For many, the word ‘entrepreneurship’ denotes the early-stage work that goes into startups. In truth, entrepreneurship can be practised at any stage in a company’s history. Excitement is there for the entrepreneur in a company that is already doing well. Indeed, there are many advantages to the work in the context of a mature organisation.
Examples abound of companies who came close to bankruptcy, yet managed to turn a failing business into a resounding success. Apple is one. Steve Jobs returned to Apple when it seemed the end was nigh; subsequently, it became one of the most highly valued companies in the world. There, it was moreover a clear case of a single individual possessed of a certain willpower – Jobs – making the difference. The rescue was not a simple matter.
Likewise, Nokia weathered considerable problems following the collapse of the Soviet Union. Nokia’s then product range included televisions, rubber boots and other items whose prospects were far from shiny. Pressed for a solution, the management gave rein to a minor product line in mobile telephony.
This brought fame and fortune to Nokia, raising it to the most valuable company in Europe. It was a complete surprise when Nokia, sadly, was overtaken by Apple in the field of mobile phones; the activities were acquired by good old Microsoft, who later sold them on with considerable losses.
Microsoft itself had grown through entrepreneurship, creating an operating system for IBM which was to provide the base for the world’s first personal computers. After the departure of Bill Gates, a hugely enterprising boss, Microsoft lost that innovative spark. An entrepreneur like Gates wouldn’t have cast a glance at Nokia.
IBM too, once a highly successful and pioneering computer enterprise, came adrift after its expansion and the departure of the original Watson family: the intrepid spirit was no longer there. Nokia’s ground-breaking abilities have perhaps not quite fizzled out, however. They acquired Siemens’ stake in the networks joint venture, and rumours say that promising new technology is on the cards.
Such stories of progress and how it was achieved are immensely heartening and instructive to the aspiring entrepreneur. And they need not be about the industry giants we all know. There are plenty of other narratives and biogra- phies that testify to success in business. The role models thus provided are important to our understanding of entrepreneurship, for this is a skill for which the phrase ‘learning by doing’ might well have been invented.
To learn about entrepreneurship at university, a student would have to progress through countless courses such as marketing, business law, finance, accountancy, personnel management, logistics and so forth – to mention only the technical subjects. To develop all the necessary skills in a plethora of disciplines would stretch most of us.
Yet some expertise in the area in which you hope to innovate is a necessity. I have at times been astounded at the inadequacy of some of the most successful entrepreneurs in areas where I would have thought their acumen was required. For example, Steve Jobs seems to have been argumentative and difficult to work with; his people skills, if we believe the book about him, was not exactly well developed.
Perhaps the success factor in his case was an ability to bring out the very best in those who could tolerate his style. That style might well have been his downfall; it was certainly the reason he was thrown out of Apple in the first place.
What cannot be denied is the fact that entrepreneurship, in all its forms, is a high-risk endeavour! It is all too easy to abandon the whole thing. We hear about the people who succeed; what about those entrepreneurs who didn’t make it? There are plenty of such cases. Inconceivably large fortunes, carefully amassed, are lost and never regained.
Add to that a plethora of disappointments, cases of lost face, depression, financial ruin, divorce and even suicide. Suffering can affect spouses, children, loyal employees and local communities. The crucial act of preparation for the entrepreneur is that he or she conducts realistic preliminary surveys and devise forecasts that will withstand the criticism of colleagues and mentors and win their backing. Every eventuality must be carefully gone through.
In other words, people must be completely sure that a vessel is watertight before it is launched. Every risk should be minimised and others given free rein to criticise your project, even though this act of courage may lead to hurt feelings. The criticism is not personal! Failure is acceptable only when a professional effort has been made – in which case, there is nothing to be ashamed of.
Most entrepreneurs, the world over, fear the shame of failure – the “I told you so” moment. No one wants to take unnecessary risks-yet we do, on a fairly regular basis. Crossing the lights on amber, for instance. This is why your own experience is so important, as well as having an experienced team who can navigate the difficulties that are bound to crop up.
The biggest challenge for almost any entrepreneur is capital and the funding for their idea. In early phases, many projects simply do not get off the ground because their initiators haven’t the money and can’t convince others to back their idea. In the latter case, this might be just as well; a realistic, water-tight business plan is a prerequisite.
Many entrepreneurs find, with perhaps a sprinkling of good luck, that their project takes off. They possess the ability to adapt, finding the niche to which their idea is well-suited. This can be the favourable wind that allows them to drive onwards. And this is why it is often far better to practise entrepreneurship in already established companies.
The basic organisation is there, with the income and positive cash flow. Perhaps the very thing they need is new ideas and knowledge – which is where the entrepreneur steps in. Now it is a matter of coming to an agreement with the management of this company. Most small and medium-sized firms operate in a scenario like this.
Smaller firms will appreciate the addition of good qualifications and specialist expertise; larger companies need someone with in-depth experience and detailed knowledge of the sector. In many cases, buying shares in a company, or even acquiring it, can be a way forward.
In summary, there is a great deal to be said for developing an idea in an existing company, either as a major shareholder or as its owner. Even if you don’t own 100 percent of the shares, you will be no worse off than someone who sets out without the necessary capital.
In virtually every case, much depends on having to convince others about your plans, but here the risk is significantly less because the company is already up and running. It can also be easier to begin as the company director’s right-hand man, rather than taking all the responsibility.
It seems there are plenty of ‘older’ companies in which the entrepreneurial spirit has evaporated and where the focus is on avoiding any kind of rough sea. The old products may well endure: they can in fact be the basis for funding the new adventure, which it is your pleasure to provide! Keep the antennae tuned!