What does it take to not just to be your own boss, but to be a truly successful entrepreneur? What qualities are essential for the entrepreneur who wants to start and build a valuable business?
Author Bill Murphy Jr. answers these and several other questions about entrepreneurship in his latest book, “The Intelligent Entrepreneur: How Three Harvard Business School Graduates Learned the 10 Rules of Successful Entrepreneurship.”
I recently sat down to ask Murphy about the entrepreneurial journey, Gen Y’s place in entrepreneurship and whether now is a good time to start a business. Edited excerpts of his responses to my questions follow.
Your book lists 10 rules of entrepreneurship. The first one is “Make a Commitment.” Why is that so important?
The first step is always to make a commitment to yourself that you are going to be a successful entrepreneur. Making a commitment does not mean committing to a specific idea or even a business plan. They say that no battle plan survives contact with the enemy, but the same is true for business. No business plan survives contact with the market.
A common pattern in entrepreneurship is that people come up with a business idea or plan and they think it is brilliant, and then they take it to the market. But the market may not embrace it. So if you have committed yourself to the success of that particular business plan versus committing yourself to being successful as an entrepreneur, you are going to be resistant to change. Your commitment to being a successful entrepreneur should allow for – and encourage – change based on the market.
Making a commitment in entrepreneurship really is embracing a lifestyle – not fancy cars or money that everyone thinks comes with owning your own business – but being committed to innovation, creativity, to making a mark, and to your own values more than society’s values.
Okay, so for the entrepreneur who has made a commitment, what comes next?
The fundamental question with any business is: ‘What problem am I solving?’ The best way to answer that is quickly. It shouldn’t take you three or four sentences, or even paragraphs, to explain what the customer problem is and how your business is going to solve it. If it does take you a long time, then that doesn’t mean you don’t have a good business, but it might mean that you don’t quite know what it is yet and you need to refine.
You’ve got to be able to identify what problem it is you’re trying to solve. It could be that you are solving a tangible problem – a real hole – in someone’s life, or it could be an intangible need and your business is showing them that need and the solution.
Gen Y has been described as idealistic. Whether that is true or not, we do volunteer more frequently than other generations and more students are graduating with degrees in international studies and political science and doing things like Peace Corps and AmeriCorps. But some graduates might think that they cannot own a for-profit and serve the public interest. Are we destined to have our idealistic balloons popped, or can we serve the public good and be entrepreneurs?
A non-profit is just a business structure – it is just a question of whether or not, at day’s end, someone is going to take assets out for their own personal gain. At the other end of the spectrum are publicly traded companies where your main responsibility is to your shareholders. But in between those two extremes, there is a lot of room for entrepreneurs to think of an idea that can make a healthy profit – even a really good profit – while being true to a social mission they believe in.
Take Zip Car, a for-profit, for example. That company is doing something good for society – fewer cars on the road and making car-sharing more efficient – while on track to make a good profit one day. Someone once said, ‘always serve the customer at a profit.’ You could say the same about serving a social mission you believe in, while still making a profit.
There is a lot of talk these days about the value of graduate school, especially in today’s economy. Does business school – Harvard Business School at that – mean you will, on face value, be a more successful entrepreneur than those who haven’t had that experience?
Harvard’s definition of entrepreneurship is: ‘The relentless pursuit of opportunity without regard to resources currently controlled.’ That is a mouthful, but what this means is any entrepreneur with the right attitude has a legitimate chance of trying to start just about anything, without regard to whether you have money, status or contacts.
You will have to acquire all of these things, but you may be better off if you don’t have any of them in the beginning. You are going to have to make the case for your idea and your ability to pull it off to lots of people and they will raise many of the things that you haven’t thought of – and it’s far better to address these things early on than once you’ve hit the market. So if you don’t have a penny and you’re living in your parents’ house, you may have one up on someone whose parents will back them with no questions. You may have a lot of hoops to jump through in the beginning, but there is value in that exercise that will serve you later on in your venture.
What would you say to people who want to become entrepreneurs, but look at the less-than-stellar job market and constrained economy and think it might not be the right time?
This is a really lousy time to be a lousy entrepreneur, but a really great time – an incredible time really – to be a great entrepreneur.
For one, because of the economy, the poseurs are not in the game right now. If you have the right package (idea that identifies a need + a business plan + personality to succeed) to take investors, there might be less money to go around than there was 10-15 years ago, but that money now has few options on where to invest. If you can show someone that you’ve got a really good shot at making your concept work, I don’t think anyone is worse off now than they would have been 10-15 years ago, as long as you have the right package.
These days personal branding is a critical component of professional success. Should we think about our careers the same way entrepreneurs think about their own business?
That old notion of graduating and going to work for one or two companies for 30 years, that is probably not going to happen anymore. Most people in Gen Y are going to work somewhere for just a few years, then maybe get promoted for a year, then go somewhere else for a few years, then maybe change fields, and so on. I said earlier that all entrepreneurs should make a commitment to being successful, but a similar commitment could be made by anyone about his or her career. Everyone in Gen Y should make a commitment to personal growth, to finding your passion and an area where you can succeed.
No matter what job you have, I think it is always a good idea to ask yourself at the end of the day, ‘What am I actually contributing here?’ Whereas entrepreneurs think how they helped answer their customer’s needs, we should all think about how we answer our employer’s needs. Everyone can think of him- or herself as an entrepreneur, and your employer is the customer.
Ashley Hoffman is Brazen Careerist’s director of communications and marketing.