[CareerZ Cast audio version of this article]
What is Enterpreneuship?
In the broadest sense, Entrepreneurship is the willingness to challenge the status quo and explore a different way of doing things.
More specifically, in the now global Silicon Valley model of Entrepreneurship that spread across the globe, Entrepreneurship the ability and readiness to develop, organize and run a business enterprise, embracing iherent risks, in order to make a profit, creating scalable companies (“startups”) that deliver innovation to the market and profits to investors.
So, there is an alternative to the career path of “getting a college degree and find a job in a good company”. Innovation these days often software-based and delivered via the Internet. This makes it easier to test and validate ideas with fewer resources, lowering the threshold for entrepreneurs to start new companies.
The peoeple who are crazy enough to think they can change the world are the one who do.
~Steve Jobs
Why do we Need Technology Startups?
Companies that achieve a significant degree of growth and success and become the status quo, have a desincentive to create innovation and disrupt themselves.
- The Innovator’s Dilemma – Take the auto industry in the past two decades, for example. Established companies like Ford, GM, Toyota knew there was a need to adopt assistive technology that eventually can lead to autonomous vehicles and move away from from fossil fuels to power engines using renewable energy. It would be natural to expect those companies to leverage their brands, expertise, factories. distribution, supply chain, etc. to lead the development of electric and autonomous cars. Instead, a new industry entrant, took that role. Large companies fail to take risks and disrupt their existing profitable products, creating space for startups.
- Crossing the Chasm – Revolutionary technologies (like The Internet, mobile technologies, autonomous vehicles) goes through a boom-and-bust cycle of hype and disillusionment before reaching mainstream adoption. A small, focused, company is better positioned to cater to early adopters and navigate the challenges of bring disruptive technologies to the mainstream.
That is why, often new products adopting innovative technologies are often created by startups with little to lose, funded by venture capital who can tolerate bigger risks. Successful startups are often acquired by the established companies and the cycle re-starts.
How do Startups work?
A group of founders imagine a novel idea to solve an existing problem. They build a prototype of the new product and validate “market fit”. Then they establish a company and develop the product and prepared to deliver it at scale.
Bootstrapping, where early revenue and profits generated by the company is re-invested for growth is the most obvious way to fund a startup.
Silicon Valley came up with an alternative model to fund big ideas… Match entrepreneurs with venture investors to fuel aggressive business plans. Companies can make the investments to create a bigger business faster and investor get to participate in the oversized returns on investment.
Angel investors invest a relatively small (seed) amount to help validate an idea and build a product. Institutional investors (VCs) can invest larger amounts after the startup shows traction to fuel the fast growth and scaling of the business. Most startups aim to eventually being acquired by a larger company or becoming a pubic company through an IPO.
Founders resorting to investment funding need to be able to “pitch” business and get investors to provide money in exchange for a participation in the company. While “Shark Tank” has been simplified for TV, the principles you see in that show are similar to startups in the regular market.
How do I Become an Entrepreneur
There no right age or market condition to become an Entrepreneur. Startup founders often disregard conventional wisdom, believe in an idea, and take risks to build a product and a business.
- Stay Curious and Creative – Look at the word with the eyes of a problem solver. Look at technology as tools to address world problems in novel ways. Be inspired by learning about the history of the companies or organizations you admire.
- Exchange ideas with the Community – Connect with like-minded people (see CareerZ Cast Guide: Professional Networking). If you leave near a large city, look up and attend meetups and startup events in your area, where you can find connections, information, and inspiration to start a company.
Conclusion
The primary founder of a startup is usually someone who can ignore risks and obstacles and execute on an idea towards a goal, and that is a relatively rare skill. Participating in a entrepreneurial project can be an exciting way to start or build a satisfying career. For more on the trade-offs between working in a large company versus a startup: CareerZ Cast Guide: Transitioning from Corporate to a Startup job.
Follow-up Action
Regardless on whether you intend to join or start a small company, explore the entrepreneurial path. Follow the recommendations above and pay attention to opportunities. Use this article as a conversation piece, set an informational interview, and talk to a entrepreneur you know.
Share this with a friends who might be at similar points as you are in their career.
About the author
Marcio is a technology veteran with over 35 year of experience in product development. He has been part of several startup projects and taught entrepreneurship in workshops at Stanford University and University of California Los Angeles. He is always open to startup chats to help individuals to navigate the changing landscape.
Marcio Saito 