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Jennifer Kushell is one of my favorites in terms of goal setting, you can read her book entitled “Secrets of the Young & Successful” and learn about how to reach your goals fast and efficiently. A friend of mine told me she also published a book entitled “The Young Entrepreneur’s Edge” way back in 1999 where she discusses the steps towards becoming a successful entrepreneur and I came across a section where she points out the disadvantages of being an entrepreneur. If I had read this one six months ago I might have avoided it, but I still feel it is a blessing to go through all those mistakes because the lessons tend to stick when it is learned the hard way… I’m glad she included a couple of tips to avoid it so I’ll be prepared the next time it happens.
Disadvantages of Being An Entrepreneur and Ways to Get Over It
1. Lack of Credibility - I’m quite used to this because as a young entrepreneur you will be stepped at every time the big players are around. But there’s nothing to worry, it’s part of the process of growing. Get around this roadblock by:
- convincing others that you are worth a chance
- align yourself with people who has credibility
- become someone important
- know what you are talking about
- do what you promise to deliver
2. Lack of Maturity - this comes in with a price tag of “pissed-off clients.” The only way you can get out of this is by being professional and I believe this needs time to develop through experience.
3. Lack of Experience - everyone has to start somewhere and that somewhere for me was zero. I want to become a established motion graphics artist and put up my own studio but my degree diploma says I was trained to be a Biologist. And I worked my way up the ladder of experience, often crashing back down along the way but nothing can stop me. It’s quite good to know that some of Kushell’s tips I’ve done personally even before I read the book:
- work for someone who has experience even if it is for free
- read everything you can read about your industry
- attend classes and seminars
- join related associations and organizations
- build any related, yet indirect skills (you can learn photography even if your major field is writing)
4. Overeagerness - I paid the price dearly for this… When clients come in, you get the feeling of being powerful and invincible that you start to forget that there are much more to learn. You’ll know it when clients are starting to call, and you’re behind schedule, short of budget, and exhausted to death… These are the things you might want to avoid if they ever happen to you:
- hiring people prematurely
- overspending on the assumption that it will be created anyway
- getting involved in projects without the necessary skills
- taking on too much responsibilities
- appearing too anxious about the project
- openly admitting you lack the experience
- not taking time to be properly trained
- not taking time to plan the business
- neglecting to write a business plan
- ignoring advices of skeptic people
5. Isolation & Loneliness - I never felt this way since my wife has been very supportive to all my projects. And besides, I like working alone most of the time, it makes me feel secure that everything is in place and under my control. But if this is something that scares you the most, you might take note of the following:
- maintain communication with the most important people in your life
- be honest with people close to you when you are having a hard time
- make sure you have a solid group of mentors
6. Lack of Leadership - perhaps the most important of all. Nobody will buy your product or follow your instructions unless they sense the leader in you. Develop this early in life and you’ll have an edge over the others, even if they are more skilled than you are…
7. Difficulty Motivating Yourself - this was a major problem I had to deal with. I ended up lazy on my second month with nothing but savings and no clients. Having so much time in your hands can be very dangerous for you and your business so be careful. Here are some tips to get you going:
- get into a strict routine
- schedule early morning meetings
- pack your schedules with appointments
- do things right away, don’t procrastinate
- take advantage of time when you have the energy
- place in a small reward system for yourself
- have other people work with you
- remind yourself of your purpose consistently
Wow, that was a long list and I hope you’ll find something useful in it. These will only be disadvantages if you allow it to, remember that the road to wealth will not always be as easy as you can tolerate. But as long as there are people like Jennifer Kushell guiding us, we will get through it just fine…
ONWARDS!!!
A month ago I came across this study made by Saras D. Sarasvathy of the University of Virginia which addresses the question: What makes an entrepreneur, entrepreneurial? We all know what entrepreneurs are and we know what they do but the question of where do this actions come from and how do they come up with such ‘plans’ are as elusive as their source of ideas. And what if this way of thinking can be duplicated, taught, and learned? This questions got me excited as i read, so here is the study as i understand it:
There are two types of reasoning:
1. Causal Reasoning - achieve a goal using given means finding the optimal alternatives
2. Effectual Reasoning - goals emerge from the given means
Causal Reasoning revolves around the logical way of thinking. In business schools, it would have the following process:
1. Market Definition
2. Segmentation (using relevant variables such as age and status)
3. Targeting (an example would be expected returns)
4. Positioning (use of marketing strategies)
5. to reach a CUSTOMER
Now this way of thinking has been used for years and years because of its ability to predict the future using the data that came in with the research (feasibility study as I would understand it), however this entails costs, time, effort and not to mention its probability to still fail after launching the product. To solve the problem (very unconventionally), entrepreneurs do the process the other way around.
Effectual Reasoning:
1. CUSTOMER identification (through Effectual Reasoning Means)
2. Customer definition (strategic marketing and selling)
3. Adding Segments and Strategic Partners
4. Definition of one of several markets
Effectual Reasoning Means:
1. Who they are
2. What they know
3. Whom they know
Using the means above, an entrepreneur would maximize his resources rather than come up with the resources. A customer then is defined by the value you could give them rather than creating the value that they need. Now instead of launching the product big time (advertisements, promotions, etc.) with how much budget they have, entrepreneurs tend to sell it directly to the nearest customer reachable or to friends and relatives who might be interested. From there, an entrepreneur would exploit other customers based on the sales made initially. What are the qualities of the people who bought the product, where do they live, what do they do? These are some of the questions that might help reach other customers. Then an entrepreneur, based on the defined customers would find strategic partners, people who have the same interests in furthering the cause and a relationship is made (this is something that is not taught in business schools). Several markets will emerge in the process creating a vast array of opportunities available for entrepreneurs to exploit. Of course, the most profitable will be chosen and refined further.
To sum up the process, here are the major differences:
1. Causal reasoning concentrates on expected returns while Effectual reasoning emphasizes on affordable loss (instead of targeting a market, an entrepreneur would bring the product to the nearest possible customer with zero resources)
2. Causal reasoning depends on competitive analysis while Effectual reasoning builds on strategic partnerships (the challenge is to pick a partner whom you could leverage early on before even taking capital out)
3. Causal reasoning exploits pre-existing knowledge and prediction while Effectual reasoning stresses leveraging on contingencies (the ability to turn the unexpected into profitable)
Focusing on the last point, entrepreneurs uses the ready-fire-aim approach model. They don’t think too much of the outcome but test the product as it is and adjust as they go along developing it. This approach will actually do more in the long run. Added to that, entrepreneurs don’t like the idea of predictable future, they like to ‘create’ the future. Not all surprises are bad and it is not the contingencies but the leveraging that entrepreneurs do.
Here are the principles behind each reasoning:
Causal reasoning - to the extent that we can predict the future, we can control it
Effectual reasoning - to the extent that we can control the future, we do not need to predict it
To illustrate the principles above, let’s say that an urn has a given of 10 red balls at 100 points each and 10 green balls at 0 points each, causal reasoning would risk 50 points for every draw since the chances of getting a red ball is 50/50. However, with the premise that life has no given colors and number of balls to be drawn upon, the only way to predict the future is carefully noting what you draw each time creating the ratio as you go along. In essence, one of the interviewed entrepreneur explained:
Whatever the initial distribution of balls in the urn, I will continue to acquire red balls and put them in the urn. I will look for other people who own red balls and induce them to become partners and add to the red balls in the urn. As time goes by, there will be so many red balls in the urn that every draw will obtain one. On the other hand, if I and my acquaintances have only green balls, we will put them in the urn and when there are enough, we’ll create a new game where green balls win.
Entrepreneurs don’t like the idea of predictable future, since there would always be the smarter and the richer who could use this predictability to their advantage, whereas contigencies help entrepreneurs shape the future.
This idea doesn’t mean Effectual Reasoning is more effective. In fact, the more knowledgable an entrepreneur is on both reasoning, better results come out. But when do you know when to use which? As I read through the study, the pattern would somehow be like this. Effectual Reasoning is better used in the early stages of development until a business is established, however, Causal Reasoning will have to support the business as it grows bigger. So knowing both acts as a leverage for entrepreneurs. In addition, Effectual reasoning may not necessarily increase the probability of success of new enterprises, but it reduces the cost of failure by enabling the failure to occur earlier and at lower levels of investments.
And finally, what makes an entrepreneur entrepreneurial? And i’m quoting Sarasvathy on this:
Entrepreneurs are entrepreneurial, as differentiated from managerial or strategic, because they think effectually; they believe in a yet-to-be-made future that can substantially be shaped by human action; and they realize that to the extent that this human action can control the future, they need not expend energies trying to predict it. In fact, to the extent that the future is shaped by human action, it is not much use trying to predict it - it is much more useful to understand and work with the people who are engaged in the decisions and actions that bring it into existence.
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