Entrepreneurship is the path forward. During these times our economy and healthcare systems are facing an unprecedented crisis, there is a widespread panic not felt in generations, and policymakers are uncertain about tomorrow. It remains to be seen just how much this will affect the global economy, but changes will certainly take place, particularly with our supply chain, and the United States’ view of globalization.
Part of the uncertainty many Americans feel is that their jobs and, ultimately, their employers dictate their ability to put food on the table. There are only so many factors people can control; we are still at the whim of the economy, the markets, and mindsets that do not free us to explore other economic opportunities. If the economy in this country does worsen, and there are many indications that it will, having the confidence to know one can generate wealth on their own is empowering. In addition, after this downturn a period of rebuilding will happen, one that will be led by entrepreneurs looking to generate opportunities and capitalizing on markets with few competitors.
Entrepreneurs who have founded high-growth startups such as Mark Zuckerberg and Elon Musk as well as entrepreneurs turned investors such as Mark Cuban have been lionized in the media. While their endeavors have created thousands of jobs globally it is important to understand exactly what entrepreneurship is. High-growth venture backed startups are one (small) example of what entrepreneurship looks like, but do not exemplify the range of small businesses, agencies, and solo entrepreneurs across this country.
According to Wikipedia the definition of entrepreneurship is the “capacity and willingness to develop, organize and manage a business venture along with any of its risks to make a profit.” In simple terms, it is the process a person embarks on, knowing the risks involved, to generate wealth. There are several attributes we’ll explore below that are key regarding the definition of entrepreneurship and could serve as a guide for someone going down this path.
The creation of value
If an entrepreneur is not creating value and solving a problem, she does not have a business that will ultimately succeed. Being an entrepreneur, a business owner, or a founder is based on the same idea. It’s not about making money for money’s sake, it’s about creating value. One creates value by solving people’s problems, and when entrepreneurs understand this idea at the gut level and focus on solving big problems by driving the most value, they become very financially successful.
Oftentimes, budding entrepreneurs enter this space, particularly with the creation of a startup, in order to make significant amounts of money when in fact they should be thinking about how to create value at a mass scale. While companies certainly face their own set of unique challenges, tech companies such as Facebook have been able to create mass value by offering billions of people the ability to communicate instantly. Uber is another example, as the company fundamentally simplified transportation for millions across the globe as well as offering employment opportunities for thousands. Local entrepreneurs can do their part by focusing on a certain population and creating a product or solution which that group needs.
Being able to analyze risk/risk-taking
There is a commonly held belief that entrepreneurs are high-flying cowboys (or cowgirls) due in part to the mythology around people like WeWork’s Adam Neumann or Spanx’s Sarah Blakely. High risk, venture backed tech companies reward young founders with this aggressive mindset towards risk. The reality for most entrepreneurs is far from that, as according to this study done by MIT Sloan the average age of an entrepreneur is 42 years old. By that point in life many people have families, mortgages, and other responsibilities so they are going in eyes wide open into building a business.
They understand there are risks involved and hedge those risks (ex., keeping overhead costs low, employee remote workers, etc.) so that if things don’t turn out on the time frame they anticipate (they never do) they’ll have the financial runway to continue to fight another day. Things not working out are part of the process; many times, aspects of the business such as testing a product, getting product-market fit right, and securing initial customers takes time. There is an excellent concept by serial entrepreneur and NYU Stern marketing professor Scott Galloway on what risk means, and that is being able to “sign the front, and not the back, of checks.” Taking risks is an important part of being an entrepreneur given the low success rate of most endeavors, however being able to properly analyze risk is certainly not the cowboy behavior associated with throwing caution to the wind.
Salesmanship and communication
If an entrepreneur cannot communicate the value of her offering pervasively then she will not be able to succeed. An entrepreneur/leader must be able to sell the idea of the company’s value to possible customers, convince investors to put their money into the company, and recruit the most talented employees. We often see this struggle with great technical founders who create revolutionary products yet who are uncomfortable with the process of selling. On the flipside, we see many good salespeople who are founders selling products the market does not actually need, but who are able to convince people to buy by appealing to their emotions.
When it comes down to one skill, persuasion is the most important. That does not mean you need to be a natural born salesperson to be an entrepreneur; these skills can be learned, particularly conveying your company’s value with written communication. Public speaking is another skill which can be learned. Most people are terrified by the act so those who do it confidently will stand head and shoulders above the rest. In the sales skillset arsenal, one of the most powerful tools is active listening. This is a skill many leaders do well in order to truly understand the other side’s needs and is something you can start doing today.
Versatilely of skills/delegation
No entrepreneur who ever started their own company was exempt from doing things they may have not been comfortable with such as taxes, understanding insurance, etc. It is very much acceptable to be hopefully average at many of these tasks, if one understands the basics of what it takes to run a business and can delegate said tasks to other people. We are in a period where the cost of outsourcing so much of our back office (or automating it) is as simple as signing up for a monthly payment plan.
An entrepreneur must manage everything, not do everything, and continue to be the persuasive force driving the endeavor. For solo entrepreneurs and small businesses, a suite of low-cost tools exists. For those building large companies there are whole industries of part-time freelancers and consultants to whom one can delegate tasks. Successful platforms (started by entrepreneurs) such as Upwork and Fiverr are geared towards just that. It is important to understand that many successful entrepreneurs are particularly good with one or two skills, while the rest are delegated to those around them.
The ability to fail publicly… and pick one’s self up again
This may seem harsh to many people, but in this age of constant notifications and updated LinkedIn profiles one’s peers will know if that person has embarked on a new endeavor. In addition, as promoting on social platforms is basically free it is the first step many take in building their business. Fear of failing publicly, particularly in many cultures across the world is akin to a social death sentence. In the United States, a country built on entrepreneurs and dreams, failure may be painful in the short term, but it is nonetheless necessary to embrace. Wisdom from Theodore Roosevelt’s “Man in the Arena” speech could prove to be relevant:
“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming.”
You must be the man or woman in the arena in order to succeed. This is probably one of the biggest open secrets out there, as public failure, and not personal financial ruin stops many people who aspire to execute against their dreams and build a company.
The common perception of entrepreneurship today glorifies the most high-risk venture backed endeavors, and not the unsung heroes and business owners who are shaping the economic landscape here in the United States. It is not only something positive but also vital to our country’s success that entrepreneurship is a desirable path for those looking to embark on, but it is important to understand the above concepts in order to have a chance when successfully building a business.