Sir Stephen Tindall defines an entrepreneur as “someone with drive and ideas, a person with the potential and passion to create something new where there was nothing before – someone with a knack for making a lot out of very little”. He should know, being one of our best-known and respected entrepreneurs, and having built a fortune, he has devoted much of his energy in recent years to social good. An English colleague – who sold his sizeable business a few years ago – believes entrepreneurs have to have a lot of “mongrel” in them. By that he means doggedness and determination to not give up when the going gets tough – something with which I’d certainly agree. I was reflecting on entrepreneurship in light of expat Peter Watson’s recent Listener comments about wealth creation. He said: “The combination of financial literacy, entrepreneurship [and] using that in conjunction with science, technology, innovation – that’s wealth creation.”
New Zealand certainly needs wealth creation if we are to lift our standard of living, and it’s those with entrepreneurial skills who will make it happen. The Chinese do it through combining strength of numbers with determination to rise above poverty. Australians, for their part, are smart developers of their abundant natural resources. American wealth creation is built on a culture of giving a seemingly never-ending stream of migrants the freedom to succeed in business. Each nation has bred a culture of entrepreneurialism. Entrepreneurs here get a bad rap – they are often regarded as a bit dodgy. It might help if we thought of entrepreneurs in the wider sense, going back to Tindall’s definition and including people in the social, sporting and creative spheres who are making something exceptional from nothing.
The fact is entrepreneurs are prepared to take risks to achieve a big return, through a leapfrog effect. Of course, for every person who manages to string together one, two or several entrepreneurial coups and become fabulously wealthy or successful, there are 100 who never make it or only modestly achieve. It takes sound judgment to make the right decisions at the right time, but also at least a modicum of luck. I often think success in business and doing well at golf come from the same impulse, which is perhaps why many business people play. To play outstanding golf, at whatever level, you need to “be in the zone” so that every shot is perfected like a ballet dancer. But you also need to see the putts drop into the hole rather than sit on the edge. If you watch top-level PGA golf, the difference between the winner and the runners-up often comes down to putts dropping in; in other words, it’s the payoff for the last 1-2% of effort.
For successful business entrepreneurship, it’s about translating a good idea into a commercial triumph. That’s not as easy as it sounds. There’s typically a huge amount of hard work in developing the idea, creating the business plan, securing the necessary resources and executing each stage with care and skill, all the while keeping the end game in sight. At each stage markets, finances, personal difficulties and other issues can intervene and kill off the most promising ideas. So, how do we create an environment in which entrepreneurialism can thrive? Here are some ideas:
- Teach financial literacy at school so kids have an understanding of the commercial world.
- Invest in science and technology education to create a pool of suitably qualified graduates.
- Develop a venture capital fund so good ideas don’t wither for lack of money.
- Encourage a culture where success in business (or the lab) is regarded as positively as that on the sports field.
The last idea might be the toughest for a country prone to tall-poppy envy.