The Union Budget 2016 announced a slew of incentives for start-ups to promote entrepreneurship, employment generation, and encourage innovation as a key partner in ‘Make in India’ campaign. Government has allocated over Rs. 500 crore under the Startup India Scheme for promoting women entrepreneurs, scheduled caste/scheduled tribes entrepreneurs to run businesses with support of various industry associations.
We have just lived through a wave of dot-com and ‘Start-up’ boom that lasted almost a decade where raising several millions of dollars for a business idea led to the belief that anybody could get-in on the “become an entrepreneur” game. These consisted many successful entrepreneurs investing in business ideas of student startups freshly out of colleges and universities. Though many have succeeded in making a mark, many have not sustained and have disappeared in less than five years. Most ventures launched have failed due to the misjudgement in the business ecosystem that raising several million dollars meant they were successful entrepreneurs.
So, what does it take to be a successful entrepreneur, the people who set up and grow their own profitable companies? Is there a typical profile of an entrepreneur?
This takes us to the age-old question that has been pondered endlessly by academic business professors and aspiring entrepreneurs: Are entrepreneurs born with the required skills or can men and women be trained by education, experience and mentorship? Or, is it all about a person’s early life experiences and background?
First let us reflect on certain qualities and personality traits that an entrepreneur should possess –
Innovation – The main quality of entrepreneurship is innovation - innovation in a new product, a new technology, sources of finding new markets, continuous up-gradation in internal systems and ways of doing business, and adaptability to latest trends. Where there is a problem, there is an opportunity to be innovative to find solutions to resolve the problems.
Capacity to take risks – Following intuition takes a certain leap of faith. Entrepreneurs need to be inveterate risk takers. As an optimistic entrepreneur, taking rational decision is important. Confidence is the key in any decision making process. A will to win, ability to deal with complexities, and the capacity to take risk is of foremost importance.
Passion and long-term vision – Passion makes entrepreneur start and grow their businesses. Self-awareness, conviction and the ability to succeed, action oriented and proactive approach helps prepare for contingencies. An ambition enables to plan for growth and set clear goals. Passion is contagious. The optimism and enthusiasm of the leader infects those who work for him/her.
Effective communication and ability to sell –Communicating well means entrepreneurs can tap potential clients and gain more customers. Successful entrepreneurs communicate in an organized manner, listen more than speaking to avoid miscommunications and redoing tasks.
Leadership and Team-building – One of the most important qualities of an entrepreneur is dealing with people and communication. Persuading people, building consensus in the team, managing diverse groups of people with diverse skill sets, keeping people motivated are often challenging. Leadership involves taking initiatives and guiding people even in uncertain situations.
Ability to seek help when needed – Nobody is perfect and entrepreneurs are no exception. Ability to ask for help when needed not only leads to faster problem solving but also strengthening team through communication and continuous learning. In other words, successful entrepreneurs know how to get things done!
Ability to wear different hats –It is not economically viable for most startups and small entrepreneurs at early stage to hire skilled and professionally qualified people for managing different areas. Ability to manage time effectively, mastering the art of prioritization, self-discipline, persistence, determination with the never give up attitude are the stepping-stones to success.
Entrepreneurs often face challenges of running business through limited resources. With finance being the major constraint in majority cases, optimum resource utilization along with the question of survival in times of downturns remains a challenge. Maintaining a balance to sustain social and family pressure is another challenge. With growth in business, number of people becomes dependent on the entrepreneur to take the right decisions. Thus, it can often be a slow and lonely climb to the top.
Nature versus Nurture
The entrepreneurial nature versus nurture is an age-old debate, but with entrepreneurship on the rise, its time to reflect on the same.
There are several examples of successful business leaders having opted out of education that is often assumed to be crucial for an executive career. They may not have the proper educational background or environment that fosters or encourages them to become entrepreneur but they have an innate sense of entrepreneurial traits; an intuition that guides them in building their enterprises. Such personalities have in- born qualities of risk taking, ability to deal with ambiguity, ambition, self-discipline all forming part of ‘entrepreneurial DNA’. Many successful SMEs to big business houses have been thriving over decades with the heredity being passed on from one generation to another. In many cases, the founders having no formal education shows that entrepreneurs are born. On the other hand, their parents and other family members who are in business train their next generation. Entrepreneurship is often genetic for people born in business families. The hereditary business acumen is passed on to the next generation wherein the newer generation already has a ready business launch pad to participate in. It often depends on early life experiences. While critical personality characteristics are heritable, the new generation is often trained from a very young age to adapt and align to the existing business. However, many vital skills need to be taught through formal education to enable to meet the changing requirements and bring about continuous up gradation as per business trends.
On the other hand, successful entrepreneurs trained from business schools having no background of business whatsoever are also running businesses. It is in the classroom where people have discovered their passion for entrepreneurship. They start with interests or endowments in terms of general skills, and further enhance their abilities through classroom training.
Talking about experience and training, many entrepreneurs can also be termed as ‘transitioned entrepreneurs’, those who have previously worked in corporates or specific industry for certain years, gained experience and expertise and later on moved to establishing their own business. Many cite their prior work experience in corporates or industry as an important training ground for their entrepreneurial career.
There are also other factors that play an important role in the development of entrepreneurial spirit. Many people often opt for an entrepreneurial career due to political, economic, educational and social environment in which people are immersed. On the other hand, factors such as favourable law regulations, incentives and subsidies offered by government, stable political situation, well-established financial and regulatory systems etc. play a major role in promoting the entrepreneurial spirit in the economy.
The debate of entrepreneurship as innate or acquired depends on the time and beliefs. The need for entrepreneurial adventure is now primarily related to one’s mind, a sense of autonomy and personal success of the individual. Over the past ten years, entrepreneurs have played an increasingly important role in the global economy. It is therefore, important to understand the motivations and drivers of entrepreneurs worldwide. Another misconception needs to be corrected: entrepreneurs are no different in nature from traditional leaders. Entrepreneurs are defined more by their first business experience, their cultural background and external environment as by innate traits. In other words, the acquired skill-sets play a more important role in shaping the innate entrepreneurial spirit.