Tuesday, May 4, 2010

What is an Entrepreneur?

Last week (prior to Interop in Las Vegas) I was attending a four day sporting training course and became good friends with one of the attendees from San Diego.  David was a very quiet guy in his early 30's, attending business school to earn an MBA and was contemplating a career change by moving into a technology startup.  He made the comment "I could never be an entrepreneur, as I don't have any good ideas".

WRONG!

There is a huge misunderstanding that an entrepreneur is the one who has a clever idea and that idea is what makes them a billionaire.

BALDERDASH

The defining characteristic of an entrepreneur is the ability to make an idea happen.  In a world with billions of people there are actually very few unique ideas - look at the simultaneous discovery of the electric light, one of the everyday conveniences that most affects our lives. We all are taught that it was invented in 1879 by Thomas Alva Edison, but he was neither the first nor the only person trying to invent an incandescent light bulb.

Also, consider the Wright brothers - they were one of thousands of people trying to achieve manned flight.  The difference with the wright brothers and Edison is that they were able to make it happen and both built successful companies around their early achievements.

After selling Netoria to Novell, many Novell employees delighted in telling us that they had exactly the same ideas, years earlier.  Our response was "of course you did" - what we were doing was common sense and straightforward - we never claimed ownership of the ideas, but rather, we took the risk to make it happen.

Even Bill Gates at Microsoft happily admits that he bought DOS (their first massive success) for $50,000 from Tim Patterson at Seattle Computer products.  IBM wanted Microsoft to provide an operating system for their new PC - Microsoft didn't have one, but Bill Gates MADE IT HAPPEN.

That's it in a nutshell.


An entrepreneur has the ability to make an idea happen.

They are able to bring the right people together and build an organization to make an idea come to fruition.

What is it that allows an entrepreneur to execute on an idea?  I see a few core values, but they can all be summed up in one world - Courage.

Courage to believe in yourself and your ideas
Courage to take a risk
Courage to potentially fail
    I have met numerous people who profess that they would love to do a startup, but (pick your excuse):
    • I have a big mortgage to service
    • My wife/husband won't let me
    • My debt is too high
    • I'm just waiting until ....
    • My kids are too young/old
    An entrepreneur pushes all of this aside and makes it happen.  This is not to say that they are not scared - believe me, I've had many scary times, and once got down to having no money in the bank, and one potato in the house to eat (not a joke).  My wife supported the family in the early days of Netoria, and she was working seven days a week at one stage.  We've moved our kids across the world many times, and both of them say that they haven't been harmed or felt bad by moving - in fact they are grateful for the life that they have led.

    Successful Entrepreneurs minimize risk by following a set process that they know will yield rapid results - they will either succeed or fail quickly.  The most important aspect here is not to commit resources to building something until you have customers willing to buy the product, and get a Minimum Viable Product (MVP) out early and iterate.

    In the case of Netoria, I was able to write the MVP product and release online while still working as a contractor - basically working two jobs, one during the day, and another at night and on the weekends.  We had enough paying customers to know that we were onto something, but going full time meant a 90% salary reduction.  We did it anyway, and used the mantra "if we fail, we'll get jobs".

    Back to David and the training course - it took me until day two to get out of him that he was a Marine Corps pilot, and had recently returned from a tour in Iraq.  This is a guy to whom courage is no stranger, but he admitted that he was scared by the idea of leaving the Marines after 10+ years, and striking out on his own.

    Actually, the Marines have taught him exactly the skills he needed to be successful in a small business, notably:
    • Leadership
    • Organization
    • Strategy
    • Communication
    • Focus
    Startups generally don't fail because they have the wrong idea, rather the founders are unable to create and grow a productive organization e.g. I've seen a startups flail because the founders lacked an ability to effectively communicate, especially around goals and priorities.  Another was unable to focus, and felt it necessary to chase every opportunity that came their way, leading to the company being unable to achieve enough momentum in any market. I could give example after example where the idea was sound, but the execution lacking.

    The real secret is that many startups fail because they deserve to - the better entrepreneurs learn from these failures and seek to address the skills they need to win next time. David has learnt core skills in the Marines that will allow him to build a functional organization and identify what skills he needs to bring in to compliment his own.

    Of course not all entrepreneurs are ex-military, but it helps explain why some countries are hot beds of entrepreneurial activity ( e.g. Israel).  Many people learn the needed skills from sporting leadership, organized activities like the Boy/Girl Scouts, Church leadership, or even just by surrounding yourself by the right advisors.

    I have another friend who saw an opportunity in his industry and is making a tactical sling for military and law enforcement (Tacstrap).  He didn't like anything else on the market, saw the opportunity, learned how to sew, and started selling the straps.  At a recent show he sold out within two days - clearly this is a market need and he has great validation.  He now outsources production and is expanding his product line based on feedback from customers.  This is how an entrepreneur functions - identify a gap in the market and make something happen.

    Very inspiring.

    So what market gaps do you see?

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