Carol Roth 1 is convinced that most people are not right for entrepreneurship. Some people try to become entrepreneurs because they want to be the boss; but they end up working for more people. They end up working for investors, lenders, landlords, customers, suppliers, and even their employees. Some people think that if they start a business involving their favorite hobby, they will have more time to spend working on the hobby that they love. The reality is that they end up spending less time on the hobby and more time running the business. Baking cakes is different than running a bakery.
The business of the entrepreneur is primarily about designing and maintaining business systems. 2 As illustrated in the project management chapter, there are at least 30 main activities and systems that have to be attended before launch date and very few involve cake baking and decorating. After one of my students filled out the Ten–Ten business template, she told me that her life-long desire to own a florist shop was gone. The two templates can be filled out very quickly, but they also highlight the numerous details that eventually need to be dealt with before launching the business. Filling out the simple templates and preparing an executive summary is a good check on reality.
Roth’s other contention is that most of the great ideas for businesses are already taken. And she argues that the value of a business is not in the idea, but in the execution. We agree, in part. The best execution of an outdated idea can surely lead to failure. Where are the old icons of the music industry, how about telegraphy, where are desktop PCs headed, and what about those old persimmon woods? The key for survival is product differentiation coupled with improving execution and driving down costs. The key is the dynamic tension created from developing Midas and Hermes versions of products and services.
Ideas for products do not seem to be diminishing, but rather increasing. Compared with the approximately 49,000 patents granted in 1963, there were over 244,000 patents granted in 2010. 3 Knowledge development and the ensuing products and services are the result of the cumulative progression of ideas over years, decades, and even centuries. 4 The foundational knowledge for a simple digital voice recorder are the results of discovering the properties of metals, research in physics on ferromagnetic theory, and the development of electronics components such as vacuum tubes in the late 18th century and earlier. The world of today is truly built on the shoulders of ancient ideas.
I am constantly amazed at the diversity of products and services students develop for term projects in my class. They include a robotic surgical simulator, a 100-amp cable dispenser, an online animated user manual development system, an organic chemistry tutorial system, a penny auctioning site where anyone could offer a penny auction, various smartphone apps, numerous shopping assistance applications, a franchise system for asphalt sealing, generic mentoring software, home, pet and child monitoring systems, home improvement and emergency repair services, a variety of health monitoring and health-related products, adult pajamas with footies, an atomic scale measuring device, different types of cloud-computing systems, and many others. Because of my ongoing interest in global positioning system technology, there have been several products related to bus scheduling, tracking assets, and social networking. I am still amused by the Smell-Me-Up-Clock that produces smells, such as coffee brewing, to wake a person up. I am also bemused by the Rent-a-Friend. It was funny and provided a poignant commentary on contemporary society.
Several projects have been or are in the process of being patented, including a technology that isolates atoms and molecules and then measures the effect of electrical and mechanical stimulus on atoms and molecules. Then there was the hockey puck that had radio-frequency identification (RFID) chips embedded in the puck that could be used to determine when a gala was scored. The prototype for the puck was developed using 3D printing technology. Another interesting product was the improved lightning arrestor device used by utility companies that would last longer and perform better.
The point is that there are many new opportunities for new businesses, but there are also many good ideas for improving existing companies. Many of the projects developed in the class are related to improving existing businesses and improving existing versions of products and services. Monopolistic competition is relentless. If a business does not make little and sometimes big tweaks to products and services, it will become a business footnote. The ideas and concepts presented in this book will not guarantee success, but they can be used to confront and sometimes even ignore the competition. Ignoring the competition is achieved by focusing on the development of new opportunities rather than meeting the checklists of product features touted by the competition. A definition of entrepreneurship was presented in the beginning of the book:
Entrepreneurship is a risky endeavor involving the continuous creation and re-creation of a new enterprise, a new product, or a new idea.
The traditional concept of the entrepreneur is that the entrepreneur starting the business absorbs most of the risk. In today’s climate, however, businesses need to be entrepreneurial. Businesses must absorb and deal with the risk of product development and enhancement. In today’s climate, the individual has to be entrepreneurial in terms of their career path. Knowledge and skills have transitory value that can be in demand today and out next year. Differentiation of the individual can only be achieved by continuous leaning-about and learning-by-doing.
As noted in the beginning of the book, entrepreneurship is currently being viewed as a set of skills that are part of a rational and logical process for identifying and creating opportunities. The skills have been likened to learning how to read, write, calculate, and conduct scientific reasoning. Entrepreneurship requires insight and knowledge of problem solving, strategic planning, new product development, project management, and portfolio management among others. Participation in entrepreneurial activity leads to the creation of opportunities for individuals, businesses, and countries.
Entrepreneurs are made through life experiences and a willingness to work hard and become totally immersed in a goal. Being an entrepreneur is the goal of the entrepreneur. The research on the personal and demographic factors contributing to the entrepreneurial activity supports the idea that the entrepreneur cannot be identified by any single demographic characteristic. There are demographic tendencies, but in reality entrepreneurs can be young or old, male or female, and from wealthy or disadvantaged backgrounds. The key is participation and self-motivation and, most importantly, continuous learning and adaptation. It is hoped that this book will put you on the right path to becoming an entrepreneur on your own or as an intrapreneur in an existing organization.