8 outdated notions of entrepreneurship
Over the course of the last year, I’ve interviewed a lot of people about entrepreneurship. The common thread running through all the interviews is that entrepreneurship is different than it was even five years ago. Barriers to entry are lower than ever, and if you measure success in terms of personal growth and flexible work, then the success rates for entrepreneurs is sky high.
Entrepreneurship has changed to become more appealing to a wider range of people. Here’s a list of the old and new ways of thinking when it comes to starting your own business:
Old: Entrepreneurs are born with a specific set of character traits.
New: Entrepreneurship is learned. There is no, single way to be an entrepreneur.
Old: Raise money and spend a lot of it on advertising.
New: Raise no money and spend no money on advertising.
Old: Women will get power in corporate America and change it.
New: Women are getting what they want by leaving corporate America to start their own businesses.
Old: The self-employed are happy because they are doing what they love.
New: The self-employed are happy because they have control over their work and they have a flexible lifestyle.
Old: Climb the coprorate ladder, learn the ropes, then start a company.
New: Start a company to get out of climbing the corporate ladder.
Old: Entrepreneurship is all or nothing.
New: You can test the waters by starting a company while you have a corporate job.
Old: Starting a business is risky.
New: Staying in corporate life is risky. Most businesses succeed, most jobs end.
Old: Do a lot of planning and make sure it’s going to work before you start.
New: Forget the big plan. Just try it. If it doesn’t work, you can just try again.
Here’s some link-goodness on how to start freelancing on tech stuff like programming and web design. It’s great if you have these skills, there’s barely any overhead and no special equipment needed, just the computer you already have.
What Cameron Moll learned:
180 days – http://www.cameronmoll.com/archives/000643.html
360 days – http://www.cameronmoll.com/archives/000904.html
Phil Gyford’s Guide: http://www.gyford.com/phil/writing/2006/10/26/a_beginners_guid.php
Steve Freidl’s Guide: http://www.unixwiz.net/techtips/be-consultant.html
“Just try it. If it doesn’t work, you can try again.” Indeed.
I keep trying to remember that the alternative is not, “If it doesn’t work, you can always go back to the office”! Or the grad school version: “You can always read another book.”
Every one of these points is certainly true for me. I sometimes jokingly tell people that my autobiography will be called “Birth of a Salesman” (a reference to the fact that I had to learn business skills through the school of hard knocks–coming from a family of academics.)
There is a corollary to your analysis for those in the professional services realm: you can have a lot of these things (flexibility, security, etc.) and still work for “the man”. In law firms, for example (the world where I have the most familiarilty) if you choose to build your own practice through marketing and business development, you can create something like your own business. In other words, there is still room for entrepreneurship within the four walls of your existing job.
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Stephen, I think you’re right that lawyers have a lot of entrepreneurial opportunities they can take — if they’re willing. I think a lot of people go to law school to avoid risk taking, so they are not likely to take risks after law school, either.Also, there is irony in that a large part of what makes a lawyer successful at a large firm is that he or she is is great at marketing and business development to attract new clients. But I don’t think people realize that going into law school.
I just talked to the CEO of a new company — Reputation Defender — which seems to be an interesting model for how to set up shop as a lawyer. It’s a bunch of lawyers running a startup that cleans up peoples’ profiles online.
And, while I clucking about stuff I like, I also like your blog, Stephen. Thoughtful stuff for lawyers.
-Penelope
Outstanding points. Succinct and absolutely correct. The only one that needs more definition is the advertising one. How do you get traction without spending on advertising? That’s the question I’ve been asking a lot lately on my blog.
As an example of businesses that don’t use advertising I think the most successful is the Spanish company Zara.
They rely on their storefronts to be their only source of promotion, that and word of mouth.
Penelope: I found the article extremely thought-provoking as I am currently not happy with my career (or lack of it).
However, I do find these stories of 12 year old and 18 year old whizz-kids to be somewhat of a demotivator. At 34 I feel like an old man when I read some of these stories!
thats nice, but you’re wrong about most businesses suceeding.
the majority of new small businesses fail.
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The point I am trying to make here is that the statistic you refer to hinges on the definition of success. Today, because of the wide range of types of success people can have, you could say more businesses succeed than fail. (The first time I ever heard this idea was when I was talking to Andrew Zacharakis, professor of entrepreneurship at Babson College — that’s what the link is.)
– Penelope
Staying in corporate life is definitely risky if what you really want to do has nothing to do with what you do right now. Make moves while you still can. Terry Bradshaw isn’t the quarterback for the Steelers anymore.
Very encouraging thanks!
Hi Penelope: great observations and great context with the links to other articles you wrote, I was pleased to see you mention Dun & Bradstreets stats that 76% of businesses are still operating after two-years. So many people get that stat wrong.
Entrepreneurship is learned and a survey I read stated that most businesses start with and average of $8,000 and writing a business plan will help you get a business loan. Plus you can use the process of writing a business plan as your own private professional development course.
I have added your feed to my reader. Thanks for adding to the conversation!
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Greg,
Thanks for adding these tips, and your bring an important point about bank loans. If you want to start the kind of company that will never grow to have a big exit strategy then a bank loan is a great way to go. And it’s true that a well written business plan goes a long way in the process of a bank loan. A lot of people need startup money but don’t want to put in the incredibly long hours that a venture-backed company requries. A bank loan is a great alternative.
Penelope
Awesome list! I agree with almost every one of your “new ideas” … and glad I found some of the links provided by you and your commenters.
Penelope: Cool post — it certainly is a myth that the best course of action is to climb the ladder and pay your dues and THEN hop out of the grind. The National Association for the Self-Employed reports that over time, there’s been a trend toward younger workers entering self-employment. People are realizing that it’s the years when you DON’T have a mortgage or kids or other responsibilities that it’s easiest to take a risk. Well, such as it is — starting a microbusiness can be a lot less risky than working for a big corporation that can eliminate your job with a tick of the stock price. I linked to this post from Grindhopping.com.
– Laura Vanderkam
Penelope-
Just stumbled upon your blog. What a great find. As someone who jumped off the corporate ladder and dove into a start-up, I like your “new rules.” Being part of a start up is a wonderful, wild ride with highs and lows. We’ll refer to your list often, I’m sure.
I also enjoyed the earlier post (it was link in this one) to the 9 facts to sway the on-the-fence entrepreneur.
I’ll tune in more often.
Jocelyn Ring
Old: “I’m going to learn the ropes at XYZ first, then start my own operation”
New: “I wrote version #1 this past weekend at Starbucks. Seed capital = none; Users = 100,000 and growing;”
Moral of the story: Just do it. Y-Combinator companies are continuously pumping out great products at $10,000 a pop (usually straight out of school, if even)
I like this list, but the one where you say most jobs end, and most businesses succeed, I have to say that is a huge misconception about starting your own business or solution.
I have seen many people get fired from their jobs ( and the pink slips are flying all over the place with the economy going hay-wire ), and they come up with bummy ideas, or good ideas and just not enough intelligence, resources, or a favorable market to have a good business.
Most people and businesses in general fail because of not doing what is on most of your list, but also one big thing: Seeing the whole picture.
I can say that I have single-handedly failed four businesses in the last four years. A lot of it was to do with my short-sightedness, and my inability to not stick to the same methods of attaining success.
Even the raise no money and do no advertising. Raising money and advertising are two different beasts, and the 2nd one can ruin a company if they are in a saturated market. A lot of successful website gurus give off the ” I did it with the word-of-mouth” technique, and now there is such a huge herd of people thinking they can do the same.
I won’t go into my view of advertising ( which I feel is equally important if you haven’t networked the right people, and doesn’t hurt if your competition is just living off a branded system.), but I have consulted businesses and freelancers, and find that they are all entities that contain a litany of mistakes, and the short-sighted ( and half-assed idea-makers) will all fail.
I am not trying to dampen your list, but I think even with the flailing economy, I think starting a business in this climate in insanely more riskier than a normal job. You can become more successful with the former, but the latter keeps the mediocre entrepreneurs from outright drowning.
Before I get blasted, let me give you some ideas that I have seen people float around my circle:
1. An idea for ice cream delivery. Very good, except that two other companies in my area do it already, they make very little on the venture ( they sell more than ice cream), and the demographic that is untapped is college students, who are only around in the winter and a part of the spring ( which is the best time for ice cream?)
2. An idea for a publication for musicians locally online. Most local musicians are poor, and since everyone has the “advertise nothing” mentality of building a name, no one will end up advertising on the blog. It is currently doing well by taking in donations for reviews, but that well will dry up once all the musicians in the area are reviewed.
These aren’t all the examples, but what is astonishing is that many people will follow the same path without looking around for competition, a decent strategy, or even a sensible revenue structure.
This should be learned over time, but my whole point is the learning curve kills more entrepreneurs than jobs, and you both can learn from your mistake and get another job or a better business plan. At the end of the day, its cooler to be on your own, but no way anyone can tell me creating a business is less riskier.