Understanding the contents and development of nascent entrepreneurs’ belief systems

Abstract This study tracks the development of nascent entrepreneurs’ (NE) belief systems (mental models) from the time they were seriously planning entrepreneurship to having started their firms. It aims to reveal their typical entrepreneurship-related belief systems to understand the underlying logic of the contents and their change. Cognitive theory predicts belief systems which are first relatively simple and partly shared, but turn more complex and more divergent, thus facilitating the mental representation of their firms’ different environments. The study finds that the NEs share coherent and rather developed belief systems at the outset. They also become more complex after the transition from prospective to actual entrepreneurship, but unexpectedly more uniform, reflecting the NEs’ need to mentally control not only the external environment but also internal issues they share, such as fears and self-efficacy. This implies that entrepreneurs’ cognitive evolution involves developing the conventional “cold” mental grip of the external environment, but also understanding their affective, “hot” side. The development paths can vary, suggesting a corresponding theoretic model. Methodologically, cognitive/causal mapping and semi-structured interviewing provide an accessible approach to studying both aspects of entrepreneurial cognitions. Pragmatically, the findings suggest that small business support should pay more attention to prospective entrepreneurs’ qualms and beliefs, often hidden and biased.