A New Definition of EntrepreneurshipOct 31, 2011
by Jeremy Koch
photo via pixabay
"Go It Alone” by Bruce Judson provides a new definition of entrepreneurship for solo entrepreneurs and lays out 10 principles for entrepreneurial success
Bruce Judson, a serial entrepreneur and a faculty member at Yale’s Graduate School of Management, has written a compelling guidebook for what he defines as the Go-It-Alone entrepreneur. In the book, Judson describes a new kind of bootstrap entrepreneurial venture that has the potential for significant scale and profitability but does not require the support of outside investors or the need to fund years of operating losses. This is all possible, of course, thanks to the power of the internet and digital technology. For those who aspire to Go-It-Alone entrepreneurship, Judson offers ten key principles for success.
In short, here they are:
10 Principles for Entrepreneurial Success for the Go-It-Alone Entrepreneur
• Focus on reducing risks associated with failure
Since Go-It-Alone entrepreneurs are spending their own money – not investor capital – they tend to be extremely mindful of the financial risks associated with launching their business. Typically, they lay the foundation for their new venture before quitting their day job, and they avoid putting the bulk of financial capital at risk until they are confident that it will produce a positive return on investment.
• Never get too far ahead of your customers
Although many people think that successful entrepreneurs need to create revolutionary new products, Judson makes the point that a great many successful new businesses are built around incremental change that fulfills some unmet consumer need without reinventing the customer’s way of doing business. Revolutionary ideas are often slow to be adopted by consumers and therefore take too much time to start generating positive cash flow for the inventor. So think smart… but think incremental.
• Make a commitment to flexibility
New businesses almost never succeed right out of the box. They require frequent readjustment and refinement. As a result, it is very important that you don’t build your business systems in a way that will be expensive or hard to change if you need to make a course correction (or many course corrections) along the way. So don’t build your business in a way that prevents you from making changes quickly and inexpensively.
• Have the ability to scale up
Businesses of scale can be built with minimal overhead and risk, but it is important that the ability to scale up is baked into the model from the start. To build a substantial business without the support of major outside investors, your concept has to be compatible with the ability to utilize automated technology, and your business systems have to be designed around that goal from the start.
• Maintain an experimental attitude
It is almost certain that the initial idea for your business is going to require modification to be a success. It is also certain that when competitors begin to see you achieving success that they will attempt to copy you or build on your good results. For these reasons you must constantly be testing and refining your business model, product offerings, promotional strategies, and business systems. As a bootstrap entrepreneur you need to make it a priority to spend a significant part of each day thinking creatively about how to improve the results of the venture through active experimentation and testing.
• Take yourself off the clock
As a solo entrepreneur, you can’t create a business of scale if your revenue is tied to the number of hours you work -- like a lawyer or a doctor or a counselor. To create true scale, you need to build an automated business that continues to generate revenue and profits, even while you sleep.
• Master the potential of new technologies
Many successful bootstrap businesses would not be possible without the power of the internet and new technology, and new applications are being developed constantly that allow businesses to provide ever more compelling products and services to their customers. While you don’t need to be a technology expert yourself, it is important to be aware of how you can apply technology to build functionality into your business to create a more satisfying and rewarding experience for your customers. So stay current. Constantly be on the lookout for how new technology can be applied to your business.
• Develop a bias toward action
Judson makes a distinction here between people who have big plans to start their own business but never take decisive action and those who make small but steady steps toward making their new business a reality. Successful Go-It-Alone entrepreneurs are in the latter category. Momentum is an essential ingredient in getting a business off the ground, and constant forward motion – even if the steps are small -- will help to create the dynamic force you need to succeed.
• Commit to finding a way
As Judson says, the act of creating something from nothing is never easy, which is why such high rewards flow to entrepreneurs who can make it happen. Trying your hardest is not enough when it comes to successfully starting a business. You have to be determined enough to make it succeed. For bootstrap entrepreneurs, there are no A’s for effort. You need to develop the attitude that failure is not an option.
• Only use off-the-shelf products and services
The recent expansion in high value off-the-shelf services in the past few years has been breathtaking. Systems that only a few years ago would have cost hundreds of thousands of dollars to build can now be accessed for less than $100 a month. As a result, Go-It-Alone entrepreneurs can compete with established, well-funded players on a much more level playing field. So before investing in proprietary solutions, seek out off-the-shelf alternatives that can provide the same (or almost the same) level of functionality. In virtually every case you’ll find a solution that provides a cheaper, faster, less risky way to move forward.
Judson’s book goes on to explain in much greater detail the basis of each of his ten principles, providing compelling examples from his own personal experience, stories of famous entrepreneurs, and anecdotes from a broad range of successful start-up ventures.
For those interested in launching a bootstrap start-up, “Go It Alone” provides both a practical resource and an inspiring guidebook. It should be required reading for all solo entrepreneurs who have a dream of starting a business of their own.
3 Characteristics of a Go-It-Alone Business
- The business is started with minimal investment and the founder retains full ownership and control.
- The business can be run by a very small staff -- usually from one to six people.
- Although small in staff, the business has the potential to become very large due to the power of personal leverage and web technology.