Daniel Smith - How to Think Like an Entrepreneur

HOW TO

THINK

LIKE AN

ENTREPRENEUR

By the same author:

How to Think Like Sherlock

How to Think Like Steve Jobs

How to Think Like Mandela

How to Think Like Einstein

How to Think Like Churchill

How to Think Like Bill Gates

How to Think Like da Vinci

How to Think Like Stephen Hawking

How to Think Like Sigmund Freud

How to Think Like Barack Obama

First published in Great Britain in 2020 by

Michael OMara Books Limited

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Copyright Michael OMara Books Limited 2020

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A CIP catalogue record for this book is available from the British Library.

ISBN: 978-1-78929-207-7 in hardback print format

ISBN: 978-1-78929-241-1 in trade paperback print format

ISBN: 978-1-78929-208-4 in ebook format

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For Charlotte and Ben get to business!

Contents

Entrepreneur n. a person who undertakes an enterprise or business, with the chance of profit or loss.

THE CONCISE OXFORD DICTIONARY

The entrepreneur always searches for change, responds to it, and exploits it as an opportunity.

PETER DRUCKER, THE DAILY DRUCKER (2004)

Entrepreneurs have been with us throughout history. There was, I expect, some cave dweller who realized they were a dab hand at roasting a bit of bison and so set up a little enterprise swapping dinner for raw meat, or a container of water or a lovely wall painting. But it is only in more recent times that entrepreneur has entered the popular lexicon and has come to be acknowledged as a vital component of our economic systems.

In the early days of formal economic study dating back to the Enlightenment or thereabouts there was an assumption that economic actors (i.e. people!) were rational creatures who made reasoned decisions based on an analysis of all the evidence available to them. There was little room in that model for the notion of entrepreneurs, who tend to be individuals prepared to act both instinctively and in a risky manner, choosing an uncertain path in the hope of rich reward. But from the mid-twentieth century there was a greater understanding that much economic activity is not conducted on the basis of cool, calm rationalism and this realization has allowed the figure of the entrepreneur to come to the fore.

So, what exactly do we mean when we talk of entrepreneurship? When broken down, it is a relatively simple concept. The entrepreneur is an individual who creates a business to fill a gap in the market, shouldering the large part of the risk and consequently enjoying the majority of any resulting rewards. Typically, the entrepreneur is also an innovator, employing new ideas to fulfil the consumers demands. Joseph Schumpeter (18831950) was among the first economists to truly celebrate such figures and the dynamic disequilibrium they bring to the market, which he considered the sign of a healthy economy.

Unlike those in professions such as law or medicine, the entrepreneur does not have the comfort of a defined path to travel. Their journey is intrinsically perilous, dotted with numerous obstacles and a constant threat of ambush. In a 2014 article for Forbes, Steve Blank a veteran of numerous start-ups since the 1970s gave a taste of that uncertainty: The safest bet about your new business is that youre wrong... A start-up is not about executing a series of knowns. Most start-ups are facing a series of unknowns unknown customer segments, unknown customer needs, unknown product feature set, etc. Ultimately, the entrepreneur must be able not merely to cope but to positively flourish as they find their own path. Inevitably, hard work tends to be part of the deal, so learning quickly and working smart are vital skills too. As Roy Ash, former director of the US Office of Management and Budget, put it in 1984: An entrepreneur tends to bite off a little more than he can chew hoping hell quickly learn how to chew it.

This book, I hope, will help you to get into the psychology of the entrepreneur as we consider the challenges they face from first having an innovative idea to ultimately marshalling a fully fledged business. We will see that the journey requires passion, courage, self-belief and initiative as well as level-headedness, resilience, flexibility and much else besides. We will explore the psychology behind crucial tasks such as branding, hiring and scaling up. Even more fundamentally, we will look at how leading entrepreneurs broke free of the niggling doubt that I cant do this to discover that Yes, I can. As Sunil Mittal, head of the vast Indian-based Bharti Enterprises, told Knowledge@Wharton in 2008 about his own early days in business: That defiance of the conventional wisdom, to my mind, was very important and being determined to challenge that thought that you cant do it as a young entrepreneur.

When reading this book, it is worth remembering that the entrepreneurs whose thoughts, ideas and experiences are explored should not necessarily be regarded as models of all that is good in humanity. Very few have demanded to be put on a pedestal or to be considered as role models outside of the commercial sphere. Many will have had their run-ins with the authorities at one time or another. Perhaps they have violated competition rules or employed questionable systems of labour. Even as I was finishing this book, one prominent entrepreneur was acquitted of defaming an innocent third party after a trial that, despite his acquittal, could hardly be described as edifying. Their presence in these pages is not to promote worship of them as heroes, but rather because, regardless of any particular foibles, they are successful business figures who have had interesting things to say or demonstrate about the art of entrepreneurism.

That said, we will also see that it is possible to be a hard-nosed business success and maintain a core of basic decency. Take Richard Bransons observation in Martyn Lewiss 1997 book, Reflections on Success:

I think that people have the idea of an entrepreneur being the sort of stereotype person who treads all over everybody and bullies their way to the top. There certainly are people like that, and they have managed to get away with it, but they generally get their comeuppance in the end.

Indeed, there is plentiful evidence contained herein that entrepreneurism and making the world a better place are far from mutually exclusive whether its the philanthropy of the Silicon Valley mega-rich set, or the sort of principled business dealing championed by the likes of Anita Roddick. She was a woman who perfectly encapsulated her own theory of what an entrepreneur should be like: An entrepreneur is very enthusiastic and dances to a different drumbeat, but never considers success as something which equates to personal wealth.