Psychology of Entrepreneurship

This article explores the psychology behind entrepreneurship and how web 2.0 and social media can be used for marketing, engaging customers, attracting new customers, listening to feedback, and responding to crises. It also discusses Kirton's Adaptation-Innovation theory and analyzes the social characteristics of Bill Gates.

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Psychology of Entrepreneurship
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Psychology of Entrepreneurship
Part 1
Web 2.0 and Social Media
The goal of any business organization is to maximize profits (Armstrong, 2019). A
great way to maximize profits is to ensure that revenues are increased while the expenses are
minimised. The internet and the social media are a great tool that modern entrepreneurs can
use to make sure that their businesses are profitable. There are numerous advantages that
businesses can accrue from web 2.0 and social media. These include cheaper and better
methods of advertising, easier methods of tracking progress and access to modern ways of
communicating with customers. Social media is overtaking the traditional media as the main
avenue of product promotion.
Marketing is an important aspect to every business. It is through marketing that a
business attracts and maintains customers. With web 2.0 and social media, businesses have a
great avenue for converting potential customers into actual buyers. Some avenues of
marketing made available by the internet are absolutely free. These include e-mail marketing.
Others are paid such as advertising on Facebook or YouTube. The paid adverts target specific
persons who are likely to be interested in the products that a business offers. Paid social
media advertising is not as costly as advertising through the traditional media. The traditional
media include newspapers and television. Businesses are investing billions of dollars in social
media marketing. This part is going to focus on the importance of web 2.0 and social media
in marketing. Specifically, the part is going to look at how web 2.0 and social media can be
used to engage existing customers, attract new customers, listen to employee and customer
feedback and respond to crises.

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Engaging Existing Customers
Engaging existing customers is very important to a business. The customer is
important to any business since they determine the amount of sales. The more the customers,
the more the sales. Businesses should strive to ensure that their customers are satisfied. There
are several ways through which web 2.0 and social media marketing can be used to engage
existing customers. One of these is through congratulating the customer for purchasing.
When a customer makes a purchase from a business, it is important to make sure that they are
appreciated. This can be done through sending the customer an email congratulating them for
choosing to buy from the business. Where the business has developed an online app, and the
customer uses the app to order for goods, a thank you message could be sent to the customer
through the app. These are a few examples of how a business can appreciate a customer.
Another way through which the social media and 2.0n can be used to engage the
customers is through notifying them about new products. Let us take an example with a
business that sells clothes. When new clothes become available, they can notify their
customers of the same. To attract them further, they could issue personalised discount to the
customers. This would motivate the customer to buy the products. In the modern days, a great
number of people own a smartphone. In addition to this, internet connectivity has increased
immensely and access to the world wide web is increasingly becoming simpler. Due to this, it
is possible to engage most of the existing customers. Another way to engage them is to make
offers on products that the client might be interested in. Let us take an example with a hotel.
Such a business could engage existing customers through giving offers.
Attracting New Customers
With web 2.0 and the social media, businesses can venture in to online marketing.
There are several ways that businesses can attract new customers. One is through paid

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advertising (Griffin, Ebert, Starke, Dracopoulos and Lang, 2015). This could be done through
such sites as Facebook, Twitter and YouTube. In addition to paid advertising, a business
could attract new customers by simply being on the social media platforms such as Facebook.
Here is an example. If a business sells bicycles, it is likely that the business name will have
the word ‘bicycles’ as part of it. Therefore, a person in need of a bicycle may simply land to
their site by searching about bicycles on various search engines such as Google. With web
2.0, it is possible to manipulate location to the favour of a business. This could be used to
attract customers. Here is an example. Let us assume that a business that deals in car repair is
located in a certain town. The business can use search engine optimization to ensure that any
person who searches for a car repair shop while in or near the town can be directed to their
site. Once directed to the website, the customer can then locate a map to the car repair shop.
Social media sites use some analytics to determine the characteristics of people who
are using their site (Parks, 2017). The information collected through such analytics include
age and sex. These analytics could be used to attract new customers through paid social
media advertising (Sajid, 2016). Here is an example. Let us assume that a business deals with
modern clothes for young women. Such a business could benefit from social media analytics.
Their adverts could be directed to people who are more likely to be potential customers. For
instance, adverts could be directed to users who are less than 35 years of age and who are
female. This increases the chance that a business will attract new potential customers. It
would not make a lot of sense for a business that sells goods for young women to target all
members of the population. Social media analytics help in achieving appropriate targeting.
Listening to Employee and Customer Feedback
With web 2.0, it is possible for businesses to create and host websites that allow swift
interaction (Tuten and Solomon, 2017). The business should ensure that it provides option(s)

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for people to provide feedback through the website. This could through offering phone
numbers that one can call or providing a feature where one can anonymously provide
feedback in form of text. Feedback is very important to a business and will help in making
appropriate improvements. There are several other avenues that the business can use. These
are the social media sites. In the contemporary society, the number of people who use the
social media has increased immensely. Therefore, a business can receive feedback through
these sites.
Let us take an example of how the social media could be used as an avenue for
collecting employee and customer feedback. Here, we consider a microfinance that deals with
such financial operations as deposits, savings and lending. It is important that they know the
concerns that the employee or customers may have. Since most people in the modern-day use
Facebook, they could create an account with Facebook and employ a person to maintain the
account. The Facebook name should be similar or close to the business name so that
employees and customers can have an easy time locating it. In addition, the business could
also create accounts with other social media sites such as Twitter.
Responding to Crisis
It is hard to predict what will happen in future. Future may mean the next minute,
tomorrow or years from now. It is worth noting that businesses rarely plan to have crises.
Most of the times, these crises arise when unexpected. Web 2.0 and the social media could
greatly help respond to crisis. For instance, a business may use its website to inform
customers on the source of the crisis, apologize for any interruption of services and assure
that normalcy will return soon (where applicable). Let us take and example with a business
that transports dairy products every morning. In a situation where one of their transport trucks
is engaged in an accident, they could the website and social media sites to inform their clients

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on what is happening. The business could also assure clients that they are looking for
alternative means of ensuring that the dairies are delivered soon.
Kirton’s Adaptation-Innovation theory
This theory was developed by Dr Kirton in 1976 (Harris, 2017). The theory has been
used over the years. In the contemporary society, it is still popular. According to the theory,
employees could be ranked according to their level of innovation or adaptation. Innovators
are those people who are likely to come up with new ideas. On the other hand, adaptors are
those who build on the ideas of others. Dr Kirton argues that it is important for employers and
employees to understand this for it would reduce conflict’s among teams. When it comes to
the approach towards social media, the more mature entrepreneurial ventures are more likely
to have better strategies compared to the new ventures. Following is the reason why. Using
Kirton’s adaptation-innovation theory, a business that has practised for a while has identified
the nature of their employees. Therefore, these businesses understand where their employees
lie when it comes to Kirton’s scale of adaptation and innovation. Such a business is likely to
have a better approach towards social media marketing and product promotion. Since they
have been in business for a while, more people are likely to be aware of their products. The
business already commands a part of the market and is seeking to expand this. A start-up on
the other hand may face several challenges since they have not yet identified the nature of
their employees. In addition, being new to the market, a start-up may face some challenges
before they can command a portion of the market.

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Part 2
The founder chosen for this section is Bill Gates. Bill Gates is the founder of the
Microsoft corporation. Microsoft is known all over the world. Microsoft products such as
Windows operating system and other software are used globally. It is interesting that Bill has
some characteristics that one would not expect for a leader of his calibre. For instance, he
dropped out of school to pursue what he considered his interests. He chose to pursue his
vision despite receiving advice to the contrary. His courage and determination has earned him
a great position as one of the richest people in the world. Most scholars have classified him as
transformational leader (Northouse, 2017). He aims to change the trajectory of a generation
through the use of technology. He has accomplished this due to a strong vision and a great
belief in himself and his team. This section is going to look at the social characteristics of Bill
Gates.
One of the social characteristics of Bill Gates is the quality of caring. It is rare to find
a person who thinks about others and works towards ensuring that their lives are made better.
This is exactly the nature of Bill Gates. In 2000, Bill and his wife Melinda started the Bill and
Melinda Gates Foundation. This is a philanthropic foundation. In addition to this, Bill retired
from his position as the CEO at Microsoft so that he can dedicate more time to philanthropic
work. Bill always plans ahead and there was no exception when it came to this. He had plans
to help people all over the world through his philanthropic works. Due to this, he was
honoured by a knighthood by Queen Elizabeth 2 due to his constant philanthropic work in the
United Kingdom (Northouse, 2018). In the endeavour to help improve things via
philanthropy, Bill has spent a lot of funds to help improve the education system of the United
states of America. He supports such programs as scholarships, vaccines and immunization,
library programs and polio eradication initiatives. He also supports the United Nations
Children Fund. Caring is a social characteristic. In contemporary world, there are many

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people who are suffering due to different factors. These factors include poverty, food
insecurity, maternal mortality, chronic illnesses and lack of access to quality education
(Klenke, 2016). Bill has funded numerous programs in different continents to ensure that
people lead better lives. This clearly demonstrates his kind and loving attitude towards
people.
Another characteristic of Bill Gates is that he is well-organized and he is good at
organizing others. Bill Gates dropped out of Harvard university. Together with his childhood
friend Paul Allen, they founded Microsoft (Harman, 2016). Teamwork is important in any
business venture that aims at increasing profits (Antonakis and Day, 2017). When working
with teams, conflicts may often arise. Human beings have personality differences that may
lead to these conflicts (Byers, Kist and Sutton, 1997). Since teamwork is vital for success, it
is important for leaders to ensure that teams work well with minimal conflicts (Western,
2019). Only then can meaningful progress be made. Bill Gates seems to have understood this
too well. First, he had great belief in himself. He fully believed that he will be able to
accomplish his goals. He was too confident about this that he told his teachers that he going
to be a millionaire by the age of 30. True to this word, he was a millionaire at that age.
Another factor that shows great belief in himself is that he dropped out of school so that he
can pursue what he was passionate about. Apart from being well organized and having great
belief in himself, he organized his team very well. It is with the help of team work that he
was able to build Microsoft as we know it today. He was a transformation leader who
empowered his teams to perform well. He would constantly hold meetings with them to
check progress and give them advice. In addition, he ensured that the employees were well
compensated so that they were motivated to work even better.
Some other characteristics of Bill Gates includes being a risk taker, daring and result-
oriented. Bianchi’s article suggests that there are some characteristics that predispose an

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individual to becoming an entrepreneur. Some of these characteristics are having parents who
are self-employed, being an immigrant or a child of an immigrant, individuals who have been
employed in organizations that have less than a hundred employees, people who have been
fired from two or more jobs in the past, a person who is the first born in their family, an
individual who has graduated from college , people who realistically take risks, people who
are good at organizing and people who are willing to leave management positions to others
(Bianchi, 1993). Bill Gates has some of these characteristics. One of them is that he was
willing to leave his CEO position. As discussed above, he voluntarily retired as a CEO at
Microsoft. The position was occupied by Satya Nadella who has great management expertise.
This shows that Gates is willing to rely on management experts to run his business even when
he is in a position to.
The second characteristic that Gates has is that of being a realistic risk taker. While at
Harvard university, Gates would spend more time at the computer room than he would spend
reading for the exams. He even decided to drop out of school to pursue computing. His
parents and friend advised him on the importance of completing his education but he was
ready to take a risk of investing his time and resources in software. His risk-taking endeavour
bore fruits since he developed one of the largest companies in the contemporary world. The
last characteristic that Gates has is that of being well organized and having the ability to
organize others. As noted above, Bill was a results-oriented leader who was determined in
seeing progress. He was great at organizing himself and empowering his teams. This
characteristic helped him have motivated employees who were willing to work and achieve
set goals.

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References
Antonakis, J., & Day, D. V. (Eds.). (2017). The nature of leadership. New York: Sage
publications.
Armstrong, G. K. (2019). Marketing: An introduction. New York: Pearson.
Bianchi, A. (1993, May 01). Who's Most Likely to Go It Alone? Burnout Article. Retrieved
from https://www.inc.com/magazine/19930501/3537.html
Byers, T., Kist, H., & Sutton, R. I. (1997). Characteristics of the entrepreneur: Social
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Griffin, R. W., Ebert, R. J., Starke, F. A., Dracopoulos, G., & Lang, M. D. (2015). Business.
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Harman, S. (2016). The Bill and Melinda gates foundation and legitimacy in global health
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Harris, W. (2017). Incremental Innovation and Risk: A Balancing Act for Federal
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Klenke, K. (2016). Qualitative research in the study of leadership. New York: Emerald
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