Alley of
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course because we're in the middle of
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New York City so but we had our own
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hotbed of entrepreneurship revolving
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around Internet technology right who
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knew so I'm going to be giving you
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little snippets of how entrepreneurs and
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stakeholders interpreted what was
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happening here in New York City from
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about 1998 to the current time so let's
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start with concept number one
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opportunity recognition and evaluation
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now what science has told us is that
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presented with the same information to
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individuals three four five individuals
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people don't necessarily see the same
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thing okay now if you reflect on your
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own experience with trying to
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communicate with others you'll see that
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this is you know what you see is black
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someone else might see is white and
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you're looking at the same piece of
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information but you're not noticing the
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same things you're not interpreting the
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information the same way so what we see
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with entrepreneurs is they often notice
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things that others don't now why is this
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relevant to being an entrepreneur
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because they often interpret what they
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notice happening out there in the
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environment let's say oh we now have
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this world wide web here this is a
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possible opportunity okay others might
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look at a new technology and say oh no
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not another new technology something
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else for me to get used to or it's
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stupid or it will never happen it will
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never be successful entrepreneurs look
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at something new and they say wow I
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wonder if there's an opportunity there
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now people also vary in how they
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evaluate whether well maybe there's an
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opportunity but it's too risky maybe
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there's an opportunity but no really
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it's not a good idea an entrepreneur is
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going to say oh I think this is a good
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opportunity so let me just read you a
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quote from the editor of a magazine back
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in 1998 which was called the Silicon
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Alley reporter and this is right at the
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beginning of when this entrepreneurial
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hotbed of activity was happening so
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remember I told you 1994 the world wide
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web became a technology that we all
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could use so here's the editor saying
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for years ago the web didn't exist as a
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commercial medium three years ago no one
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believed
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advertising would work on line two years
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ago the popular opinion was that
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commerce would never take off because of
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security fears today people are saying
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broadband will never make it to the home
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and that content will never make money
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now since we are we have the benefit of
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quite a few years having passed since
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1998 we can see that although many
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people saw the world wide web and said
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no no one's ever going to advertise know
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whenever is ever going to buy anything
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online we're never going to read our
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magazines or newspapers online here in
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2015 we can see well of course we do all
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of those things with the benefit of
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hindsight and having these entrepreneurs
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having developed ideas developed the
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businesses making them viable now all of
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these things have come true okay but as
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you can see there's a lot of variation
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how people interpreted this reality of
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the world wide web let's move on to
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concept number two it's called sense
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making what do we mean by this so when
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we see events happening around us we try
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and make sense of them why are they
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happening who's responsible okay what
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does this mean for me what does this
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mean for my business is this a good
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thing is this a bad thing okay and again
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just like opportunity recognition no two
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people are going to make sense of their
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world in the same way so let me
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illustrate with another quote from the
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editor of the Silicon Alley reporter who
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said when people ask me to explain how
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Silicon Alley which is New York's
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high-tech district for those of you who
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arrived to class late those are his
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words not mine how Silicon Alley was
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born and how it boomed over the past few
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years I point to advertising dollars as
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one of the main factors so this
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illustrates
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okay so here is one observer who he's
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both an entrepreneur he started this
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magazine so it's a content business
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within this new hotbed of
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entrepreneurial activity based on the
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world wide web and his interpretation is
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what is driving these businesses are
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advertising dollars which means that he
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is interpreting these businesses as what
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we call content or media businesses
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which we know are based primarily on
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advertising revenue models okay now
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someone else might look at this
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situation and say well no it has nothing
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to do with advertising no one is ever
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going to advertise on the web okay so
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how you make sense of information is
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going to influence the steps that you
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take as you're trying to pursue your
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goals and this is going to vary and
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entrepreneurs again see that can see the
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world in a different way then other
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people different entrepreneurs may see
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the world also differently so you need
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to understand that this is a an
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important foundation as an entrepreneur
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yourself to understand that others may
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not see what you see others may not be
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making sense of the world in the way
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that you do this leads us to concept
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number three which is sense giving this
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may seem like an odd term but what this
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means is it as an entrepreneur you now
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have the responsibility if you want your
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idea to be successful if you want others
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to invest in your idea you need to
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provide your stakeholders with the
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stories that help them make sense of
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what it is you're trying to do so the
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ability to tell stories to legitimate
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your ideas to help other people who see
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the world in a different way to
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understand
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how you're seeing it is a very important
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skill okay so because you depend on
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stakeholders to provide you with
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resources whether its financial
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resources or space or employees and so
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on they need to believe need to
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understand and believe in what you're
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doing okay so that's what we well we
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call it sense giving you're providing
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and understanding to those who are in a
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position to help you develop your ideas
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and finally we're on to concept number
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for which we call collective cognition
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this may seem a little odd because we
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think well cognition is all it's in one
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person's head but actually if you go
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back and think about where what we've
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been talking about from concept number
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one sort of recognizing an opportunity
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concept number two making sense of that
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opportunity concept number three
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explaining to others about the
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opportunity now we're talking about okay
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we may have a community of entrepreneurs
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a community of entrepreneurs and
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stakeholders who are all starting to see
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Oh what is the potential of for example
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going back to our silicon alley
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illustration what are the possibilities
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here what business models might make
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sense okay and so you as an entrepreneur
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it's important to not only tell the
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story to your specific potential
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stakeholders but you also need to sort
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of explain and help create a community
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that really believes in the future of
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whatever business models you are
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creating okay so the last thing I'm
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going to do is show you
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a a picture with the term is called the
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ecology of interaction and don't worry
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about the you know the very sciency
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terms there but what this means is that
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the entrepreneur is sort of at the
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center of this circle and is creating a
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network okay with whether it's venture
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capitalists angel investors perhaps
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educational institutions government tree
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associations other entrepreneurs and so
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on okay so you're creating this
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understanding this collective cognition
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among all of these potential
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stakeholders and what this does is
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provides everyone who might be
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potentially supportive either in the way
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they talk about your business or whether
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they provide actual resources everyone
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is sort of on the same page in terms of
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understanding all right this is what you
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have in mind okay now I get it now going
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back for a moment in our timeline I
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started with some illustrations from
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1998 Silicon Alley in New York City is
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just emerging you may or may not
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remember in the early 2000s we had a
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pretty significant economic collapse and
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with that came the demise of many of
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these entrepreneurial firms in Silicon
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Alley now some interpreted at the time
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that well New York City cannot be a
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hotbed of entrepreneurial activity okay
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others say well economic downturns
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affect everyone we will you know we will
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come back so again different individuals
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interpret the same reality differently
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what entrepreneurs
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do when they're successful is to stick
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with their ideas sometimes adapting
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their ideas to the new realities one
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great example of this is you may or may
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not have heard of the company
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double-click even if you haven't heard
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of them any time that you are navigating
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your way around the web and you're
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getting ads their customized for you you
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can blame double click OK they
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originated in New York City in Silicon
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Alley ok with one of the most with the
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original entrepreneurial idea of wow
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let's advertise on the World Wide Web
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let's embed advertising on web pages ok
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at the time people thought they were
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crazy now as of 2005 they were acquired
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for a very hefty sum and that you might
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say is a sign of a Silicon Alley success
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story thank you
