One, Preparing for Entrepreneurship, opens the curtains on A Trilogy on Entrepreneurship. As the title proclaims, Book One endeavors to take the entrepreneur through the step-by-step process of Opportunity Seeking, Opportunity Screening and Opportunity Seizing. The first step allows the entrepreneur to unravel the myriad possibilities in finding a good business venture by following any one of several proven methodologies. This is a creative and divergent thinking process. The second step evaluates the possibilities using logical and convergent thinking based on criteria deemed important by the entrepreneur. The third step enables the entrepreneur to focus on the critical variables that could make or break a business venture and to craft a positioning statement that would differentiate the business and its products from competitors.
To ensure success, the entrepreneur must validate the opportunity through rigorous Market Research. In addition, Customer Profiling and Location Analysis are the two crucial research endeavors which the entrepreneur must embrace fully. The first one enables the entrepreneur to target a specific and appropriate market segment while the second one chooses the best place for doing business and selling products.
Finally, Preparing for Entrepreneurship, delves into the systematic process of New Product Development, the jump-off point towards creating a new enterprise.
Chapter One
Opportunity Seeking
Entrepreneurs are innovative opportunity seekers. They have an insatiable curiosity to discover new or different ideas that will work in the marketplace. This curious streak is what separates them from the ordinary businessman whose obsession is, simply, to make a profit from producing, buying and selling goods. A lot of business venturers set up shop to repeat what everybody else is doing but this is not really entrepreneurship. It is just doing “business as usual.” So what is an entrepreneur and what does innovative opportunity seeking got to do with it?
When the word entrepreneurship was coined, the discerning economist wanted to stress the point that entrepreneurs contribute significantly to the economy by raising productivity from one level to the next. Entrepreneurs create value by introducing new products or services or finding better ways of making them. They may innovate on the design of a product or add features to existing ones. They may experiment on work flows and operating systems to extract greater efficiencies. They may improve technologies to gain better economies or achieve unassailable superiority. They may create new demand from undiscovered customers. They may expand horizontally or vertically to maximize market coverage or ensure production control. They push their competitive advantage to the limit in order to gain industry dominance. They will not stop seeking for that proverbial pot of gold at the end of the entrepreneurial rainbow.
The entrepreneur as seeker begins with the Entrepreneurial Mind Frame. This mind frame allows the entrepreneur to see things in a very positive and optimistic light. What is garbage to others is green gold to them. In my favorite anecdote on opportunistic optimism, there were these very young twin brothers who woke up one morning to the foul smell of horse shit. The first twin, an incorrigible pessimist, moped woefully on his bed. “When mom smells that, she will tell us to get rid of it because it is near our window. Then I have to solve this messy problem by getting a dust pan, a broom and a plastic bag to get rid of the horse shit. Then I have to throw it in the garbage can, making sure I put the lid on.” The second twin, a pollyanic optimist, exuberantly exclaimed, “if there is horse shit, there must be a pony somewhere.” He then ran out the house to look for the pony.
The mind frame of the entrepreneur puts a positive spin even on problematic situations in order to generate innovative ideas. In contrast, many managers in the business world will only focus on what they are paid to do, which is to solve business problems. They may find the solutions but that just brings them back to where they were. In many business schools, the focus of discussion is to “find the central problem” in a business case, determine the “areas of consideration,” screen the alternative solutions according to certain criteria and assess the pros and cons of the alternatives in order to arrive at the best solution. This is actually well and fine but business schools do not stress the positive and creative part of business. They tell students to “stick to the case facts” and not stray away from them. However, the entrepreneurial mind frame is different. The entrepreneur experiments on possibilities by asking, “In how many ways can I solve the problem?” and goes beyond problem solving into the realm of creative thinking.
The optimistic mind finds the potential even in crisis situations. The pessimistic mind sees the risk. Many pundits on entrepreneurship often repeat the observation that the Chinese calligraphic representation for the word crisis is composed of two characters: the first character means danger while the second character means opportunity. This reminds me of one of the darkest years for the Philippine economy following the assassination of Senator Benigno Aquino Jr. The country lost all international support. There was massive capital outflow. The GNP growth rate turned negative. Real estate prices dropped precipitously. An entrepreneur friend of mine encouraged me to buy a condominium. He himself was borrowing money in order to buy ten units. He said it was the best time to buy. I did buy one. Two years later, the martial law government was overthrown. A year after that, real estate prices multiplied seven times in the Makati district where we bought the condominiums. The same thing happened after the Mt. Pinatubo volcanic eruption. Mansions could be bought in Pampanga for a song.
The entrepreneurial mind frame makes me doubt the adage that entrepreneurs are “risk takers.” From the many case studies I have written on entrepreneurs, they did not seem to be worried about the risks as much as they were enthusiastic about the opportunities. Many, in fact, think like inventors who know that they must attempt many times in order to find success, even if there would be a lot of “failed experiments” along the way. Each experiment is a step closer to success. Provided the entrepreneur reacts quickly to his or her failures, then they are not risks but heuristic processes towards finding success. Again, this inventor mind frame is important because entering the world of business throws the entrepreneur into many uncontrollable situations where there are too many variables shifting from time to time.
Business is not a mathematical equation with a definite method for solving the equation which has only one correct answer. Business is not an algorithm. It is, oftentimes, a trial and error process with a lot of art, rather than science, into it. Experience, education, contacts and connections, personality, market conditions, technological evolution and countless other factors enter the largely human equation of consumers, employees, suppliers and competitors. Juggling all these factors all at once necessarily means that each and every factor actually represents a risk. On a day to day basis, the entrepreneur is more engrossed in making all the juggled factors stay up in the air rather than focused on the risk contained in any one factor. Risk fetish would only serve to distract the entrepreneur into losing sight of the objective. In other words, the entrepreneur should concentrate on controlling the factors for success rather than obsessing about “taking risks.”
What drives the inventor also drives the entrepreneur. Both are consumed by the Entrepreneurial Heart Flame or that surging passion to find fulfillment in the act and process of discovery. Inventors and entrepreneurs do not even stop to relish the victory of their discoveries. Each discovery is just a step to another one. Hence, the fire of creation is always alive in their hearts. The entrepreneur as seeker will soon lose interest if the passion behind the seeking subsides. This passion springs from the perfect (or near perfect) fit between who the entrepreneur is as a person and what he or she is doing for a living. Passion comes from great desire to attain a vision or fulfill a mission. Passion is about wanting something so much that a person would be willing to devote one’s self totally to the quest.
Passion is, therefore, not for the dilettante nor the dabbler in business who thinks that a little effort is enough to get by. Passion is not for the person with some capital and asks, “Now what is a good investment
