Archive for May, 2010

‘Entrepreneurship by Demand’ Vs ‘Entrepreneurship by Choice’
Lesson on Entrepreneurship from likes of  ‘Jack the Ripper’.

For more than one year now, I have been reading much around Entrepreneurship – Biographies, Success stories, books, articles and whatever interesting I get my hands on. And this interesting thought striked me while I was thinking about the right time to get into Entrepreneurship. Interestingly, if we look closely, we find that there are two types of Entrepreneurs – Entrepreneurs by Demand and Entrepreneurs by Choice.
You are an immigrant (forced or voluntary) and have come to a new country, new place to make a living. You don’t have any support system, you don’t have enough money. You have to support your family and you have to earn a living. You have to start from scratch. You are talented, you are skilled… but you are unable to land with a job. Now, all you can do to make a living is to sell (use) your talent directly in the market. A roadside shop to sell your art or some law advisory. Anything depending on your skills. But, you have to start something on your own. Bingo! You are an Entrepreneur. And this is Entrepreneurship by Demand. Look at the history and many of these Entrepreneurs have made a big fortune starting from the scratch.
Another scenario. You are a person from a stable family. You always had access to good education. You always have been a good student. Now you have a good cushy job. After a relaxed sleep you get up refreshed in the morning. You have filling breakfast and go to work. You are at work from 9 to 5. You come home and have good time with you family and kids. End of the month, you are taking home a decent salary. You have build up few assets and you have reasonable savings in your account. And then, one fine day you decide, you don’t want to work ‘whatever’ for ‘whoever’. You want to be your own boss. You are filled with gallons of confidence that you have accumulated over years. You take a stalk of your strengths and skills. You decide to start something of your own. Bingo! You are also an Entrepreneur. And this is Entrepreneurship by Choice.
So, whenever I think about Entrepreneurship, I find two types of entrepreneurs:
1.       Entrepreneurs by Demand.
2.       Entrepreneurs by Choice.
So, which one of these makes a more successful Entrepreneur? I could not decide and I understand this is debatable as well. Some will vouch for Entrepreneurs by Demand and equally for Entrepreneurs by Choice. Nevertheless, let us give it an attempt.
Probably, we can start by high-level comparison between both these type of Entrepreneurships side by side:
Entrepreneurs by Demand
Entrepreneurs by Choice
Initially driven by ‘Urgents’
Primarily driven by ‘Importants’
Play on existing strengths
Play on existing + Develop required strengths
Tactical focus
Strategic Focus
More perseverance , ‘Do’ or ‘Die’ situation
Less Persevereance
No looking back. Commitment.
Can switch back to cushy jobs.
So, can we say which one is better? Hmm… No concrete conclusion yet!
I was just wondering if we can draw some parallel from criminal psychology to deduce which type of Entrepreneurship could be better. In criminal psychology, it is said that there are two types of criminals – Criminals by Demand and Criminals by Choice. Law enforcers and Psychologists vouch that it is harder to catch Criminals who are criminals by choice and that they are shrewder than criminals by demand. Remember Charles Shobraj, Jack the Ripper.
Now, would it be fair to compare entrepreneurship with crime scene? I guess not, but here I think we are comparing the cases where environment Demands us to get into some action Vs where we make some thoughtful Choices within the given environment.
If we accept Criminal Psychology then we should agree that Entrepreneurship by Choice should be better. So, why is it not true always? Why history stands equally behind Entrepreneurs by Demand.
Looking closer we find that there is one underlying principle which we have been ignoring all this while when we are trying to make direct conclusion based on the analogy of criminal psychology. Criminals, irrespective of whether by choice or by demand, makes an ‘irrevocable commitment’. It is difficult for them to again become acceptable in the society. In most of the cases, they commit themselves to the criminal lives. The same is not true in case of Entrepreneurship by Choice. Failed Entrepreneurs are acceptable in work and social life though there is some social stigma of failure that they have to face. But, there is nothing like point-of-no-return for Entrepreneurs and especially for ‘Entrepreneurs by choice’.
And again, this difference now becomes of greater prominence when we compare Entrepreneurs by Demand and Entrepreneurs by Choice. Entrepreneurs by Demand, because of demanding pressures, have higher level of commitment to the Entrepreneurship route they have been forced to take. They are bound by a commitment which is kind of irrevocable.
So, based on this thought would it be justifiable to conclude that ‘by Demand’ or ‘by Choice’, the most important thing for any Entrepreneur to be successful is ‘To make an Irrevocable commitment’.  And, I have started to believe that this makes the real difference between Entrepreneurship by Choice and Entrepreneurship by Demand – ‘Irrevocable Commitment’ of never looking back. If both type of Entrepreneurs are bound by similar level of ‘Irrevocable Commitment’, I believe Entrepreneur by Choice would be more successful. And why not? He would have all the time and all the resources to take more informed decisions and he would have time to develop on his skills and to plan his moves strategically. But, apart from all these good to have time and skills, there is this one thing that Jack the Ripper can teach all Entrepreneurs is the importance of ‘Irrevocable Commitment’.