Entrepreneurial mindset shift and the role of cycles of learning

ABSTRACT

This article describes how the entrepreneurial mindset is comprised of two predominant orientations, one toward finding and selecting potential solutions, the other focused on implementation and execution of these solutions. We explore this duality of the entrepreneurial mindset and note its role in moving forward the field’s understanding of this elusive concept. Specifically, we argue that entrepreneurs cycle between these two orientations in order to learn about their nascent opportunity and to continue to move it forward. Our work addresses prior theoretical inconsistencies and highlights implications for future research, measurement, and pedagogical approaches.

KEYWORDS:

• Entrepreneurial mindset
• duality
• cognition
• learning cycles
• failure
• action

Introduction

The concept of an entrepreneurial mindset is widely used by practitioners, written about by scholars and taught by educators in the classroom. Entrepreneurial mindset is used by practitioners to describe a necessary competency, often listed as a learning outcome in course descriptions, and discussed by participants at scholarly conferences where the term is used widely and freely. Within the literature, we have seen a number of articles that reference its existence, both in their titles and their topic of discussion. Krueger argues that understanding the mindset and deep cognitive structures of entrepreneurs represents a path forward for the entrepreneurship research community (Krueger, 2007). More recently, Neck and Corbett (2018) tell us that an entrepreneurial mindset is at the core of entrepreneurship and is how we can help nascent entrepreneurs successfully develop their ventures.

Foundational research in entrepreneurship explains that market opportunities are interpreted in the mind of the entrepreneur (Gaglio & Katz, 2001) and that ventures only come to fruition when possibilities come together in the mind of a nascent entrepreneur who persists in evolving a business model and persists until a venture is created (Shaver & Scott, 1991). Progress has been made in developing the concept by looking to the wealth of research on metacognition and mindsets, and applying this to entrepreneurship (Haynie et al., 2010). Mathisen and Arnulf (2013) expanded upon Haynie et als’ foundational work by detailing the importance of elaboration and implementation to the concept of entrepreneurial mindset. Yet, to this day, expert entrepreneurship scholars concede that we do not know exactly what an entrepreneurial mindset is (Neck & Corbett, 2018).

Here, we argue for the duality of entrepreneurial mindset and that there is value, even a requirement, to have more than a singular form of mindset. We explore mindset as an oscillation contingent upon whether a nascent entrepreneur needs to further elaborate on their opportunity or if it is time to implement and execute. Building from the extant literature, we incorporate the role of learning, failure and context to explore a multifaceted view of entrepreneurial mindset. We contribute conceptually by explaining how mindset is not fixed (Dweck, 2006, 2016), but dual in nature and shifts between elaboration and implementation as the entrepreneur learns. We develop these different orientations of entrepreneurial mindset and in doing so resolve the theoretical contradictions whereby “the decisions of the would-be entrepreneur” seem to be disturbed (Mathisen & Arnulf, 2013, p. 139).

Our first contribution is focused on the duality of the entrepreneurial mindset and the need for entrepreneurs to activate both in order to move their entrepreneurial goals and venture concepts forward. Second, we argue that when actions are not leading to the desired outcomes (Chen et al., 2020) the entrepreneur needs to shift to an elaborative mindset or risk producing undesirable results. Third, we explore the concept of mind shifts within the entrepreneurial mindset that facilitate and actualize learning allowing for the continued development of nascent entrepreneurial opportunities.

Our work continues by first exploring the pertinent theoretical predecessors to the concept of entrepreneurial mindset and adding to it a foundational base from cognitive and social psychology. We then analyze and critique the mindset within the canon of entrepreneurship prior to bringing forward our propositions, a framework for the cycles of learning, and a typology that explores different manifestations of the elaborative and implementive orientations of mindset. We end by providing a brief discussion on the implications of our theoretical advances on the concept of entrepreneurial mindset.

Theoretical forerunners to entrepreneurial mindset

Foundational research tells us entrepreneurs think differently from individuals or business managers (Busenitz & Barney, 1997) and that understanding the differences in how entrepreneurs think will allow us to build a well-grounded foundation toward explaining the role of individuals within the process of entrepreneurship (Mitchell et al., 2002). These researchers explained well the individual attributes of entrepreneurial cognition including specific concepts such as biases and heuristics (Busenitz & Barney, 1997) and cognitive scripts (Mitchell et al., 2002). That said, a detailed review of the “cognitive perspective” of entrepreneurships revealed that elaborating on how these parts interconnect and how they impact on the process of entrepreneurship is still in its infancy (Grégoire et al., 2011). A more recent review by Naumann (2017) shows few articles have mindset as its main focus, so when taken together these works suggest that key conceptual features are lacking within our current understanding of the entrepreneurial mindset.

Much of the early work at the intersection of entrepreneurship and cognition paved the way for development of the entrepreneurial mindset as a concept. Baron’s work (Baron, 1998;., 2004; Baron & Henry, 2010) is an exemplar for taking constructs within another field (cognitive psychology) to show how they could be redeployed to provide additional insights in the field of entrepreneurship. His work ported cognition and cognitive processes to entrepreneurship by borrowing mindset from the psychology literature (Gollwitzer, 1990). As a field, we have brought less specific focus with the concept of entrepreneurial mindset, although many scholars (See Table 1) have provided foundational descriptions (Ireland et al., 2003; McGrath & MacMillan, 2000; McMullen & Kier, 2016; Shepherd et al., 2010). Thus, we begin by looking to cognitive psychology to better understand the broad concept of mindset, in order to inform and develop our understanding of entrepreneurial mindset.

Table 1. Prior descriptions of entrepreneurial mindset.

Author	Description
McMullen and Kier (2016, p. 664)	“ability to identify and exploit opportunities without regard to the resources currently under their control”, only working when entrepreneurs experience promotion focus
Shepherd et al. (2010, p. 62)“	“ability and willingness of individuals to rapidly sense, act, and mobilize in response to a judgmental decision under uncertainty about a possible opportunity for gain
Haynie and Shepherd (2007, p. 9)	“ability to adapt thinking process to a changing context and task demands”
Hitt et al. (2001, p. 968)	“growth-oriented perspective through which individuals promote flexibility, creativity, continuous innovation, and renewal”
McGrath and MacMillan (2000, p. 15)	“ability to sense, act, and mobilize under uncertain conditions”

Mindset from cognitive and social psychology

The ways in which scholars implement and conceptualize mindsets vary significantly across fields outside of entrepreneurship, and even within fields (French Ii, 2016). The original conception of mindset comes from the work of cognitive psychologists in the early twentieth century at the Würzberg School of Cognitive Psychology (Gollwitzer & Bayer, 1999). While it may sound simplistic today, these early cognitive psychologists proposed that becoming intensely involved in solving a task initiates cognitive procedures that assist with task completion. Therefore, they defined mindset as: the sum total of the cognitive processes activated to best solve the task (Gollwitzer & Bayer, 1999).

The central tenet of the Würzberg perspective is this connection between task and a particular grouping of cognitive processes best suited to solving the task. This implies that there is a range of cognitive processes from which an individual can choose from, and that the individual selects the process that they perceive is “best suited to the task at hand” (although this selection is often done subconsciously) (Gollwitzer & Bayer, 1999).

Since the concept of mindset was conceived, its existence has been supported by a body of empirical work. We refer to several definitions that capture the way the meaning of mindset has subtly changed. As referenced by the review carried out by French Ii (2016), the definition of mindset has evolved slightly to include:

• Mindsets describing “the general cognitive operations with distinct features that facilitate a given task” (Torelli & Kaikati, 2009, p. 232).

• Mindsets are the “activation of different cognitive procedures[…] which affect how people interpret subsequently encountered information” (Nenkov, 2012, p. 616)

• Mindset “is evidenced by the effect of performing a cognitive or motor activity on the likelihood of performing a similar behavior in a subsequent unrelated situation […] it reflects the activation and use of a cognitive procedure” (Xu & Wyer, 2011, p. 921)

Having conceptualized mindset as the sum of cognitive processes, scholars then widened their focus to examine the ways in which mindset affects behavior, perception, attitude and mood (Gollwitzer, 2012).

The literature from social and organization psychology reveals a slightly differing perspective on mindset (French Ii, 2016), but one that enrichens the concept of mindset and is worth detailing for the entrepreneurship community. In these fields, mindset is considered to be the filter through which an individual views the world, a predisposition to perceive and reason in certain ways (Rhinesmith, 1992). A sort of lens that blocks out certain information, distorts inputs, and emphasizes some data. This allows the world to be simplified in a way that is more manageable (Rhinesmith, 1992) because these filters (Gupta & Govindarajan, 2002) and heuristics (Oyserman et al., 2009) simplify the world and impact what we do and do not pay attention to.

Perhaps the most widely known work in the area of mindset comes from (Dweck, 2006, 2016) who developed the idea that there are two foundational mindsets; a growth mindset and a fixed mindset. She argues that our mindset is not just some personality idiosyncrasy but something that creates our mental world underlying our attitudes, goals, relationships and whether we will fulfil our potential (Dweck, 2006). Those with a fixed mindset view abilities and talents as being set in stone which leads to individual stagnation. Alternatively, the growth mindset sees talent as something that can be developed over time and that individuals can acquire new abilities. The growth mindset is goal directed (Chen et al., 2020), seeks new opportunity and experiences, and thus provides a stanchion for the entrepreneurial mindset.

Earlier influential research on mindsets focused on how simple tasks become automated and nonconscious (Humphrey, 1951). Humphrey shows that tasks would gradually disappear from consciousness in subjects who participated in reaction studies. The original task is forgotten and appearance of the stimulus automatically activated the prescribed conduct (Humphrey, 1951). Thus, a mindset can also be described as where the mind is already set on finding a certain outcome and is a type of pattern recognition where people then respond in an automated way based on prior experiences (Cohen-Kdoshay & Meiran, 2007). However, mindsets are different in two important ways from more traditional habits. The first is that they are goal directed in nature. While habits are insensitive to outcomes, with goal-directed mindsets people are more likely to change strategies if the desired outcome is not achieved (Mathisen & Arnulf, 2013). That is, if their initial attempts fail, then they resort to differing cognitive processes until they find one that helps them achieve the desired outcome. This provides a key piece of the puzzle as to how mindsets play a role in entrepreneurship. That they are sensitive to outcomes means that applying the same tactics that are repeatedly not working is a habit, the willingness to acknowledge that they are not working and to change tactics reflects a mindset.

The second major difference is that mindsets do not just describe responses to situations, but rather they are more sensitive to intuiting environmental factors that may impact on the perception of the situation, sometimes requiring considerable cognitive effort, in this way they more closely resemble tacit knowledge (Mathisen & Arnulf, 2013). A close reading of this highlights what initially appears to be a contradiction – that mindsets require considerable cognitive effort, yet also disappear from consciousness as a stimulus leads to an automated response. Later, we incorporate all of the elements discussed above into our conceptualization of entrepreneurial mindset and seek to resolve this apparent contradiction, thereby grounding our work in the established body of research from cognitive psychology and providing a theoretical extension. Prior to this, we next look to the entrepreneurship literature and how it has viewed entrepreneurial mindset to date.

Entrepreneurial mindset in the entrepreneurship literature

One of the earlier descriptions of entrepreneurial mindset comes from McGrath and MacMillan (2000) who describe it as individuals who are alert to opportunities, are selective in their choice about which opportunities they pursue, and when they do pursue opportunities they leverage the resources and networks that they have at their disposal. This description provides a useful starting point for saying what entrepreneurs do. However, the description does not explain what triggers these observed behaviors and ignores, for example, the cognition that aids in selecting opportunities.

Another early description of entrepreneurial mindset comes from Ireland, Hitt, and Simon who describe it as a “growth orientated perspective through which individuals promote flexibility, creativity, continuous innovation, and renewal” (Ireland et al., 2003, p. 968). While the Ireland et al. (2003) article was not focussed directly on entrepreneurial mindset, they acknowledge its importance as a strategic asset that can leverage the positives associated with ambiguity and uncertainty. Mitchell et al. use entrepreneurial cognition as a synonym for entrepreneurial mindset and say that “entrepreneurial cognitions are the knowledge structures that people use to make assessments, judgments, or decisions involving opportunity evaluation, venture creation, and growth” (Mitchell et al., 2002, p. 97). However, Mitchell et al. (2002) does not speak to what these cognitions or knowledge structures are or how they influence venture creation.

Each of these early descriptions contributes to an understanding of what might be observed by those with an entrepreneurial mindset (like identifying opportunities) or saying what kind of perspective they might have (such as a growth-orientated perspective). More recently, scholars have augmented this early research by emphasizing the importance of acting under uncertainty without regard for resources (Haynie & Shepherd, 2007; McMullen & Kier, 2016; Shepherd et al., 2010). Yet, this work is more focused on metacognitive strategies, entrepreneurial organizational culture (Haynie and colleagues), opportunity seeking and escalation of commitment (McMullen & Kier, 2016): developing and defining the construct of the entrepreneurial mindset was not the primary scope of these works.

We have a surfeit of articles that provide high-level descriptions of expected behaviors of those with an entrepreneurial mindset. Again, however, since development of the idea of an entrepreneurial mindset was not the primary driver of these works, they do not examine the underlying cognition behind these expected behaviors. We argue for a precise definition that incorporates hereto absent concepts from the field of cognitive psychology in order to progress the field of entrepreneurship and clarify the “theoretically puzzling” (Mathisen & Arnulf, 2013, p. 139) mindsets of entrepreneurs.

Mindsets as applied to the entrepreneurial process

In order to transfer the existing body of work from cognitive psychology into our conception of the entrepreneurial mindset, it would be instructive to first summarize the findings from the field of cognitive psychology. We arrive at eight points that have varying amounts of overlap:

• Mindset is the sum total of cognitive processes activated to best solve the task, involving a range of choices and a selection of cognitive processes.

• Cognitive procedures that affect how information is interpreted (Nenkov, 2012).

• Mindset impacts behavior, perception, attitude and mood (Gollwitzer, 2012).

• Mindset as a filter. A sort of lens that blocks out certain information, distorts inputs and emphasizes some data and allows the world to be simplified (Rhinesmith, 1992).

• Simple tasks become automated and nonconscious and stimulus automatically generates prescribed conduct (Humphrey, 1951).

• The mind is already set on finding a certain outcome and mindset is a type of pattern recognition, where people respond in automated ways based on past behavior (Cohen-Kdoshay & Meiran, 2007).

• Mindset is goal directed in nature, and people will likely change strategies if the desired outcome is not achieved (Chen et al., 2020).

• Mindset is sensitive to environmental factors that may impact perception of the situation (Mathisen & Arnulf, 2013).

Applying these points to the context of entrepreneurship, we build a definition of entrepreneurial mindset that encompasses all of the primary findings from cognitive psychology. Descriptions from the entrepreneurship literature on what constitutes an entrepreneurial mindset focus on what might be observed by those with an entrepreneurial mindset (the ability to identify opportunities) or they define what kind of perspective they might have (a growth orientated perspective). Recent scholars added the importance of acting under uncertainty without regard for resources (Haynie & Shepherd, 2007; McMullen & Kier, 2016; Shepherd et al., 2010) and we use this, together with initial descriptions, to build a foundation for our definition. Just as the work cited above (Haynie & Shepherd, 2007; McMullen & Kier, 2016; Shepherd et al., 2010) does not limit entrepreneurship to the process of venture creation, we do not wish to imply that our definition of mindset only relates to venture creation, but rather applies to situations where people are acting under uncertainty in the opportunity development process. The literature also states that the situational perspective of a mindset implies that tacit knowledge (Mathisen & Arnulf, 2013) and an automated nonconscious (Humphrey, 1951) element are also at play. Finally, the psychology literature also tells us that a mindset is goal directed with an emphasis on prior experiences (Cohen-Kdoshay & Meiran, 2007).

Learning and failure

This emphasis on goal direction and prior experience leads to a recognition that current descriptions of mindset in the entrepreneurship literature could benefit by including work from the entrepreneurship learning and failure canon. This is because we learn from our actions, experience, and failure. The opportunity development process is girded by learning (Cope, 2005; Corbett, 2005, 2007), a willingness to act and make errors of commission (McMullen & Shepherd, 2006) and a capacity to use previous entrepreneurial failure(s) to influence future entrepreneurship efforts (Yamakawa et al., 2015).

Therefore, our definition highlights that entrepreneurial mindset is a cognitive mechanism that allows for change and adapts to assist the entrepreneur with solving the challenges at hand in the pursuit of achieving entrepreneurial goals of all types (not just venture creation). Specifically, we define entrepreneurial mindset as:

The sum total of cognitive processes; that lead to an individual’s willingness to take action under uncertainty, make errors, learn from failures and shift that learning to specific goals to best solve entrepreneurial tasks.

This definition allows an individual with an entrepreneurial mindset to relentlessly pursue an entrepreneurial goal through pragmatically using the cognition that best suits the task at hand. In order to be effective at this they need to be realistic in assessing what is working, and what is not. When the current approach is not working, they will seek alternatives and select the next best approach for trying to solve the task they are currently grappling with. This definition emphasizes an important point that entrepreneurial mindset is a complex concept that varies with context, develops over time, and can be learned. By arguing for the importance – and inclusion – of learning and failure into prior conceptualizations, we can bring clarity to prior theoretical ambiguities.

Competing mindsets: A theoretical contradiction

Having established a definition of entrepreneurial mindset, we return to the existing literature to examine the ways in which mindset shifts and changes as the entrepreneurial process unfolds. Reminiscent of the landmark work of Shane and Venkataraman (2000) on the discovery and exploitation of opportunities, Mathisen and Arnulf (2013) examine “elaborating” (deliberating and planning) and “implementing” (acting and evaluating) mindsets as foundational for developing new ventures. Mathisen and Arnulf explain that like any mindset these two orientations become automated, activate and happen subconsciously, and are concerned with markedly distinct phases of the entrepreneurial process. Working from this foundation, the elaborating orientation of an entrepreneurial mindset can be seen as an automated, cognitive effort that considers the pros and cons of various ways to shape a business opportunity. The implemental orientation is concerned with strategies and actions on how, where, and when to take specific action on the opportunity by “implementing goal striving behaviors” (2013, p. 139).

Mathisen and Arnulf (2013) hypothesized that an elaborating mindset (thinking about what was desirable and feasible) would support deciding what to do, and would then be sequentially followed by an implementing mindset (how to execute on the goal) that would support acting on the entrepreneurial idea. Their empirical results found that an implementing mindset was related to the founding of firms but that “high frequencies of elaborating mindsets seemed to disturb the relationship between implementing mindsets and entrepreneurial behavior” (2013, p. 138). Further, Mathisen and Arnulf note that their data shows how an elaborating mindset can come at a cost to entrepreneurs as enacting this mindset shows lower levels of firm founding.

Overall, these authors had difficulty resolving their findings and saw the relationship between these two orientations of the entrepreneurial mindset as theoretically puzzling. They explain that it should be assumed that the transition from an elaboration mindset to an implementing one would be sequential; and that after moving from thought to action elaboration should diminish and implementation should intensify. However, they were stymied when they found their results undermined this theoretical prediction and showed that increased rates of elaborating thoughts increased the positive relationship between high intensity of implemental thoughts and entrepreneurial activities.

While Mathisen and Arnulf (2013) view both elaborating and implementing as important, it appears their straight-line, sequential view of implementation following elaboration, and their suggestion that implementation takes precedence over elaboration leads to their own difficulty with their results. We view both as equally valuable, understanding that one might be emphasized over the other at different times (Servantie & Rispal, 2018). Further, we recognize that success is unique to each individual entrepreneur and dependent upon issues like specific goals and where they are in developing their opportunity. This brings us to our first proposition which sets a foundation for those that follow:

P1: The elaborative and implementive mindsets are necessary for the long-term success of an entrepreneur; lacking one of these orientations will negatively impact entrepreneurial success.

Entrepreneurship is ultimately about taking action under uncertainty (McMullen & Shepherd, 2006). This means making decisions where information might be limited, or where the entrepreneur does not necessarily have prior experience that can assist them in making the right choice. In these situations, entrepreneurs generate hypothetical choices or possible courses of action, from which they must select a path forward (Haynie & Shepherd, 2009). The decision to move forward requires judgment, and this judgment is informed and updated based on prior experiences and how well the entrepreneur’s judgment corresponded to the realized future is of crucial importance (McMullen & Shepherd, 2006). This judgment is not necessarily a conscious choice, but rather something that can take place almost automatically (Gollwitzer, 2012). What choice is made depends on a number of factors, including goal orientation, knowledge, experiences and the environment (Haynie & Shepherd, 2009; Haynie et al., 2010). Consistent with earlier conceptions of mindset, in these situations the mindset of the entrepreneur will be focussed on the cognitive process that is best suited to the task at hand (Gollwitzer & Bayer, 1999). This acknowledges that there is no one right answer, but likely a multitude of choices from which to choose, some which are obviously wrong, while others might be more subtly less suited as solutions. During this period of choosing, the entrepreneur will likely be engaged in an elaborative mindset. This step is described as deciding “what to do” in the given situation (Mathisen & Arnulf, 2013). The entrepreneur’s focus will be on gathering as much relevant information as possible in order to support the decision-making process. However, this is a fine balance. Gathering too much information might lead to “paralysis by analysis” (Langley, 1995) whereby the entrepreneur might never get around to taking action. Alternatively, gathering insufficient information might lead to making a suboptimal decision, which might be costly in terms of the resources and time that will later be invested in executing the decided course of action.

Taking action and learning from it, and iterating on opportunities comes straight from the effectuation school of thought (Sarasvathy, 2008) and the assumption that implementation sequentially and simply follows elaboration is short of the point. We argue that it is the recognition of a shift between the two orientations of the entrepreneurial mindset that is critical and absent from prior work. Aspiring entrepreneurs make mindful deviations over time using causal and effectual approaches to find a market and customer fit for their concept (Agogue et al., 2015). It is expected that an entrepreneur encounters challenges, setbacks and dead ends in the quest to develop ideas. As the entrepreneur experiences the current implementative path as not generating the desired results, they are forced to acknowledge that their current attempts are being thwarted. The exact reason for the implementive path not working might be one of many, however, the entrepreneur is forced into generating new ideas about how to proceed.

In an effort to resolve the confounding results and theoretical puzzle of Mathisen and Arnulf (2013, p. 139), we argue that the shift from elaborative to implementative is not a onetime occurrence and that the focus should be on the shift and learning. Our point of departure is that the cognitive shift from elaborative to implementative and back to elaborative is an ongoing process inherent in entrepreneurial action (Wood, Williams, and Gregoire, 2012), and continues as the entrepreneur evaluates the opportunity (Williams & Wood, 2015). The process is cyclical as the entrepreneur shifts from elaborative and implementation to generate possible new solutions.

P2 When action results in an undesired outcome, an entrepreneur will shift mindset from implementative back to elaborative to generate new alternatives for moving forward.

This shift of orientation within the entrepreneurial mindset is critical as flexibility with these cognitive mechanisms is often the determinant between failure and growth of the venture (Yamakawa et al., 2015). This flexibility to change orientations has been found to be of importance in entrepreneurial performance (Smolka et al., 2018). However, it is important to note that failure of the firm does not equate to failure of the entrepreneur (Sarasvathy, 2008). When one includes learning, errors and failure into the conceptualization of the entrepreneurial mindset, one can see that the simple sequential view of elaboration and implementation would be better viewed as an ongoing cycle of elaboration and implementation as the nascent entrepreneur works through their initial business idea and shapes it through market interactions.

The entrepreneurial mindset can then be seen not as one specific conceptualization, but one that oscillates over time between implementation orientation and elaboration orientation, and in doing so creates learning cycles (See Figure 1). As a reaction to the environment and information flows from potential customers, partners, suppliers, and other stakeholders, the entrepreneur fluctuates between effectual and causal decision-making (Agogue et al., 2015; Smolka et al., 2018), while subconsciously shifting from elaboration to implementation orientation, and back again. This illustrates the opportunity development process as one that is imbued with learning, errors of commission, and failure at its core (Corbett, 2005; McMullen & Shepherd, 2006; Yamakawa & Cardon, 2015; Yamakawa et al., 2015).

Figure 1. Cycles of learning within the entrepreneurial mindset.

Learning occurs through the iterative process of shifting between elaborative and implementative orientations as the entrepreneur refocuses on the goal (Chen et al., 2020) to find the proper market fit. As the shift between these two orientations takes place the entrepreneur learns and incorporates new information into their consciousness, allowing them to make better judgments in their selection of implementative path(s) forward.

P3: The shift between elaborative and implementative mindset triggers learning and is incorporated as cumulative knowledge in the cognition of the entrepreneur.

The learning that occurs in these cycles between the orientations results in better judgment. Developing a new business requires entrepreneurs to be experiential learners who reshape their business concepts by taking action under uncertainty and thus committing errors of commission (McMullen & Shepherd, 2006). As seen in Figure 1, the entrepreneur goes through continuous cycles of learning through which error of commission and small failures help them reshape the idea from market feedback.

Thus, viewing the entrepreneurial mindset at the level of the entrepreneur and not at the firm level is crucial. Mathisen and Arnulf’s work is critical in moving the field forward by extolling the importance of elaboration and implementation. However, their theoretical musings may be awry because their empirics measured mindset at the individual level with firm level outcomes. Individual entrepreneurs do not simply elaborate on one idea and implement it, with the result being a firm that succeeds or fails and this appears to be the core of their current theoretical confusion (Mathisen & Arnulf, 2013). We argue that the individual continually tests the hypothesis of their business idea by shifting between both elaboration and implementation numerous times. The opportunity evolves and changes as depicted in Figure 1 as hypothetical Opportunity A becomes Opportunity A* then Opportunity A** over time. From this, we can see a more nuanced perspective of learning cycles of an entrepreneurial mindset composed of continuous oscillations between elaboration and implementation. The errors, learnings, and failures from testing Opportunity A allow the entrepreneur to make some small, some subtle, and sometimes some large changes to their initial Opportunity A in order to reshape it.

A matrix of entrepreneurial mindsets

Viewing mindset as not being a fixed (Dweck, 2006), or sequential process (Mathisen & Arnulf, 2013), but one that cycles through the opportunity shaping process, suggests that both implementation and elaborative mindsets can be positively correlated with start-up activity. It is not about having a singular mindset of elaborative or implementive, but rather the ability to cycle back and forth between the two. The quicker an entrepreneur does this, and the more effective they are in incorporating feedback from the market, competition, and other stakeholders; the more likely they are to be able to incorporate new knowledge and develop a better opportunity. This is akin to lean entrepreneurship, which notes that those who can cycle through learning cycles the quickest and cheapest will have the greatest chance of success (Ries, 2011). Although this cyclical nature of learning is not unique to lean, and can be seen in meta-cognition models (Haynie & Shepherd, 2009; Haynie et al., 2010), entrepreneurial decision making (McMullen & Shepherd, 2006) and perspectives on learning in general (Burgoyne, 1995; Kolb, 1984). Learning cycles (Figure 1) allow us to further explore the duality of mindset, the importance of the shifts, and to propose a matrix of mindsets.

Through combining our cycles of learning with extant literature it can be seen that the entrepreneurial mindset may be better viewed as a matrix of four typologies with elaborations, learnings, errors, small failures, and implementation at its core.

Figure 2 shows that various combinations of high or low implementation and elaboration with learning through the action taken yields four typologies that are connected to differing levels of start-up activity. We argue that the mindset associated with the classic serial entrepreneur or lead founder can be found in the top left hand corner (high implementation and high elaborative), and that the other typologies are associated with nascent or fledgling entrepreneurs sometimes experiencing a lack of flexibility in shifting between mindsets. However, associated weaknesses with the other typologies can be mitigated through a founding partner offering alternative complementary cognitive orientations. For example, someone in the upper left quadrant with both high implementation and high elaboration orientations is most likely to learn through active experimentation (Kolb, 1984) and have a high start-up rate relative to the other orientations. With continuous elaboration and implementation these individuals may be more likely to be solo founders, lead founders and serial entrepreneurs. Those in the lower left quadrant have high implementation proclivities but their lower elaboration orientation would see them experience more failure. These individuals learn via concrete experiences (Kolb, 1984) by trying and experiencing small failures. They could become the entrepreneurs we see with multiple ventures, some of which fail. These entrepreneurs may be better served by having cofounders.

Figure 2. Typology of entrepreneurial mindsets.

The right side of Figure 2 finds another type of entrepreneur in need of a cofounder. In the upper right quadrant, we find nascent entrepreneurs with high elaboration orientation but someone who will not or does not implement appropriately. Kolb would term them as “abstract conceptualists” those who learn best by thinking and planning. However, in this case, they appear as classic overthinkers who likely also need a cofounder, someone with a strong implementation orientation. In the bottom right corner we find individuals with low elaboration and low implementation orientations. Any entrepreneurial role for these individuals is more likely to be that of a team member but not founder. These individuals can become valuable members of a venture but tend to learn via reflective observation (Kolb, 1984) by watching and learning from the primary founders. Taken together, examining entrepreneurship through this matrix of the entrepreneurial mindset aligns with start-up team composition: there are few solo founders and serial entrepreneurs, and most ventures are started by cofounders and teams.

Discussion and implications

When viewed together our synthesis of the concept of mindset, our development of propositions, our conceptualization of cycles of learning within the mindset, and our typology provide entrepreneurship researchers with at least four clear contributions. Below we detail (1) the importance of the cognitive shifting that occurs within the entrepreneurial mindset; (2) the cycles of learning that are an outcome of this shift; (3) the opportunities for research that come from including learning and failure within the conceptualization of entrepreneurial mindset; and (4) the practical implications of our work for those mentoring and educating nascent entrepreneurs.

First, our work brings nuance to prior research by explaining both the duality of the entrepreneurial mindset and the importance of shifting that occurs between these two orientations. Entrepreneurship researchers, practitioners, and educators continue to be confounded by exactly what the entrepreneurial mindset is; this was never more clearly articulated than by a panel of research experts who conceded that we still do not really know what an entrepreneurial mindset is (Neck & Corbett, 2018). Broadly, we shed light on this conundrum by expanding the work of Mathisen and Arnulf (2013) to show that the entrepreneurial mindset is better viewed not as one fixed perspective but one that continually shifts between two orientations. While these authors perceived a mindset where the implementation of one’s idea linearly follows a period of elaboration, we amend their work to envision a cyclical process. In this view, entrepreneurs continuously shift between elaboration and implementation as they shape their opportunity while engaging with stakeholders (Wood et al., 2012). Entrepreneurs use their cognitive abilities to assess different cues about the environment and other factors to evaluate and reshape their opportunity (Williams & Woods, 2015).

For instance, as an entrepreneur learns from market interactions that their opportunity is both novel and rare (Haynie et al., 2009; Wood & Williams, 2014) and that the window of opportunity might be closing (Choi & Shepherd, 2004) it might be beneficial for them to shift from an elaboration mindset to one of implementation. Conversely, if this same entrepreneur then found that, despite its novelty and rarity, this opportunity’s magnitude (Dutton et al., 1989) still would only return little value, then it might be time to shift back again from implementation to elaboration to alter the original opportunity.

Second, the mindset we describe here has parallels to Dweck’s (2006) foundational work and the learning that comes from a growth mindset. Our framework generates learning as the entrepreneur cycles between implementation and elaboration and back again. Thus, this learning from the change in mindset can be seen as a practical manifestation of openness and opportunity-focused perspective of the growth mindset (Dweck, 2006). Dweck’s most recent work with colleagues explores the concept of a strategic mindset (Chen et al., 2020) and notes that such a mindset is more than just certain metacognitive skills and that it is important to put those skills into use. The “pursuit of any challenging goal often involves actively analyzing tasks and then planning, self-monitoring, and revising strategies” (Chen et al., 2020, pp. 14,066). Our entrepreneurs learn and revise their strategies from elaboration to implementation as they cycle and shift in the pursuit of their goal (Chen et al., 2020).

Third, the emphasis we bring forward in our definition on the importance both of learning and failure (and their interaction) brings clarity to the opaqueness that persists in extant research (Neck & Corbett, 2018). Prior descriptions of the entrepreneurial mindset highlighted the importance of sensing and acting under uncertainty (McGrath & MacMillan, 2000), being creative and innovative (Hitt et al., 2001), adapting one’s thinking (Haynie & Shepherd, 2007), making judgments for a gain (Shepherd et al., 2010), and having a promotion focus (McMullen & Kier, 2016). Given the importance of learning to the opportunity development process (Cope, 2005; Corbett, 2005, 2007) making learning central to our conceptualization seems apt. As entrepreneurs pursue their goal to develop an opportunity, most make errors of commission (McMullen & Shepherd, 2006) and experience small failures (Yamakawa et al., 2015) along the path. Our inclusion of learning and failure within the concept of entrepreneurial mindset brings a fuller and more complete definition and one that provides new opportunities for research centered on active learning as opposed to a singular or static mindset.

Fourth and finally, research on entrepreneurship education lags behind our understanding and research on entrepreneurship, and our work on mindset can help fill this gap. Morris and Ligouri tell us that the rapid emergence of entrepreneurship has “outpaced our understanding of what should be taught by entrepreneurship educators … and how it should be taught” (2016, p. xvi). Our work should encourage educators and mentors to ensure that teaching interventions focus on teaching and understanding both aspects of the entrepreneurial mindset. The duality of the mindset we describe can alleviate part of the confusion educators have on how to teach the skills and mindset of being entrepreneurial (Neck & Corbett, 2018). By recognizing that there is more than one static mindset, and more than one approach (Lynch et al., 2019) our work lifts the fog that surrounds this concept for educators. As such, their students should be better equipped to apply the elaborative or implementive mindset at the appropriate time and recognize when to shift between the two.

Limitations and future research

Just as the focus of prior work referencing the entrepreneurial mindset had boundaries and often had a primary focus on other issues (i.e., Haynie and colleagues on metacognition, McMullen & Shepherd on action, etc.) our work, too, cannot answer all of the questions regarding entrepreneurial mindset. Our focus has been to: (1) explore the psychological foundations of mindset and port them to the entrepreneurship literature, (2) argue for heretofore missing concepts such as errors of commission, learning, and failure, and (3) and focus on the duality of the elaboration and implementation that occurs within the entrepreneurial mindset. From this, we develop the concept of learning cycles and shifting for the entrepreneurial mindset and our typology. Given this, there are issues and questions that are outside the scope of this work.

While we have discussed mindsets at the level of the individual, we know that entrepreneurs do not work in isolation. The expression of a person’s sense of self is one that occurs within social contexts and social rules that regulate the ways in which we express ourselves (McCrae & Costa, 1999), and we did not address this potential impact on the entrepreneur mindset: neither social construction nor in-depth environmental implications. Further, in his work, Burgoyne (1995) describes a meeting of minds in learning, whereby entrepreneurs’ mindsets are shaped by those around them. Again, we did not directly examine the effect of other individuals on one’s entrepreneurial mindset. Entrepreneurs most often work in teams, therefore, the research on collective cognition (West, 2007) provides avenues to expand our work on the entrepreneurial mindset. Research at the intersection of cognition and entrepreneurship (Haynie et al., 2010; Haynie & Shepherd, 2009; Mitchell, 2007) informs us that multiple cognitive processes occur within the process of entrepreneurship which is another prospective line of inquiry for researchers who want to further understand the concept of the entrepreneurial mindset.

In addition, pivoting (Kirtley & O’Mahony, 2020) is a concept related to the core of our work and might be a logical outcome of a shift in the mindsets described in this article. Future research might, therefore, wish to explore the relationship between shifts in mindset and pivoting, and examine whether a shift in mindset is a precursor to a pivot. Specifically, our conceptualization of a shift from Opportunity A to Opportunity* to Opportunity A** was meant to reflect the learning that occurs during the back and forth between implementation and elaboration. Pivoting can be seen as the decision for move from any form of Opportunity A to Opportunity B and requires further research at the intersection of mindset and pivoting. For example, a lack of flexibility between mindsets could result in delays in pivoting or continuing on entrepreneurial trajectories that are unhelpful or destructive.

The issue of learning within the process of entrepreneurship is central to our work but also opens up avenues for additional research. The shift between implementation and elaboration can be investigated in future research by focusing on what specific factors impact learning, what contexts facilitate or constrain learning, and how individuals capture and use their learning as they iterate through a mindset shift. Researchers can imagine various cognitive mechanisms, learning styles, behaviors and/or actions that moderate or mediate the relationship between learning and mindset shifts.

Finally, is the issue of goal achievement and that it might be difficult to decipher the difference between those who have a mindset that facilitates goal achievement, and entrepreneurial mindset. We acknowledge that entrepreneurial achievement mimics a general goal orientation in general, but with a specific context (entrepreneurship) and that this could suggest that those with an entrepreneurial mindset likely experience positive outcomes in other areas of their lives. We do not delve into what these differences in mindset might be but suggest there is a large overlap between them. One particular avenue for research would be to attempt to locate the particular differences that only relate to entrepreneurship, and are not relevant for other forms of success.

In summary, it is clear that there are many avenues for future research examining the entrepreneurial mindset at different levels of analysis and with various contingent factors.

Conclusion

Our overarching contribution is to bring forward the duality of the entrepreneurial mindset: the shifting that occurs during the cycles of learning and how this extends previous concepts of the entrepreneurial mindset. We did so by bringing a grounding from cognitive psychology to bear on current descriptions of mindset in order to explore the continual oscillations between elaboration and implementation. We show that our cycles of learning are critical to understanding that an entrepreneurial mindset can be seen as more than one static view.