Having what it takes

To find a place in the sun, jungle law applies!
Have you ever wondered what is the difference in being a mere 'start-up' and a successful one?
While pundits try to answer this million-dollar question, Amar Bhide of Harvard Business School and his 20 years of research have something to tell.

What archetypal entrepreneurs step out with

The idea does not have to be 'brand new'. Successful entrepreneurs use existing ideas after working on them for improvements that add value to the customer. They also believe that their venture is money spinning, and this attitude helps serve the customer better. Entrepreneurs who make it big also have exceptional interpersonal skills that endear them to their customers.

The risks involved

The best entrepreneurs prefer to tone down innovation and not to take on excessive risk as their capital is initially low-budgeted.

The tolerance of ambiguity plays a big role, as most entrepreneurs are not aware of the proportion of the risk involved. This tolerance goes along with the absence of a 'novel idea' and lack of a sound financial backing. The risk takers If they don't have a proprietary idea, capital and innovation, then what makes them tick? It is the product that the company has to offer that finally clinches the deal. Successful start-ups sell directly to the end-user, not through retailers.

Hence the entrepreneur is able to tailor products to meet customer needs. The success of the entrepreneur depends largely on convincing the customer to try his product. This takes a lot of creativity and strategising in order to breakthrough brand loyalties.

The risk takers

It is the customer who actually takes the risk as he spends time and money as well as switchover costs (if the start-up goes out of business). In many cases, investors who fund start-ups also take risks by providing capital at an early stage in the venture.

The risk progressively increases after the start-up is established, as there is much more at stake and risk-taking becomes important at this stage.

In a field that is conducive to success

A field that is changing rapidly will provide enough scope for entrepreneurial success, provided start-ups take advantage of it. The computer and IT industry are classic examples. Start-ups will also benefit in a field where end-users are not very clear about what they can expect from the product.

Competition (or rather the lack of it) helps entrepreneurs. If consumers are not able to compare and contrast similar products or vendors, it is easier for the entrepreneur to make his presence felt.

It is wiser for an entrepreneur to introduce his product on a smaller scale, so that the product can be fine-tuned. Once it is perfected, the product can then be launched on a larger scale. If it fails to make a mark, the entrepreneur should continue to perfect it by finding better ways and new technologies further improve the product.