I am often asked to assist people in the evaluation of an entrepreneurial opportunity. A prevailing belief is that entrepreneurs are good at identifying and exploiting market opportunities, as if such opportunities somehow exist with or without the entrepreneur. A related belief is that if one simply improves at recognizing opportunity then one can become a better entrepreneur.
The assumption that entrepreneurial opportunities somehow, somewhere, lie dormant until exploited by an insightful entrepreneur simply has no validity. No doubt after an opportunity has been developed and exploited for gain it can be identified, but that is not the same as identifying one before it is realized.
Many nascent entrepreneurs are unfortunately captivated by the assumption that there is an opportunity “out there”, somewhere. They are paralyzed by the thought of getting the opportunity “wrong.” To help them feel like they are taking action toward exploiting the opportunity many nascent entrepreneurs conduct extensive market research, or they write detailed business plans and financial forecasts.
Expert entrepreneurs think and act differently. Most will readily admit that they don’t have a business plan, and maybe they’ve never actually written one. They will write a plan if they need to raise capital or appeal to some high-profile advisors, but planning is not their first inclination about how to pursue an opportunity. Expert entrepreneurs know there is no way they can plan their way out of the uncertainties and unknowns that accompany every opportunity.
Experienced entrepreneurs know that there is no better way to pursue and understand an opportunity than to go ahead and explore it. They become adept at articulating their venture’s value proposition, but are at the same time ready, willing, and able to modify it if it doesn’t captivate their hoped-for customers. Expert entrepreneurs are driven by a vision, to be sure, but it is not a singular, “damn-the-torpedoes” vision of the future. Instead, they are driven by a vision of a future that has many possible outcomes, any one of which could be regarded as a success.
Novices often are hamstrung by what is referred to as “paralysis by analysis.” Many aspiring entrepreneurs that I meet exhibit this unfortunate characteristic. It does not seem to help much when I bluntly point out that they are suffering this common affliction of the aspirant. The usual reaction to receiving this feedback is to deny it, and then to continue on a quest to seek other counsel. I fear that many are simply hoping to find that one, magic genie who will transform their ideas into clear and obvious opportunities.
What the novice doesn’t realize, that the expert has learned to understand so clearly, is that opportunities don’t pre-exist. Entrepreneurial opportunities, instead, are created via reciprocal and repeated interactions between the venture and potential customers. Adjusting the value proposition, price point, features and benefits, and many other things are impossible to plan in absence of real-world feedback. Of course, gathering this feedback means taking some risks. It means risking getting things wrong, spending some money, and exposing oneself to potential failure. After all, what if the market doesn’t like what you’ve produced? What will that do to your dreams?
The expert entrepreneur has learned how to minimize the risk of failure by distinguishing between the venture and the self. Ventures fail, routinely, but the entrepreneur persists to try again. In order to have the courage to create and pursue opportunity the experienced entrepreneur maintains a clear distinction between their personal self-image and the relative success of the venture. In fact, seasoned entrepreneurs wear it as a badge of honor to have had failures in their entrepreneurial pasts. It suggests they’ve been to the frontline and survived, and that they’ve come back better, and more experienced to fight another day.
To avoid the paralysis by analysis fate of many novice entrepreneurs it’s imperative to recognize that there is not a “right time” to launch a venture, and no magic genie is going to help ensure the “right opportunity” is pursued. Opportunities don’t exist somehow “out there” in reality. They are created by the bold and the experienced. There’s only one way to realize opportunity, and that is by taking the actions necessary to create it. That also means creating the potential to fail. As long as the novice keeps in mind the distinction between the self and the venture, potential failure is not something to fear, it is the price paid to create the entrepreneurial opportunity.
Duening is director of the Center for Entrepreneurship in the College of Business and Administration at UCCS. He can be reached at firstname.lastname@example.org.