A Tale of Two Entrepreneurs sample essay
2. In Andrea’s case I would advise her to look at her options. She must look into the benefits and the drawbacks of staying within the company and transferring departments, or taking her redundancy package and starting up her own business. She should assess and measure the opportunity. Not only banking on the government authority as her only customer she must analyse if other customers are reachable. She must assess is if her market potential and annual growth is could be significant and durable. She might also measure if the customer payback would be less than one year, and if she would break even within the first 2 years. Andrea should also assess her competition and see if she can compete and provide her services at lower cost than them, and lower capital.
All the above is important for her to look at when assessing and differentiating starting her own business from being a mere idea to an opportunity. Kit too should look at these same aspects of differentiating between a good idea and an opportunity as Andrea. He should look into finding out the costs involved in operating his business in an environmentally friendly manner, and measure if the venture will be sustainable as well as profit maximizing, with cost effective measures. He must assess and formulate a plan on how he would build relationships and alliances with both the small firms in the industry as well as the larger companies who make and market the final product. With the skills and experience of his partner, he could learn more about how to start a new venture and learn from the mistakes made in the past, assess them and formulate a plan to do better.
3. If I were in their positions, my decision would be to branch out and move into small businesses. It would be good to achieve independence in this small business. It would make the move to expecting a profit after taking such a risk and leaving the security of the large company. In Kit’s position I would take the chance to start a business whose operations have less damaging effects on the environment, thus contributing to a better environment making a significant difference. In Andrea’s case I would make the move as well as it would be a solution to the government authority as they are looking to outsource its central services, as well as a solution to my problem as I was “in a rut” at work and would have needed to transfer departments or find new employment. This move would give an opportunity to reach my full potential that could have been held back in the confines of the government authority.
4. The Entrepreneurship Process is driven by opportunity. Market demand is key to measuring an opportunity. In Andrea’s case we see that there is viable demand for her Payroll business. If she branches out and starts her business she has the opportunity of getting the contract for the government authority she was working for before and provide the necessary service to them. This customer is reachable, thus enhancing the opportunity. In Kit’s case, he saw the opportunity of starting a business with a difference that operated in an environmentally friendly way setting him apart from the other businesses out there. There would be a business like his that uses environmentally friendly and less damaging processes. It is important to understand and marshal resources and not be driven by them. Andrea would qualify for a redundancy payment which would be an available resource to manage and use to start up her business. It is however important not to be focused on what cash one has like her husband – “If I could have a big enough redundancy package I’d join you” – because this would limit creativity and hold the entrepreneur back.
Kit on the other hand had a business plan I place as one of the resources he was use make use of, the environmentally friendly approach to his business would be a useful strategy for his business. He also planned to use relationships as a key resource. Building a network between other small firms in the industry would be a useful resource in his own business. An entrepreneurial team is vital for success. Kit planned to partner up with Robin Davidson for his business venture. Davidson has relevant experience and had been the founder of a former high tech company. He had motivation to excel, leadership and courage as he sought after Kit to partner with him and start up another business after his previous business collapsed. He was a good partner in that he was rather pragmatic and caused Kit to see the risks and realistic side of things as he shared his ideas, “‘sure – as long as it doesn’t push our prices up and lose business.’”
Taking the Rough with the Smooth
1. Entrepreneurs can learn many valuable lessons from the setting up of Innocent Drinks. Firstly one can learn from the three gentlemen to look at one’s own life for inspiration on a new venture. They based their idea on something they personally knew a lot about, and proved to be a real market opportunity. Entrepreneurs learn that ideas are worth little, but implementation is key. The idea of the automatically-filling bath was good, though implementation would be hard as it would be hard to convince others that it would work. The idea of the drinks was a good idea and it successfully implemented. Aspiring entrepreneurs can learn a valuable lesson in collaboration and the effectiveness of a reliable team. “Reed attributes getting through this phase to the strength of their friendship and to being part of a team.” Another lesson one can learn is to research the product and the market and learn everything you can about your endeavor.
The gentlemen had no experience in the fruit and drink market, but they conducted their own research in product tasting and in the market at the jazz festival. One can learn the lesson of perseverance from the Richard Adam and Jon’s experience. The ‘cash ran dry’ and distributers initially refused to stock their drinks, but they persevered, personally delivering them to health shops. From there we see that sales began and the companies wanted more. If they had given up, they would not be the success they are today. Another lesson for entrepreneurs is to be the solution where others complain. One should figure out a way to solve the problems and make a profit in the process. “if they could only come up with a way of doing something healthy and didn’t require a lot of time…” “…this moment of insight led to Innocent Drinks…”
2. A critical success factor is having a compelling case for innovation. In this case they had the idea of the automatically filling bath which did not succeed as they found it hard to convince people. On the other hand, the Innocent Drinks idea was conving and they made a compelling case, and people could see why the innovation was necessary. Another success factor is that their business plan fostered teamwork and the support of their friendship and passion to see this business venture through. A creatively resourced and dedicated team turned this idea into an innovation when they took matters into their own hands and began personally delivering the drinks.
The entrepreneurs were willing to take the risk of presenting themselves to local juice company and giving free samples, and personally asking the owners to sell their drinks, even when they had had not cash and had been rejected by distributors, thus presenting another critical success factor. Another success factor is having a well defined, yet flexible execution process. They had the initial plan of using distributors, but after they refused to stock their drinks, they entrepreneurs were flexible and came up with personally delivering the drinks.
3. Innocent drinks measured opportunity and well differentiated this opportunity from an ‘idea’. They had a large market demand as they this idea was based on something they knew about, they knew that the customer was reachable. They identified the market readiness and saw the consumer trends and behaviours such as their own that were seeking a new product. “Customers were asked to place their empty cups in a ‘yes’ or ‘no’ bin…” and the ‘yes’ recorded “a sliding victory.” The opportunity was very large, growing and undefined.
Resources – the business had very limited resources and investors were looking at different business propositions to what they had, and so at a point the ‘cash ran dry.’ The entrepreneurs had to be creative and learn to do more with less. Successful entrepreneurs devise creative and sparing strategies to marshal and gain control of resources. e.g. they loaded a van with drinks and personally delivered them to health shops and delicatessens.
Entrepreneurial Team – Richard, Adam and Jon formed a great team that was motivated to excel, had tolerance for risk, ambiguity and uncertainty as neither of them had done anything like this venture before. They had a good friendship and supported each other as a team through hardships, “Richard Reed attributes getting through this phase to the strength of their friendship and to being part of a team.” This team had resilience, commitment, determination and persistence, which is seen in their actions when they kept on with deliveries “distributors refused to stock heir drinks”
Importance of fit and balance – it is importance to find a balance among the driving forces of a team, resources and opportunity. These factors rarely match, but if they are in the right proportions (e.g. large enough team, sufficient resources, if the company will grow 20% over the next 2years) In this case we see they has insufficient resources, but that was balanced out by their having a strong friendship and team to get them past the hardship.
Sustainability as a base – a sustainable venture means achieving economic, environmental and social goals without compromising the same opportunity for future generations. This business was sustainable as Innocent Drinks was “a fruits smoothie that tasted good, was good for you, and that could be easily and quickly consumed.” It successfully addresses the social issue of healthy living and good food quality.
Importance of timing – we see the importance of timing in this case as Innocent Drinks was started just at the start of the dot-com era, when investors were not looking into their kind of business proposition. Because of this their financial resources were very limited due to few or the lack of investors leading to the cash running out. However, there is no perfect time decisiveness and seizing the opportunity makes all the difference, which is what the entrepreneurs did and they succeeded.
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