Entrepreneurship is an elastic term. It could mean a variety of things: a startup backed by venture capital, a small business, a corporate venture outside the established industry vision.
The Search for Excellence
As an entrepreneur, you are often seen by others to be single-minded, persistent, and highly-focused. This is because you usually see only a small window of opportunity to manifest your vision. You must attract the necessary resources before you run out of cash. Consequently, you must act with a sense of urgency. This mindset is rarely seen in an established company because the vision, goal, and the opportunity are merely considered part of the portfolio to beat out the competition.
Pursuing a New Opportunity
As an entrepreneur, you probably pursued your passion because you were thrilled at the idea of introducing a new opportunity: perhaps you have invented a new product or service that fulfills an unmet market need; perhaps you have come up with a new, unique business model; perhaps you have developed either a better or less expensive version of an existing product or service; or perhaps you have discovered a different set of customers for an existing product or service.
What's more, you may be pursuing at least one or more of these angles. For instance, you may have invented a new product or service and also come up with a new way of showcasing it, marketing it, and selling it to consumers.
Risk, often considerable risk, is part of the entrepreneurial journey because of insufficient resources to handle a loss. You may face four types of risk:
- A risk associated with demand: Will people buy your product or service? Will they like your solution?
- A risk associated with technology: Does your product require new technology to bring it to the marketplace?
- A risk associated with ability: Do you have the necessary knowledge and skills to bring your product or service to the marketplace? Can you assemble the right team of partners and employees?
- A risk associated with finances: Will you be able to get the funding you need?
A Constraint on Resources
Initially, you may find yourself working with few resources—your own will, your social connections, and limited financial capital. You may have to bootstrap your venture, using your own funds. Thus, besides the difficulty of seizing a new opportunity, there is also the constraint of working with insufficient resources.
There are usually four ways that you might handle this high-risk, low-resources situation:
- Use the smallest available series of activities, timelines, and resources to test out your hypothesis.
- Do things sequentially, reaching one milestone after another, each milestone opening up the way for the next phase.
- Partner with people or organizations that are able to shoulder your risk because they have the skill sets or funding you need in exchange for a portion of your business.
- Become eloquent at spelling out your vision, enlisting the help of people whose time, energy, money, or resources you need to leverage to fulfill your vision.