Ron Bienvenu gave a great speech last week about entrepreneurship, and he raised some really interesting points. Ron has founded and sold 2 software firms, lead a hostile takeover, managed 50 public and private M&A events, and has raised over $250M through every possible method from venture capital firms. This guy is super smart, really charismatic and is clearly a phenomenal business man.
One of the points he brought up that really hit home was that almost everything is a commodity these days. Intelligence can be a commodity if you hire smart people. Money is clearly a commodity. Even ideas become commodities as ideas spread across the internet faster than companies can monetize them. Ron had no problem discussing his next big idea in front of an audience of entrepreneurs because the idea will likely become public knowledge anyway before he has a chance to bring it to completion.
So what is it that Ron believes sets successful entrepreneurs apart? In his words, "toughness". How you respond to setbacks, competition, disappointments and the unexpected dictates how successful your company will be. Anyone can hire a smart CFO to read a balance sheet or a good marketing person to execute a marketing plan. These are business skills. How you react when a customer is late with a payment and you can't make payroll, or a huge company decides to enter your space with a competitive product is where toughness really becomes essential the the survival of your company.
I'd love to hear your thoughts. This theory assumes that everyone has (or hires someone who has) the hard skills necessary to succeed. Is that a valid assumption? And is toughness really the differentiating factor for success?
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John,
You summarized many of the key points of the discussion very nicely. In my opinion, up to 60% of success or failure is dependent on getting all aspects of the strategy right - product, price, promotion, go-to-market, barriers to entry, and personnel. If you get the main strategy correct, you can screw up a lot of the tactics. At any given moment, any or all of the above can be in flux, so the next critical element is senior management's ability to think and respond to the changing environment. Every management team will face challenges and will make many, many mistakes. However, having the proper strategy in place will keep the management team focused on the right things during times of duress. Another critical element of my talk was the importance of "real" barriers to entry in today's fast paced world. It is imperative that a start up has a real grasp on where they can create a sustainable barrier to entry and execute on it. Without that element, it becomes very difficult to create radical wealth. The reason I am happy to share my latest ideas with the good folks of Babson is because I don't think anyone has figured out the barrier to entry problem (except for perhaps me and my team). It is like basketball. I get the general idea - put the ball in the hole that happens to be 10' in the air. However, doing that has always proven to be difficult for me :-) Same with the Fourth Shock. It is coming. It is inevitable. But it will take a well thought out strategy to build a successful, dominant company over the coming years. I welcome the challenge and the competition.
Ron
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