21st century entrepreneurship

by Eduardo Estellita on outubro 18, 2012

Meet Rachel Lowe.

One fine day, Rachel had an idea and a desire: to launch a board game that would compete against the 7-decade top-seller “Monopoly”. She researched the market for a few months before she pitched her plan to experienced venture capitalists. The result was a resounding “No” as her inexperience (she was 27 years-old then) and lack of long-term plan got in the way.

Rachel’s pitch on the Dragon’s Den gets to the core of what the shifts of the 21st century are all about.

In a predictable world where “stability leads to growth”, the way to approach business was quite straightforward:

1)      You research the market (eg. Porter’s 5 forces) and forecast how the future will be (with a little error margin)

2)      You lay out several strategies, choosing the optimal one (that maximizes your profits)

3)      You gather resources, mostly by pitching your 3-year plan to investors

4)      You work very hard and become a “winner”

In such a world, the only possible endpoint was achieving your goals.

The problem with that approach is that there’s very little that is predictable or certain about the 21st century. Just the simple exercise of Porter’s 5 forces becomes a nightmare in the face of the complexity and interconnectedness of the stakeholders’ network.

To provide a solution to this frustration, Leonard Schlesinger and Charles Kiefer met serial entrepreneurs to understand how they approached uncertainty. The result is a very interesting book called “Just Start” that outlines the principles of what they called “Creaction”.

1)      Start with desire. You don’t need to be passionate about your business in the beginning, just have enough desire to give it a try.

2)      Act quickly by taking a small smart step (that is within your acceptable loss) with the means at hand. A healthy step would be to enroll others in your idea, to multiply resources, and dilute risks. The question should be “How much am I willing to put in to see how it’ll play out?” instead of “How much will I make at the end-point of my venture?”

3)      Reflect and build from the lessons learned from that step. Reality-check is a gift and both positive and negative results give you an opportunity to adapt your aim for the next step.

4)      Repeat until you’ve succeeded, exceeded your acceptable loss, proven yourself it can’t be done or changed your mind.

Back to Rachel, Creaction was exactly her approach. She started with desire. Then, she tried to enrol others to gather resources (money and experience) by focusing her attention on the next step (the launch at Hamley’s Toy Store). She was not as concerned with the long-term plan of her venture, as she understood that trying to become the first competitor of an established brand was an unpredictable scenario. She defined her acceptable loss and built on what she has learned from the dragons and the launch.

As it turns out, Rachel’s product was an outstanding success, debunking “Monopoly” from the top-seller position already in its first year. She has then brought others along by establishing partnerships with Disney and Warner Brothers (a Harry Potter’s version) and has now sold 26 different versions of her game.

The road was not failure-free as she filed bankruptcy during the 2008 crisis, but in every  step she built from what she has learned from reality. Eight years down the road, Rachel has gained the experience of a serial entrepreneur. She knows what works and what she likes. She has saved money and has created successful opportunity-based partnerships. Had she adopted the Predictive model, her reality would have been nothing more than a line on a regret list.

The reason I’m sharing this story here is not to tell you how Generation Y is chosing entrepreneurship as an alternative to meaning inside the traditional workplace, or to explain how rampant youth unemployment (around 1 out of 3 young individuals in Europe) has contributed to the rise of entrepreneurship, or how the resources in the Idea Era have allowed individuals to express their creativity and innovation. You know this already!

Sharing stories about the many Rachel’s in this new world is essential if we’re going through and out the many crisis in our societies. Whether you’re researching about a topic with an endless list of resources (like generations at work) or jumping into 21st century entrepreneurship, your first and foremost challenge is leaning into the discomfort of uncertainty. Those who accept to let go of control and create a space that welcomes chance opportunities will be the global leaders we need so much.

How are you doing on letting go of control?

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