The Entrepreneurs DilemmaScene settingPeople often ask me how did I become an entrepreneur? The answer lies in the first 23 years of mycareer working for Multi-nationals and their subsidiaries. An important role for a key employee inthese types of organisations is to be continually adding value for the organisation as a whole, and forthe specific business unit you work for. This means you have to be what is called an intrapreneur(An internal entrepreneur). Ten years ago I jumped out of the corporate world to become anentrepreneur to build businesses that I have an equity stake in. My motivations were both self-realization and monetary in doing this. Over the last 11 years I have successfully created and beeninvolved with a small number of technology companies as a founder and CEO which have hadsuccessful exits. I have also been involved with as an added value investor in several others, some ofwhich did not succeed as intended. It has been a rewarding roller coaster of highs and lows, withgreat learning. Over my career I have been an advisor, coach, mentor, trainer, director etc. to manyother organisations, start up, growth and turn around and have worked with private and stateagencies that promote enterprise and economic development. After my most recent exit and lock-inperiod I decided to jump back into the entrepreneurial world again and today I have activeinvolvement with 4 technology companies and continue to be actively involved with promoting andsupporting other new ventures, through several channels such as Enterprise Ireland as an exampleand IBM Smart-Camp as another. All this is by way of scene setting for introducing “Theentrepreneur’s dilemma”.“The entrepreneurs Dilemma”The key hypothesis is; that it’s difficult for entrepreneurs to know: What is the right thing to bedoing? , what is the right way to do it? at a particular point in the entrepreneurial cycle. A criticalsuccess factor for a start-up organisation or for that matter an evolving and maturing business is,that in the context of their business and effective use of limited available resources is, that they arealways doing the right thing, the right way at the right time. We all know that start up failure ratesare extremely high, even the professional investors such as venture capitalists build in this situationinto their business models, expecting many investments to fail to deliver on expectations, but asmall number to be very successful. There is a good study on failures carried out study by HarvardBusiness school which quantifies the statistics.There is a vast array of tools and information available to entrepreneurs, but how do they knowwhere to access these and which are the right ones to use at any point in the entrepreneurial cycle.At the end of the day it comes down to the individual entrepreneur’s knowledge and experience.We need to facilitate entrepreneurs from all different back grounds to be successful. If like me youserved your apprenticeship in the Multi-nationals and completed several 3rd level qualifications youwill have seen many of the tools, strategies and approaches and used some of them as a small fish ina large pond. This partly equips you for starting a business as an entrepreneur, but it is by no meansadequate as small, resource constrained, innovative start-ups with novel product/services ideashave many different challenges in getting new propositions into the market place. On the other endof the spectrum you have both new and successful entrepreneurs who have had a different lifeexperience, perhaps never worked for a large organisation, maybe always self –employed, perhaps
have limited formal education, these have just as much chance of creating a successfulentrepreneurial venture. For entrepreneurs coming from this end of the spectrum they also havegaps in their knowledge and experience all be it they differ from my own. There is a spectrum orcontinuum of knowledge and experience that entrepreneurs come from and up to now no guide orroadmap to help them focus on the right things, the right way, at the right time.Can you elaborate and help me understand this dilemma?Ok, The best way is to think firstly of the entrepreneurial cycle, or more accurately the business cyclefrom the idea to achieving success. I am outlining in very general terms a likely sequence leading tosuccess. Remember there will be set backs along the way. 1. Most businesses start with the idea or opportunity 2. Some jump in at this stage and design/sell the product/service, most talk with contacts and do a bit of research. 3. Once stage 2 is completed most entrepreneurs invest some time and/or cash to design and build the product or service and show it around. 4. They may get lucky and sell one or more of the first version, often they sell nothing or give it away. 5. Assuming there is a bit of traction, and the related learning, they may further refine the product or service and find more similarly profiled customers. 6. Once there is some momentum they start to look at how they scale the business, how they will fund it, and often reach a level that they need more formality and more over-heads. 7. All going well, the product/service line is growing with customers and revenues, as well as costs, expansion to new markets, new related products etc. 8. Some will now be at a stage where diversification and growth by non-organic means is the order of the day, some will eventually go into decline because of complacency, or a shift in the market, technology or performance.At every stage, entrepreneurs, leaders and managers have to consider and take some level of actionon each of the following functions. The proposition R&D Marketing Sales Operations Strategy Management & Governance Finance Staff Suppliers Partners Society Etc.
The dilemma is what part of the functions above are important when you consider the context ofthe business and the stage of development above. For example How important is the Marketingstrategy early in the development of the product and initial customers.ConclusionsEntrepreneurs and leaders must make choices at every stage of the cycle as to what is important atthat stage of the business evolution. They can try do everything, and perhaps do several badly orburn out, they can select what to focus on based on their experience, but what if they select thewrong things or the wrong way, they can use the tools and techniques available but which ones. Thebottom line is that regardless of experience or knowledge there is no right answer, as each scenariois different, the risks of failure are increased as a result.(The Business Advantage Model)™ - (BAM™ )was developed to help entrepreneurs and leaders makebetter decisions to do the right thing, the right way at the right time, thus reducing the risks andincreasing the potential for sustainable success in the business. The BAM acts as a guide androadmap for entrepreneurs and leaders. For more information on BAM, The Entrepreneurs Masterclass Series or to Register for Module 1 of the Entrepreneurs Master Class click links.