There is a stereotype that many successful entrepreneurs like to work alone and hence the term coined: “lone wolf” entrepreneur. Over the last decade, a trend of the “solopreneur”, (solo-entrepreneur), has gained momentum. These are entrepreneurs who work on their own without staff or partners. Whilst, the solo or “Lone Wolf” entrepreneur is quite common in early-stage enterprises, as the enterprise grows it tends to employ people.
This phenomenal rise of the solopreneur has largely been due to a number of factors including the advent of the “gig” economy, and also other considerable factors, such as the challenges of businesses being able to find talented staff, and the low cost of technology, (including more affordable automation, and the ease of availability of virtual services). Furthermore, employment conditions in most advanced countries have become so complex, that employment provides many additional costs and regulations for enterprises, including complex termination conditions, OHS, taxation, superannuation, etc.
Whereas, the “gig” economy provides temporary and flexible jobs that have become commonplace with companies, which now tend to hire independent contractors and freelancers instead of full-time employees. This has allowed companies to side-step many of the employment challenges faced, (as discussed above). In the “gig” economy, there are four tribes including the “Digital Nomad”, the “Fly-In” Worker, the “Autonomous Worker”, the “Digital Valet”.
Most of the “gig” economy is driven by a combination of need and opportunity, and has surfaced largely due to the advent of the “Sharing” economy (e.g., Facebook Uber, Air BnB, etc.). Interestingly, in a recent TED video, there was also a claim that 43% of American full-time workers have a side- hustle. Whilst in places like the UK, Singapore, and the Philippines, more than 50% of the workforce reported having a side gig in addition to a main job, (source: TED), which seems to be more likely a combination of need and opportunity for participants.
Whilst, there has always been a tendency for entrepreneurs to be more independent, according to Global Entrepreneurship Monitor (GEM) (2019), (which monitors entrepreneurship globally), solopreneurs, however, only account for 9% (on average), of non-early-stage enterprises, globally. This research directly conflicts with the current trend of solopreneurs, which is as high as 53% in places like Brazil, where entrepreneurs do not even intend to employ anyone as they grow. Even the Netherlands has a relatively high-rate of solopreneurs at 23% (Source: GEM 2019). Whilst in the USA, (and similarly in Australia), 62% of small businesses don’t have any staff (Source: Source: Babson (2019)). So, are they entrepreneurs or just small business owners buying themselves a job?
Well, I guess it depends on how you define an entrepreneur. The general consensus of many entrepreneurship researchers is that it can loosely be defined as someone that has started a business and wants to build and grow it, and not just creating a job for themselves.
Furthermore, successful entrepreneurs need business partners and social networks to succeed. Some examples of successful business partnerships include Apple: Jobs and Wozniak, Microsoft: Gates and Allen, Google: Brin and Page, and Facebook: Zuckerberg, Moskovitz, and Hughes.
Successful entrepreneurship also requires strong social networks and an entrepreneurial “eco-system”, (which I will address in an upcoming article). Another interesting side note is that technology or product development companies have a much higher chance of success if the founder or co-founder is a “techie” (such as a programmer) or an engineer. The main reason for this is they are able to make “real” time changes to their coding or products as they receive feedback from their customers. This allows for quicker pivots, and quicker market entry, as well as maintaining control of the intellectual property. Something to consider if you are looking at starting a technology or engineering company.
Whilst, many become solopreneurs because they are just buying themselves a job, or running their enterprise as a side hustle, not all are in this position. Some do it because they want additional freedom and lifestyle.
But being a lone-wolf or solopreneur is not as scary or lonely as it used to be, due to the facilitation of new networking activities and meetup groups, etc., that cater to this phenomenon. Today, many of my clients are now turning to solopreneurship, and using automation and virtual assistants, not only to remove the headaches of employees but also to significantly raise their net profit margins from 60% to some cases 80%, (compared to many businesses who are only able to achieve 15-20% net profits in most cases).
These solopreneurs are able to build multimillion businesses by carving their own niches, through improved productivity and effectiveness, resulting in improved lifestyles. They no longer want to work 60-70 hours per week that many traditional business operators face, and don’t want the additional baggage of employees, whom they are often heavily reliant on for growth. No doubt if done properly, solopreneurship can lead to a bespoke success formula.
What do you think? Have you made the change to being a solopreneur? How have you adapted? What is your success story?
The idea of teaching entrepreneurship is an ongoing debate in both the academic and entrepreneurial circles, and one that has a number of perspectives, given the emotional appeal of entrepreneurship as a career choice, and the “rockstar” status it holds in today’s world. The question is can it be taught?
There has been a lot of research conducted in entrepreneurship pedagogy, which has contrary opinions. Even in my own cohorts, it creates a bit of controversy. So, let’s examine what we do know.
In research conducted on “success”, there is little evidence that suggests having a university or college degree will lead to being successful in your profession. Now, of course, it all depends on how you measure “success”, but in this context let’s assume it’s about leadership success (i.e. being able to get to top leadership roles). Mainstream, society states that having an education qualification is the benchmark that it tends to hold as a measure of success. However, in my belief, this is an outdated view and something that belongs in the chronicles of the Industrial Age.
Furthermore, even employment innovators such as Google Inc., have recently discarded the idea of having an undergraduate degree for its candidates in place of a 6-month training course through its “Google Academy”, to receive a “Google Certificate”; which is supposedly equivalent to a four-year degree (according to them).
So, if this is the case, then what relevance do universities play in training future candidates for professions, when clearly success does not always lay in hard-skills development? It seems in today’s world soft-skills development, such as problem-solving, critical thinking, emotional intelligence development, curiosity, creativity, etc., are highly sought after (and required) because these are the skills that are hard to replace through AI or robotics.
Does that mean universities will become irrelevant? Well not quite, as they still will be required for professions such as medicine, law, engineering, etc., but the way candidates will be trained will dramatically change over the coming decades, not just with virtual or blended form, as we are currently seeing, but for more experiential and self-discovery type of education, where educators become facilitators of self-learning and mentors to the candidates. This is exactly the type of development that is essential for entrepreneurship. These are personally tailored experiences around project development that enables curiosity and allow for soft-skills development, whilst hard-skills or theory development is introduced through self-learning when required, or in the latter parts of the project development. Over the last decade, this has been my proven teaching model for undergraduate entrepreneurship at a university level, here in Melbourne.
Research suggests that whilst entrepreneurship skills can be taught, the desire or drive to be an entrepreneur is usually not. It seems as though the enterprising spirit must be discovered within the individual, NOT developed by the individual’s experience. This discovery is often initiated through imagination and “play”, and that is why curiosity is an important attribute for success in entrepreneurship.
Furthermore, universities are not adequately preparing candidates for careers in entrepreneurship. In fact, education may even hinder them from being a successful entrepreneur, as it does very little to encourage the discovery of the enterprising spirit, replaced with the teaching of risk avoidance behaviour, so that candidates can be “conditioned”, and seen as “risk-free” for the employer, (just ask any employment recruiter).
In today’s uncertain world, being “safe” is the riskiest thing a business can do. Given the average length of a company today is around 8 years, it is a sure-fire way of growing broke. In fact, if a business fails to innovate, it’s a potential disaster in the making, not a case of “if” but “when”, due to technology (and more recently Climate Change and the COVID-19 pandemic), which is driving rapid societal behavioural change.
An entrepreneurship education experience must create a “safe” environment for candidates, one that teaches game theory and is designed to enable curiosity and imagination. It must be created in a way that creates a trial and error environment; a play area with boundaries. Such environments encourage “failure tolerant” behaviours, that also instill resilience and self-confidence. All of which are critical characteristics for successful entrepreneurship. These skills can be taught and developed through tools such as gaming and simulation activities, where making mistakes don’t have “real” world consequences.
So, as our learning capabilities have evolved towards experiential learning, today’s education institutions also need to keep up (in fact innovate), to remain relevant in the modern world. Contemporary education requires it to be a customized and self-learning experience for candidates.
As entrepreneurship requires creating a unique experience both for the entrepreneur and the customer, so too does the learning environment, and in the words of the author and entrepreneur Steve Blank, “it all begins with a blank canvas”. Therefore, the candidate’s learning also needs to be unique and tailored to their experience, not something that is “cookie-cut” and churned out for Industrial Age environments, that maximises profits for teaching institutions.
The human brain is complex and capable of incredible things, but it can make extremely flawed decisions because of the way it processes information through unconscious mental modelling. Cognitive biases are all sorts of “mental mistakes” that we tend to make, that affect both our thinking and actions. In fact, there are over 100 different known cognitive biases.
These biases are systematic errors in the way information is processed, thus providing “blinding” effects on the way reality is perceived, and how such information is then extrapolated. It can hinder our thinking to confirm existing beliefs (which may or may not be right), as it refers to our tendency to only search and remember information that supports our beliefs, values, and behaviours, often leading to poor or bad decision-making outcomes. They are one of the greatest hindrances for entrepreneurs resulting in a high level of failure in new enterprises.
Seeking to understand cognitive biases, will help overcome some of the pitfalls that affect the success of startup entrepreneurs. Some of the more prevalent cognitive biases that entrepreneurs should be aware of include confirmation bias, Dunning-Kruger Effect, optimism bias, and cognitive dissonance.
When evaluating business opportunities, there are a number of fatal biases in the way entrepreneurs process information including not conducting proper market validation, (instead solely relying on “gut feeling”), confirmation bias, making wrong assumptions, and not “knowing what you don’t know” (Dunning Kruger Effect).
When confronted with a difficult decision, most entrepreneurs rely solely on an egocentric view, and many bad decisions have been made with hubris and over-confidence, resulting in improper or insufficient market validation.
An entrepreneur can reduce the impact of confirmation bias, first by learning to develop an open mind to new ideas and not continue to cling to a “fixed-view” position. They must be able to learn to use logic and reasoning to question everything and become sceptical. They must also learn not to make “cause and effect” inferences without properly examining all evidence presented (whether it agrees to their point of view or not). Furthermore, an entrepreneur should also take the time to get multiple and credible points of view, which will help them develop insight, and they should try not to judge differing opinions but rather listen to them. Doing this will help develop deeper empathy and understanding which is beneficial for a successful outcome. Finally, only when they are able to process various points of view and examine all credible evidence, will they be in a position to make a proper judgement or decision on any business opportunities.
So, you’ve been warned, as an entrepreneur, not being able to recognize your cognitive biases, will result in a high probability of business failure!
There is an age-old question about entrepreneurship: “are entrepreneurs born or made”, and can it be taught? Well, I’ve done a Masters in this field, and after spending years researching this particular theme, it’s still an unknown to me.
Whilst, research by Taylor from Northeastern University has shown that 42% of entrepreneurs launched their first venture during childhood (i.e. lemonade stand, swap cards, etc.), it can be argued that no one is born an entrepreneur, (just like no one is born a leader), because, there are certain characteristics that can only be developed through one’s experience and their environment. However, there are certain intrinsic behaviours that are important to be a successful entrepreneur, such as having personal “grit”, risk tolerance, and the ability to deal with ambiguity or uncertainty. Arguably, these traits are most likely discovered through observation and personal experience.
Until 1985, research was focused on personality traits and characteristics, as it was believed: intrinsic psychological factors had a significant influence on the individual’s decision to become an entrepreneur. Subsequently, it has been discovered that: environmental factors also play a contributing role in the decision-making process to start a venture. These include the existence of an entrepreneurial eco-system, cultural factors, and exposure to business in early life, (such as your parents running a business when you were growing up). Furthermore, circumstances such as personal need or access to opportunity are also pivotal.
Then, the question is: can someone study a course in entrepreneurship and become an entrepreneur? Research by Taylor also suggests that whilst entrepreneurship skills can be taught, the desire or drive to be an entrepreneur is usually not. It seems as though the enterprising spirit must be “discovered” within an individual, NOT developed by an individual’s experience. This discovery can be initiated through imagination and “play” activities. Furthermore, risk-taking behaviour can also be taught, through simulation and gaming, where individuals can develop these skills in a safe, “no consequence” environment. Hence, the reason why Gen Z and “Centennials” are the most entrepreneurial generation of our time.
Notably, universities are not adequately preparing students for careers in entrepreneurship. Today’s education needs to be a customized and self-learning experience for students, one designed to enable curiosity, imagination, problem-solving, and game theory, which instil “risk-inclusive” behaviours, all in a trial and error, and “failure tolerant” environment.
If you want your child to be entrepreneurial, then schooling will not help, in fact, it’s a hindrance. Yes, you can learn skills that are required, but the entrepreneurial spirit has to be discovered. Furthermore, a child’s curiosity must be stimulated and not shut off as the child gets older. Thus, the earlier your child begins, the less likely that these mental faculties are not disengaged.
Ever thought about how our grand-parents coped with tough-times? It was their mental resilience. Arguably, they were different times, but it does seem society works in 60-70-year cycles. So, here we are, again, facing one of the greatest existential threats to our way of life.
To rise through it, we must develop character and resilience, because, in life, it doesn’t matter what happens to you, it’s how you react to it, that is the key- “stuff” happens. The ability to getting through it all is somehow, try to keep moving forward, towards hope; then our resilience will naturally develop. Remember the Stockdale Paradox?
We WILL get over it! How do I know? When I ask my parents, who survived WWII, they keep reminding me, that this will pass, just like the War. The lesson here is: “nothing is permanent”. What’s good, turns bad, and what’s bad turns, good, and there is no pleasure with pain, the two go hand-in-hand.
We are facing unprecedented times, so the “rule book” has been thrown out, NOW is the time to create the future we have dreamed of for ourselves. For some of us those shackles have been broken, for others, it’s the “Chicken Little” approach. Now is the time to figure what REALLY matters. Those material possessions we have strived for, may not be relevant in the future, as many of us have come to the realisation, that external happiness is an illusion. It must come from within and for many of us, we now have that clarity of thought, (due to the Lockdown); it may be time to reboot. Just like the old Soul II Soul song, “Keep On Movin”, don’t stop!