A Perspective on Entrepreneurship, Technology & Locative Dynamics

At the Everything A Startup Needs blog (German) they are asking for tips you can give aspiring entrepreneurs.

The typical answers you here most often:

1. You need a great team,
2. a concept that is demanded by the markets,
3. you should solve a problem,
4. ask for early stage opinions of customers,
5. know your competitors and their next moves,
6. be motivated and focused,
7. you need endurance and passion,
8. don’t forget to network and communicate your idea,
9. try to gather as much feedback as possible and listen to it,
10. only hire skilled and productive team members,
11. be conservative with your financial expenditures and of course
12. just do it. If you do nothing, nothing happens!
13. With hard work it is easier to find the right time, the right place, the right product and the ability to meet the right market demands.

True, that’s all right but still leaves you somehow unsatisfied. There are no “If you do exactly this right, you will have success!”-factors. It is most often the context in which you live that coins your ideas, you business opportunities, your professional networks and your growth potential. Thus, I want to add one point I consider important to become motivated to found your own company. Let’s take a look at the entrepreneurial context. What does it mean and how is it characterized?

With the word context I refer to your environment, your surroundings, your networks and contacts, the support you get and everything that directly influences your ideas & decisions. Everyone is dreaming of having the one great idea that will automatically lead to a successful million dollar business. It is not unlikely that many people have great ideas but they never execute them.

Let’s consider four diverse examples of successful contexts:

• Silicon Valley: The Silicon Valley is a hot-spot for the IT industry. Companies like Google, Apple or Yahoo dominate in many ways and are leaders not followers. The startup scene is big and attracts highly-skilled persons from all over the world who are looking for the next big thing. The tech affinity, the willingness to take risks, the entrepreneurship talent, the most influential investment companies and the increased competition creates a flourishing entrepreneurial environment with a tremendous outcome.

• Elite Business Schools and Universities: The influence of Stanford University students and alumni on the Silicon Valley is big. Their entrepreneurship education is one of the best in the world and it shows results. Many successful companies are grown out of this school. Same for Harvard or the MIT. The WHU Vallendar or the HHL Leipzig, two high-class German business schools are also fostering entrepreneurship talent. Take a look at the highly-successful companies like Spreadshirt or Jamba, for example. These schools with very talented students are coined by a very competitive environment but also by very valuable business networks you will get access to. You are never on your own if you try to build the next big thing and if you are looking for support while pursuing your idea.

• Sports: Ever wondered why there are mainly runners from Kenya in long-distance runs, or why the Scandinavian countries are always the best in cross-country skiing competitions, or Germany has often places one to three in bob races? Their trainings are most often coined by high competition which will lead to very successful outcomes. It is like the system archetype success to the successful. Everyone wants to be the best, and if you train with the best you will reinforce your ambitions to become better.

• Hidden Champions: “Little known European companies conquering the world.” Hidden Champions are very successful companies that are number 1, 2 or 3 in the world or number one in Europe in their market. They have less than 3 billion dollar in revenues. These companies have very ambitious goals (strong growth strategy) and try to dominate their markets to be the best. They are often unknown to the public (e.g. Enercon, Britta, Brainlab) but another interesting fact is that it often occurs that two direct global competitors for one very specific market are having their headquarter in the same small city. Würth and Berner (both mounting and compound material) in Künzelsau, for example. There is a head-on competition going on between these companies that makes them succeed both. See the Escalation system archetype for clarification.

To conclude, are you living in a context that drives you to build the bakery chain instead of just one local bakery? Or, to go for investments to ramp up your business more quickly? Or, where you feel the (healthy) pressure to be better than your competition and to succeed? Here are some points that could help you finding the right context, the important motivation and the perception of competition.

• Join entrepreneur or business networks or student entrepreneurship initiatives.
• Go to entrepreneurship events, business plan competitions, presentations of founders or StartupCamps
• Do brainstorming sessions with your friends and discuss opportunities.
• Networking can be very valuable over time. Join alumni networks of your school or university.
• Read books and articles about entrepreneurs you admire most or who provide the most interesting (often radical) perspectives.
• Read founder / start-up blogs or follow their Twitter messages.
• There are many websites with high quality entrepreneurship videos and podcasts that give you the right insights.

So, hopefully I made my point and you will think differently about your context & perspective and how it influences you and your ambitions.

“It’s a big, fun game we’re all in here–nothing more. Don’t take it so serious… play hard and enjoy it!” Jason Calacanis, successful entrepreneur and founder of Weblogs Inc. and Mahalo.com.

Last Wednesday the Swedish founder of dotCom startup letsbuyit.com, Johan Stael von Holstein, held an exciting and inspiring presentation about his life and his experiences at the University of Mannheim. This great event was organized by the entrepreneurial student initiative, Thinc!.

Many of you will still remember the many advertising spots on TV with the red ants convincing you to buy in groups with LetsBuyIt.com. The European company headquartered in London, registered in Amsterdam, failed as many others after the dotCom bubble burst, after receiving dozens of millions of venture capital and not making any profits or reaching break-even. Despite that, with the co-buying revenue model, the company was one of the more innovative ones during the New Economy times.

“We all get things cheaper when we buy in a group.”

“All together better value.”

“Together means more.”

Mr. von Holstein is still a believer in this model that buying in groups to get a better price is a valuable approach and he wondered why not more companies picked up this idea.

He is a great speaker and likes to share his knowledge to support entrepreneurship and aspiring entrepreneurs. This is also highlighted through his various investments in early stage companies and his work in the IQube incubator in Sweden. Let’s take a look at the many points he talked about:

Money is not all. He is a strong believer in entrepreneurship with all its freedom and responsibilities. Just focusing on making money makes you fail. Having owned multiple millions in stock options which have been priced by the short term thinking of stock markets and the New Economy bubble, he went through all ups and downs from a financial perspective.

Successful entrepreneurship is the 2nd best feeling in life. Love is number one. Mr. von Holstein was born in a small village and many were struggling around him and had no perspectives for their future. He was lousy in school but found his passion in skiing, what he followed professionally for 4 happy years until an accident destroyed his career. He did not know about entrepreneurship until age 26 when he went to university to study business. During this time he recognized his desire for achievement and the desire to win and to become an entrepreneur.

Work hard! Working always two hours more than everyone else makes you succeed, you don’t have to be too smart. He pointed out that the smartest will never win, but they can work for him, one of the many polarizing comments which made the presentation worth attending.

Everything works. You don’t need to have the best idea but you need the courage, the willingness and the passion to execute it.

Diversity is important. Mr. von Holstein lived in several countries for many years and always was surrounded by diversity, creativity and a multi-cultural environment. You have to be open-minded as an entrepreneur to succeed. The more diverse the team, the better.

Entrepreneurs make irrational decisions. These decisions drive innovation but also lead to many situations you are not expecting beforehand and are difficult to solve afterwards.

Nothing sells itself, ever! Thinking about the sales process, the distribution and the marketing in an early stage with a high priority is very important to create revenue. No one should ignore this fundamental business aspect.

Quality is a matter of recognition and thus over-engineering is more a burden than a success factor.

Avoid the help of VCs. They add overhead on top of the 100% work you already put into the product. Just the financial investment is highly appreciated. If you need an investment you have to reduce the risk levels.

A company needs time to grow. To be sustainable a company needs more than a couple of years to establish efficient structures and to expand. Ikea needed 40 years for its second shop, for example. The growth of letsbuyit.com was incredibly fast and led to the collapse.

Mr. von Holstein concluded with pointing out that the entrepreneur is the biggest hero in society because he or she creates jobs and supports the growth of the whole economy. A country that wants a long-term growth and a sustainable wealth has to support entrepreneurship in all areas of society.

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