For entrepreneurs, the journey from idea to IPO is paved with trophies and trenches, with thousands of occasions to fail. The creative minds of entrepreneurs weigh risk and rewards in their pursuit of solving the problem and a structured programmed help from outside fundamentally improves the odds of success.
By Samir Sathe
The history of businesses and endeavors is replete with evidence of someone seeking someone’s help to achieve something. In the case of entrepreneurs, the journey from idea to IPO is paved with trophies and trenches, with thousands of occasions to fail, and the need for structured programs of help is indeed indisputable.
An entrepreneur is born:
Entrepreneurs globally are driven not by money, power, or any superior position in the society that allures them to start with an idea.
Entrepreneurial orientation is characterized by autonomy, innovativeness, risk-taking, competitive aggressiveness, and proactivity. Contrary to popular belief, they do not become entrepreneurs since they are more risk-takers than others. Their awareness of risk and management of it is heightened than others.
These entrepreneurs have an innate drive to solve what they feel is solvable, and they are willing to take the bet on their ability to solve the problem they notice, consciously or subconsciously. Additionally, it is also a sense of sensing an opportunity that they feel urgently, which could solve the problem that may bother society somehow.
Entrepreneurs are creative as they see the world as it ought to be and not as is. The idea that germinates in their minds and hearts is a tool they use to solve the problem or the opportunity they see or sense to change the status quo, not to accept it.
The difference between them and others is that they think they own the role of solving that problem rather than referring it to someone else; they want to do it independently, so they become their masters.
Need for Structured Programs:
The need for structured programs to provide help to entrepreneurs and their enterprises cannot be downplayed. Among several reasons, three stand out:
- Is the idea good enough?: Usually, it is born but never static; it keeps changing, just like an artist improvising their idea on canvas. The entrepreneurs need help to know if their idea is good enough to solve the problem.
- Is perceived pay-off better than the opportunity source of income? Entrepreneurs take risks in their ventures only when the rewards offset the opportunity income from sources other than entrepreneurship. The trouble is that entrepreneurs do not know whether others have also thought about the same idea and if so, are as successful or unsuccessful. Success is more likely with fewer competitors pursuing the same idea. Therefore, they do not know if their pay-off is realizable or otherwise. Primarily, entrepreneurs know them, their ventures better than their competitors. The outside-in view is, therefore, critical to validate the hypothesis on one’s venture. Being blissfully unaware of whether one is lagging or leading the market does not help. In the end, spotting the problem or opportunity and ideation is not enough; it is more important to know if one is better than others in solving that problem. That would, in turn, determine the payoff equation.
- Stakes become higher with separation of capital and ownership: As stakes become higher, with owners or founders thinking about scaling up their business idea, the need to be sure, to be more circumspect, goes up. From the stage of a bootstrapped venture to seed, to venture, to other sources to series A, B, etc. and then going for funds from private or public money involves multiple stakeholders, amplifying the risk dramatically. The downside risk of failure could wipe not only the idea but the founder and entrepreneur and other funding partners too. This necessitates help to the entrepreneur coming from experts and experienced ones when needed.
In summary, as the creative minds of entrepreneurs weigh risk and rewards in their pursuit of solving the problem, the structured programmed help from outside fundamentally improves the odds of success by institutionalizing data management, filling information gaps, offerings lessons from business history, balancing the creativity with order, in managing money, materials, people and information, to achieve success.