Austrian Business Principles
Learning theory and principles might seem impractical for your business, but it’s imperative to understand them to help avoid costly mistakes. When you learn principles, it’s similar to teaching a man how to fish instead of feeding him for a day.
Problem To Solve: How to make decisions in the face of uncertainty without relying on math and models.
How To Use This Tool
1. Focus on real people and their emotions, motivations, interactions, decisions, instead of relying on math, models, and predictions. 2. Embrace dynamism and uncertainty; the market is constantly changing and it’s impossible to accurately predict it, therefore learn to be adaptable and open to new ideas and experimentation. 3. Understanding subjectivism is key to understanding entrepreneurship. If customers don’t find your product to be valuable then entrepreneurs won’t produce it. 4. Production takes time. Consumers are the ultimate decision-makers in what gets produced. 5. Forecasting is wildly inaccurate and difficult to determine due to factors that can’t be predicted such as a pandemic. Pattern recognition is a better alternative. Focus on real people and their emotions, motivations, interactions, decisions, instead of relying on math, models, and predictions.