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RISE CAPITAL
America is the land of entrepreneurial opportunity. The American l. Dream is one of doing better than your parents' generation in terms of education and standard of living. Entrepreneurship is often the path that leads people to that dream. The level of entrepreneurial activity in the United States leads the industrialized world. At any given point in time, over 10.6 percent of the adult population is pursuing an entrepreneurial venture or is the owner of a new business less than forty months old.* Yet this statistic is misleading because there are different types of entrepreneurship. Individuals such as Bill Gates (Microsoft), Arthur Blank (Home Depot), and Michael Dell (Dell Computer) have founded companies that not only became industry leaders but also changed the way we live and work. At the other end of the spectrum are the mom-and-pop owners of the local dry cleaner or pizza shop. Then there are all the entrepreneurial businesses in between. We describe these types of entrepreneurship as lifestyle, foundation firms, and high-potential ventures. What type of entrepreneur are you? More important, what type would you like to be?
Our first job is to inspire you to "think big enough." Time and again the authors have observed the classic small business owner who is enslaved and wedded to the business. Extremely long workweeks of seventy, eighty, or even one hundred hours, and rare vacations, are often the rule rather than the exception. And these hard-working owners rarely build equity, other than in the real estate they may own for the business. The implication is clear: one of the big differences between the growth- and equity-minded entrepreneur and the traditional small business owner is that the entrepreneur thinks bigger. Longtime good friend Patricia Cloherty puts it this way: "It is critical to think big enough. If you want to start and build a company, you are going to end up exhausted. So you might as well think about creating a BIG company. At least you will end up exhausted and rich, not just exhausted!" Pat has a wealth of experience as a venture capitalist and is past president of Patrioff & Company in New York City. She also served as the first female president of the National Venture Capital Association. In these capacities she has been a lead investor, board member, and creator of many highly successful businesses, many of which were acquired or achieved an initial public offering (IPO). Her theme of thinking bigger infuses this book. How can you engage in a "think big" process that takes you on a journey always treading the fine line between high ambitions and being totally out of your mind? How do you know whether the idea you are chasing is just another rainbow or indeed has a bona fide pot of gold at the end? The truth is that you can never know which side of the line you are on - and can stay on - until you try and until you undertake the journey.
Great companies are built using ideas and entrepreneurial creativity Yet while the metaphor of a carpenter or mason at work is useful, in reality the process is more like the collision of particles in the process of a nuclear reaction, or like the spawning of hurricanes over the ocean. Ideas interact with real-world conditions and entrepreneurial vision at a point in time. The product of this interaction is an opportunity around which a new venture can be created. Small businesses sometimes lose sight of this entrepreneurial chemistry and stay small in an attempt to control their environment. In reality, the business environment in which an entrepreneur launches his or her venture is usually fixed and cannot be altered significantly.
It is worth emphasizing again that a good idea is nothing more than a tool in the hands of an entrepreneur. Finding a good idea is the first step in the task of converting an entrepreneur's creativity into an opportunity.
The importance of the idea is most often overrated, usually at the expense of underemphasizing the need for products or services, or both, which can be sold in enough quantity to real customers. Most small business owners realize this and have real-time market intelligence that gives them a competitive advantage. But they sometimes lack the perspective on how their knowledge of the products and services translates into scale. We'll talk about that later.
Most people can certainly spot creative flair. Children seem to have it, but many seem to lose it. Several studies suggest that creativity actually peaks around the first grade, because a person's life tends to become increasingly structured and defined by others and by institutions. Further, the development in school of intellectual discipline and rigor takes on greater importance than during the formative years, and most of our education beyond grade school stresses a logical, rational mode of orderly reasoning and thinking. Finally, social pressures may tend to be a taming influence on creativity.
There is evidence that one can enhance creative thinking in later years. Eureka! Ranch was founded on the principle that creativity is inherent in most people and can be unleashed by freeing them from convention. Oftentimes, executives will be doused with water as they step out of their vehicles onto the ranch.
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