Think Like an Entrepreneur

Recently, I was asked whether I thought entrepreneurship could be taught. I wondered if that was a loaded question since I teach entrepreneurship at Boston University. My (only slightly) bruised feelings aside, the embedded assumption was that entrepreneurship is some kind of magical process that can only be done by people born with certain characteristics.

After all, nobody wonders whether finance, or juggling, or tap-dancing can be taught. But when it comes to entrepreneurship… we often assume there are those who can do it and those who can’t. ? I don’t buy it. To me, entrepreneurship is really just a way of thinking and acting. It involves curiosity and a big-picture perspective (in many ways similar to strategic thinking) and is a way of assessing a business challenge or opportunity. ? As important, it’s not something that can only occur in start-ups or other “innovative” companies. It’s a learnable skill with practical application in any number of situations, including inside of well-established businesses. ?

It Starts With an Idea

While many of us find ourselves annoyed when faced with things that don’t work well or things that are changing in the market, an entrepreneur might instead think about how the situation could be improved. ?

For example, when I worked for a discount general merchandise chain in the Midwest, we faced threats to our prescription drug business as insurance plans were starting to dictate pharmacy choices for customers. Serving a not-so-densely-populated part of the country, our chain was an unlikely candidate for such an arrangement, meaning we would lose business to larger players. ?

So I came up with the idea (still somewhat new in the early 1990s) of serving our customers with mail-order prescriptions. ?

But Is It an Opportunity?

Coming up with the idea is step one. From there, entrepreneurs need to consider whether the idea represents a marketable opportunity: will people pay for it and are there enough of them? ?

In the mail-order example, more than 70% of prescriptions we were filling were “maintenance drugs” — drugs for chronic situations like high blood pressure, cholesterol, etc. Drugs that, once prescribed, are taken daily for years and years. ? That made mail-order sensible. We further validated our assumptions by interviewing insurers and customers. ?

Is It Perfect?

?If your idea needs to be perfect from the start, you’re unlikely to try many things, let alone things that are truly breakthrough. There is always a learning curve. ?

That’s why entrepreneurs often think in terms of a Minimal Viable Product (MVP) when launching something new. The concept is to start by offering something with just enough value (that’s the “minimum viable” part) to find out if people will pay for it. This way, you can gauge market interest before investing more significant time and money. ?

The first Apple iPad had no camera, limited functionality, and could only operate one program at a time. Only after there were sufficient sales for version 1.0 did Apple invest in a faster chip and a more durable battery to support fuller functions. ?

Does Entrepreneurship Work in a Large Company Setting?

Many gigantic corporations set up “innovation labs” as a way to create a separate place for new idea development. But whether these are necessary — or even helpful — remains to be seen. One study showed that few real innovations come from these corporate shops. ?

Better, I think, to simply encourage entrepreneurial thinking within your core business. If everyone across the company adopts a mindset of finding new ideas, you are more likely to arrive at real-world opportunities that support your primary business and protect it from outside threats. ? Specific suggestions in that regard…

• Look for changes or challenges. Are there areas where customers have complained or where staff feels things aren’t working? Has new technology emerged that might change how things are done?

• Encourage idea generation. I prefer something in between the old-fashioned “suggestion box” and the overly contrived “growth hack” sessions of recent years. Instead, find ways for ideas to boil up in the normal course of assessing your business.

• Test. Is there data suggesting a large enough market for your idea? Can you conduct some basic customer / prospect surveys to get a sense of the level of interest? (Keep in mind that while these can be directionally helpful, people are notoriously bad at evaluating a concept that doesn’t yet exist.)

• Launch with manageable risk. See if you can launch a basic offering people will pay for. If it works, build on it. If it doesn’t, kill it (fast).

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Reflections

Entrepreneurs are not born as such and entrepreneurship is not black magic. Of course, there are people and companies that take more quickly to the fundamental concepts. But in the end, entrepreneurial thinking is mostly just a way of viewing the world and taking steps to find solutions and uncover opportunities.

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