Have you ever known someone who seems to always be able to get what they want no matter what? If you do, you can bet that this person has a specific strategy which they have developed to help them achieve their goals.
Entrepreneurship: A comedy of errors!
The Gulf region boasts of a fairly large number of first generation successful entrepreneurs and an equally large number of failed start-up ventures. It is believed that 90 per cent start-ups fail within the first five years. Of the remaining, nine out of ten fail within the next five years. The tenth year is a tipping point.
Why, does this happen? Almost all failures within the first five years are because of inadequate capital (poor cash flow management). In the next five years the failures are primarily because the founding team has lost its passion – that original adrenaline that fired their imagination at the start-up time. The message to all entrepreneurs is loud and clear. You need to constantly measure and calibrate three things in your business: cash in, cash out, and the fire in your belly.
This is the irony in the life of a first generation entrepreneur. Invariably he would have come from a family that encouraged – learning, securing high marks consistently, graduating with honours and joining a reputed company with the highest salary offer. He then goes through the corporate rigour, and during the tenure with a single or multiple organisations he understands the nuances of business. The enterprising executive is then exposed to sales, marketing, technical support, finance, production, even as he specialises in one function. He is also (more often than not) very handsomely compensated, yet is unhappy. Office politics, promotion policies, relationship with bosses, slow decision making process, lack of time, inconclusive meetings, all combined make him restless, disgruntled, disenchanted, and a bundle of unhappiness.
Then a host of questions arises in his mind – “Why am I doing this, what I am doing? Will I not be happier if I am my own boss? With my own small team, can I not do significantly better than what this company is doing? Can I not make more money?” The intelligence he has garnered over the years also makes him weigh the risks of an entrepreneurial journey. The more analytical you are, the less is your risk-taking propensity. One common trait across most successful entrepreneurs is abundance of courage and low analytical skills. They go by their gut – there is no place for logic here. So our executive quits and creates a start-up with a small founding team and a small capital. It is great fun – small is indeed beautiful!
Then the irony ticks in. An organisation is like a human being. It has to grow. It cannot stand still. One cannot remain small, although small is beautiful. And growth requires food – cash in this case. He now realises a harsh truth that is diametrically opposite his original assumption. He cannot take cash out of the business; he has to leave cash inside the business to enable growth.
As the business grows, one by one, original assumptions fall by the wayside. An organisation in any sector has to go through the following four phases: start-up, build, growth and scale. As the entrepreneur goes through these phases, he realises that the skills required to succeed in each of these four phases is completely different. Ability to select the right operating team is of paramount importance. Start-up and build phases bring tremendous excitement and the growth and scale phases are absolutely challenging. Irony kicks in again. The entrepreneur realises during the growth and scale phase, the colour, the form, the behaviour of his once beloved start-up is really no different from the company he left. It is a bane of all large organizations and now his company is a large one. The subtle difference is that what the entrepreneur owns now is a significant portion of the ‘asset’ called the company.
So, before embarking on your entrepreneurial journey, be very, very clear in your mind on the ‘why’ part of it. Think deeply about the future and define your exit strategy. It is no longer as easy as a “resignation.” You cannot get into life with the objective of making money. You must have a much higher objective.
Success or happiness cannot be pursued. It must ensue, as the unintended consequence of one’s dedication to a cause, far greater than oneself.
Entrepreneurship is definitely not for the faint-hearted. An opening batsman on the first day of a test match in the game of a cricket has the mental disposition of an entrepreneur about to start a new commercial venture. He has no idea how the pitch will behave, how the climate might change, how the opposition will bowl, and more importantly, he has no idea how many runs he needs to score to help his side win. A middle order batsman on the last day of the test match has a completely different mental disposition. The game is still cricket and batting remains the only source of accomplishment. Entrepreneurship is a test match and not one-day game – it is a test of character, temperament, staying power, determination and the will to succeed far more than luck, knowledge or skill.
So, all you would be entrepreneurs, please check your courage quotient before you dive. Once you dive, it will be a fun ride – a comedy of errors. My personal experience bears me out.
Welcome to the club of entrepreneurs.
Premchand Kurup is the the CEO of Paramount Computer Systems. Paramount has established a reputation for providing practical security solutions that are both business driven and cost-effective. This has enabled the company to secure the IT infrastructure of leading government undertakings, banks and financial institutions, airlines and transportation companies, telcos, universities and large corporates in the region. Paramount is also among the top 10 companies in the Dubai SME100 ranking.