A New Take on Competiton

There are tons of people out there who have great ideas for new startups. However, most of them never actually act on them. Obviously, there are many different reasons for this. For some it may be because they lack the time, others do not want to take any risks, and some possible entrepreneurs are discouraged because there is already another company in the market that does a similar thing. 

At the end of the day, these are all valid excuses. But that is all they are. Excuses. If you really want to start your own business, you will have to face all the issues mentioned above. You will find hardly any entrepreneurs who feel like they have time to spare, or who did not have to take any risks. And most importantly, you will never find any entrepreneurs who will tell you they don't have competition. And you know what, that is a good thing. 

Just think about the very basic things you do with your company. Maybe you are selling a certain product. Fair enough. But why do people buy your product? It's pretty simple. They buy it because it satisfies a need. So at the end of the day you are not only offering a product, but more importantly you are offering a way to satisfy needs. This is a critical change of perspective. 

If you look at your business from this perspective, you will soon realize that you are not only competing with companies that offer the same product, but with a whole bunch of other companies that offer seemingly different products as well. For instance, if you are selling ice cream on a hot and sunny day, you might think that you are mainly competing with other ice cream sellers. But that's not quite right. In fact, you are also competing with the kid next door who sells lemonade. 

Most people buy ice cream because they feel like they need a sweet refreshement. Both ice cream and lemonade could potentially satisfy this need. So if your potential customers chose to buy lemonade, they are probably not going to buy ice cream from you anymore. Because you know, that too much of that sweet stuff is unhealthy, right?

This thought can be pursued even further. If your potential customers have access to a swimming pool they have other means to cool themselves down and get a refreshing experience, so they might not even feel like eating ice cream anymore. So even products from a whole other industry might compete with your products. 

Now, this may appear rather intimidating if you are thinking about starting your own business. Why even bother if there are so many competitors? It's simple: because competition proves that there is a need. If there is nobody who satisfies the same needs that you are targeting with your product, in most cases there is no need for it either. Literally. This is important to keep in mind. Even if you are the first one who comes up with a new product, there are probably others that target the same needs. 

Of course that does not mean your idea is not new or innovative. It actually means that you might be on to something. If your product is able to satisfy the same needs better than the existing products (from other companies or industries) then you have a chance to be successful. You "just" have to be better. In fact, this is how most disruptive innovations start. 

Just keep that in mind next time you talk to a potential investor. They will always ask about your competition. Whatever you do, don't tell them you don't have competition. Talk about the needs you are targeting, how you are targeting them and why that's better than what is being done at the moment. There is no such thing as no competition.

In a nutshell

Companies are selling products and services. More importantly however, they are selling ways to satisfy needs. This is a critical change of perspective. If you look at your business from this point of view, you will soon realize that you are not only competing with firms that offer the same product, but with a whole bunch of other companies that offer different products but target the same needs. Even if you are the first one who comes up with a new product, there are probably other competitors that satisfy the same needs. So at the end of the day competition is a good thing because it proves that there is a need for what you do.

How to Ruin Your Startup in 7 Simple Steps

There are countless articles and posts out there that tell you what you should do in order to become a successful entrepreneur. Actually, we have published one as well not long ago (see How To Become A Successful Entrepreneur). However, as always there are two sides to that story. There are of course also some things you should not do if you want to successfully build your startup. 

So for the sake of completeness we decided to take a look at the issue from another perspective for a change. As a result, we came up with 7 simple steps to ruin your startup. But before you read on, please be advised that the following paragraphs may contain traces of sarcasm. In fact, some passages may even appear cynical to the attentive reader. So please, do not take the following list too seriously.

1) Do not take any risks

You have probably heard the phrase "no risk no fun" before. It's something crazy people say before they do stupid things. So unless you are into skydiving, bungee jumping, or any other activity that requires a death wish, there is no reason for you to live by that slogan. With regards to your startup it should also be pretty obvious why taking risks is a bad thing. Because it involves risk. Duh. To be fair in some cases, if you were to take risks, there might be a tiny chance of success. It might even turn out as the best decision you ever took and you could live happily ever after. But yeah, that's probably not going to happen and you'd most likely regret it for the rest of your life, so just don't do it. You know how they say in sports, "you can't win if you don't play." Well guess what, you can't lose either. But more importantly, if you don't play, you can still pretend you could have won. In other words, if you don't even start (i.e. don't take any risks) you can always tell people you've got the next big thing, without actually having to prove it, because they can't prove you wrong either. Genius.

2) Try to do it all by yourself

One of first and most important decisions you will have to face is, if you want to found your startup alone or with a team. Researchers generally suggest that startup teams are more successful than single entrepreneurs. Uhm yeah, they were probably thinking about teams like Mark Zuckerberg and his team, or Richard Branson and his team, or Jeff Bezos and his team... you get the point right? Let's face it, if you want to make it to the top, you will have to do it all by yourself. But that's not so bad actually, because there is probably no one out there who is as talented and capable as you are anyways. At the end of the day, you will be much better off if you don't have to babysit any cofounders or partners. It's not like they could contribute much to your idea in the first place. Worst case they would develop their own ideas and you'd have to argue with them and actually start thinking in more detail about your idea. Ugh. You don't need that kind of negativity in your venture. However, if you absolutely can't do it on your own for some reason, you might still have to include someone else. In that case, don't spend too much time looking for someone with similar ideas or a complementary skillset. It's not like you are going to listen to what they have to say anyways, right? So just go with the next best person you can find. 

3) Avoid talking to other people about your venture

This one should be a no-brainer. The only thing other people will do if you tell them about your venture is steal your ideas. It's sad but true. They won't even care about the fact that you probably have a significant advantage because you've already spent a huge amount of time working on your idea and developing it. They will start copying your idea immediately after you finish talking to them. You should definitely be worried about that. Everybody is a potential competitor. Just think about it for a second. Most people would rather pursue a vague idea (of which they don't even know whether it might ever be successful) than have a secure and high paying job. They are just waiting to jump ship and become entrepreneurs like you. So there is absolutely no benefit for you if you talk to other people about your venture. You'll hardly ever find anyone who will give you valuable feedback or offer new thoughts that hadn't crossed your mind before. And you won't be able to significantly increase your network either. And even if that were the case... you'd just end up with more people who could potentially steal your idea. So just shush.

4) Do not take advice from anyone 

If you follow step 3 (see above) you should not encounter too many situations where people try to give you advice. However, if it still happens, you shouldn't take it. There is absolutely no added value in doing so. What could these people possibly know that you have not already considered? And if they actually did come up with something you have not thought of before, of what importance could that possibly be? Given the fact that you're probably the only one who truly understands your business idea anyways, you are the expert. There may be other people who work in the same industry or people have successfully founded multiple companies similar to yours, but that does not make them any more of an expert than you are. They may be more experienced than you, but we all know that experiences are made in the past. You don't take advice from a history book, do you? No, because you are not trying to be successful yesterday. Your time is now, you are here to shape the future.

5) Make sure your product is perfect right from the start

The last thing you want to do is enter the market with an unfinished product. If you want to be better than the market, your product has to be better than your competitor's offering. In fact, it doesn't only have to be better, it has to be perfect. Right from the start. Think about it, no one is going to buy a product that does not meet their needs. When was the last time you bought something you were not completely satisfied with (except for all the occasions you probably just remembered). Anyways, since you don't exactly know who your customers are, you just have to meet all potential needs. Yup, all of them. Some people like small cars, others like big cars. So your car has to be small and big at the same time. Some people like red jackets, others like blue ones, so your jackets have to be red and blue. Don't settle for just one out of two customers if you can have them both, even if you can't. Just make sure your product is perfect for everybody before you enter the market and you will be fine. It's that simple. 

6) Don't waste money on promoting your product

Ok, if you've done everything right, you should have a perfect product by now. So far so good. But you are probably wondering how you are going to get people to buy it. Should you spend a fortune on advertising or any other type of promotion? Nope, definitely not. Let's look at the reasoning behind this. Companies need promotion to convince people to buy their products. But unlike all the other companies your product is perfect, so there is no need to convince anyone. People will want to buy it as soon as they see it... they would be foolish not to do so. And they will tell others about their great purchase, so word-of-mouth will do all the work for you. No need to spend big bucks on advertising. And if for some odd reason, there are still people don't want to buy from you after all... well, joke's on them, because they are the ones who are missing out. It's not like you need them. They'll soon enough realize they are the ones who need you. So just sit back and wait for them to come back. 

7) Stick with your initial plan

Now that we have covered the most important aspects, there is just one last thing to remember: never change your initial plan! If you have done everything we mentioned above, there is really no reason why you would have to reconsider anything. Yeah, maybe the circumstances have changed, that is possible. That actually happens quite often, to be honest. But why would you have to adapt to them? Let's it real here for a moment; your plan was perfect when you developed it, so it must still be perfect simply because you haven't changed anything since then. The mere fact that it is not suitable for a given situation anymore should not discourage you. Why don't you just go out there and try to change the world instead of your venture? That's long overdue anyways. Just look at all the things that are going wrong out there at the moment. And while you are at it, just recreate your environment the way you need it. This is how most people do it, so it must be right. 

In a nutshell

There are countless articles and posts out there that tell you how to successfully build your startup. However, there are two sides to that story, so for the sake of completeness we decided to take a look at the issue from another perspective for a change. As a result, we have come up with the following 7 simple steps to ruin your startup: 1) Do not take any risk, 2) Try to do it all by yourself, 3) Avoid talking to other people about your venture, 4) Do not take advice from anyone, 5) Make sure your product is perfect right from the start, 6) Don't waste money on promoting your product, 7) Stick with your initial plan. If you follow these simple steps your startup won't last very long... guaranteed!

What Type of Entrepreneur Are You?

There is no such thing as the stereotypical entrepreneur. Even though there are some traits that most entrepreneurs may have in common (e.g. persistence, dedication), we can find a wide variety of different personality types among them. To provide a simple overview we will try to classify these types into several groups. This will also allow you to find out what kind of entrepreneur you are.

Now, to make this distinction we will need two dimensions. The first one is whether or not entrepreneurs are trying to predict the future. This is important because it significantly affects their perception and activities. The second criteria is their mode of control, i.e. if they are reactive or proactive people. This aspect considerably limits or enables the opportunities that can be seized and created. 

When we combine these two dimensions we end up with a matrix that illustrates the four most fundamental types of entrepreneurs (see illustration 1). We will look at each type in more detail below.

Illustration 1: Different Types of Entrepreneurs

The Planner

Planners are convinced that preparation is key in any given situation. They try to predict the future to be prepared for whatever might come up, which puts them in a reactive mode of control. Even though their strategy is highly dependent on what happens around them, planners are rarely caught off guard, because they have planned out a wide variety of different scenarios in advance. As a result they are usually experts in their fields, have an impressive technical knowledge about their venture, and an answer for seemingly every question anyone might ever want to ask. 
However, being prepared for everything in advance is a virtually impossible task. Because of their low allowance for uncertainty, planners are more likely to suffer from a burnout than other entrepreneurs. Furthermore they are often at risk of over engineering their products and missing out on valuable opportunities, because they spend too much time providing for all contingencies, rather than taking a risk and just jumping right in.

The Visionary

Visionaries are the kind of entrepreneurs who want to create a future based on their ideas. They too make predictions about the future, but unlike planners, visionaries take a more proactive stance in doing so. In other words, visionaries do not only predict what is going to happen, but they actively try to make it happen. Due to their proactive nature, visionaries can have a huge impact on any industry, especially because they can get others to join them rather easily due to their energetic nature. Their confidence and beliefs often carry over to others and increase their motivation.
On the flip side, this confidence can quickly turn into overconfidence. Visionaries sometimes tend to underestimate risks associated with their ventures because they are convinced they can shape the future however they want it. This illusion of control may also lead to blind spots where potential problems are overlooked completely. 

The Adapter

Adapters are the quick learners among entrepreneurs. They are aware that they can never really predict the future so they focus on adapting more quickly than others. Thus they are characterized by a reactive mode of control, which means their actions are generally triggered by specific developments or events. This reactive approach requires adapters to be extremely flexible. They are able to learn quickly and adjust within a short amount of time. To do this, most adapters have a broad basic skill set that allows them to adjust to new situations more easily than others. 
Despite that, they are at risk to be caught off guard by new developments and sometimes forced to act before they have fully adapted. As a result they may have a hard time establishing or maintaining a first-mover advantage, because they rely on triggers while others are more proactive.

The Effectuator

Effectuators are people who want to shape the future together with their stakeholders. Unlike visionaries they do not predict the future, but they try to create it by interacting with others. Hence they take a proactive stance. The important thing to note here is that effectuators gradually shape the future despite the fact that they don't know what they will end up with right from the start. As the Entrepreneurial Method suggests, some of the most successful entrepreneurs are considered effectuators. They are generally very interactive people who care a lot about their stakeholders. In addition to that they are flexible and have a fairly high allowance for uncertainty. 
However, because of their flexible nature, effectuators may be at risk of overconfidence. A "Screw it, let's do it" mentality will not always lead to success, so it is important to consider the consequences of a possible failure as well.

In a Nutshell

There is no such thing as the stereotypical entrepreneur. However, the most fundamental types of entrepreneurs can be classified into four groups (i.e. planners, visionaries, adapters, and effectuators), depending on whether or not they are trying to predict the future and whether their mode of control is reactive or proactive. The planner tries to predict the future and has a reactive mode of control. The visionary also tries to predict the future, but with a proactive mode of control. Meanwhile the adapter does not try to predict the future and shows a reactive mode of control. Last but not least, we have the effectuator who does not try to predict the future either but takes a more proactive stance.

How to Become a Successful Entrepreneur [Infographic]

Starting your own business is a tough job. There are thousands of new companies founded every year all around the world, but most of them fail within the first five years of operation. However, for the few ventures that actually make it, the upside potential is virtually unlimited. 

The latest research on entrepreneurship (see also: Entrepreneurial Method) shows that the success of a venture depends on much more than just its business case. Hence, if you want to start your own business, you have to know what it takes to be successful and how you can increase your chances.

With this in mind we have created an infographic that illustrates and explains the 8 most important things you should consider in order to become a successful entrepreneur. Take a look:

Embed Code

<a href="http://principles-of-economics-and-business.blogspot.com/2015/06/how-to-become-successful-entrepreneur.html"><img src="http://i.imgur.com/ZVb9yoC.png" alt="Infographic - How to Become a Successful Entrepreneur"></a><br />Source: <a href="http://principles-of-economics-and-business.blogspot.com">Principles of Economics and Business</a>

The Entrepreneurial Method

There are thousands of new companies founded every year all around the world. Most of them fail within the first five years of operation. However, there are a few extremely successful ventures that become incredibly valuable in a short period of time.

Hence, we have asked ourselves: What does it take to be a successful entrepreneur. Why are some successful while most others fail. And how can we increase the chances of becoming successful entrepreneurs?

Fortunately enough, scientists have already done quite a lot of research on this. One concept that stands out is what we call The Entrepreneurial Method (by Professor Saras Sarasvathi). It describes a logic of thinking that is commonly used by some of the most successful entrepreneurs to build their ventures. We will look at it in more detail below.

Effectual Principles

The Entrepreneuiral Method mainly consists of five effectual principles. As mentioned before, they represent a logic of thinking that some of the most expert entrepreneurs use to build their ventures. By observing a large number of entrepreneurs and ventures over time and across different industries, the team around Sarasvathi has come up with the following principles that can help entrepreneurs advance their ventures.

• Start with your means: If you are trying to build a new venture you should start with your available means. That is, you have to ask yourself: who are you, what do you know and whom do you know. Once you have answered these questions, you can start to imagine different possibilities and outcomes that originate from your means. It is important to not just focus on one specific goal, but to be open for new possibilities and opportunities. 
• Focus on affordable loss: To limit your downside risk, define your affordable loss. Especially in early stages of your venture it is much more reasonable to limit the downside potential rather than to focus on possible returns and pursue a risky all-or-nothing strategy. However, always define your affordable loss in advance to protect yourself from potential cognitive biases during the project.
• Form partnerships: Working together with interested stakeholders reduces uncertainty. Partnerships can help you create new markets together with people who have a complementary skill set to yours, which significantly reduces your own risk. Plus, it is generally more fun to work with others instead of trying to do it all by yourself. 
• Leverage contingencies: If life gives you lemons, make lemonade. Seemingly bad surprises and unexpected turns are not always bad, try to see them as new opportunities. Maybe you just found another way that does not work. These experiences can be more valuable than you might think. In fact, many of the most successful ventures were the result of another failed project or a coincidence. 
• Control the future: Focus on activities that lie within your control. If you spend too much time worrying about what might or could happen to your venture, you give up control. Concentrate your efforts on what you can influence to reach your goals one at a time. In other words, if you control the future you do not have to predict it.

Since these principles have proven to be quite successful in practice, additional research has been conducted and has revealed several other relevant principles for entrepreneurs (which we will discuss in another post). Now, this goes to show that there is a multitude of other aspects and principles that affect the success of any venture. Thus following the Entrepreneurial Method may not always lead to success, but it certainly provides valuable insights into the logic of thinking that can be used to be more successful as an entrepreneur in the long run.

In a Nutshell

There are thousands of new companies founded every year all around the world. While most of them fail, some become incredibly successful. Based on that, the Entrepreneurial Method (by Professor Saras Sarasvathi) describes a logic of thinking that is commonly used by some of the most successful entrepreneurs to build their ventures. It consists of five effectual principles: Start with your means, focus on affordable loss, form partnerships, leverage contingencies, and control the future. These basic principles provide valuable insights for entrepreneurs to be more successful in the long run.

For more information, visit: http://www.effectuation.org/

Why Do Firms Need Growth?

Growth is one of the most prominent business objectives of many firms. In recent years it has become almost self-evident that a company has to grow in order to be successful. No matter what firm or business, there always seems to be a need for further expansion. In other words, growth has become an imperative.

Admittedly, this may not come as a surprise, considering we live in an economic system that builds on constant growth (see also Do We Really Need Economic Growth?). In that sense, companies would need to grow simply because they are a part of the system and all the others are doing it too, right? Well, fortunately it is not quite that simple.

In fact, the need for growth firms experience depends on several factors. These include the owners' ambitions, the age, the markets, the current size, and the ownership structure of the company. The most important of these determinants is the ownership structure, or more specifically, whether a company is privately or publicly owned.

Private Companies

In general, privately held companies do not depend on growth as much as public firms. Obviously in the beginning they require a certain level of growth to establish a presence in the market and to become self-sustainable. However, once they reach this critical size, their need for growth may actually decrease for the following reasons:

• Low complexity: Private companies are often small, entrepreneurial firms that sometimes consist of not more than a single member. In these companies there is little need for complex governance and compliance structures. As a result, they have to deal with less bureaucracy and can focus on their core business instead. 
• Limited capabilities: Small private companies have a limited capacity. Some of them deliberately chose not to expand their business even though they are working to capacity (or even beyond). Often, the reasons for this is that the managers (i.e. entrepreneurs) lack the necessary capabilities to manage a larger firm or they want to rather focus solely on the technical part of what they are doing.
• Long-term orientation: Family firms in particular are generally managed with the intention to pass them on to future generations. Hence, they are seen as legacies that derive their value from tradition and emotional attachment, rather than just high growth rates and short-term profits.
• Niche markets: Many private firms supply very specific niche markets. Since these markets are usually quite limited, there is no need for these companies to grow beyond the point where they can sufficiently supply their niche. This is especially true if the expansion into other markets would require substantial and risky investments.
• Capitalization: Private firms often have a closed circle of investors who are also highly involved in the company. As a result these firms do not depend on traditional capital markets and financial ratings as much as public companies. This is important to note because capital markets generally value firm growth extremely high (as we will see below).

Ultimately, there are several reasons for private companies to stay small (once they are self-sustainable). Of course this does not hold true for all private firms. There are still plenty of privately held companies that have a strong need for growth. In fact, some of the worlds largest companies are privately owned. Nonetheless it is safe to say that it is not always necessary for private companies to grow continuously in order to be successful in the long run.

Public Corporations

Unlike private companies, public corporations usually experience an extremely high need for growth. This is mainly due to the fact that the shareholders (i.e. the owners) mostly see their ownership stake as a short- to midterm investment. Thus they demand high payout ratios and dividends as soon as possible. If corporations do not grow continuously, they will not be able to meet those demands in the long run for the following reasons:

• Competitive edge: Companies can use their size to get a competitive edge. For example, they may be able to realize economies of scale, i.e. to produce large numbers of a certain product while at the same time reducing costs per unit. However, if they stop growing, they will lose this advantage eventually, since competitors will catch up and maybe even pass them.
• Customers: If corporations do not grow, they risk losing existing and potential customers. As the customers expand their businesses, it will become increasingly difficult for these firms to supply the additional goods or services demanded. As a result, the customers will eventually have to look for another supplier.
• Market valuation: Financial markets value firms by how much they have grown in the past and by how much they can potentially grow in the future. Thus, a company that does not grow will not be valued very high, because its projected future cash flows (i.e. dividends) are stagnant. As a result it will lose a significant amount of its market valuation.
• Raising capital: If the market valuation of a corporation decreases, it will become increasingly difficult for that company to raise capital (i.e. equity and debt). As we said, investors generally want to increase their return on investment and creditors want to make sure they get their money back. Both becomes more unlikely if the company does not grow.
• Resource allocation: Big companies have a lot of bargaining power, thus they can usually get a substantial share of resources over the course of an allocation process. This is especially relevant for firms that depend on limited natural resources. If they lose bargaining power, they essentially lose access to those resources. 

In conclusion publicly held companies can only survive if they are able to provide attractive investment opportunities. If dividends don't grow, shareholders could have just bought government bonds with a similar interest rate but at a much lower risk. Once again, there may of course be exceptions to this rule, but in general it can be said that corporations have to either "grow or go" in the long run. 

In a Nutshell

We live in an economic system that builds on constant growth. Accordingly this is also one of the most prominent goals of many companies. However, the need for growth that companies experience depends on several factors including the owners' ambitions, the age, the markets, the current size, and most importantly the ownership structure of the company. Privately held firms often do not need to grow beyond a certain point, because they are characterized by low complexity, limited capacity, long-term orientation, niche market positioning, and less dependence on capital markets. Public companies on the other hand need growth because they are at risk of losing their competitive edge, customers, market valuation, investment capital, and resources if they stop growing. In that case they cannot pay increasing dividends anymore and thus become a less attractive investment opportunity. 

Connecting Business and Economics

Business and economics are highly interrelated. At the end of the day one would not exist without the other. The success of any business depends on a variety of economic aspects and at the same time businesses essentially make up the economy.

However despite this unquestionable connection, we often only hear about business or economics. In particular, many people fail to notice that in order to be successful in business it is  essential to have at least a basic level of economic understanding. Therefore we will look at how business and economics can be connected.

Business economics

Business economics is a branch of economics that specifically deals with the challenges faced by corporations. In that sense it is similar to microeconomics with the exception that it has a strict focus on corporations. Business economics may include topics like financing, business organization, strategy, or basically anything a corporation would have to deal with. 

Like most other economic branches, business economics emphasizes the use of quantitative methods to analyze issues and takes a positive approach. That means it deliberately restricts itself to describing the world without any judgmental component. In that sense business economics may help us to assess the effects of a certain decision but it does not tell us whether these effects are actually desirable for stakeholders or not. 

Hence, in order to enable people to take the right decisions and benefit all stakeholders we have to shift our focus more towards the business side. The economic consequences of any decision should not only be analyzed and described in hindsight, but should actively influence the decision itself. Therefore we have to move one step further and include such considerations into a more comprehensive framework.

Econ-founded business studies

A good way for business executives and entrepreneurs to connect business and economics in order to take better decisions is what we call econ-founded business studies. The basic idea behind this is pretty similar to business economics, since we also look at the challenges faced by corporations (and entrepreneurs). However, the major difference is that we shift our focus from the economics side more towards the business side. Which has some significant effects.

In particular, by looking at the issues from a business perspective we take more of an inside-out view. Business economics on the other hand takes a descriptive outside-in view. Rather than just analyzing and describing the relevant decision making processes from outside, we want to contribute and actively influence the process by taking into account various economic (and non-economic) aspects in advance to provide a more well-founded basis for the decision. 

As a result, econ-founded business studies go beyond the scope of business economics, because other branches of economics (e.g. macroeconomics, microeconomics) have to be taken into account as well. To take well-informed decisions it is important for executives and entrepreneurs to have a comprehensive understanding of basic economic principles and processes. Focusing on one branch does not provide enough information in that regard, since it does not take systemic interdependencies into consideration.

Ultimately, the goal of econ-founded business studies is to provide a comprehensive framework of economic and business knowledge that enables executives and entrepreneurs and guides decision-making processes in any business-related environment for the benefit of all stakeholders. By the way, that is also our guiding principle for selecting the topics of our posts (in case you wondered).

In a Nutshell

Business and economics are highly interrelated. At the end of the day one would not exist without the other. Therefore it is important to connect the two from an academic point of view. A possible approach to do this is business economics, a branch of economics that analyzes and describes the challenges faced by corporations. A more comprehensive way that originates from the business side, is the concept of econ-founded business studies. The idea behind this is to provide a comprehensive framework of economic and business knowledge that enables executives and entrepreneurs and guides decision-making processes in any business-related environment for the benefit of all stakeholders.