Entrepreneurial theory in Austrian Economics employs several terms to describe the entrepreneurial process and the exercise of entrepreneurial skills.

Alertness refers to the ability of some entrepreneurs to identify, and quickly gain profit from, marketplace opportunities to buy from one resource and sell to another in a way that benefits both and allows for a profit.

Discovery refers to the process of applying empathic diagnosis to accurately identify unmet needs of potential customers and to rearrange resources to meet that need, enabling customer value and generating entrepreneurial profit.

Capabilities-based strategy is the idea of identifying certain key resources — tangible or intangible — that enable a firm to establish a strong and potentially lasting competitive advantage in the marketplace. This approach to strategy is often packaged up in textbooks as the Resource-Based View (RBV) of the firm.

In a recent podcast episode, Ed Pletner helped us gain a deeper understanding of this theory by putting it in the context of his business. Check out the results below or click here to download the PDF version.