Monday, 24 March 2008

It is not luck that drives entrepreneurs – it is timing

Getting a technology to market can take a long time. Ensuring its robustness, trialling it, researching markets, gathering resources are all long winded processes. By the time one can achieve this – it may be that a faster moving competitor enters the market and takes a dominant position. Or that by the time the technology comes to market the perceived need has moved on. Perhaps complimentary technologies of the relevant infrastructure is still many years away from making it all happen.

Under these various conditions of uncertainty – we come across the “window of opportunity”. When should we attempt to enter the market, when can we start to talk about our ideas? Who else is doing the same thing?

It would seem from the outside that entrepreneurial people have an uncanny knack for getting the timing right! On the whole they seem better able to make bets on when to enter a market or even when to get out – for example from holding shares in a company! They seem to be lucky, the chances are in their favour or they seem to have the ability to draw on serendipity!

Explanation of luck, chance and serendipity may all be correct in certain circumstances, but in reality all these are enhanced by people being alert to their environment, being among people who know what is going on, sharing tacit knowledge, market information and expert opinions.

As Gary Player (the golfer ) said:

The more I practise, the luckier I get,

He also said Persistence and common sense are more important than intelligence.

So be lucky – but don’t rely on it! You will need a great deal of depth and breadth of knowledge about the market place – much more than about your own product or technology. To understand market trends, customers’ hot buttons, convenience, reliability, cost advantages, existence of supply chains, the strengths and weaknesses of competition, the government regulations that might govern the markets you plan to enter, industry standards, safety criteria and much more.

This deep knowledge and ability to interpret the signals from the market has more to do with how you and your team build the business than with some element of luck. After all you are not betting on horses or playing a roulette table.

Sure there is luck that can go your way (or against you) because a competitor takes some action or there is an unexpected event – for example a disaster, but these are part of our understanding of risk and it’s management rather than a central part of a business plan!

1 comment:

Josep Pocalles said...

Completely right !

PS: I won't be able to attend your networking event today in Barcelona. I will miss a chat :-)