Theory of Entrepreneurship: To Make Testable Predictions
“A true entrepreneur has to predict the future. The idea that a businessperson is great because he had “built a company from the ground up” is missing a major component– the entrepreneur’s original hypothesis. Without a well-defined theory and end goal, it’s difficult to test a market and therefore difficult to start an enormously successful business.” (Source: “The Science of Entrepreneurship” by Dustin Curtis).
Economists and social scientists have been discussing, exploring and defining the uncertainties of entrepreneurship to make it a science, helping entrepreneurs to make testable predictions. Steve Blank, Alexander Osterwalder Yves Pigneur and Eric Ries are among the proponents of the science of entrepreneurship.
Eric Ries in his book, “The Lean Startup“, advocates for “a comprehensive theory of entrepreneurship” which should address all the functions of an early-stage venture:
- vision and concept
- product development
- marketing and sales
- scaling up
- partnerships and distribution
- structure and organizational design
Emphasizing the need for the theory, he further adds that “it has to provide a method for measuring progress in the context of extreme uncertainty”, which “can give entrepreneurs clear guidance on how to make the many trade-off decisions the face….Most of all , it must allow entrepreneurs to make testable predictions.”
Source: The Lean Startup