The Wikipedia definition of entrepreneurship: “Entrepreneurship is the practice of starting new organizations or revitalizing mature organizations, particularly new businesses generally in response to identified opportunities…Entrepreneurial activities are substantially different depending on the type of organization that is being started.”

I have been shocked over the past few months at what I believe to be a misinterpretation/misapplication of the word “entrepreneurship” or “entrepreneur”.   It seems that many people believe that the term “entrepreneur” or “being entrepreneurial” is reserved only for those who are currently bootstrapping together a new business from scratch.  I have encountered numerous of these people at TTEA events who will ask me, “Where are all of the entrepreneurs?”.  While I respect anyone who is currently forming or running their own business (especially those starting from modest beginnings, without “daddy’s help”), I have to respectfully disagree with their “elitist” definition of the term.

I believe entrepreneurship can be displayed in numerous venues and positions and is not reserved for only one specific action.  In fact, there are several actions/activities that I would consider very entrepreneurial such as:

• Starting a non-profit organization
• Working at a VC/PE fund or a law firm where you are constantly forming and nurturing early stage companies
• Working at a firm where innovation is expected and is “part of the job description”
• Taking part in a restructuring or a rebranding of a firm

These are just a few examples of other activities that I believe should qualify people to be classified as entrepreneurs.  In addition, I think those that aspire to one day run their own businesses, and are in the process of preparing to do that, are also entrepreneurial.

I believe our good friends at Wikipedia have put forth a pretty good definition of entrepreneurship (see top of post).  Specifically, they mention “revitalizing mature organizations” and they say that entrepreneurial activities are “substantially different depending on the type of organization.”  I would put forth the following tweaks to the Wikipedia definition in order to fully capture the ideals we believe in at TTEA:  

“Entrepreneurship is the practice of starting new organizations, revitalizing mature organizations or conducting business via innovative thinking in existing organizations.  This is particularly seen in new businesses, generally in response to identified opportunities, however is also true of existing organizations that are managed with innovation in mind.  The key tenant of entrepreneurship is innovation, regardless of the form or forum.”

TTEA was created to provide a (i) forum for the exchange of ideas, (ii) educational opportunities and (iii) opportunity for all members to give back to their respective communities.  We believe it is vital to have each of these “pillars” take place between established, in-progress and aspiring entrepreneurs.  Only through this exchange of varied backgrounds and perspectives can the maximum benefit be created for all ENTREPRENEURS.

My general feeling toward entrepreneurship is that there is never going to be the PERFECT time to start your own company.

When you are young, there is going to be a reason or reasons that urge you to wait a few more years to start a business. At some point, this reasoning will turn into, “Well if I was ever going to try it, the perfect time would have been a few years ago.”

No one knows what the perfect time IS, they only know what the perfect time WAS.

The point is that if you give it a shot when you are young and you fail, there is always more time to try again. However, once you realize that the perfect time was a few years ago, then you have missed your opportunity.

This doesn’t mean that it is best for every entrepreneur to start a business right out of school, just that you need to be aware that at some point you are going to have to take a chance.

Some people in the world choose to waive risks and live a secure life, which is a fine decision. However, I’m assuming that people on this site are entrepreneurs at heart and look forward to being their own boss one day and growing a business that they created.

The truth is, it is never going to seem like the perfect time to start a company and that is why it is important to stay focused on the pro’s of starting a business and not let the thought of failure and other deterrents shape your decisions.  You don’t have time to worry about the risks of failure.

As stated by Richard Branson in the November edition of Entrepreneurs Magazine, “There are moments when things have gone wrong in adventures where I’ve certainly been scared. But equally, I’ve realized that just like in business, I have to stay completely focused. I haven’t got the time or the energy to spend getting scared.”

When I think about one day starting my own business I generally put my options into three categories:

• The Big Idea:  Come up with the next big idea that will either completely revolutionize an industry, or maybe even create a brand new one.  Examples of this in my mind are companies/ideas like Microsoft and Under Armour. 
• Build a Better Mousetrap:  Improve on an existing idea or business model, even a very simple one (like a mousetrap), thereby giving my company a competitive advantage.  Examples include the Apple iPhone, a specific niche of investing and our friends at Game Wager.
• Execute and Outperform:  Take a classic business and just do it better than your competitors.  This can include anything from the restaurant business to air-conditioning service to private equity investing.

While there are shades of grey in between these categories, and there are numerous sub-categories one could create within each, I think this provides a framework for aspiring entrepreneurs thinking about how they will successfully start a business.  Each option presents its own challenges, opportunities, positives and negatives that must be weighed. 

Everyone would like to come up with a ground-breaking idea and reap the huge rewards that it can lead to.  However, the majority of people will not generate such an idea and must rely on one of the other two options.  The fact is, that does not mean one can’t be an entrepreneur – in fact, it might mean you have a higher probability of success.

I would love to hear your opinions on these observations.

I was thinking about some points that I wanted to talk about related to starting your own business. With all the bad economic news and uncertainty in our economy I had a lot  of topics. I decided to point out some of the good points. Being your own boss means you can hit the golf course when ever you want. There is no one to answer to when making your schedule.Cell phones and the Internet means you can make critical decisions real time from your office or from an exciting vacation spot. The new business owner will find little time to do this in the beginning but it is a goal that is very attractive to most entrepreneurs.

 I have several employees that have not embraced any of the new technological advances. In fact some don’t even want to be involved in any new technology. It is a dilemma when you have a person that is very capable in their job but they do not want to learn new ways to do their job. I am implementing a paperless invoice system for some technicians. To say it was met with a luke warm reception would be an understatement. This is a green initiative and also eliminates double work writing the invoices once and then putting them in the computer later. I found a couple of technicians to start the program, once the others saw them learning a new skill it became easier to find volunteers. The technicians are smart enough to know the more skills they have the more money for them. Competition,more money, and peer pressure helps keep people motivated to learn.

Everyone knows what’s been happening in the financial markets and what has happened to get us here. Panic gripped the markets beginning with mortgage finance and has spread into every corner of our market. Now our country’s financial system is lacking its most important element: confidence. Our system of banking and short term lending is heavily dependent on trust in counterparties…trust in government…trust in regulators and credit rating agencies. Right now the market has none. As we’ve just experienced first-hand, trust is ruined very quickly and could take a long time to rebuild. CEO after CEO has stared straight into the TV cameras explaining how their company is in ship-shape, only to announce large losses and massive common shareholder dilution a few weeks (or days) later.

Two weeks ago Warren Buffett made news by investing billions into Goldman Sachs and General Electric through preferred stock and warrants. It has also been well publicized that he made the investments on great terms for Berkshire Hathaway. Both GE and Goldman essentially gave him a discount in exchange for supplying capital, perhaps for providing liquidity in an illiquid market–but that does not likely explain the full premium.  As investors have lost faith in the institutions that we thought were the bedrock of the entire US economy, from the investment banks to the Federal Reserve, Warren Buffett remains one of the rare bright spots with a large amount of credibility remaining during this panic. It seems to me that the two firms could have found equity financing on better terms elsewhere, but Buffett has built up such a great reputation that GE and Goldman paid up for the “credibility by association” deal with Buffett. It’s as if they are saying to the market, “Everything is okay now, we have the world’s greatest investor watching over us.” Make no mistake about it, Buffett’s intentions about building a powerful reputation throughout his long career have paved the way for deals like these.

As aspiring entrepreneurs in the digital age, you and I must be even more conscious of the reputations we are crafting as we set out to establish ourselves in the business world. Nowadays we leave a readily accessible timeline of our lives and our digital fingerprints are left on most everything we deal with.  If you are working on a startup, new information about it (good or bad) can spread like wildfire via the internet. In the age of Google, there are dozens of websites dedicated to sharing customer reviews, and the whole world can watch your every move. Your past becomes your present. Having a digital identity is probably a net positive for 90+% of entrepreneurs and job seekers, as you can try to carefully censor what gets on the web about you and strive to put your best face forward. Either way, you are constantly molding your reputation, so it’s how you do things that matters most.

Mr. Buffett puts it best: “It takes twenty years to build a reputation and five minutes to ruin it. If you think about that you’ll do things differently.” It will take confidence to get our financial markets and economy going again, just as it will take confidence and credibility to get your own entrepreneurial venture established. Work on your reputation diligently, then guard it with your life, so you too can eventually receive a ‘credibility premium.’

I had a contract with one of the large banks. When I heard the news it had been bought out at an extreme discount I was concerned about the validity of my contracts. I called my contact and was assured that the money had already been earmarked and we were still going forward with the projects. Friday I received a call that all the projects had been scrapped. I hope to be able to find projects to fill this void but it won’t be easy in the current market.

My last post questioned whether an aspiring entrepreneur, that lacks the capital to start a company, should seek investment from venture capitalists or private investors.

Before I asked that question, what I really need to know is if it is smart for a college grade to “grab the bull by the horns” and start their own company upon graduation. Therefore, my question is…

In general, is a college grad better off working for several years for a large company and making money and connections, then starting their own business with their own capital? Or, should they seek outside capital to help start their business right out of school and learn from direct experiences and create contacts along the way?

I would argue that one would learn a lot more from direct experiences encountered while running his/her own business, than he/she would while being the “low man” at a large company.

This is my feeling. What is yours?

Wow…what a couple weeks we have seen on Wall Street. Starting with the bankruptcy of Lehman Brothers and now ending (hopefully) with the recently passed $700 billion government rescue plan.  The events that have occurred have either never been seen before or are firsts since the great depression.  In these uncertain times, I was thinking about what this means for someone who is considering starting their own business.  There are pros and cons of starting a business in this environment…here are just some of the considerations I thought of:

• Little to No Capital:  First, the tightening of credit across the entire market is going to limit entrepreneur’s ability to access capital.  I have seen this in my business where energy companies we have formed are not able to borrow near as much as they were 6-12 months ago.  This will especially affect those with unproven track records who are trying to borrow in asset light businesses.  It will also make it very tough to start something without a well capitalized equity provider (you, a partner or institutional money).  Basically, those without capital are at a huge disadvantage in this market because there is little to be found.
• Increased Opportunity:  When the economy goes through processes like this, there often are numerous opportunities that arise for innovating people who are willing to take a chance.  The U.S. is going to go through a process of de-leveraging itself over the next several years – quality assets will shake out and create golden opportunities.
• Recession: If one starts a business right now, they would be trying to sell their products and services in a market where consumers and businesses have been, and will likely continue, ratcheting back spending.  Consumer confidence is significantly weakening which has a broad impact on the overall U.S. economy.  Europe also appears heading for a slowdown.  That is a tough market to get started in.  The one flip side to this is that what follows recessions are periods of growth and expansion, and the business you started during the trough will be up and rolling by time the expansion phase rolls around.
• Lower Opportunity Cost:  Another clear positive I see about the current market environment is that leaving one’s job could have become much less costly over the past 6 months.  As companies curtail spending and growth slows it is likely that compensation in most industries will follow suit.  The opportunity cost of leaving (i.e. the salary and bonus you leave behind when you start your business) is now much more palatable.

I had a staff meeting today with two of my key people. I expected it to be brief to emphasis a few points. I came to realize they did not fully understand some new procedures I had been trying to implement. Two hours later we were all on the same page. That reminded me as the “captain” of the ship I need to make sure everyone is going in the same direction.