I’d like to share my personal opinion about entrepreneurship and also take part in the promotion run by Fernando from the Primeiro Milhão Blog, who received a complimentary copy from publisher Ediouro. I’m entering to win the book The Toyota Report.
Well, leaving the announcements aside, let’s get to the point. I think of entrepreneurship as an attitude that a group of people have managed to refine (through trial and error, courses, observation, experimentation, and intuition): identifying and meeting the needs, desires, and dreams of a particular target audience in exchange for financial gain.
Although I mentioned courses, they only complement an entrepreneurial attitude; they are not essential to it.
I’ll talk here about two topics: the difference between an owner and a self-employed person, and effectiveness versus efficiency.
1. Owner vs. Self-employed
The difference is that, if a self-employed person has to be away from the business for a few days because of illness or some other reason, the business simply STOPS operating. An owner, on the other hand, has a system that works at least partially (in most cases) independently of them. In other words, the owner can be away for a while without putting the business at significant risk.
What does this look like in practice?
I ran a one-year experiment with a small business sharing an internet connection. I won’t get into the legal details, because this is just an example of a temporary experiment. It helped me save a little on phone bills while learning a bit about what it might be like to run a business—on a scale with zero risk and almost no effort, of course.
I soon discovered that I had to take on several tasks to keep the service running:
- Offer the service
- Installation
- Technical support
- Collect payment
Since it was only for two neighbors, I didn’t have any major difficulties. Even so, I made a few mistakes along the way, such as assigning the same address to one of them on an extra notebook computer I had, which caused an IP conflict.
What I learned was that if the problem becomes more complex and I still want to keep the business running, I need to document it so that it works as independently as possible of the person who created it. That means defining the different roles and the tasks required for whoever fills them to do the job well. Another essential point is storing data in some kind of tracking system, because an owner’s mind isn’t a perfect machine. This experiment also taught me to say no. I knew I’d get requests to fix programs that weren’t working, so from the start I made it clear that I could only support programs related to the connection:
- Web browser
- Messenger
This strategy saved me a lot of headaches: my customers knew what they could ask me for, and if something was outside the scope, they would need to call a computer repair service.
2. Effectiveness vs. Efficiency
Doing something perfectly (efficiency) or solving a real problem (effectiveness)?
When I was an undergraduate, I thought doing something efficiently was the most important thing. But I soon discovered that efficiency without effectiveness is worth nothing—absolutely nothing. After doing some reading and running that small-business experiment for a year, I realized that the hardest thing to find is the real problem. The media give us tons of information to grab our attention, and that often keeps us from seeing the problems right in front of us.
In my small business, I focused only on effectiveness, and it worked very well. I made up for the lack of technical efficiency, limited availability, and slow problem resolution with great customer service and flexible payment. If a user wanted to travel for 15 days and let me know, they only paid for 15 days that month.
For technology businesses (startups), the idea is still the same: the most important thing is to find genuine market gaps, then gradually implement a solution and improve its efficiency.
I’ll end this small contribution here, and I look forward to your comments and suggestions.