Characteristics of an Entrepreneur

The A to Z of the characteristics of an entrepreneur
Much academic research has been conducted to define the characteristics of an entrepreneur. Like an animal in the zoo they have been studied at length by economists, anthropologists, management academics, psychologists, sociologists, historians, finance experts and organisational scholars.

Who are these creatures? Why do these persistent people never know when to give up? What drives them to take risks that ordinary folk find overwhelming? Where do they get that energy? How do they create value from nothing and most importantly … what are the characteristics that define them as an entrepreneur.

As practicing entrepreneurs, lecturers and authors of entrepreneurial books and material, Dr. Neil Flanagan and myself have developed our own view on the A to Z characteristics of an entrepreneur .

Introduction – Characteristics of an Entrepreneur (the A to Z)

Even though entrepreneurial skills can be identified, analysed and taught, we believe that the position of the entrepreneur in society is more aligned to a calling than that of a skill-set. What others may see as ‘a black sheep’ curse, the  entrepreneur sees as a gift which is quite possibility, simply an accident of birth. For example, according to the Myers-Briggs personality classifications, entrepreneurs come from fields like the ISTP ‘Craftsman’, ESTP ‘Doer’, ENTJ ‘Field Marshal’, ENTP ‘Inventor’ or the ENFP ‘Champion’ type temperament, which will all gravitate naturally to the entrepreneurial style of endeavor.

The characteristics of an entrepreneur are identified in high energy creative people, who are self-confident, have high levels of self-esteem and are futuristic in their outlook as they seek to incessantly solve problems, take risks and learn from failures (theirs and others). They thrive on change and have a natural predisposition to showing initiative and willingly accept personal responsibility for projects. They harness all available resources within their scope in order to achieve success on their own terms.

Successful entrepreneurs learn to control and discipline their gift and by combining this with a business education (both formal and from the ‘school of hard knocks’) together with a perseverance and an enjoyment of hard work driven by a righteous passion, they eventually craft their success in spite of the many preceding disappointments and set backs.

Many people have tried unsuccessfully to categorise the entrepreneur, with the Webster’s dictionary describing them as ‘one who organizes, manages, and assumes the risks of a business or enterprise’. This is a typical researchers description, written without the privileged insight into the mind and spirit of what makes an entrepreneur tick. As entrepreneurs, educators and authors, we have made an attempt in this Knol to identify the A to Z of what sets entrepreneurs apart from their other commercially engaged contemporaries.
Now the entrepreneurial skill-set would afford success in many fields of human endeavor, however, the entrepreneur is drawn to the world of business and commerce. We believe that this is because their great desire for independence, their love of a competitive environment, the business world’s reward for objectivity over subjectivity and the fact that excelling at this core societal realm makes the greatest use of their talent.


However, sharing this ‘money accumulating’ space in society are other players, with some like the scammers and value takers, whose view of success is so focused on just the money that they are quite prepared, if necessary, to sell both their integrity and their grandmother in order to have it.  As you will see, whilst both this particular acumen and the entrepreneur’s methodology share the same ‘money accumulating’ outcome, each achieves it with an entirely different mind set and approach. Entrepreneurs ‘make money’ – meaning they create value that did not previously exist rather than just accumulating money via schemes and exploiting weaknessess that take from another’s hard earned assets. Following is the ‘A to Z’ of what we believe are the unique and distinguishing aspects, skills and mind-sets of the entrepreneur – the characteristics of an entrepreneur.

Ambiguity is the “doubt about meaning: a situation in which something can be understood in more than one way and it is not clear which meaning is intended”[1] Ambiguity usually occurs at times of significant societal, environmental, economic, political, technological or organisational change. Now, whilst periods of change are quite stressful for the vast majority of people, it marks a time when entrepreneurs becomes quite invigorated. Entrepreneurs are people that have a great tolerance for ambiguity [2]. This is because entrepreneurs know that change always brings with it new opportunities and as Albert Einstein observed “In the middle of every difficulty lies opportunity” .

Furthermore, the entrepreneur has no fear of change because they bring to every new period of ambiguity, their past experience with its already highly developed coping strategies. Entrepreneurs position themselves via alliance building, work activities, engaged learning and market intelligence gathering, at the very epicentre of the change and look out through the rolling mist for an emerging opportunity and need for which they are uniquely resourced to bring a solution. Entrepreneurs do not work from the turbulent outside-in but rather from the focused inside-out, seeking to find their own unique place in an evolving and changing environment.
Entrepreneurs have both the conceptual skill to quickly sum up the changing big picture by identifing relationships and patterns in complex situations, as well as the ability to identify, take advantage of and action specific solutions to the emerging problem and need.

“I am not sure where I’m going but I still prepare myself diligently for the journey every day” PB.

B is for Beachhead strategies


Entrepreneurs have a natural understanding and appreciation of Beachhead Strategies. Beachhead strategies are the strategies that an entrepreneur uses to gain market penetration and customer acceptance for their products. Like the war metaphor they mirror, beachhead strategies aim to secure a foothold as a prerequisite to the main game. Entrepreneurs and generals alike know that the main game is too heavily guarded and fortified for a full frontal attack so they each secure a space in some easily acquired ground and then use that position to eventually strike out for the intended target.

Entrepreneurs may launch with ‘me-too’ products just to establish market acceptance and then leverage their new found position to release the high-margin innovative upgrade or add-on. They may partner with established networks, alliances and trusted brands to establish a market acceptance before striking out on their own, they may gives lots away for free, just to build momentium and demand for their product. They may spend time working in an industry or firm to gain the necessary contacts and market intellegence before the launch of their own venture.

The book Harvard Business Essentials: Strategy – Create and implement the best strategy for your business”  talks about ‘beachhead strategies’ [3] in the light of Carl von Clausewitz’s nineteenth century book on military strategy titled ‘Principels of War’. The authors purport that the lessons learned from Clausewitz’s timeless advice is to ‘aim at the sharp end of the spear where rivals are weak or uninterested in what you are doing.” The book sites many examples of this strategy including Sam Walton’s (Wal-Mart) strategy of opening in small towns that were not served by the formidable rivals like the retail giants, Sears and J.C.Penny.

Once launched, other beachhead strategies that could be adopted by the new venture include: (1) Build momentum not profit (2) Be the topic of conversation (3) Work with your champions (4) Create memorable experiences (5) Create addictions (6) Break habits and break through (7) Remove barriers (8) Linkup with the locals (9) Focus on what matters and (10) Exploit  the unforeseen opportunities.

“Every project can be broken into two halves – making a start and all the other stuff” PB

C is for Commitment

Entrepreneurial endeavour will never happen without it. Commitment is the founding drive of the entrepreneur. Not just the commitment to do – but the commitment to do and then see it through – not just the commitment to see it through but to see it through with everything on-the-line. It is a commitment to the long term, the commitment to never giving up on the dream, the commitment to getting up and starting all over again if fate so decrees.
The commitment tap root for the entrepreneur is the deep desire to live a life of significance. So, commitment for the entrepreneur stems from their belief that they are doing something worthwhile, not just for themselves and their associates but for the ‘greater good’. It is this commitment that sees them continue in the face of disappointment and set backs, when others declare it as ‘all too hard’. According to Michael Simmons, author of the book “The Student Success Manifesto” – “The difference between an interest and a commitment, is the difference between if and when. When we truly commit ourselves to success, it becomes inevitable.”

If commitment is the ‘ying’, then the whole is complete with the ‘yang’ of courage. For one can not exist without the other. That is, courageous people are committed just as committed people are courageous. Now courage is not acting without fear but is rather the ability to look beyond the things that scare you to death and see the things that inspire you to live. For more, see the knol by Sandra Walston on courage.

“More important than all the talent, all the resources and all the opportunities – is a solitary act of commitment” PB

                                                                                           
D is for Destiny
The entrepreneurial spirit is interlocked with a sence of destiny. For the entrepreneur, life is not just a process of accumulating physical assets nor just the indulgence of physical pleasure nor even the cyclical life of comfort and leisure – NO! It is making a difference, it is living a life of significance, it is embarking on a never ending journey to be the best that they can be and being the greatest influence for ‘good’ that they can.


They are driven to take control of their future, to craft their destiny and if needs be, to make sacrifices in the short term for a greater long term gain. Many entrepreneurs hold to the same view as was expressed by Winston Churchill [4], the wartime Prime Minister of Great Britain, who  said  “I felt as if I were walking with destiny, and that all my past life had been but a preparation for this hour and this trial.” It is not their business that makes entrepreneurs a champion, they chose the champion’s life from an early age and so developed their character until it eventually becomes self evident.

“Our destiny is the last thing we discover after having prepared for it all our lives” PB

E is for Effectual reasoning

Business schools and corporate enterprises the world over teach the process of managerial or strategic decision making as the basis for all business development. This process starts with clearly defined goals, that translate into specifically defined objectives that inform the strategies and then determine the tactics.
This basis for decision making is actually at the antithesis of the entrepreneurial one, that takes stock of the strategic resources, capabilities and unfair advantage within the entrepreneur’s control and then selects an emerging opportunities that these capabilities make them uniquely placed to exploit. This peculiarly ‘effectual’ entrepreneurial thinking has been researched by Saras D. Sarasvath an associate professor of the University of Virginia and is explained in her article “What makes entrepreneurs entrepreneurial”.

“To build anything, we need to progress down the hierarchical pyramid from purpose to values to goals to objectives to actions – trouble is, our own life is built the other way up.” PB

F is for Focus

Entrepreneurs know better than most, the power generated by focus. They define the mantra for their venture and in spite of the many morphs, changes and set-backs they manage to keep everyone focused on the main game. They know how to focus their own lives as well as the lives of others onto the targeted outcome and so penetrate barriers by the concentrated attack on a single point.

Their concentration at times can boarder on obsession as they stick with their passion, in spite of the many distractions, and get the job done. They narrow their living to a few core commitments protecting those at all costs but forgo the fringe and peripheral engagements that can clutter the lives of those less focused and obsessed.  These successful entrepreneurs are single minded with a eye-constantly-on-the-prize. They are not easily distracted, they rarely quit and with blinkers on they stay focused on the task at hand until it is done.

“Unfocused energy dissipates whilst focused energy, like the sun’s rays through a magnifying glass, BURNS!” PB

G is for Global
 
True entrepreneurs today are identified by their global vision. Sure, they primarily offer solutions for their immediate surrounding market but they have an eye for how that could translate into the global sphere. They recognize the power of the internet to deliver a global outcome for their enterprise and so shape their model to include it in their thinking and ‘blue sky’ possibilities. No longer happy to be tagged the SME (Small to Medium Enterprise) these start ups are better tagged GOS (Global Opportunity Startup). Yes, they start small but their ambition is to change the world – literally. Kevin Hall talks about this further in his knol Why is it important for an Entrepreneur to go Global?

“Life is a vast open plain in which your courage stakes out the boundaries”                                                                     

H is for Health
Good health is a remarkable aspect of entrepreneurial life. For many entrepreneurs this is simply because they refuse to be sick, mostly because they can’t afford to be. The entrepreneur finds no benefit in this concept as their sick-leave entitled corporate counterpart may find. We believe that good health for the entrepreneur is derived from their positive and creative mind set, their problem solving obsession and living the life of ‘doing what they love + loving what they do’ that keeps them so. They give no mind to the carcinogens of envy, anger and jealousy because they are too obsessed with pursuing their own fun, fortune and fulfilment. Not only is good health a benefit of the entrepreneurial life, but it is also a necessity, because successful entrepreneurs are often called upon to work long hours for extended periods of time. Research [5] carried out in 2006 inidcates that entrepreneurs are objectively more healthy than others.
The founder of the website Baby Boomer Entrepreneurs in the article [6] “Characteristics of Entrepreneurs”,believes that being in business for yourself is good for health. They believe that good health is a common trait of entrepreneurs primarily because their stress can be self-managed whilst the work-for-the-man stress is imposed and many times irresolvable. It is this unresolved stress that the author believes leads to poor health. The author contends that “being an entrepreneur is one of the healthiest occupations on the planet.” – We agree!
“My good health comes from a balanced diet of accepted truth whilst exercising much kindness, integrity and cheer and avoiding those deadly carcinogens of envy, anger, jealousy, revenge, pretence and double-mindedness” PB
I is for Innovation

Innovation sets the entrepreneur apart from all of their other commercially engaged contemporaries. Entrepreneurs know how to add value by making a product better and getting a target market to demonstrate their appreciation of it by parting with their money. The management theoretician Peter F. Drucker in his book “Innovation and Entrepreneurship: Practice and Principles” describes innovation as what entrepreneurs do. For him, innovation represents “the specific tool of entrepreneurs, the means by which they exploit change as an opportunity for a different business or different service … innovation involves, changing the value and satisfaction obtained from resources by the customer” (p. 19-33).

 An entrepreneur’s core competency is to find new ways to solve problems and to come up with clever, workable solutions. They are naturally curious, inquisitive, bright and highly flexible in their thinking. They constantly scan their environment for new trends and are keen to spot a potential new venture opportunity. A very interesting aspect of the entrepreneurial mind-set is that having no money is not perceived by them as a barrier to ‘making it happen’. They possess an almost naïve belief that funds are the resources that naturally follow an opportunity whose time has come and where a balanced and experienced team has been gathered to exploit it. A surprising fact for many, but that’s how it works.
“Creativity is born of a passion to do it right and to do it better” PB
J is for Just do it

The Nike mantra could so easily be the entrepreneur’s. Entrepreneurs do. Just like Richard Branson says in his book ‘Screw it, Let’s do it’. Entrepreneurs also think, plan, judge, arrange, source, allocate, choose etc … just like everyone else but doing is the priority and often times the first thing done. For the entrepreneur it is more a case of ‘ready-fire-aim’ than it is the more conventionally accepted sequence. Entrepreneurs are action takers and should not be confused with creative day dreamers and idea makers. Entrepreneurs are decision makers and are unafraid of making wrong decisions knowing that these are often necessary in finding the path to the right one.

For the entrepreneur, the decision to just do it is often to do it alone. This is what separates an entrepreneur from a highly competent corporate executive, for the latter on getting knocked back on a proposal will simply shelve the project. This is not the entrepreneurial one. They immediately look for an alternative even if that means putting 100% of their own resources behind the project to make it happen. They believe in the opportunity to the point of going it alone if needs be. ‘Making it happen’ is what the entrepreneur does.

“The suffering born of a tragic event is fate’s doing – the regretful anguish of a missed opportunity, is ours” PB
K is for Keep it real
 
Entrepreneurs are separated from creative dreamers on this point. Entrepreneurs  know how to ‘make it real’. Whilst possessing the perceptive vision that can foresee future societal paradigm shifts they can equally explain the ‘what comes next’ in making it so. Whilst this is not always part of the ‘idealist’ gift of entrepreneurship, the’ keeping it real’ soon becomes a cornerstone skill of successful entrepreneurial engagements.
Entrepreneurs have an objective approach which while empathising with people’s needs are more concerned with the performance and accomplishment. Entrepreneurs are obsessed with the ‘truth’. The what’s real. They are honest and straightforward in their dealings and expect others to do likewise. This is often an area that they lose out to other commercially engaged players whose truth is subjectively determined by the greatest personal monetary gain. Still, entrepreneurs learn the best aspects of business acumen from their commercial counterparts but apply it to their ventures without the need to sell their soul to the ‘money over all’ mantra. Get-rich-quick is not in the entrepreneur’s vocabulary.

Herb Kelleher, the entrepreneur who started Southwest Airlines, identifies this keep it real approach in entrepreneurs with what he calls [7]  “a pleasant sense of scepticism”. This mind set can challenge on points of reality without turning negative or destroying motivation. He says that he plays the passionate advocate who applies “sound judgement to focus on the truly important issues, and delivering the type of positive yet challenging scepticism needed to fully explore ideas”

“Reality is in the ‘what is’ not in the ‘what should be’” PB

L is for Leadership
 

We think it is truer to say that entrepreneurs do not chose to be leaders but that leadership chooses them. They lead because they are prepared to take responsibility in an effort to get the job done. They lead because, from their objective standpoint, they don’t trust another’s decisions too heavily skewed by political or subjective bias. They lead because others follow, and other follow because they see their own needs being fulfilled in the entrepreneurial direction and outcomes. They lead because in times of great change they are the ones still moving forward, still possessing the energy to work tirelessly to solve the confronting problems. They live in a future that others wish to be guided to.

Leadership for the entrepreneur is not about status but about function. Imbibing a healthy self esteem, they have little need for status. They are not motivated by external acknowledgement but by achieving their own internal measures of success and achievement. Armed with a generalist approach, futuristic mindset, excellent people skills, a penchant for action over words and operating often in high variance industries, the entrepreneur makes for a natural-born leader [8] .

At the very core of entrepreneurial leadership is problem solving and decision making. If there is a problem – they solve it. If there is a decision to be made – they make it.

Anita Roddick, founder of the global retail chain The Body Shop, says [9] “I want to define success by redefining it. For me it isn’t that solely mythical definition – glamour, allure, power of wealth, and the privilege from care. Any definition of success should be personal because it’s so transitory. It’s about shaping my own destiny. … Entrepreneurs have this real belief that their lives are about services and leadership.”

“Groups are lead to achievement by good leaders, supported all the way by great leaders but achieve their own success with the very best of leaders” PB
M is for Meaning
 
Entrepreneurs start enterprises because they want to make meaning. They have an inherent desire to change the world and to make the world a better place. So, for the entrepreneur, making money becomes a means to that end and not an end in itself. Richard Branson says “Above all, you want to create something you are proud of…. I can honestly say that I have never gone into any business purely to make money … I’ve had to create companies that I believe in 100%. These are companies I feel will make a genuine difference.”

Guy Kawasaki in his book ‘The Art of the Start’ [10] goes further to explain that entrepreneurs can create the meaning, which will become the driving motivational force behind their ventures, in one of three ways

  1. To increase the quality of life and to change people’s lives for the better
  2. To right a terrible wrong which is most prominent in the area of social entrepreneurship
  3. To prevent the end of something good where but for a new innovative approach something beautiful can be made to be sustainable again

“Purpose to Life? How about, never giving up, committing yourself to the continuous development of your allotted talent and being the best possible influence for good in every corner of the world in which you live” PB

N is for Never Giving Up

If the term ‘faith’ was not already an icon of religion, it would be the mantra of the entrepreneur, because most entrepreneurs would declare, “if faith is an act of believing in spite of the past or present circumstances, a hope unseen, an aspiration unrealised, a destiny unclear – then faith is my mountain”
For understanding the concept of faith is no more complex than planting sunflower seeds and with proper husbandry fully expecting that sunflowers will grow. For the entrepreneur, the seed is their life long learning, husbandry is the development of their character and the sunflowers are their enterprise, that will grow to sustainability when a fertile environment meets the appropriately timed season.

It is this faith or belief that underpins the entrepreneurial trait to never give up. For what others see as failure the entrepreneur see as either a learning, as a chance for character development or as simply a barren environment or an improper timing. So, they continue doggedly on their quest with great persistence working for the moment when their time will come. Most of all, they never give up and never quit striving for their success.

“Never give up on the hope that ‘Your time will come’.” PB
O is for Opportunistic
 
Entrepreneurs are opportunistic. In fact the synonym for the word ”opportunist” [11] is actually entrepreneur. But an important fact to make clear is that they are not opportunistic about any or every opportunity – just theirs. Sure, their natural comprehensive awareness affords them a view of the total situation and the possibilities wrapped up in every option but it does not mean they action every opportunity they see. In fact, entrepreneurs say no to hundreds of great opportunities because they only have eyes for theirs.

As Tom Caprel [12] points out in his article “The Gold, The Opportunist and The Entrepreneur”, those sad creative dreamers that do chase “every pot at the end of the rainbow, will find it devoid of gold but full of broken hearts, dreams and bank accounts … they fail as entrepreneurs because they are enticed by bright shiny objects and seduced by the next new dot bomb and become too distracted by UFOs (Unidentified Flying Opportunities)”

Having said that, entrepreneurs do develop an options portfolio and keep a constant vigilance for significant changes in the environment and/or a chanced resource discovery that may trigger a promotion from option to opportunity. Either way, they are not searching for AN opportunity (like a lottery ticket) but THEIR opportunity (the one that they are uniquely resourced to provide a solution to a need).

“If you are not centre stage in your own opportunity then you are just a bit player in someone else’s.” PB

                                                                                         

People and the Entrepreneur

P is for People

Although it is a common trait amongst entrepreneurs is that they like to be the boss, it does not mean that they are elitist. They need to be in charge for practical reasons and is not a status trip. In fact when in charge, entrepreneurs typically employ an egalitarian style of management. Entrepreneurs are honourable people who would do business on a handshake or promise (if they could) and tend to form strong associations with others who share the same ethos.

Their temperament package radiates a certain charm that makes for binding relationships, which inspires cooperation, confidence and loyalty. It is this genuine relationship that entrepreneurs form with their financiers, partners, vendors, sub-contractors, professionals and employees that supercharges their organisations and though small in numbers is big in stature and capable of taking on the giants in any industry. Being mostly generalists, entrepreneurs have no problems employing people smarter than themselves. In fact, it is almost a prerequisite to their success that they do.

Of all the rare, immutable and un-substitutable resources an entrepreneur can secure to build their enterprise, it is the people resources that is the most valuable. This is why every person an entrepreneur meets is seen as a potential resource or teacher. Entrepreneurs want you to teach them what they don’t know and if they perceive you know too much, then they want to employ you. Right then!

“If you want to achieve something individually great, then don’t attempt it on your own” PB
Q is for Quirky
 

Entrepreneurs revel in the quirky. They add it to their products, you will find it in the unusual parts of their assortment, your will see it in their marketing and it is the endearing part of their service. It is a form of creative, almost cheeky humor, that can only be produced by a person with boundless self-esteem, who is confident in their offer and who understands that it is this very quirkiness that creates the fond and lasting memory in the mind of their customers.

Seth Godin in his book “Purple Cow: Transform Your Business by Being Remarkable” states that in business, being the same is as good as being invisible. The world is full of brown cows and to survive you need to stand out from the herd – you need to create the Purple Cow. Entrepreneurs know this fact all too well.
You may be interested to know that the term ‘quirky entrepreneur’ has been used extensively by media when describing entrepreneurs. It was used by the Los Angeles Times when describing the founder of the candy empire Forrest Mars Sr., by Newsweek to describe Mike Bloomberg, it was used by Howard Kurtz, Roger L. Simon the in their book Straight Man: Inside Wall Street’s Game of Money, Media, and Manipulation to describe the founder of Amazon.com Jeff Bezos, by the Mail on Sunday to describe the Body Shop founder Anita Roddick, by the International Herald Tribune to describe Richard Branson, and by Jeff Cohen in his book Cable News Confidential to describe the founder of CNN, Ted Turner. So it seems, if you’re an entrepreneur … its OK to be quirky.

“The same’ is never recorded – ‘the quirky’  never forgotten” PB

R is for Risk
 
Most people think that the choices in life are to take risks or to not take risk. This is not how entrepreneurs weight up the risks of living. What entrepreneurs see is that risk is unavoidable, but you do get a choice in life at to which risk you wish to take – to risk a failure that leads to the loss of replaceable assets or to risk a failure that leads to the loss of one’s life. The entrepreneur chooses the former because they perceive that a life is lost if it is lived without significance, lived without meaning and lived without seeking to be the best they can be. Entrepreneurs are fearful of a so called ‘risk-free’ life that ends in the anguished regret of what might have been, of what could have been, of what should have been. Compared to this life failure, an entrepreneur perceives their risk to be actually quite small. For the entrepreneur, life is not just to survive, for everyone untimately fails at that, NO! It is to live with purpose. This thought, truly eats at the entrepreneur’s soul: “if I don’t take a chance I will never know what I could have become”.

There are hundreds of jobs, sporting feats and activities that we witness every week that we believe are ‘too-risky’ for us, yet ask the expert performing them and they will hardly even acknowledge any risk at all. Their natural gift, training and experience all make it so. So too with entrepreneurs. To the untrained eye entrepreneurs take risks, to the entrepreneur they are simply taking the next challenge after carefully evaluating the risk and deciding to do it based on their ability to accommodate it. Anyway, the entrepreneur places little faith in assets for security, preferring by far their coping ability regardless of the threat.

Just as the concept of risk and reward is fundamental to the finance and investment industry so it is with entrepreneurial living. The entrepreneur is not satisfied with the mediocre life returns of pleasure and comfort preferring instead to strike out for a life of fulfilment, joy, meaning and destiny. These rewards are so highly valued by the entrepreneur that they will risk everything they own to have them. Entrepreneurs then simply invest their lives to attain the highest return and willingly accept the risks that this involves.

“Many a soul is lost to the risk–free life of irrelevance” PB

S is for Subjective Margins

The art of the entrepreneurial offer is to not fight with competitors on the battlefield of price, but rather to shift the focus to the satisfaction of customer needs. They do this by leveraging subjective or emotive margins. Subjective margins are the margins that entrepreneurs achieve because they know how to perfectly position their offer in an emotive arena where price for the customer is not the issue.

The real issue for the customer is the satisfaction of their emotive need and they will willingly pay a price that has little relationship to the accounting costs of production or the market price of another similar but poorly positioned good or service. The following represent areas in which customers will willingly pay a premium to have their subjective/emotive needs satisfied. (Urgency, Self Esteem, Pain Relief, Fear Mitigation, Scarcity, Unique name, High Emotional Experience, Vital Small Cog, High Sentimental Value or Indulgence)

“The problem with a life ruled by money is that it only sees the price – never the value” PB

T is for Timing

For entrepreneurs, timing is everything. Experienced entrepreneurs know that many a successful venture happened because they launched it in the right place at the right time. There often appears to be a large element of luck in these ventures but what is unseen is the preparation time that took place prior to the launch. The gathering of market intelligence, their positioning in the emerging field, the securing of the people resource, the look-out for the environmental trigger, their trial & error a few times to get it right, the organising of their personal life and the thinking through of the business model which all laid the ground work prior to the successful launch. Or as the 1st century Roman philosopher Seneca said “Luck is what happens when preparation meets opportunity.”

“Success is all about timing – being there at the moment when it mattered as well as the 99 times when it didn’t” PB

U is for Under the radar
 
Scratch the surface of any true entrepreneurs and you will find a revolutionary on a mission to change the world. However, entrepreneurs soon learn that they achieve this best by flying ‘under the radar’. That is, securing their entry into markets with minimal notice or perceived threat ensuring the least negative reaction from competitors, suppliers, partners or customers. They often are the wolf in sheep’s clothing appearing to be like everyone else until the timing and strength is there to reveal all. Entrepreneurs know that the status-quo in any field is a powerful force and it is programmed to quickly and ruthlessly crush any sign of difference or deviation from the mean.
So, the entrepreneur, instead of full frontal attack will appease, cajole and avoid ruffling feathers until it is too late for others to counter respond i.e. by the time the entrepreneurs full hand is revealed it is too late for others to mount a challenge. Entrepreneurs will arrive at a sustainable position almost un-noticed by flying ‘under the radar’ and will conquer more by stealth than by force. Arnold Kling in his book “Under the Radar: Starting Your Internet Business without Venture Capital” outlines the benefits that this strategy delivers when starting a new internet business.

To a large extent even this Google Knol project is being launched ‘under the radar’. There is very little self promotion being done by Google and very little responce from them when they are attacked. Google’s knol project is quietly adding features to improve the product and gaining traction in the market almost unnoticed by rivals that have too quickly placed it in the non-relevant and non-threat box. Whilst not privy to the Google mind, it seems that there is much more in store for the Knol project that when fully released and promoted it will be too late for competitors to respond.

“Entrepreneur – Revolutionary inside”
V is for Value-add
 
Unlike their other commercially engaged counterparts, the entrepreneur’s primary goal in their commercial endeavour is to add value. As President Ángel Cabrera, Ph.D [13] declared to an audience of entrepreneurs in Phoenix in October 2008 concerning the ‘other’ approach “Their focus is on extracting value, not creating value,” Cabrera said. “If they can pay their employees less or treat them worse to improve the bottom line, then that’s what they do.” He went on to then say “You (entrepreneurs) are obsessed with creating value.”

As discussed in the introduction, both approaches outlined by Cabrera make money, but each approach is adopted with a quite different mind-set. The entrepreneur makes their money by taking a slice of the added value that they create for their customers via their innovative products and services. To take Cabrera’s words further – “You (entrepreneurs) are not looking at your business venture as a way of extracting value away from others”. Unlike other operators in the field of commerce, entrepreneurs are not in the business of ripping people off.

“There is a vast difference between exploiting an opportunity and exploiting a weakness. The former adds the latter takes” PB

W is for Work & Play
 
The global entrepreneur Richard Branson said in a 2003 interview with Fortune “I don’t think of work as work and play as play. It’s all living.” This is typical of the entrepreneurial mind-set and quite possibility contributes to their remarkable good health. It is the entrepreneurial promise ‘to do what you love and to love what you do’ so it is near impossible for the entrepreneur to tell when they are working and when they are having fun. For them, this sort of hair splitting definition, the entrepreneur leaves for others to identify.
This enjoyment of what they do leads to another typical response from entrepreneurs – retire from what? Entrepreneurs have no plans to retire in fact have great trouble understanding how you retire from living. Sure, they sell their enterprises from time to time but it is not long before they are back into the thick of things with a new project or idea. The sales pitch of the ‘get-rich-schemers’ to retire early, is definitely not directed at the entrepreneur. Research [5] inidcates that entrepreneurs are three times more likely to indicate that they never intend to retire.

Perhaps the closest entrepreneurs could get to anything resembling this would be the entrepreneurial concept of returnment. That is, to return all those favours and benefits that have been bestowed on the entrepreneur throughout their life, back to a new generation of start-ups by way of angel investing, mentoring and coaching.

“What a fulfilled life it is where work and play mesh so indistinguishably. Where both are pursued with a spirit of excellence, displaying at all times an unconquerable passion and imbibing an endless duty to love. Where every act is an expression of a deep sacred belief, the totality of which is acknowledged by others as the ‘mastery of life’.”[14]

X is for X Factor
 
When Herb Kelleher of Southwest Airlines was asked [15] about the characteristics of the successful entrepreneur that could not be learned he detailed “1. a reasonable intelligence, 2. good health, 3. optimistic disposition, 4. lengthy attention span, 5. perseverance, and 6. a love of people.” One could summarise these into three basic points of intelligence, health and attitude of which Herb declared attitude of paramount importance or the X factor that must be an inborn characteristic of the entrepreneur. He carries this simple maxim all the way through to the hiring process: “You hire attitude, everything else can be trained”

For Anita Roddick [16] the X factor was obsession and she explains it in this way “Dysfunction is the essence of entrepreneurship. I’ve had dozens of requests from places like Harvard and Yale to talk about the subject. It makes me laugh that ivy leaguers are so keen to “learn” how to be entrepreneurs, because I’m not convinced it’s a subject you can teach. I mean, how do you teach obsession? Because it is obsession that drives the entrepreneur’s commitment to a vision of something new.” She goes on to say that “Potential entrepreneurs are outsiders. They are people who imagine things as they might be, not as they are, and have the drive to change the world around them. Those are skills that business schools do not teach.” She believes that the X factor is passion and imagination.

Whatever the X factor might be (attitude, passion, obsession, self confidence, enthusiasm) most entrepreneurs believe there is one. Just like any field of human endeavour some people have it – some don’t. For us, entrepreneurship is a destiny. A calling. A sense that this is what we were meant to do. It is the one role that that both creates the greatest good for others whilst still fulfilling the aspirations of the soul.

“The smugly talented know they can do better than those less gifted achievers – but they never will.” PB

Y is for You

 
Entrepreneurs are people so totally engaged with the outside world that they can tend to pay too little attention to their one greatest asset – themselves. It is paramount for the entrepreneur to understand and accept what makes them tick. They need to accept that to all others they will be ‘the black sheep’. This is normal. They need to understand that whilst others climbed high up the pole of their specialised careers, theirs will be a career of the generalist building more a mound of skills that allowed for easy movement across many fields and skills. They need to accept that whilst not always completing higher education studies they will become masters of their craft, honed in the world of the practical hands-on.
Entrepreneurs need to know their place. They need to understand when they should lead and when they should step back to allow other skill sets to manage the growing venture.

Now whilst not part of their natural gift, entrepreneurs need to educate themselves on the other half of business success – business acumen. The cheapest way to learn these skills is through formal education, however most entrepreneurs choose the far more expensive option from the ‘University of Hard Knocks’. Which ever way the learning takes place, these are lessons that must be learned if the entrepreneur is ever going to create a successful and sustainable enterprise.

Another unusual characteristic of the entrepreneur is the concept of self-branding. They share this attribute with the show ponies and the egotists but again for different reasons. Entrepreneurs know that they will be at the epicentre of any new venture and so it is vital that they have a reputation that inspires trust, that demonstrates courage to act alone if needs be, that copes effectively with the unforseen and that can create the future. So, they have no hesitation in placing themselves at the forefront of any option to volunteer, any option for publicity or any option that allows them to demonstrate or build their reputation. It is the ‘hit they take for the team’ even though the team has not yet been formed.

Anita Roddick again “We entrepreneurs are loners, vagabonds, troublemakers. Success is simply a matter of finding and surrounding ourselves with those open-minded and clever souls who can take our insanity and put it to good use.”

“It is a condition of living that we are compelled to withdraw 24hours of time each day from our account at the Bank of Existence. What will you do with that time? Squander it on the fleeting gratification of your senses? Will your use it to acquire those decaying and life-absorbing assets? Will you flitter it on the winds of nothing to do or will you invest it in the incorruptible legacy for a fellow traveler’s betterment.” PB

Z is for Zest

Zest or passion is in the life-blood of the entrepreneur.  As Anita Roddick explains “An entrepreneur is very enthusiastic and dances to a different drum beat, but never considers success as something which equates to personally wealth. That never enters our consciousness. We have incredible enthusiasm, and I think part of the success of any entrepreneur is energy. If one has that energy one can create a wonderful enthusiasm.” This enthusiasm is infectious and plays a key part in the creation of the founding team and the maintenance of its mantra. It is a characteristic of the entrepreneur that their locus of control is within them and is least affected by the changing pressures of the external environment. The entrepreneur’s zest comes from their belief that they can create and control their future and not simply live a life at the mercy of either either fate or providence.

“The zest of life actually comes from having to make a choice, in a state of frailty and in a world of uncertainty whilst being fully conscious of the painful consequences of getting it all so wrong.” PB

                                                                                                                                                                  
See more than 300 eTopics on business management, authored by Dr Neil Flanagan. www.management2go.com
                                                                                                                                                                 
Photo Sources

Image #1 by Army.mil uploaded 2/12/08 Creative Commons – Attributaion

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Image #8 by by monkeysox – uploaded 27 January – CC Attribution-No Derivative Works 2.0 Generic

About the author

3qqabyzrn9hq0-qx077n-peter001These days Peter Baskerville likes to call himself a New Venture Architect. This is because he is keen to impart the knowledge and insights he has gained from establishing over 13 new ventures (involving over 30 outlets) to help budding entrepreneurs of today design and build sucessful new ventures.
As a teacher, mentor and coach to hundreds of ‘real world’ new venture intenders, Peter now wishes to share his expertise with the millions of intenders scattered across the globe who have been brought together via the medium of the internet. He has contributed many works on entrepreneurship here on Knol and on other content publishing platforms. He fully intends to continue expanding this body of work as well as provide value-added resources via his website, designed to help people start and succeed in their own business.



One response

  1. What is the best definition of being an entrepreneur?…

    Entrepreneurs have been studied at length by economists, anthropologists, management academics, psychologists, sociologists, historians, finance experts and organisational scholars, but they are yet to reach consensus on a definition of an entrepreneur…

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