By Edward D. Hess,
Distinguished Executive in Residence and
Adjunct Professor of Management, Goizueta Graduate School of Business
What is the definition of an entrepreneur? Who is entrepreneurial? What is entrepreneurship? Can big companies be entrepreneurial? Can you be an entrepreneur working for a charity? Can you learn how to be entrepreneurial or must you be born with “it”?
Who are entrepreneurs? Sam Walton went from Benton, Arkansas to being head of the wealthiest family in the U.S. Bill Gates and Paul Allen went from college dropouts to multi-billionaires. Anita Roddick, Tom Cousins, Charles Brewer, Howard Schultz, Tycho Howle, and Ben Dyer are all examples of successful entrepreneurs.
Some think entrepreneurs are visionaries that can see or imagine what ordinary people cannot; and people who can do what ordinary people cannot; people who can overcome the fear of losing it all with passion and persistence. In studying successful business builders and in representing some for over 20 years, I have come to the conclusion that entrepreneurs are NOT smarter than the “average bear”, NOT more creative and NOT more passionate about wanting to succeed. So what are the keys to the kingdom to entrepreneurship?
The following factors are common in successful entrepreneurs:
- Many successful entrepreneurs come from humble backgrounds and are driven passionately to escape that humble background;
- Many successful men entrepreneurs had dominant mothers who instilled an internal drive and ambition into them and expected outstanding performance for love and affection;
- Many successful entrepreneurs began their work careers in traditional jobs and became entrepreneurial after learning an industry and hitting a plateau;
- Many successful entrepreneurs ended up in places they never intended to be. They were plodders; they were tinkerers and they were not big discovery people;
- Many successful entrepreneurs were not creative geniuses. Many were copiers – imitators or next generation extenders. Most successful new ventures are either extensions of existing products to new markets or uses or the transfer of applications or ideas across industries.
Most successful entrepreneurs do not create a new customer need. It is obvious because the customer tells them of the need and the current employer for some reasons does not capitalize on the opportunity and the entrepreneur does. The entrepreneur recognizes and seizes the opportunity.
IT IS OPPORTUNITY RECOGNITION THAT IS KEY.
AND IT IS BEING ITERATIVE AND TINKERING UNTIL YOU GET IT RIGHT IN EXECUTING THE OPPORTUNITY.
If I am right, and opportunity recognition and executing the opportunity are the keys, then people can be entrepreneurial in many different environments – big or small businesses; government or not for profits, etc.
Opportunity recognition is critical. In addition, successful entrepreneurs, especially serial entrepreneurs, have a process for evaluating key opportunities. Key components of this opportunity evaluation process include:
- Evaluating the potential lifecycle of the opportunity, taking into account the industry, structure, market size, ease of replication, and competitor abilities;
- Testing the idea without betting the ranch. How do you try it without risking large sums of emotional and/or financial capital? And
- A Customer Focus – the landfills are full of great products which customers did not need nor want.
If you think about it, this process is not unlike the scientific research process; not unlike the venture capital investment process; not unlike the innovation process; not unlike the new product development process; not unlike inventing software. All of these processes are iterative, learn-as-you-go, adaptive, sense and respond processes.
Successful entrepreneurs are able to get from opportunity recognition to commercialization quicker and better than others. It is the process of execution – doing it – which creates the value. So maybe the definition of a successful entrepreneur is someone who:
Recognizes opportunity and executes on that opportunity before others do.
And the opportunity can be a different way to deliver services to people in need (charities) or services to constituents (public service) or a different way to deal with homelessness or the cycle of poverty or to start a children’s museum. And yes, to make a product to sell.
And opportunity recognition and execution skills can be taught. So, yes – you, too can be an entrepreneur – if you want to.