Entrepreneurial risk

As a specialist in risk I was asked to provide some advice to a pair of entrepreneurial young men who had an idea and had started putting the wheels in motion to make it happen. After talking to them for an hour I was appalled at how little they knew about starting a business and how poor the advice they’d had from so called experts so far had been.

They had the entrepreneurial spirit but no clue as to how to run a business, or even carry out some of the key elements. They had already invested a couple of thousand pounds of their savings in a project without any research whatsoever. They had an idea and hadn’t researched whether they had a market, interest or competition – and were about to embark on a trip to China to resource the product!

They’d received advice from the local Business Link – but nobody had suggested they researched their market, which must surely be common sense.

It seems to me that we are not breeding entrepreneurs. Schools, governments and society is all focused on preventing people thinking for themselves and seem to actively discourage entrepreneurial activity. The environment is focused on rules, laws and doing things by the book.

Academic qualifications are fine – but how do people learn how to take risks – intelligently?

Two years running our local university asked us if we would like to give a group of MBA students a project to carry out. It had to have a business focus and be useful to us. They were briefed and went into action – the outcomes fell a long way short of anything that was useful! They had no idea about risk and saw it as something to be avoided at all costs. They just could not see that you cannot run a business without taking risks. All the business strategy theory they’d learned didn’t include that critical piece of information.

So where is the means to generate the experience of entrepreneurial instinct? Millionaires don’t work by the rules – they are known for largely ignoring them.

The TV programme, the Apprentice is a good example of how apparently competent, experienced people demonstrate they haven’t got a clue how to run a business or even carry out some of the key elements. Alan Sugar didn’t learn his entrepreneurism in a classroom – nor did he become successful by not doing his research and not taking risks!