In 2016, Mark Zuckerberg- the world-renowned founder of Facebook, in response to Y Combinator president Sam Altman, delivered a powerful message as quoted: “In a world that's changing so quickly, the biggest risk you can take is not taking any risk." His statement once again confirms the irrefutable precept that risk-taking is one of the prerequisites for entrepreneurs. A daring aspiration and an effective resolution to enforce it are the common wishes that propel entrepreneurs to drive their business ventures forward and stoke up the economy.
First, regarding product risk, in-depth research into the landscape is a critical factor. In the face of the cut-throat entrepreneurial competition, it is the business owners’ responsibility to accurately and adequately identify the market demands. This assessment enables them to devise well-tailored blueprints for their idea execution, which in turn guarantee imminent recognition. According to Victor Green; a serial entrepreneur and author of “How to Succeed in Business by Really Trying”, 60 percent of new businesses fail within the first three years. The underlying reason is that many entrepreneurs walk into the field not knowing whether their products have a niche in the market or not. Entrepreneurs, hence, need to pinpoint the market gap; otherwise any hope of future success is likely to be all dashed.
Second, startup business owners are soundly advised to conduct all-inclusive research into their potential consumers. Just as a presenter has to know his or her audience before commencing a speech, a startup founder is obligated to understand his or her targeted clients before launching a business. If customers’ expectations are not properly fulfilled, or their demands have already been profusely accommodated, entrepreneurs need to reflect upon the discord between their approach and the mass’s needs. A concrete example of the merit of market research is in the case of Tender Greens, a well-known chain of restaurants in Southern California. The founder, Erik Oberholtzer and his colleagues, before opening Tender Greens, had already worked in the restaurant industry for years. Their accumulated familiarity with the sphere, particularly its clients, rendered them capable of consolidating their strategic planning, a key player in any startups’ progression. Therefore, in fairness to its magnitude, market research is viewed as a credible gauge of an entrepreneur’s chances of accomplishment.
Third, with respect to financial risk, identification of consequential milestones is indeed one of the top priorities. According to CB Insights – a platform analyzing millions of data points on startups, out of the top 20 reasons why startups fail, cash deficit ranks second, accounting for 29%. Such evidence denotes the importance of financial aids, given that a startup business is an enterprise or a company at its infancy. Prior to the establishment of any startup business, entrepreneurs should formulate detailed plans in accordance with the supposed timeframes to foresee the requisite budgets for their activities. If executed neatly, they will represent as a barometer to attract funding from potential investors and ensure a more sustainable future for the startup business.
Fourth, human resources are worth the founder’s investment. Reid Hoffman, co-founder of LinkedIn, once said “No matter how brilliant your mind or strategy is, if you are playing a solo game, you’ll always lose out to a team”. Fully aware of the obstacles that ineffective teamwork incurs, entrepreneurs, accordingly, should enhance employees’ efficiency by such measures as solution-oriented encouragement, transparency implementation and handsome incentives. Also, as underscored by Sreekanth Ravi, entrepreneurs might take the helm, but they should not take full control, particularly in the decision-making process. Concentration of power on the part of startup founders will only prompt their corporations to lurch further towards one-man rule and authoritarian that would eventually spark sharp division and disjointed fragments among the team.
Last but not least, a combination of attention to detail and adherence to the company’s overall mission is highly advisable. While meticulousness precludes potential errors and maximizes realization, strategic thinking enables entrepreneurs to establish a foresight strictly on par with their vision. Instead of overvaluing one and debasing the other, mastery at both should be prioritized. Take a look at the success story of Bill Gates, the famous entrepreneur who is known for being a Generalist (visionary) thanks to his audacious dream, yet also reputed to be a Specialist (detail-oriented) given his superintendence of every line of code in the early years of Microsoft. He has set the pattern for aspiring entrepreneurs to adopt a dichotomous and strategic approach simultaneously.
For entrepreneurs, life is about challenging the status quo and treading a different path. For entrepreneurs, there is no formula for success. In principle, risk is an ingrained part of entrepreneurship and uncertainty resolution entertains a deep-seated position in an entrepreneur’s pursuit of success. In the end, entrepreneurship rides a constant learning curve, one that requires business founders to deploy coping mechanisms best suited to their characteristics and ideologies.
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