My last article was an illustration of entrepreneurial opportunism - having the mindset to recognise and take up chances when they come knocking.
However, as I (or, in fact, Thomas Edison) said at the end of that article, you need to be capable and committed to maximise the potential of what you have seized. You could call this entrepreneurial application.
Here is part two of the story. I believe it demonstrates that turning an opportunity into a successful enterprise is neither straightforward nor glamorous! It is far more likely to be haphazard and stamina sapping with the difference between success and failure being a mixture of luck and tenacity.
It is always helpful to have a bit of luck at the outset. In my case I was fortunate that local authorities were too slow to process searches and the property market was buoyant for my first five years of operation. This helped me to overcome my first business mistake - not knowing anything about how to run a business.
Many, many start-ups are in the same position. Being driven (even consumed) by the passion for realising an opportunity often occurs without the benefit of preparation - prior acquisition of the skills (maybe learnt on a business course). The mechanics were relatively easy to acquire with an idiot's guide' and application. However the good fortune of a "fair wind" in the market gives the entrepreneur the slack to make mistakes with finances, strategy, operations, employees and customers - allowing them, to a degree, to use "trial and error" to learn how to run a business.
Because the door is there (always was or newly built depending on the individual), opportunities will continue to come knocking throughout the (often long) period of entrepreneurial application.
Some of these opportunities relate to new services and others will relate to new businesses altogether. It is not my intention in this article to deal with either of these types of opportunity (see Part One). Suffice to say that you should always prioritise the pre-existing opportunity unless there is a (very) compelling commercial reason not to. This is because of bandwidth, finance and focus - or the lack thereof.
The opportunities I want to talk about here occur during entrepreneurial application. They are the ones that give you the chance to enhance or even transform your chances of succeeding with the original opportunity you recognised and took up.
Typically, these subsequent opportunities revolve around innovation or re-engineering that delivers a distinction to your business/service. Critically a distinction that your customers value. Don't underestimate these opportunities - they can turn out to be game changers. Let's call them sub-opportunities' to distinguish them from business/service creation ideas (opportunities').
The first of these for me came via the introduction of personal (as opposed to mainframe) computers into businesses in the mid-eighties. Suddenly smaller enterprises could acquire affordable automation to reduce errors and speed up processing. It has always amazed me how long it took most small businesses back then to harness technology - perhaps it was because there was no shrink-wrapped', off the shelf' software to load onto these bad boys. You had to build your own workflow from scratch in the pre-Internet, pre-Windows world that existed then.
As a small business, if you couldn't write it yourself you couldn't afford the programming cost. So - boom! - if you could afford the box, and you could also write/commission the software, you had a significant advantage over the competition. So I set about writing a workflow process myself using an idiots guide and application. Two years and lot of sticking plaster later - a rather shaky workflow (I called it SearchFlow') was born which was essentially a keyboard entry database capable of automatically generating all the paperwork required to undertake, and account for, a search. We were miles ahead of anyone else and, for that matter, miles ahead of our customers - which was my second big business mistake (more on this in my next article).
I have heard people talk about sweat equity' when they value a business and the above is an example of how this is created. Business or personal resource is channelled into engineering (or innovating) an enhancement (or transformation) of a business that increases its value. Perhaps the above is an example of building sweat equity into a business. However, I don't think it was the sub-opportunity, the transformation, the game changer. The earth was never going to move for our customers with a workflow designed to deliver internal processing benefits and reduced operating cost for their supplier.
The real game changer was the internet - but this opportunity would not have come without having previously built the workflow. The game changer was the realisation that the service (and the business) would be transformed if the conveyancer was able to directly input the instruction into the workflow. So we built a website that changed SearchFlow into the first online search service and ultimately transformed my business and the whole industry. The only problem was that hardly any lawyers had heard of the Internet in 1994
So far - over both articles - we have seen that business success depends on firstly recognizing, seizing and exploiting the opportunity when it comes knocking. Secondly, and subsequently, it involves entrepreneurial application, luck and innovation/re-engineering. But there is a third, ingredient - having the tenacity, stamina and stubborn self-belief to keep going. It took ten years (and a roller coaster ride) for my game changer to transform my business and industry. I will discuss this next time...
*Mark Riddick is the founder of Searchflow, chair of Search Acumen and has been an investor and entrepreneur for over thirty years.
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