There have always been entrepreneurs, and there always will be, though the term was first used in 1723. While we could get bogged down in semantics and detail, an entrepreneur (for our purposes) is someone who takes an idea and develops it (in theory and practice) to the point where it is either proven to be viable in the longer-term, or has been dismissed as non-viable at the present time.
In doing so, they will find a business model to exploit the idea, gather information to help them understand the opportunity offered by the idea and the nuances of the business model that they intend using, create a plan of how to reach the point where the business model is in place, gather a team of people around them to make it happen, solicit investment from a wider community, and oversee any proving processes. They will also often have a number of exit strategies planned ahead.
Not all viable ideas lead to the establishment of an enterprise. Some may be developed in-house and so become a product within an existing portfolio. Some may be acquired in their early stages by an established organisation. Some may be acquired to remove a potential competitor or to absorb their people into a different project. There are many other possibilities too.
Sadly, many entrepreneurial ventures fail to achieve their true potential. This may be the result of any combination of a myriad of possible issues. Good preparation at the outset helps. So does the strength of the network surrounding the venture, and their ability to manage risk and luck.
Lots of entrepreneurs invest a great deal of their own resources into the venture – a process often referred to as ‘bootstrapping’ and usually involving a combination of credit card debt and finance secured on a private property (mortgaging) – which is why many people suggest that ‘risk taking’ is an important quality of such people. If they aren’t successful in an acceptable time frame then they have to give up and often get a job working for someone else. This risk isn’t for everyone – and it is important to recognise that it may concern those who are financially dependent on you more than it does you. It is also not always as easy to get a job in these circumstances. That said, the absence of any other stakeholder gives the entrepreneur more freedom to develop their enterprise. Many successful companies – including Dell Computer and Facebook – started by bootstrapping.
When you have limited personal resources and the prospect of living from hand-to-mouth for several months doesn’t appeal, then you may feel you need to bring on board a business angel or family members to provide the necessary financial stability for a short period. Of course, they will have their own expectations of what they want in return and may have other skills and contacts to offer too.
Largely due to a few high profile TV series, the public have a very distorted impression of what an entrepreneur is like. According to one source, “by the time they reach their retirement years, half of all working men in the United States probably have a period of self-employment of one or more years; one in four may have engaged in self-employment for six or more years. Participating in a new business creation is a common activity among U.S. workers over the course of their careers.” Similar figures apply to Western Europe. Every other person, certainly men, will have had at least one episode of entrepreneurial experience before they retire. It is quite possible that the figure is higher for women. Many entrepreneurs are therefore driven by the need to survive rather than a passion for a new idea. Many would not automatically describe themselves as such!
The following is my own preference for describing the phases of an entrepreneurial venture;
* Idea identification and development – which may lead to the protection of the idea in some way
* Opportunity development and evaluation – exploring the practicality of reaching the growth phase
* Pre-launch preparation – leading to the launch of a pilot or prototype product/service
* Start-up – from launch to the demonstration of a viable business model
* Growth – if this is part of the entrepreneurs’ plan
* Exit – if this is part of the entrepreneurs’ plan
* Maturity – if this is part of the entrepreneurs’ plan
Breaking this process down into steps doesn’t mean that they have to take an eternity. While more traditional individuals will wish to explore and document each stage in infinite detail, there are plenty of examples of people and groups who have accelerated this considerably.
Essentially, identifying an idea – which is usually a solution to someone’s problem or need – right through to the later stages of start-up, is a series of problem solving steps. It was this that led a number of us to recognise that you could apply the well developed processes of Total Quality, Lean Manufacturing, Six Sigma and Kaizen to start-ups ,,. In this way, many teams have managed to go from idea identification to start-up in the space of a few days. It’s a popular model for student entrepreneurial groups, for in-company product development teams, and mass-participation events.
In future articles, I will try to explore each of the phases in turn. For the time being, I want to highlight one simple practical principle which pervades all of them…
YOU CANNOT BE AN ENTREPRENEUR ALONE
Entrepreneurs universally say that the skill that they have had to develop above all others is that of networking. There’s a simple reason. Our minds naturally want to believe in ourselves – they do this at every stage of the development of the venture. Unless we surround ourselves with people who are strong enough to stand up to us, and who will give us the benefit of their opinions, then we risk deluding ourselves at every step of the way.
At times this will call for individuals with specific expertise, at others it will simply call for a group of friends, or a collection of the anticipated users of the product or service. The skills of an entrepreneur in this setting range from the ability to communicate their passion, to those of facilitating conversation and listening openly to feedback.
Best wishes, Graham
 Ries, Eric (2011) The Lean Startup. Portfolio Penguin. (ISBN 0670921602)
 Wilson, Graham (2005) Six Sigma and the Product Development Cycle. Elsevier, Oxford. (ISBN 0750662182)
 Wilson, Graham (1994) On route to perfection. IFS International. (ISBN 1859070035)
Dr Graham Wilson is a behavioural scientist who has worked internationally as a consultant in organisation development, helping to create exceptional places to work. He is the author of nine management textbooks, including two that focus on the process of product development in both entrepreneurial and intrapreneurial environments. Active in the Oxfordshire business networking community, he is a Fellow of the Royal Society of Arts (FRSA) and a part-time lecturer in leadership and business at The Oxfordshire Business and Enterprise School. He is a mentor for the Oxford Launch (www.oxfordlaunch.com)