Entrepreneurial Success

Together with my earlier post on busting common myths connected with entrepreneurship- this post strives to present the notion of entrepreneurial success in a different light. In the post, I take the vantage point of the founder of an entrepreneurial venture.

It is very easy for a to-be or a virgin entrepreneur to fall prey to the lure of grand entrepreneurial success based on famous and popular success stories. A future state which is alluring enough and is worth pursuing gives lot of energy to the entrepreneurial efforts particularly in the face of adversities- which in fact is often the case! But, basing the entrepreneurial success within a set of commonly and narrowly defined parameters does no good at least to the entrepreneur. Let me give an example. One success parameter for an entrepreneurial venture could be leading the start-up all the way to a successful IPO. This objective measure of success of the entrepreneurial entity as a whole is not to be doubted but this does not translate necessarily into success of the founder or the founders of the start-up. Very few founders are able to stick all the way to the IPO stage. Many founders feel that the essence of the company is lost at least on a personal level, when too many people get involved in running the affairs of the company which happens to be the case for many start-ups as they scale up to a level worthy of an IPO. So the important question to ask is- what growth or scale of the venture defines the personal success boundary or when is it the right time for the start-up founder/(s) to hang in their boots?

As the entrepreneur struggles to balance the varied pressures of the start-up particularly if its heavily funded he/she has to be answerable to the investor community at the expense of everything else, the creative freedom that the entrepreneur craves comes under serious restriction. At the same time as the entrepreneur grows with the entrepreneurial entity itself and this period for a healthily growing venture could easily be 5 years or more, the personal life priorities also start creeping in. Hence, from the point of view of the entrepreneur, it is easy to get disillusioned if the only measures of success are hard factors- growth, scale, revenue, cost etc. The biggest strength of any entrepreneur who goes and strikes his/her own path is creative freedom and the loss of creative freedom could result in serious personal dissatisfaction. To avoid not falling into this trap requires defining success more broadly. The entrepreneur could take content in the fact that he/she created opportunities for growth for so many people- many a times life-changing opportunities for the team. The fact of creating something from scratch when many people especially the closest ones doubted the success of the idea- is itself the biggest pat on the back of the hardy entrepreneur. The satisfied customers who use the product and service of the venture are the biggest validators of the success. Even if the growth in number of customers is not sustainable to support the growth of the enterprise from a revenue target as set by current burn rate and future projections, the number of happy customers should be part of the measurement and the growth in number of happy customers should be a measure of success. From a personal standpoint, I can validate the fact that nothing gave me more happiness when I met customers with smiles on their faces. I would rather have higher proportion of happy customers rather than higher number of total customers. Similarly, I would rather have higher number of happy and motivated employees rather than higher number of total employees and a high attrition rate. Both these considerations could potentially result in restriction on growth and scale and it will not go too well if there is heavy involvement of the external investor community. I believe the start-ups that become really great companies balance both these considerations i.e focus on scale and growth and at the same time developing a motivating environment and culture internally and creating ever innovative products and services for the customers.

Although a sense of loss of creative freedom is a personal challenge that the entrepreneur faces in his/her own venture as it goes through a high growth phase, it does not mean that he/she should become dispassionate. The entrepreneur has to grow with the venture and if personal capabilities or capacity becomes a concern or a restriction, then it is not wrong to bring in experienced and expert professional help from outside for the benefit of the venture. In such a case, the entrepreneur could take a different role in his own venture or define other avenues for exercising creative freedom. The personal definition of success would be a much better way of making a decision in such a case. If creating great products is the passion that drove the entrepreneur in the first place to start the company, then he/she should take this as the main barometer for success and should guide the company to focus on this rather than sacrificing it for the sake of scaling up or try to balance both innovation and scale (which could be extremely hard and sometimes nearly impossible because of various factors- Steve Jobs himself could not achieve this in Apple during his first stint!).

In the end I believe that entrepreneurship is a journey and the entrepreneur when he/she takes this path is not necessarily to be constrained by the first venture or the second venture or so on. It is very easy to get beholden to the venture that you started and perspired in but if it becomes too much a toll from the point of personal criteria of success, rather than christening it a failure it is better to move on and take the lessons elsewhere and do a better job the second time, third time etc. I do not believe there is anything called failure in an entrepreneurial venture. I say this not because of my optimist nature but because of the very basic fact that as a start-up the definition of success is not that which applies to other things in life. When you are working for someone else, whether you like it or not the only factors of measuring success would be the impersonal ones i.e. money, perks, position, influence, power etc. When you work for yourself the only factors of success that I think are the personal ones i.e the ones dear to your own heart whether it is creating innovative products, achieving customer excellence, developing a highly motivated team of people and grooming them for success and so on. Hence, the underlying success factors for an entrepreneurial venture from the point of view of the entrepreneur should always be the ones closest to his/her own heart.