Death Of The EntrepreneurI have been involved with entrepreneurship and intrapreneurship since 1989 when, at 21, I set up my first company. Since then, I have set up ten companies and have never (ever) sought funding. In that time, I have made money and lost money; made friends and lost friends… and, just to repeat something here, never (ever) sought funding.

I never knew that I was an entrepreneur – in fact, it wasn’t until the summer of 2012 that it was pointed out to me that I was a serial entrepreneur.

When someone like Lord Sugar states “don’t define yourself as an entrepreneur – if you take care of your character, your reputation will take care of itself” then I guess I was on the right track for 23 years or so as I never really considered myself anything other than someone just getting on with things. My Entrepreneur DNA was pretty intact… even if I didn’t know that I had any.

For the last few years, I have been involved in what can only be described as the enterprise industry – an entire market given over to training, mentoring, advising, hosting, funding people with ideas – the ‘ecosystem’. There is probably more money made by the industry wrapped around entrepreneurship than generated by the entrepreneurs themselves. For every Instagram, there are probably 999 failed businesses and lost investment.

I have spent a lot of time speaking with, meeting with, working with, and consulting with ‘entrepreneurs’ and I have been wondering if, for now, the modern entrepreneurs have had their day.

Here’s a few definitions of the entrepreneur

  • one who organizes, manages, and assumes the risks of a business or enterprise (Merriam-Webster);
  • entrepreneurship is a process of identifying and starting a business venture, sourcing and organizing the required resources and taking both the risks and rewards associated with the venture (Wikipedia);
  • Entrepreneurship replaces in whole or in part inferior offerings across markets and industries, simultaneously creating new products and new business models (Austrian American economist and political scientist, Joseph Alois Schumpeter);
  • entrepreneurship is about taking risk – the behavior of the entrepreneur reflects a kind of person willing to put his or her career and financial security on the line and take risks in the name of an idea, spending much time as well as capital on an uncertain venture (Frank H. Knight [1921], Peter Drucker[1970])

Do you see the standout with each of these?

The entrepreneur assumes the risk; the entrepreneur creates something new and different (market disruption).

Except that this isn’t really true is it? When we look at Western European and also North American ‘entrepreneurs’, their first question seems to be “who will fund it?”: Bank loans, startup loans, family & friends, seed capital, angel networks. These aren’t entrepreneurs – these are people with an idea and then the intent to work on it with someone else’s money.

In the USA, the JOBS Act allows anyone who wants to start or grow a business to use an online equity crowd-funding portal to raise up to $1,000,000 by selling stock in their company.

So I ask again… where’s this risk that entrepreneurs talk about?

I had one entrepreneur approach me with a pretty good idea for a sauce (condiment) with a fairly interesting market to exploit. The entrepreneur had been working on the idea whilst being employed but then, one day, the email came through to my desk: “my position has been made redundant and I have had a $50,000 settlement”.

Wow, brilliant! He has the time to work on his idea properly and really get it moving. How can I help?

And here’s the killer moment… he doesn’t want to spend his money, he wants me to find other people to ‘invest’ instead. What is an entrepreneur if they are unwilling to take the risk?

I accept that you can’t base an argument on one single example so how about the ‘entrepreneur’ that sold equity in his company to an investor ($75,000 in exchange for 15% of a company that hadn’t started trading). As the company traded, the entrepreneur mis-ran it to such an extent that he was emailing us asking for money to shore up the business as the investor didn’t want to put even more money into the venture (never a good way to open any negotiation).

I went to see him and listened to the history and then the prospects of the business. First things first: the idea was a poor one. Interestingly though, they had been developing a social media back-end that did have potential.

As we started to explore the idea of ditching his current business model and pursuing the social media idea, he suggested defrauding his current investor as a way to ‘both make a bit of cash’.

What is this entrepreneur if they are unwilling to take the risk (not to mention the massive risk for me of working with such a character!)

This is my point: if you are an entrepreneur, then be an entrepreneur. Yes, you will eventually need external funding – and that will come when you have worked on your idea, built a nominal customer base, proved the concept, and so on. You are also going to be negotiating better investment with a more favorable equity offering.

Maybe it’s not the death of the entrepreneur but the birth of a) skilled fundraisers and b) a better class of entrepreneur – it is important that we all recognize which is which.

Death Of The Entrepreneur