The Skills of an Entrepreneur

Last week in class, a software student asked me: “I want to be an entrepreneur like Steve Jobs or Bill Gates and starting my own company. What do I need to know before I graduated?”. Suddenly, several students also wanted to know how to start their own companies. It seemed everyone want to be their own boss rather than working for somebody else.

I explained to the class that starting a company requires a lot of works but the most critical element is the skills to be entrepreneurs. Wanting to be an entrepreneur is one thing; Being one is another. Many students want to be Bill Gates but my question is do they have what he has or do they just want his fames and his money? Of course this question led to a lot of discussions among students and every students have different opinions about it.

I told the class: “As entrepreneur, you will need different responsibilities from people who work for a company. It is a challenge that can be very stressful. Unless you are prepared both mentally and emotionally, you will not go far. You must ask yourself whether you are the right person for the job of an entrepreneur. As the owner of a company, you are responsible for everything, from establishing your company’s vision, bring in revenue, and manage the daily works. When you become a company owner, you work for yourself because your business and your success depend solely on you. What you say and do must be positive as you move forward to achieve your vision. People who work for you will share that vision and your determination to succeed, even under difficult circumstances. If you do not possess a strong positive mindset, how can you convince people to work for you? If you do not treat them with respect, how do you ask them to stay with you in difficult time?”

A student asked: “So the key factor is be positive on everything but do we need to be good at technical too?”

I explained: “Of course, you must have technical knowledge but being an entrepreneur is mostly about the passion, the management skills and the commitment. Managing a company requires a strong commitment to quality and to satisfy your customers. You cannot short cut anything, you cannot miss deadlines, you cannot deliver bad products or make promises beyond your capabilities. You must be able to resist any temptations and distractions and get your work done according to the highest quality and ethics. Because market changes often as well as technology, you must continually learn new things, seek new information, look for new ideas, to have better chance for success. You must follow market trends and adjust your products or services according to customers’ needs. You must focus on providing the best value to your customers. You must continuously improve your competitive advantage and efficiency to maximize your revenue. You must monitor everything to identify potential problems before they could hurt your company”.

Another student asked: “It seems that the whole thing is about management. Is the question about can you manage a company? Is it correct?

I explained: “It is more than just managing a company. You can be a manager in a company but an entrepreneur is more than managing. You must know how to recognize a business opportunity and market it to others. Many people do NOT pay attention to marketing as they consider it the job of a salesperson. That is a big mistake. No business, no matter how good, will succeed without some kind of marketing. The best marketing people in the world today is probably Steve Jobs. He is NOT a technical person as many people thought. (In Apple, Steve Wozniak is the technical person). He is NOT a good manager either. (He hired others to manage his company and made a big mistake when they seized control of the company, took all the money then kick him out – Yes, Steve Jobs was laid-off by Apple). But when he returned, he built his company on marketing new products instead of selling computer and in this field he is number one. He knows that he cannot compete with Microsoft on software. He knows that he cannot compete with HP. Dell, Toshiba, Sony, Samsung on computers. However, he knows what the market needs, he knows what technical people needs, he knows what customers want, he pays attention to what his competitors are doing, and he knows how to differentiate his products from others. As an entrepreneur, he knows how to recognize an opportunity and take action before others even understand it. Do you know that the “computer mouse” was invented by Xerox at Menlo Park? People at Xerox did not see the potential as it has nothing to do with “copy or print something” so they gave it to Steve Jobs and he took advantage of it. That is why Apple was so successful with the Mac computer in the early time. Today every computer has a “mouse” because it is easier to “point and click” than type in command. Do you know that the MP3 player was invented in Germany and brought to Microsoft first? People there did not see the potential as it is a hardware and not software so the inventor brought it to Steve Jobs. Steve created the iPod and changed the entire music industry with his iTunes concept. Do you know that the smart phone was invented by IBM but the people there did not see any potential as IBM is not a telephone company. IBM sold it to Nokia but Nokia cannot make it work because it needed a lot of software and Nokia is not a software company. Nokia licensed it to Microsoft who built the Window CE to make it work. Microsoft smart phone was not a success because the it was very difficult to use with so many buttons to click. Finally they gave up and Steve Jobs grab the idea, changed it into a flat screen with no button to push, only touch screen and market it as the iPhone. You probably know the rest of the story. What Jobs did is the ability to recognize a business opportunity when other did not and he knows how to market it. Of course, today so many people copy it, compete by lower price products but consumers still prefer the original and Apple is still doing very well. To be an entrepreneur, you must have that kind of skill, the ability to recognize potential business opportunity when other do not”.

The class suddenly seemed quiet. Many students began to think deeply as they have not thinking about this kind of skill as they are mainly concern with technical idea aspect.

I concluded: “Even having good idea is NOT good enough because reality may be different. Anybody could come up with an idea or a concept but you must ask yourself whether there is a need for your particular idea? Can you market it? Can you sell it? How many people will buy it? As entrepreneur, you must do some calculations here. You must have the answers to these following questions: How big is your market? Who are your competitors? How much money must you invest in your product? How much profit would you generate? How many employee do you need to build the product? How many equipment must you buy? There are many questions that you must think very careful and have the answer for them before starting anything. A good company owner must knows how to analyze these issues from many perspectives and understand that strengths and limitations of each. So my last question is do you have the skills, the passion, the technical knowledge, the business knowledge, the commitment to take actions on your dream? Do you have the skills to drive your business to succeed and be responsible to all of your employees? What would you do if the market changes? What would you do if the technology changes? What would you do if your customers change their minds? Do you still have the passion, the love, the courage in adverse situation? When you work for yourself, you must know exactly what you are doing”.

Sources

  • Blogs of Prof. John Vu, Carnegie Mellon University

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