Originally Published in Business Insider | August 15, 2011 | By Paul Mandell
As financial turmoil swirls in the wake of the S&P’s recent downgrade of the U.S. credit rating, it is evident that our economy needs help. Much of what we need as a nation lies in the hands of our elected officials. However, we also need a steady crop of new entrepreneurs to boost employment by creating more businesses. And with respect to these entrepreneurs and their businesses, I say the more boring the better.
In the modern era, entrepreneurship conjures up exciting notions of high-tech, consumer-oriented software that will change the way of life for people across the globe. Indeed, many brilliant startup founders have made dramatic technological or scientific contributions to the world, as well as made a mint along the way. Think cancer-fighting drugs, Google, Facebook, and Netflix. Countless entrepreneurs are motivated by these high-risk, high-return opportunities, and we need more such individuals to keep our economy on the cutting edge of innovation. However, in a flailing economy with discouraging employment data, it is worth recognizing that these are not the only entrepreneurs we need.
Operating in the shadows of the Sergey Brins and Mark Zuckerbergs of the world are other entrepreneurs who are decidedly less interesting. These are the entrepreneurs who identify opportunities to enter existing markets and one-up the competition. They focus on changing entrenched business models, and they work to execute a simple game plan well, rather than identify “the next big idea.” You can call them old-school entrepreneurs, or the low-tech crowd. But as one who fits neatly into this camp, I’m happy simply to call them what they are: boring. Fortunately, the world needs boring entrepreneurs.
Years ago, as I contemplated getting into the startup business, I thought through a variety of business ideas revolving around the Internet. I even wrote up a couple of business plans, but I opted not to pursue any of them. Each was too much of a lottery ticket; there was the promise of a big payoff, but the odds of failure were imposingly high. So, for quite some time, I lived with the startup itch but no means to scratch.
Then one day, as I sat at my desk, I learned of a vendor in the legal industry that was immensely successful, despite a host of frustrated clients. It was then that I recognized an opportunity to satisfy my interest in entrepreneurship without the creativity or vision of the tech gurus that frequented the covers of Time and Fortune. Instead, I could pursue this path simply by attacking a relatively mature industry and working to outperform the competitors with modest improvements. Now in my second such effort, building an event-development business named Consero Group, I’m fairly sure that I have found my calling. And although I haven’t made it easier for humans to fly to space or clone themselves, I am hopeful that I am still contributing to the growth of our economy.
Calling any sort of entrepreneurship boring is a bit silly, as nothing about entrepreneurship is truly boring. Every startup, whether in high-tech software or Popsicle sales, brings interesting challenges that can keep a founder motivated. However, my point is that there is an alternative to the sexy business concepts that make the news. Too many would-be entrepreneurs opt out of starting a business because they haven’t come up with a glamorous concept. These individuals should recognize that there are countless opportunities for startups in existing, competitive industries. Indeed, we need those entrepreneurs—to create jobs, drive efficiency, and speed innovation. Our country thrives on extraordinary but unglamorous businesses.
For those readers who lack the next big idea but want to pursue entrepreneurship, I would provide the following few pieces of advice:
1. Do what you know. The first step along the path to becoming an entrepreneur is coming up with the concept. Here, I would recommend that you begin by thinking about your educational and professional experience. To which industries do you have exposure? Where do you have expertise? If you target an area where you have some knowledge your odds of success will be much higher.
2. Solve a problem. Once you have found an industry with which you are comfortable, the next step is to identify an area of weakness among the companies operating in that arena. What are these companies doing wrong? In what ways are their customers dissatisfied? What could these companies do differently to be more successful? For answers to these questions, I would strongly recommend that you do your research. Speak to potential customers and get their honest feedback. Listen and learn. And once you have a sense of what they need, create a plan to deliver it. And work to deliver it well.
3. Study basic finance. One of the greatest risks to entrepreneurs is a lack of financial acumen. It is critical for every entrepreneur to understand how to create and interpret a balance sheet, an income statement, and a cash flow statement. Too many company founders start with a great business idea but go bust when caught off guard by unanticipated financial issues. Be sure to educate yourself regarding basic finance. Those few hours of effort could make the difference between success and failure.
4. Do what you love. It is a lot easier to put in the long hours that a startup requires if you like what you do. In considering businesses to pursue, give thought to whether you would be happy selling a particular service or product. Can you find some passion in your work? Can you integrate a mission into your business? For me, I find great passion in the startup experience itself. However, I am much more motivated when I feel strongly about the problem I am working to solve. Building financial value can be extremely gratifying, but there is nothing like channeling your passion to make just a little bit of difference.
5. Don’t be afraid to bunt. Many entrepreneurs opt to swing for the fences out of the gate, spending most of their first few years in search of capital and working to build scale as quickly as possible. There is nothing wrong with aiming high, but aggressive growth typically brings more risk. As an alternative, consider going the slow and steady route—opting for the bunt, rather than the home run. There is no dishonor in laying a solid foundation first and then pursuing more rapid growth. The firmer your company’s footing, the easier it is to expand.
Pursuing entrepreneurship as a career is not an easy path. It requires a wide array of skills, a strong work ethic, and a good measure of intestinal fortitude. But the potential benefits are great, and whether glamorous or plain vanilla, our economy could use the help.