“... the only way to be truly satisfied is to do what you believe is great work. And the only
way to do great work is to love what you do.” Steve Jobs
One of the most important questions associated with the overall attractiveness of an
opportunity (and the corresponding likelihood of a venture’s success) is the question, “How
attractive is this opportunity for me?” There may be an excellent opportunity for a new
aluminum smelter, for example, but if I don’t have any relevant interest or knowledge, it’s
probably not a good opportunity for me.
Opportunities are all around us. Recognizing them is the challenge. And then you must
still find an opportunity that works for you. If we think about job positions in traditional
organizations for a moment, it makes sense that a job applicant is more likely to be
successful if she possesses the appropriate qualifications. Having the “most” qualifications
will not necessarily ensure success, however. If the candidate is over-qualified for the job,
for example, she may quickly become dissatisfied and frustrated in the position, resulting
in poorer job performance.
Instead of trying to hire the “most qualified” person, most human resource professionals
attempt to select the best person for the job, which can be expressed as a problem of
“matching” the person to the job, or of the “fit” between the person and the job. And most
HR professionals will even go one step further, trying to select the individual who is the
best fit not only with the requirements of the job, but also with the organization itself, and
the culture and values it embodies.
These kinds of decisions don’t just apply to HR professionals. If we want to make good
decisions about our own careers, then we need to take a similar approach to evaluating
our own fit with the jobs and organizations we are considering. The more we know about
a particular job and organization, the better the choices we are likely to make. But, just
as important, we need to consider ourselves – our own strengths and weaknesses, likes
and dislikes, interests, skills, values, goals, priorities, etc. If we are truly trying to make a
decision more likely to lead to success, it will be important to carry out the process of self-
reflection as honestly and thoughtfully as we are able.
From an entrepreneurship perspective a reasonable place to start is to think about our
own fit with the demands of the entrepreneur’s role. Are your head and heart suited for
this journey? There are a many self-assessment exercises or “tests” available online to
guide one through this process and several are included in the Links section for this module.
A word of caution – there are many, many myths about entrepreneurs that are quite
common – don’t be fooled by them. Examples of these myths include:
a. Entrepreneurs are risk takers
b. Entrepreneurs are motivated mostly by money
c. It takes a lot of money to finance a new business
d. Most successful entrepreneurs start with a breakthrough invention.
e. Real entrepreneurs are successful.
Below is the Entrepreneur assessment framework we will use for the duration of the course.
Whenever we are trying to answer the question, “how attractive is this opportunity for
me?” (or the particular Person/Entrepreneur being considered) we should try to carefully
consider each element of the framework. We will rely on this list extensively so it’s worth
getting to know well.
You may notice that while the first item deals with one’s fit with the role of the
entrepreneur (in general), the remainder can be seen to have relevance to the specific
opportunity under consideration. Nevertheless, it is important to remember that at this
stage our concern is to simply conduct an audit of what the entrepreneur is able to “bring
to the table” under each heading. Evaluating the adequacy or fit of these attributes with
the particular opportunity occurs in a later stage of the opportunity evaluation process
and will be the subject of a separate module.
Entrepreneur Assessment Framework
1) psychological characteristics
3) interest & commitment
4) ability to take risk
5) human capital: knowledge/skills
6) financial capital
7) social capital
1) Psychological Characteristics
Under this heading you should try to identify any personality or other psychological
characteristics possessed by the prospective entrepreneur that seem especially relevant to
his/her ability to function effectively in the role of an entrepreneur. For example,
someone who has a strong need for stability or dislikes making decisions may be very
uncomfortable in the uncertain and fast-moving world of the entrepreneur. A high energy
level and/or optimistic outlook, on the other hand, could be helpful to the prospective
entrepreneur in dealing and persisting with the many challenges and frustrations of
starting a business. An outgoing personality could be useful for “selling” the venture and
its products. Stubbornness, often considered a weakness, could help to bolster the
entrepreneur’s resistance to naysayers, but it may also make one less receptive to useful
feedback and advice.
2) Motivation / Goals
Motivation, here, refers to the underlying motivation of the entrepreneur for starting the
business in the first place. (Important: Do not confuse this with “how motivated” or the
entrepreneur’s “level” of motivation – that is a different issue entirely and will be
considered separately under the heading “Interest/Commitment.”) What we are trying to
establish here is why the entrepreneur wants to start this business. What is kind of reward
or motivation is driving their interest in this venture? What is it that they are hoping to
accomplish? Why are they going to all this trouble? What personal goals are they
hoping to satisfy? What do they want from it in the end?
Surprisingly few entrepreneurs started their businesses with the main goal of becoming
rich. While money is a useful means of keeping score and providing feedback on how
well the business is performing, most entrepreneurs started their businesses in order to
fulfill other kinds of needs. A medical researcher, for example, might be motivated by the
opportunity to save lives or improve the health of others. A craftsperson might be
motivated by the opportunity to work at what they enjoy doing – making pottery with
their own hands. A young mother might be motivated by the opportunity to work at home
while caring for her children. Someone who has lost their job may simply desire to
replace their lost income.
3) Interest / Commitment
A person’s interests will likely have a strong influence on how committed s/he is to the
business, and a high degree of commitment is necessary if one is to persevere against all
the setbacks an entrepreneurs typically encounters. If you are passionate about something
you will be willing to spend more time at it and bring more positive energy to the task at
hand. Not only will you probably do a better job, but you will also be more willing to
make sacrifices in order to reach your goals. Many people have good ideas for a
business, but only a few have the desire, commitment and determination needed to turn
that idea into reality.
4) Ability to Take Risk
It’s worth noting that in this section we are not interested in someone’s willingness to take
risk. That will already have been considered under the first heading, “Psychological
Characteristics.” Instead, here we should try to assess the person’s ability to take risk.
One factor that may be especially important here is the age of the (potential)
entrepreneur. A young university student, for example, may be in an excellent position to
take a great deal of risk because: a) s/he has very little to lose, and b) there is still lots
of time to recover if the venture doesn’t work out for some reason. On the other hand,
someone in their late fifties or early sixties who is considering cashing in their RRSP’s
and/or putting a mortgage on the house in order to finance a new business won’t have
much time left to prepare for retirement if they lose their savings. Other factors that might
be considered here include the number and age of any dependents, amount of personal
indebtedness, personal net worth, etc..
5) Human Capital
Human capital refers to any relevant knowledge and skills the person may have. Human
capital is usually acquired through education or experience.
We make an important distinction between business versus technical knowledge/skills.
Under the “business” heading we ask the following question: Does the person possess any
knowledge or skills that would be useful in starting or running a business? If so, it is worth
considering how robust or strong these are. Some people may have no business
background whatsoever. For those that do, however, we should consider the various
business functions individually. One person may be especially skilled in marketing and
sales whereas another person may be strong in project management but be relatively
weak in other areas.
“Technical” background refers to any industry-specific or product-specific knowledge or
skills that may be useful in a particular firm. Physicians and software programmers, for
example, often possess a great deal of technical knowledge but may have little
knowledge about how to run a business.
6) Financial Capital
Under this heading we examine the financial resources the entrepreneur is able to
personally invest in the venture. This includes not only cash, but also assets that could be
converted to cash (e.g. RRSP’s), access to credit/borrowing and any other additional
sources of income that may exist.
7) Social Capital
Social capital is about “who” you know. It refers to the personal network of the
entrepreneur, and especially to his/her access to individuals in a position to help the
venture. Social capital can be helpful for providing missing resources or covering resource
shortfalls and gaps. For instance, perhaps the entrepreneur’s aunt knows someone who
would be willing to serve as a business mentor or perhaps she has business expertise she is
willing to share herself, or has a friend who might be able and willing to invest money in
Readings / Links