There is no life, no life without its hunger
Each restless heart beats so imperfectlyYou Raise Me Up by Celtic Woman
I can spot a true entrepreneur from a mile away. I can see the hunger. The desire. That certain something that pushes a soul to do more, to be more, to seek more.
My father was an entrepreneur. He was not a man with PhDs hanging off his wall or someone who preached the importance of education as the gateway to financial success. His formal education was limited, but he remains the most learned man I have ever known. He’s retired now, but he still works. He spends his time grooming future entrepreneurs. My father is the reason why I became an angel investor.
Entrepreneurship is the adventure of a lifetime. Nothing else comes close.
There are many paths that lead to the same destination. Every entrepreneur has their own ‘recipe for success’. But one thing all successful entrepreneurs do is create and harness never-before-seen opportunities for economic growth. Entrepreneurship is not rocket science. The most intelligent, the most educated, the most-likely-to-succeed people that you knew in school are not the ones that end up succeeding as entrepreneurs.
So what happened? Is the school system rigged?
Rich Dad, Poor Dad author Robert Kiyosaki is known for criticising the school system for churning out workers who have been conned into the rat race. In my opinion, it’s not so much the rat race that is the problem; but that the entrepreneur is born with a hunger to be, to do and to create.
If, for some reason, an individual were to find school unnecessary, that person will simply leave. Many entrepreneurs do drop out. We can’t simply blame the school system for failing to ‘churn out’ entrepreneurs or employees with even an iota of financial acumen.
As an investor, I am not an entrepreneur. I am a member of the entrepreneur’s team. My first priority is the well-being of the entrepreneur. Without the entrepreneur, there is no business. My second priority is the well-being of the venture as an enterprise. I have no time or patience for fools who show signs of indecision, a lack of bravado or lacklustre commitment to a goal.
We are all unequivocally here to create something from nothing. Much like artists, entrepreneurs are a creative force. Unlike artists, entrepreneurs are also enterprise leaders and must keep their eye on the bottom line. Their job is to create wealth that quite simply did not exist prior to their arrival on the economic scene.
The Economic Cycle
Robust, recession, boom, bust, stagnant…
These are some of the words that we use to describe ‘the economy’. But what is the economy? How does it work? Who are the players?
If I were to put it simply (and slightly crudely), the economy consists of three things:
- Production (of goods and services)
- Consumption (of goods and services)
- Supply of money
If we were to dig into it a little deeper, we would realise that the entire concept of ‘economy’ comes down to the management of available resources. These resources include: land, capital, labour and physical resources.
An entrepreneur’s success in his or her chosen field is not about how amazing their idea is, how excellent they are at innovation or even how much their team loves them. An entrepreneur’s success comes down to the management of a multitude of resources to create new opportunities.
An entrepreneur must always be prepared to make unpopular decisions for the sake of long-term progress. They are leaders who must keep an eye on the pot of gold that they are seeking.
This is a big one. While not all entrepreneurs are high school drop outs, there is a relationship between education and the capacity to take risks. The more educated an individual is, the less likely they are to take risks.
The school system is a sheltered environment of regimens, rules and regulations. If you listen to your teacher and know how to work the system, you will most likely succeed. For entrepreneurs, that is simply not the case. The more educated an individual is, the more likely they are going to say, “I can’t do it. It can’t be done. I don’t know how to do it. Why don’t you teach me etc etc.”
The excuses are endless.
There’s also the question of financial risk and responsibility. In the event that you mess up at school, the consequences are: you fail and have to retake the exam. In the event that you mess up as an employee at an organisation, you will likely get a bunch of ‘veiled warnings’ till you realise that someone else was promoted instead of you.
But if you mess up in your own venture, you are dealing with loss. Real, tangible, irrecoverable loss.
Most people can’t or don’t want to deal with failure. That is something an entrepreneur accepts… perhaps even expects. Someone who is used to getting an A from their teacher–who has quite likely never worked outside the school system–will not have the necessary skills to work in an enterprise. Forget entrepreneurs. I have even seen this in employees.
Many highly intelligent people do not understand how to work in teams, work with others, or even foster a relationship with their leaders. Intelligent people who cannot connect with others or make a significant contribution to the team will ultimately end up losing in both the rat race and in the entrepreneurial journey.
As an investor, I pull the purse strings. But even then, I would never disrespect an entrepreneur. I see the entrepreneur as the leader of the organisation. If I were to so much as sniff an employee treating the entrepreneur and the enterprise with disrespect, I waste no time in giving the employee the axe.
We are a team. We win together and lose together. End of story.
Starting at Zero
Entrepreneurs are a rare species. Even in innovation-driven economies, only 1–2% of the work force starts a business in any given year.
The goal of an entrepreneurial venture is to create new sources of wealth. Mature and established businesses take considerably longer to change trajectory and usually remain confined to existing markets and industry norms. The risk profile of established organisations tends to be significantly lower than entrepreneurial ventures. This means that they eventually hit a ceiling in terms of income.
When an economy is doing well, there is less incentive to encourage new, entrepreneurial firms. If your life is perfectly fine as it is, why take a risk on something new and untested?
It takes a real crisis for an individual–or a group of individuals–to change the course of their professional lives. Entrepreneurs typically start businesses in a ‘bust’ cycle as opposed to a ‘boom’ cycle.
For the entrepreneur, 0 is the perfect place.
For established enterprises, starting at zero is simply not an option. Mature businesses tend to focus on sustaining what is already in place. There have significant amounts of historical data to work with and trends that have been identified over a period of time.
All the entrepreneur has is zero. Which means that the only place he can go is up… or wind back at zero. The equation is really not that complicated.
When unemployment increases and the economy is contracting or stagnating, the entrepreneur taps into the skill of managing resources to turn the whole situation around. By developing novel products and increasing competition, new ventures can boost demand, which in turn creates new job opportunities and reinvents entire industries.
From the nonstop ads that are bombarding us everywhere on social media, I get the sense that what is described as ‘entrepreneurship’ in the internet age has very little to do with the management of resources and everything to do with achieving a variety of personal goals.
The fad of ‘hate your job, start a business’ is so hyped up that resource management doesn’t even seem to factor into the equation of ‘follow your passion and do what you love’. Self-employment is essentially exchanging your day job to work for yourself. These reasons are emotional and personal, not entrepreneurial.
Entrepreneurship is the transformation of inventions, ideas and systems into an economic force that benefits society.
People have grown disillusioned with corporate life and it is not without reason. From the Second Industrial Revolution till the 1970s was a period that saw the rise of large corporations. They had the economies of scale to grow big and spread their influence all over the globe. The creation and establishment of these giants led to a decline in the small business owner.
Since the mid-1970s, however, the self-employment rate has started to rise in most modern economies. Small businesses have an innovation advantage over larger companies. They can move quickly to hone in on trends that are ‘on the ground’. Smaller businesses begin by focusing on niche market segments. Large corporations, on the other hand, tend to focus on their core competencies and overall performance.
Entrepreneurs play an important role in new and emerging enterprises. Educated professionals tend to take up a significant percentage of the labour force in established companies. Nevertheless, it is important to note that without the entrepreneur, an affluent class is simply not feasible. The former communist countries have a highly-educated labor force but are still not able to create high-income paying jobs due to a shortage of entrepreneurs.
At the end of the day, you can read all the clever books you want and quote all the learned men you admire, but it is the management of resources and the ability to take calculated risks that will differentiate the businesses that thrive from those that don’t.
That’s why I respect my father. He started with nothing, but gave me everything. He was an entrepreneur. He taught me to create wealth, not work for it. He taught me to win as part of a team and not to put yourself first.
And most importantly, he taught me that the entrepreneurial journey, is the greatest adventure on earth. I am proud of every venture I’ve had the opportunity to be a part of.
And I look forward to many more to come.