The word has a nearly mystical feel to it. Many people think that entrepreneurs are born not made. I contend that we are all entrepreneurs. I believe that within each of us is an entrepreneur trying to express himself.
There is a unique connection between the idea of an artist and the idea of an entrepreneur.
The idea of this post is to hopefully identify what makes an entrepreneur tick and why we should each try to release the entrepreneur we have within us.
Management Guru Peter Drucker literally wrote the book on entrepreneurship and business management. The following 12 keys for entrepreneurial success were found in Peter Drucker’s book The Daily Drucker.
1 “Those who perform love what they are doing”
Being an entrepreneur means you are willing to act passionately to create your vision. You have to love what you are creating in order to have the stamina and energy needed to achieve the vision you created. As Michelangelo said, “I saw the angel in the marble and carved until I set him free.”
2 “Successful entrepreneurs do not wait until “the Muse kisses them” and gives them a bright idea; they go to work.”
Being successful in this process requires acting on faith. Faith that your initial vision was correct and then you go to work making adjustments as you go rather than waiting for the perfect plan to come to you next week before you begin to execute it. As General Patton said, “A good plan executed violently today is much better than a perfect plan executed next week.”
3 “What is your business?”
It is utterly amazing how many people start a business without a clear definition of not just what the business is (i.e. what it delivers) by why the business is. It is your business can you answer the question, what is it all about? Jeff Bezos said, “I strongly believe that missionaries make better products. They care more. For a missionary, it’s not just about the business. There has to be a business, and the business has to make sense, but that’s not why you do it. You do it because you have something meaningful that motivates you.”
4 “Who is your customer?”
How many businesses are started without a clear definition of who the end customer is? The great product idea is worthless if there is no one willing to buy it. Your customer is not everyone who needs what you have to offer. No, your customer is those who want what you have to offer. Change one word – need to want – and the whole game changes. Peter Drucker said, “The purpose of a business is to create a customer.”
5 “Neither studies nor market research nor computer modeling is a substitute for the test of reality.”
Got a new product or service? Think about Homer Simpson, picture him lying on his couch, watching TV, with a beer balanced on his stomach. Ask yourself is your marketing capable of motivating him to stop – pay attention – set his beer down – sit up and finally reach for his wallet. That is the test of reality. Today it is possible to actually test products without focus groups, or marketing surveys or trying to develop big-data computer models. Build your prototypes and sell them online. Test your market in real time! As Peter Drucker said, “The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.”
6 “Measure innovations by what they contribute to market and customer.”
Does the new innovation you’re thinking about introducing actually contribute to your customer? Did you customers ask for it? As Steve Jobs said, “You can’t just ask customers what they want and then try to give it to them. By the time you get it built, they’ll want something new.” Innovation comes in three flavors. Flavor one – Incremental Innovation, think of adding additional memory to an iPod so you can store more music. Flavor two – Evolutionary Innovation, think of the shift from video cassette to DVD. Flavor three – Revolutionary Innovation, think of the introduction of the iPod and iTunes.
7 “Often a prescription drug designed for a specific ailment ends up being used for some other quite different ailment.”
Be ready to take advantage of the unexpected. Being agile or able to pivot from one direction to another is required for successful entrepreneurship. Remember the Post it Note was not invented on purpose. As a matter of fact accidental inventions have cropped up for centuries. From Silly Putty to Super Glue and Potato Chips to Corn Flakes, even Teflon and Velcro were all the result of what I call serendipitous happenstance, or accident. As Albert Szent-Gyorgi said, “Discovery consists of seeing what everybody has seen and thinking what nobody has thought.”
8 “Innovative ideas are like frogs’ eggs: of a thousand hatched, only one or two survive to maturity.”
A true entrepreneur is willing to search through the thousands of ideas of what he could do to find the one or two that he should do. And keep in mind the ideas you should do may not be, at first blush, the best ideas. As Mary Kay Ash said, “A mediocre idea that generates enthusiasm will go farther than a great idea that inspires no one.
9 “All one has to do is learn to say ‘no’ if an activity contributes nothing.”
Don’t have the time to do the next right thing? Try saying no to anything that doesn’t move you toward your goal. There is real power in the word no. An artist and an entrepreneur has to cultivate this power. Your time is too valuable to allow others to distract you from your purpose. As Paulo Coelho said, “When you say ‘yes’ to others, make sure you are not saying ‘no’ to yourself.”
10 “In the Next Society’s corporation, top management will be the company. Everything else can be outsourced.”
I have a friend who, when he was consulting, had a client he saw twice separated by 5 years. The first time they did almost everything in house. (This company built communications systems for countries.) Everything from PC Board assembly to painting the equipment was done internally. 5 years later all that was left was inside was engineering, sales, quality assurance and management; every other function was outsourced. We are already at this point. As Tom Peters said, “Do what you do best and outsource the rest.”
11 “Most of the people who persist in the wilderness leave nothing behind but bleached bones.”
You have to know when to walk away. If you persist too long in a lost cause you will have nothing left to give. You will become like a man wandering in a desert with no water, waiting for the end. As Mario Thomasello said, “One of the hardest things you’ll ever face in life is choosing whether to walk away or try harder.”
12 “Finding and realizing the potential of a business is psychologically difficult.”
Is this the reason that 8 out of 10 new businesses fail? Yes it is hard to be an entrepreneur, but it’s also difficult being an indispensable employee. Can we finally admit that although conventional wisdom says that 80% of all new businesses will close their doors in less than 5 years we don’t have to accept that? Think about it. The statistics have stayed the same for the last 25 years at least in spite of all the programs available to help. Is it a fact or can we change it?
A study released in January of 2014 showed the largest contributing factors in business failure. The number one factor responsible for 46% of all failures was Founder Incompetence. This is, to me unacceptable. It should be to our politicians and business leaders. Think about what a 10% reduction rate in business failure would mean. What about a 40% reduction? On average 50,000-200,000 businesses don’t close and all those employees keep contributing to their communities.
I’ll be focusing on the solutions here in the next few posts.