In this episode, we discuss the challenges of modern life with complexity, ambiguity and information overload – we have too much information to process, which leads to overwhelm and confusion. We will explain what mindset is and how to begin to cultivate an entrepreneurial mindset. This episode explores:
- Understanding that you have cognitive biases that limit your ability to see things clearly
- Every individual’s mindset is the product of their history and evolves over time
- The 5 Dimensions of Entrepreneurial Mindset
- How to begin the practice of cultivating an entrepreneurial mindset
In this new series, we will talk about the Entrepreneurial Mindset Theory and why everyone needs to adopt this mindset in our changing world, whether they want to start a business or just be fulfilled in their life.
Debra Maldonado 00:28
Hello, welcome to another episode of Soul Sessions with CreativeMind. I’m Debra Maldonado, here with Dr. Rob Maldonado. We are introducing a new series, it is called the Entrepreneurial Mindset Theory. We’ll talk a lot about what it takes to have an entrepreneurial mindset, whether you want to be an entrepreneur, or just want to think like one, how important it is. Before we get started, I want to remind you to subscribe to our podcast if you haven’t already. We’d love to hear your feedback, leave a review for us. If you’re watching us on YouTube, there’s a button in the corner, you can click to subscribe to our channel and make sure you don’t miss an episode. So what is the entrepreneurial mindset? How is that different? How do we think like an entrepreneur? Do we have to think like Elon Musk, or Steve Jobs, or Sara Blakely? What type of mind is that?
Robert Maldonado 01:27
It’s an important topic, especially now, with the economies of the world the way they are. We all have to be entrepreneurs, in a sense that we all have to be able to take the reins of our financial freedom to some extent. Even if you’re in the corporate world, we’ve worked with many people in the corporate world that benefit from understanding these principles.
Debra Maldonado 01:55
It’s like an entrepreneurial mindset when you’re in the corporate world and in anywhere in life. As you get to understand it a little more, you can see how this can apply to all areas of your life. We’ve always been in a crazy time, no matter what you think about the different stages of humanity. But right now, with the technology and the way things are changing, it seems to speed up a little rapidly.
Robert Maldonado 02:26
Certainly, complexity has been increasing, uncertainty, as well as information overload.
Debra Maldonado 02:37
The first time I got a smartphone, I was so excited to get emails on my phone, I didn’t have to rush home and check my emails, I could check it anywhere I wanted to. A friend of mine who had one said “You’re going to regret that because you’re going to be tied to it all the time.” Right now, we can’t even escape, there’s people that go to bed with their phones, the first thing when they wake up is checking their phones, it’s like an extension of them. We’re getting too much information, breaking news all the time, friends telling you what’s going on in their lives. There’s so many ways we’re being bombarded with information and addicted to that information.
Robert Maldonado 03:28
Like everything else, it depends on what you do with it. Obviously, you can become overwhelmed with these things. But they’re also a great benefit if you know how to use them and have the entrepreneurial mindset. It’s about a gradual evolution. As we evolve socially, as societies grow and become more technologically savvy, they become more complex. Navigating that culture, understanding everything that’s going on requires a deeper dive into understanding what is happening, how things change.
Debra Maldonado 04:14
When I first started communicating via text and didn’t know the shorthand, you’re learning a whole new language, it’s just not the traditional way we’ve learned to communicate. There’s all these nuances with email, text, and video we have to think about. When we think about the entrepreneurial mindset versus — would you say ordinary mindset? Or the default mindset— how would you describe it?
Robert Maldonado 04:44
Let’s define the mindset first, so we’re all on the same page. This is from Psychology Today. “A mindset is a belief that orients the way we handle situations, the way we sort out what is going on and what we should do. Our mindset helps us spot opportunities, but may also trap us in self-defeating cycles.” It depends on the mindset, we can have a limited, closed mindset, or that growth mindset of opportunity.
Debra Maldonado 05:26
I think of the limited mindset as more of a reactive mindset, we’re not consciously making decisions. We’re making decisions from our old assumptions from the past. It makes sense to us, but we’re not really even aware they’re making them. What’s the entrepreneurial mindset versus the fixed mindset?
Robert Maldonado 05:47
Let’s say, the ordinary mind. We all begin with this mind, it’s not like some of us are born with entrepreneurial mindset. We could make an argument that children do have certain entrepreneurial qualities because of their playfulness and creativity. But in general, the way we’re talking about it, most of us, our ordinary mind is very geared towards simplicity, predictability, bias, stability, and control. Some of us need more control than others, but it’s always there, we prefer predictability, we prefer control, we prefer to know what things are about and how they’re going to play out. Instead of that creative mind of probability.
Debra Maldonado 07:02
A possibility, you’re okay in the void, you thrive in it. You thrive in the non fixed reality, this innovation.
Robert Maldonado 07:17
Innovation, creativity, some of the things that are associated with the entrepreneurial mindset. They’re uncomfortable to a lot of people because they’re not predictable, because they point at taking risk.
Debra Maldonado 07:38
There’s probably a psychological term for this, people that are more mechanical, they need to know A to B to C, “Tell me every step I need to take”, where an entrepreneur doesn’t necessarily need to know, they’re more like “We don’t want the step by step.” They want to figure it out by themselves, or they want to create their own steps.
Robert Maldonado 08:00
I’d say that’s a personality trait. There are people that are more risk averse, they’ll avoid risk at all cost. Therefore, they’re not really suited for an entrepreneurial mindset, because risk is inherent in becoming an entrepreneur. Now, it’s not a reckless risk. A lot of people misinterpret that, you’re like a gambler of some kind. No, it’s not that, it’s calculated risk. But it’s still risk. A lot of people think being in the corporate world is a sure thing. We know that’s not true either. There’s risk in that too.
Debra Maldonado 08:44
During the pandemic, lots of people in the service industry, airline industry, hotel industry thought they had a steady job, it went away overnight. I was a person who was laid off from a corporate job. It’s a false sense of security. But it doesn’t mean you always have to become an entrepreneur, you can actually use that entrepreneurial mindset. It’s more of being willing to look at things in a less rigid way, the unpredictability. You told me earlier about a research study they did about ambiguity, and how that really affects people. This is basically how we’re programmed from deep in the past evolutionary theory.
Robert Maldonado 09:42
We look at research into learning. One of the things we are averse to is ambiguity. There’s a very simple research experiment, it’s probably in most introduction to experimental research or experimental psychology. I think they call it the executive monkey experiment. They have a monkey who is shown a circle and given sweet water, a treat when the circle appears. Then they’d show him a square, and a mild shock would happen when they showed him the square. Monkeys are pretty good at learning very quickly. So very quickly he learned “When the circle appears, I’m gonna get a treat, when the square appears, I’m going to get a mild shock, no big deal.” But then they started creating these mixtures of a square and a circle to where it was hard to discern what the image was, whether it was a square or a circle because it was a blend of the two. The executive monkey’d become very stressed, the cortisol levels would go through the roof, very anxious. That’s a good sign of stress. We biologically are averse to not knowing what’s coming next. We are deeply rooted in our biology. That’s why most people find it very uncomfortable to be entrepreneurs, because it’s hard to predict how things are going to play out.
Debra Maldonado 11:48
When you’re saying that, it makes me think of public speaking, how most people would rather be in the casket than give the eulogy. We’re terrified of public speaking because we don’t know how the audience is going to react or respond, or how we’re going to perform. All the attention is on you, I could see that being an ambiguous risk to put yourself out there, they’re going to shoot arrows at me. I guess it comes from the early human experience of wanting to plan for survival. Most of us have grown up in a household where that is in place, we want to know if we’re going to get punished. Even kids that get punished, if it’s expected, it seems okay, if the rules are clear. But if it’s ambiguous, you’d said children get really anxious if sometimes the parent is happy, sometimes the parent is sad, and they don’t know what to expect. Lack of certainty feeds anxiety.
Robert Maldonado 12:57
A lot of it it has to do with how you manage that anxiety. Are you able to override it? Or do you lose control when it shows up? Some people have better skills at that, or they’ve learned how to manage their anxiety, where others don’t have any tools on how to manage anxiety.
Debra Maldonado 13:19
Someone with a fixed mindset would be less averse to ambiguity. Someone who’s more willing to take a risk or be in that unknown is that entrepreneurial mindset. That can apply to any part of life, entering a new relationship can be an unknown, going out and dating again, or being thin after being overweight for a long period of time. It’s why we stay in those same patterns because we built our life on those expectations. We want to stay in that fixed way, because the unknown is terrifying to most people.
Robert Maldonado 14:54
The question would then become “Can someone learn these entrepreneurial mind skills?” The answer, of course, is yes, you can cultivate these skills. Obviously, if we couldn’t, there would be very few entrepreneurs. But we know there’s a lot of entrepreneurs, and every day more and more people become business owners and entrepreneurs because it’s also a great way to work. You have a vision, you’re in charge of your own time, your own resources.
Debra Maldonado 15:33
You’re able to do what you love versus do something for money and a paycheck. But also, I think there is a downside to being in the rigid expectation of an ordinary mindset because you see so many people, golden handcuffs tied to that job because they are so attached to “I need to live in that expectation”, but there’s another part of them that craves ambiguity, craves something new. There’s a conflict between them. It’s like as if we were supposed to be creative in our life, and our conditioned survival mind wants to keep us in, so we have two fighting forces within our mind.
Robert Maldonado 16:25
Not all jobs are the same. Some corporate jobs are boring, restrictive, monotonous. There’s no opportunity for growth and creativity. Whereas other positions are all about growth, creativity, challenging yourself to create better systems, better ways of working. It depends a lot on the company culture.
Debra Maldonado 16:55
Back in the day, in the 90s, I worked in a lot of internet startups when the internet was in the Wild West. We did things differently. We had margaritas on Mondays, contests and team building, we had a football table, we did meetings in a different way. It was all very new, we were building something new. Even if you’re getting a steady paycheck, you’re involved in creativity, which I found is really rewarding.
Robert Maldonado 17:32
I’d like to mention some of these characteristics, because they’re so rich. There’s so much to this topic we can talk about later. In general, these are starting points to think about, especially for those of you thinking about becoming entrepreneurs, or are already an entrepreneur but would like to develop the mindset a little bit more, that five dimensions of an entrepreneurial mindset. Self-efficacy, it means your belief in your ability to accomplish something. If you don’t believe you can accomplish something, most of the time, you won’t try it. You don’t have the sense it’s even doable to you, so why would you do it?
Debra Maldonado 18:39
I think that’s a reason not only to become entrepreneurs, but people that don’t go for promotions. They don’t feel like they can do the next level job. The people that get the promotion have that self-efficacy, they’re breaking that barrier of where they are in the line of the corporate world too.
Robert Maldonado 18:57
This is a well-documented, well-researched psychological factor. It comes out of social psychology, Albert Bandura did a lot of work in the 60s, 70s, and 80s. Self-efficacy is an important factor to consider in yourself. When you think about challenges, do you feel you can do them? Or at least you feel you can learn and develop the skills in order to accomplish those things?
Debra Maldonado 19:30
You’re willing to try. Is this something that is genetic or conditioned, nature/nurture, being encouraged as a child and young adult to do things on your own?
Robert Maldonado 19:45
To most of these, there’s both genetic and environmental factors. Half of it is going to come from your genetics, and half is going to come from your environment. The second one, internal locus of control. Albert Bandura, the great social psychologist, says if you think the locus of control is outside of you, you’re probably not going to try to do something either. You’re thinking “The social systems are outside of me, the economy’s outside of me, these are factors that I have nothing to do with.”
Debra Maldonado 20:34
If you don’t have locus of control, you feel success is about luck. You don’t have any control over your destiny.
Robert Maldonado 20:45
I wasn’t born into the right family, right social class, right country, etc. The external is given a lot more weight than the internal. Internal locus of control says “I can try, I can develop, I can learn, I can find new ways of doing it, find contacts, etc.” Where’s the control? It’s within you, within the individual. If you have that, you’re more likely to be a successful entrepreneur. Now, can you develop this skill? Yes, of course, you can learn by just by understanding the psychology of it, you can start to learn that there’s a specter of internal locus of control. You can observe your own mind when you’re projecting outward, when you’re thinking “I don’t have any control, the bank does, or economy.”
Debra Maldonado 21:45
It’s interesting how you see people give up so easily when they start a business. They give up because they think no one out there wants their service, or no one out there can afford them, or they don’t know what they’re doing, they’re not doing all the marketing. Waiting for that external feedback to tell them it’s okay for them. The idea has value that people need, what they have, the service they have, or the product they have. This is about controlling it and knowing the outside is reflecting my inside.
Robert Maldonado 22:22
The third one is intrinsic motivation. They’re all related, talking about the same thing. Where is your motivation coming from? Where are your ideas centered? Do you see it as luck coming from external circumstances? Or do you see them as you having some power, some agency in the matter? Extrinsic motivation means if you’re motivated by external things like money, success, or praise by others—
Debra Maldonado 22:57
That quick fix, you want to know right away whether something’s working, you’re only motivated if things work out, you’re getting evidence, versus motivated regardless of the outcome.
Robert Maldonado 23:10
Intrinsic motivation would mean there’s a value to you intrinsically, for whatever reason it is, it’s important to you. Whereas an external reward means you’re doing it for the bonus, for the money, for the claim, for the praise, etc. The motivation is outside of you, like the locus of control. You’re giving power to external circumstances to dictate to you how you’re going to behave.
Debra Maldonado 23:53
If you’re a coach, and you’re saying “I only feel good about my coaching when my clients tell me they’re getting good results, or they’re telling me I’m good versus intrinsically you know you’re doing your duty, this is what you should be doing. It’s a different motivation, your ego gets out of the way, you’re really able to be present with the other person.
Robert Maldonado 24:19
Can we developed intrinsic motivation? Absolutely. Think about what you value, what you love, why you would do things instead of having some reward at the end of the day.
Debra Maldonado 24:34
If you didn’t get paid for it, would you still do this? That’s the secret question. If no one told you you were doing it right, and you were doing it because you loved it. That’s the key. The reward is in doing it.
Robert Maldonado 24:51
Number four would be resiliency. Think about it is the ability to bounce back. Life is going to throw some curveballs, things we don’t anticipate, we can’t anticipate, that are going to knock us on our arse, as the Brits would say, because that’s life. Business is the same way, it’s just an extension of life. It’s gonna throw some curveballs at you. If you don’t have the resiliency to stick to it, to get back up, try it again, you’re gonna quit, you’re not going to be a successful entrepreneur, or you’re going to be one of those statistics. Can we cultivate resiliency? Yes, absolutely. We can learn skills, we can learn from mentors, from coaches, we can hang out with people that are resilient, we can observe them. When they face setbacks, they’re able to regroup, rethink, and reinvent something, and come up better for it.
Debra Maldonado 26:15
I like resiliency because no matter what type of business you start, there’s always going to be something that shows up. The more resilient you are, the more likely you’ll keep going and not give up. The last one is the growth mindset, which is this mindset of possibility, not seeing things in their limited way. This gets into that idea of cognitive bias where we start by default, we see things as we believe they are, that confirmation bias. We believe the economy’s bad, so we go out and take action, and then we get back this idea that the economy is bad. Or the stability bias, I only feel safe when things are stable, the anti-growth mindset. The confirmation bias and the stability bias keep us out of that growth mindset, it makes us believe that there’s obstacles out there. Because we believe they’re obstacles, they appear that way in the world. We believe there’s obstacles, it’s going to be hard, it’s going to be difficult, it’s not going to work, then we have that stability bias. It says “Isn’t it better if we just stay where we are instead of grow? Let me stay in my job. Let me stay with my income at a certain level as an entrepreneur. Let me just stay here where it’s safe.” Versus the growth mindset, breaking these rules.
Robert Maldonado 28:00
A, the growth mindset is very popular because there was a book recently talking about the fixed mindset versus the growth mindset. It’s a very powerful but not the only component of an entrepreneurial mindset. I always think of it also as the beginner’s mind, you have to have that beginner’s mind that whatever situation you’re facing, you’re approaching it with this openness. I don’t know what the solution is going to be but I’m open to thinking in all kinds of ways and in all possibilities about it.
Debra Maldonado 28:40
It’s like not worrying about the how, holding the vision, the how is never going to be what you anticipate or what you plan, it’s always going to show up differently. If you have that limited mindset, and your plan that you write doesn’t work, there’s no room for flexibility or creativity. I often say this to entrepreneurs that I coach about going into this realm of the unknown, this ambiguous, unknown uncertainty of going into something new in their life. Imagine there’s a cave, and I’m telling you there’s this amazing treasure in the back of that cave. The treasure contains everything you’ve ever wanted, all your biggest hopes and dreams, all the money you can ever have, all the love you can ever have, is in this treasure waiting for you. The only caveat is that you have to go through this dark tunnel. On your way there, I don’t know what’s in that tunnel. You’re going to have to go into this cave, this dark tunnel to get to that treasure. How many people, if you think about it, would be willing to go into that dark tunnel to face the unknown to get the treasurer? They think “The risk is too great, I don’t need the treasurer that bad. I’m going to stay where it’s predictable. I’d rather know I’m suffering than go into something unknown.” If you think about it that way, this is the choice most people make when they start to step into the unknown. That is the mystery of leaving outside of your old condition patterns. It’s like stepping into a void, stepping into possibility in something new. But to the regular mind it is very scary.
Robert Maldonado 30:42
Last research I wanted to mention was the marshmallow experiment. It was done in the 60s, out of Stanford. The experiment is very simple. You bring in a kid, sit them in front of a table with a marshmallow on it, and tell them “If you wait until I come back in about 5-6 minutes, I’ll give you two marshmallows instead of one. Or you can eat that one but you’ll only get that one.” It’s experimenting on delayed gratification. Is the individual child able to manage their impulse to eat the marshmallow and resist, delay their gratification or are they not? Sure enough, about half of them could delay and half couldn’t. Now the interesting thing about this is that these people then were followed for over 40 years, throughout their life, and periodically assessed to see where they were at, what they were doing. Sure enough, the kids that were able to delay gratification and say “I’ll wait until you come back so I can have two” did a lot better on their SATs, a lot better grades in school. If you can delay having fun and do your homework, you’re gonna do better. Once you finish school, that’s that domino effect, of course, you got a better degree, so you can hold up for better positions, better jobs.
Debra Maldonado 32:48
Relationships too. People can be very impulsive in relationships versus stepping back and waiting for the right person versus taking the next person that comes along.
Robert Maldonado 32:58
Interestingly, better health outcomes.
Debra Maldonado 33:03
Because of eating? You have better impulse control.
Robert Maldonado 33:08
Better impulse control, better eating habits, drinking, drugs, less addiction than the kids who couldn’t delay gratification.
Debra Maldonado 33:20
That’s important as an entrepreneur because when you have a regular job, you get the paycheck you expect, it comes every week. When you’re not, that paycheck may be delayed. Are you still going to work? If you don’t get the paycheck on Friday, are you still going to invest in your business, invest your time, invest in your vision, or are you going to need that immediate “I need to have the money in today or this isn’t for me.” Some people need that security from the external where other people are like “I know I’m building something. I’m going to be patient.” Is that what this is teaching?
Robert Maldonado 34:01
I’d say there’s probably both kinds of people in entrepreneurship. There are some that are a little bit more risk taking, and others that are more risk-averse or may appear risk-averse. They’re more careful with their money and invest in and wait longer for the payback. But in general, I’d say if you’re able to have that long-term vision and invest in yourself, invest time, energy, effort into something knowing the payoff is in the future, you’re going to do a lot better than if you want the rewards right away, if you want instant gratification.
Debra Maldonado 34:47
I see so many people with such great gifts. When I first started, I hung around a lot of entrepreneurial people, how easily they gave up. I don’t know what it was about me, my friend gave me a book my first year, before I met you, it was called Unstoppable. She’s like “When I think of unstoppable, I think of you, Debi.” That’s how you have to be, nothing can stop you, you’re going to keep going, you’re gonna keep believing in that dream. It has to be something you really care about too. I think that’s really important. You can’t just want to be an entrepreneur to retire and be a billionaire one day. I guess that is satisfying and motivating. But I think it doesn’t eventually satisfy your soul. It’ll never fully complete you like doing something that makes you feel you’re giving back to the world, you’re meant to do this, you’re meant to share something. The most rewarding thing, I think, is creating something that’s never been created before. It’s so exciting. It’s like art in a way, you’re bringing this art, or a book, or a picture, or art piece into the world, a song that’s never been heard before. It’s just a beautiful part of being human that naturally part of us is creative. We can activate that. Would you say creativity is also a dimension of the entrepreneurial mindset?
Robert Maldonado 36:12
Absolutely. The bad news is our natural mind is not entrepreneurial. If we let it go, we never do anything with it, we tend towards stability, predictability.
Debra Maldonado 36:32
Standard cognitive bias of “It’s just the way it is.”
Robert Maldonado 36:37
We’re social beings. We tend to want to go along with our friends, our classmates, most people are not entrepreneurs. The likelihood of us being an entrepreneur is very low if we never encounter people that are doing it as well.
Debra Maldonado 36:57
Then we also hit adversity when we do it because your family and friends are like “What are you doing? You have a steady job, why are you risking it all for this crazy idea?” It doesn’t seem rational to everyone around you.
Robert Maldonado 37:10
The good news is, we know there’s research now, there’s actually an entrepreneurial mindset theory, we know these skills can be developed. If you don’t have these skills, you can acquire them, you can learn them, practice them, and become a better entrepreneur. There is a science to it, it’s not just luck like most people believe, this person just got lucky and made a million or 10 million with their business. No, there’s a science to it, they worked at it, they practiced some of these attributes we were talking about. We’ll be talking more about them throughout the series because it’s such an important topic. People need to understand that even if you’re not going to start your own business, it’s good for you to understand how the mind works in relationship to success, money, entrepreneurship.
Debra Maldonado 38:11
Have a more expansive, extraordinary life. Next week, we’ll talk about how entrepreneurs can uncover opportunities. If you are an entrepreneur or if you’re in the corporate world and want to have an entrepreneurial mindset, how do you see opportunities before they show up, how to recognize them, how to be open to new opportunities and create them in your business and your life? Thank you, everyone, for joining us. Great topic today, Rob. We’ll see you next week for another episode of Soul Sessions. Take care everyone.
Rob Maldonado 38:51