The Meaning of Entrepreneurship - 06/03/2009

This past semester I acted as a student eMentor for a business entrepreneurship class at the University of New Hampshire. The name of the class was “The Meaning of Entrepreneurship.” This role led me to put considerable thought into this particular topic and I had an opportunity to explain my perspective on this topic to the class. As a change of pace, I wanted to share my thoughts here as it is clearly relevant to anyone starting a new venture.

Many people think of entrepreneurship within the typical stereotype or pattern of having an idea and building a successful business out of it. This pattern assumes entrepreneurship is about success. In reality entrepreneurship is about failure at least as much as success – at least it is for most people. And although ideas are important, ideas do not really strike me at the centerpiece of entrepreneurship either. The fact is ideas are a dime a dozen. Most ideas are meaningless without execution. Founders I meet with are always worried somebody will steal their “idea” but in reality this just isn’t practical. The idea is just a small part. So this definition does not work for me.

In my mind, the meaning of entrepreneurship is about four key concepts they don’t teach in college.

Action. Entrepreneurship requires constant action. When you take a class, or work at a regular job, generally people tell you what you need to do and when. Your job is to carry out those instructions in the most competent manner possible, until 5 or 6pm, then go home. The only exception to this rule might be the few most senior executives of a larger company. When you run a start-up business, nobody tells you what you need to do or when to do it. You must constantly be taking action to get a customer, develop a relationship, build your product, or pay your bills. Which action to take next, and how much effort or money to expend on it, whether you think you can go home now or not, it is all up to you. If you do not take action, you fail. If you take the wrong actions, you fail. The requirement for constant action with the real threat of failure looming over your head is a hallmark of entrepreneurship. Fortunately, most people work actually better under pressure.

Risk. Clearly, starting businesses is about risk, and especially the risk/reward trade-off that comes with creating something of value. But the risk I think about is not just the glamorous kind that comes with making a big bet and taking a shot at a payoff. It is about the everyday risk, like not knowing how you will pay you team next week, or if months of development will be wasted because user reject your product - and you have to lay-off half your staff. It is about walking into a big corporate client to negotiate a deal that will make or break your company, and having absolutely no idea what you are doing or how you will fulfill the promises you are making. It is about the real risk of going out of business, screwing up your customer’s business, letting your partners down, or losing your parents money. Risk, and the fear that always follows it, goes hand in hand with entrepreneurship.

Emotion. The emotional ups and downs of entrepreneurship are extreme. Start-up companies are a magnifier for emotion. They pack incredible highs and incredible lows into a very small window of time. Your emotions change from week to week, and even from day to day. One day you have an incredible breakthrough with your product, and prove you can do something you thought was impossible. Pop the champagne and call the investors. The next day you discover your great product idea has already been built by three well-funded venture backed companies, and months of work are wasted… and more importantly, precious time and capital has been used up. When we were trying to sell our first start-up, we knew that we would either a) be bankrupt and out of work in less than 30 days, or b) be the best return for our investors in years. We sold the company. But we couldn’t fly home for two more days because our discounted tickets required a Saturday night stay over.

Commitment. To see something through that is difficult, emotionally taxing, with huge stakes requires a high degree of commitment. When the chips are down, you need to put a smile on your face and move on. Don’t let the team sense your fear. Convince your customers you have the best solutions and then commit to see it through to the end and ensure they are delighted (or at least satisfied). Be committed to your team members, do everything you can for them and don’t jerk them around. Earn their loyalty by setting the right example. Respect them, don’t use them. Don’t hire somebody who you might have to lay-off in a few months - instead work a little harder.  Be prudent with your in-laws’ retirement fund, and if things go south, ensure you can live with yourself knowing you did every possible thing you could to make good on their investment. When it does blow up, commit to see it through, professionally, responsibly, all the way to closure for your employees, your customers, and your investors. And if you are fortunate enough to sell your company, commit fully to the buyer to see it through and make it a success.

Entrepreneurship is about taking a path others are not taking and not knowing what is around the corner. Entrepreneurship can sometimes mean loneliness, especially for the CEO who cannot share his fears and the true reality with those that work for him. But it is also about not being scared by all the things you don’t know, it about trying to create something when you don’t know if it is possible. It is definitely about making it up as you go along. And it is absolutely about intensity, passion, and fortunately, fun. The most rewarding things in life are never the easiest, and that is definitely what entrepreneurship is about.

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