How does a non-entrepreneur become an entrepreneur?

Entre­pren­eurs behav­ing badly

In Aus­tralia the term ‘entre­pren­eur’ has a very mixed her­it­age that may be respons­ible for dis­cour­aging oth­ers from embark­ing on new enter­prise. Bond and Skase are cent­ral to many Aus­trali­ans’ view of an entre­pren­eur and they, Bond, Skase and Entre­pren­eurs gen­er­ally are often cited with venom­ous deri­sion; so much so that it has even gen­er­ated the straight-to-video release of equally dubi­ous movies such as “Let’s Get Skase”.

Addi­tion­ally, many Aus­trali­ans exper­i­ence a sense of schaden­freude in watch­ing suc­cess­ful pub­lic fig­ures fall from grace, even going so far, at times, to assist their fall, in a cul­tural phe­nomenon known as the “Tall Poppy Syn­drome”. The Tall Poppy Syn­drome is a social lev­el­ling phe­nomenon, related to envy, that is well-known in Aus­tralia and New Zea­l­and (Feather, 1989; Mouly and Sank­aran, 2002).

Against the back­drop of failed entre­pren­eur pari­ahs and a social phe­nomenon act­ing to drag the suc­cess­ful toward mediocrity, it can be daunt­ing for the inspired would-be Aus­tralian entre­pren­eur to act on their ideas; par­tic­u­larly because entre­pren­eur­ism, des­pite the bad press entre­pren­eurs may have received, is often a force for pos­it­ive change within society.

Entre­pren­eurs as contributors

Under­stand­ing whether or not you would like to become an entre­pren­eur greatly depends on what being an entre­pren­eur means to the indi­vidual. The schol­arly defin­i­tion of entre­pren­eur and entre­pren­eur­ism has seen sig­ni­fic­ant evol­u­tion over time. Daniel Wren, in his excel­lent exam­in­a­tion of the his­tory of man­age­ment thought (Wren, 2005, : 42), describes the use of entre­pren­eur, or more lit­er­ally the word ‘under­taker’ by Richard Can­til­lon in 1755 as ‘any­one that bought or made a product at a cer­tain cost to sell at an uncer­tain price’. This defin­i­tion encom­passes almost all those engaged in any com­mer­cial enterprise.

Since Cantillon’s defin­i­tion, the dis­tinc­tion between the entre­pren­eur and the man­ager has fur­ther evolved, pos­sibly as part of the aca­demic drive to develop con­cep­tual dicho­tom­ies. Entre­pren­eurs are seen as those that drive innov­a­tion whereas the man­ager is primar­ily engaged in imit­a­tion (White, 2004).

The view that the entre­pren­eur is a source of innov­a­tion is one presen­ted and sup­por­ted by the often-quoted and well-regarded Aus­trian eco­nom­ist Joseph Schum­peter, that ther­ole of the entre­pren­eur is to drive “cre­at­ive destruc­tion”; that is, to reform or revolu­tion­ise (Pet­ra­kis, 2005; Turner, 2009). The neces­sity for entre­pren­eur­ial activ­ity to be cre­at­ive or innov­at­ive has also led to the con­clu­sion that small busi­ness, pre­vi­ously thought to be syn­onym­ous with entre­pren­eur­ism, need not be entre­pren­eur­ial (Car­land et al., 1984).

The role of the entre­pren­eur in cre­at­ing jobs and con­sumer value has also been described in great deal, par­tic­u­larly by Peter Drucker who goes on to describe the activ­ity of the entre­pren­eur as someone that always “searches for change, responds to it, and exploits it as an oppor­tun­ity” (Drucker, 1985, : 28).

Entre­pren­eurs take on risks

When the activ­it­ies of entre­pren­eurs are watched from afar though media reports it may appear that entre­pren­eurs are people that take on very large risks. This appar­ent propensity for tak­ing on risk has been extens­ively described in lit­er­at­ure (for a sum­mary see Pet­ra­kis, 2005), how­ever, stud­ies have not con­clus­ively con­firmed that entre­pren­eurs engage in greater levels of risk-taking beha­viour than non-entrepreneurs (Brock­haus, 1980) and for a review and sum­mary of other stud­ies see Busen­itz, 1999).

If entre­pren­eurs, suc­cess­ful or oth­er­wise, make the decision to act upon their innov­at­ive ideas des­pite the pre­vail­ing depressed eco­nomic con­di­tions, what can the non-entrepreneur learn from the exper­i­ences of entre­pren­eurs to gain the auda­city to trans­ition from non-entrepreneurship to entrepreneurship?

This essay seeks to exam­ine two Aus­tralian entre­pren­eurs; Sid­ney Myer and Wil­liam McPh­er­son to argue that the pre­vail­ing eco­nomic con­di­tions, boom or bust, provides oppor­tun­ity for the astute entrepreneur.

Addi­tion­ally, it will be argued that les­sons may be learnt from the two examples of entre­pren­eurs so that the non-entrepreneur may take that walk through the ‘val­ley of dark­ness’ to emerge a suc­cess­ful entre­pren­eur on the other side.

Simcha Baevski (Sid­ney) Myer (1878 — 1934)

Simcha Baevski was born in Kritchev, Belarus, in 1878, the last of 11 sib­ling, his mother Koona Dubrusha who ran the family’s drapery busi­ness and his Father, Israel, a schol­arly Talmudist (Lifi­man, 1999). After arriv­ing in Aus­tralia in 1899 he adop­ted the name Sid­ney Myer and, with his brother Elcon, opened a small store in Bendigo, Vic­toria and began door-to-door sales of fab­ric and clothes to coun­try house­wives (Lifi­man, 1999). His aptitude, charm and enthu­si­asm, des­pite the ini­tial lan­guage bar­rier, led to rel­at­ively rapid suc­cess and he moved his busi­ness to a lar­ger store in Bendigo where he worked on build­ing and improv­ing the “Myer Emporium”.

He com­mit­ted him­self to world travel to make busi­ness con­tacts, under­stand emer­ging fash­ion trends and mar­ket­ing meth­ods and even­tu­ally took a large, but cal­cu­lated risk in buy­ing Moffat’s Drapery in Mel­bourne (Anonym­ous, 1922). Sid­ney, com­ing from a back­ground in which schol­arly pur­suits were val­ued, became a bene­factor of edu­ca­tional and health facil­it­ies dur­ing the ‘Great Depres­sion’ and, being an ama­teur actor, he also became a great sup­porter of the arts (Lifi­man, 1999). He was equally gen­er­ous to his staff, provid­ing paid hol­i­days, staff share offer­ings and even provid­ing an elab­or­ate in-store hos­pital (Hyslop, 1986). He also estab­lished the Myer Wool­len Mills in Bal­larat to deal with dif­fi­culties with imports of some of his lines of products (Neil, 1920).

Fol­low­ing his untimely death in 1934 (Anonym­ous, 1934), Sid­ney Myer’s leg­acy is one of cour­age and phil­an­thropy and would most suit­ably fit within the “Great Per­son” school of entre­pren­eur­ism described by Cun­ning­ham and Lis­cheron (1991).

Wil­liam Mur­ray McPh­er­son (1865 — 1932)

Wil­liam McPh­er­son was the son of an iron mer­chant who inher­ited his busi­ness con­cerns after his father’s death in 1888 and his brother’s death in 1896 (Patrick and Hamer, 1986). Wil­liam received a six-year appren­tice­ship to a metal mer­chant and machinery import com­pany prior to his inher­it­ance, giv­ing him a good under­stand­ing of that busi­ness. In later years he, among oth­ers, estab­lished the Acme Bolt Com­pany which he owned out­right by 1905 (Patrick and Hamer, 1986) which even­tu­ally became McPherson’s Pty Ltd.

His edu­ca­tional and fam­ily back­ground provided the basis for his entre­pren­eur­ial activ­it­ies main­tain­ing and grow­ing the busi­ness dur­ing the “Great Depres­sion” he did this through a shrewd busi­ness man­ner and an aver­sion to debt. Through­out his role as a busi­ness­man he inter­viewed every job applic­ant and, after going on to serve as Treas­urer, and sub­sequently Premier of Vic­toria, he ensured that his staff were treated well; provid­ing them with lunch facil­it­ies, share offer­ings and bonuses at a time when this was uncom­mon (Patrick and Hamer, 1986). Wil­liam McPherson’s pro­file fits best with the Mana­gerial School of entre­pren­eur­ism (Cun­ning­ham and Lis­cheron, 1991).

Defin­ing Char­ac­ter­ist­ics of Entrepreneurs

It appears from the two case stud­ies, and the obser­va­tions of Peter Drucker (Drucker, 1985), that change is the fuel of entre­pren­eurs. Though change is all sur­rounds us all of the time, it takes skill to identify the oppor­tun­it­ies offered by that change. To be able to identify change, the above case study examples con­stantly searched it out. They believed in intel­lec­tual improve­ment and pur­suits often trav­el­ling around the coun­try or around the world to find new ideas and fresh perspectives.

It may be argued that being polit­ic­ally con­nec­ted may also foster entre­pren­eur­ial activ­ity, as Wil­liam McPh­er­son cer­tainly had a very close affil­i­ation with polit­ics. This may provide the appear­ance that ‘it’s not what you know but who you know, it could be argued that polit­ics is a pro­found source of change and being near to and in con­stant com­mu­nic­a­tion with the agents of change means that the entre­pren­eur is more likely to be able to identify change in the gen­eral environment.

To respond to and exploit an oppor­tun­ity, it is essen­tial to have a great deal of sup­port. The entre­pren­eurs above sought out that sup­port from sev­eral sources to achieve their goals. They required a sup­port net­work of fam­il­ies and friends to help guide their val­ues, provide them with ini­tial skills, give them encour­age­ment dur­ing times of stress and to cheer them on when they were win­ning. They required the sup­port of their cus­tom­ers, which they achieved by identi­fy­ing their needs and meet­ing them with innov­at­ive or more effi­cient goods and ser­vices. They also depended on their staff to ensure that their cus­tom­ers are well looked after and both Myer and McPh­er­son demon­strated this example in their innov­at­ive approaches to valu­ing their staff. They also needed the sup­port of the com­munity in which they oper­ate and the afore­men­tioned entre­pren­eurs are exem­plars of not only cor­por­ate social respons­ib­il­ity but cor­por­ate social benevolence.

It is also pos­sible that entre­pren­eurs identify and dia­gnose oppor­tun­ity dif­fer­ently. While the research for two of the case stud­ies can­not defin­it­ively provide an answer to how they iden­ti­fied an oppor­tun­ity, in each case the next step was to be will­ing and able to act upon the “find­ings of an oppor­tun­ity dia­gnosis” (Pech and Cameron, 2006). It is this will­ing­ness to take that leap of faith that requires the con­ver­gence of a num­ber of factors based on per­sonal attrib­utes of the entre­pren­eur such as abil­it­ies, atti­tudes, skills and know­ledge. It also required an under­stand­ing of the envir­on­mental obstacles and oppor­tun­ity factors affect­ing the new ven­ture such as cul­tural and com­munity accept­ance, social, polit­ical and envir­on­mental shifts, and resource avail­ab­il­ity (Pech, 2009).

Key dif­fer­ences between entrepreneurs

The two entre­pren­eurs cited above came from dif­fer­ent edu­ca­tional back­grounds. One star­ted his own enter­prises while the other mod­i­fied the activ­ity of exist­ing enter­prises that was inher­ited. In one case there is a clear example of where the entre­pren­eur had a good under­stand­ing of the need for someone that com­ple­men­ted their own busi­ness skills; such as Lee Neil’s man­age­ment skills sup­port­ing Sid­ney Myer. It would appear that the dif­fer­ences out-number the sim­il­ar­it­ies, which may be of com­fort to the non-entrepreneur look­ing toward embark­ing on an entre­pren­eur­ial enterprise.

Recom­mend­a­tions

The decision to take the leap and become an entre­pren­eur is a daunt­ing one, a walk through the val­ley of dark­ness as sug­ges­ted in the title, but each suc­cess­ful entre­pren­eur has made this jour­ney by being pre­pared with a map and a torch (a good under­stand­ing of their industry and cus­tom­ers), tak­ing each small step at a time, sur­roun­ded by sup­port­ive fam­ily and friends, with an enthu­si­asm for the jour­ney itself.

For a non-entrepreneur to make the trans­ition to entre­pren­eur, based on the case stud­ies and lit­er­at­ure cited in this essay, it is recom­men­ded that you start learn­ing to “think what no-one has thought yet” to identify oppor­tun­it­ies but then develop the decision mak­ing skills to eval­u­ate and then map out a way to bring ideas to ‘life’. This may be achieved by:

• Find­ing an oppor­tun­ity that you are pas­sion­ate about or develop pas­sion for the oppor­tun­ity you find;
• Devel­op­ing the abil­it­ies skills and know­ledge neces­sary to run a business;
• Main­tain­ing a high aware­ness of change and remain in fre­quent com­mu­nic­a­tion with change agents;
• Being aware of the actions of poten­tial competitors;
• Enlist­ing the sup­port of your loved ones and friends;
• Under­stand­ing your skills and lim­it­a­tions and part­ner with those that com­ple­ment your skills;
• Plan­ning and map­ping out how you will develop the idea and then start the busi­ness; a busi­ness plan may assist this (Stut­ley, 2007);
• Start­ing small but plan to grow;
• Main­tain­ing a lookout for new oppor­tun­it­ies while remain­ing wary of new threats;
• Com­mit­ting your­self to self-improvement and edu­ca­tion; and
• Being mind­ful of the sup­port you receive from your cus­tom­ers, staff and the com­munity and ensur­ing that you provide sup­port in return.

Ref­er­ences

Ander­son, F. (2001) Entre­pren­eur­ism is not a dirty word. The Cour­ier Mail : 29.

Anonym­ous (1922) Large Drapery Mer­ger. Argus: 32.

Anonym­ous (1934) Sid­ney Myer: Sud­den death in Mel­bourne. The Can­berra Times: 1.

Brock­haus, R. H. (1980) Risk tak­ing propensity of entre­pren­eurs. Academy of Man­age­ment Journal 23(3): 509–520.

Busen­itz, L. W. (1999) Entre­pren­eur­ial risk and stra­tegic decision mak­ing: It’s a mat­ter of per­spect­ive. The Journal of Applied Beha­vi­oral Sci­ence 35(3): 325–340.

Car­land, J. W. et al. (1984) Dif­fer­en­ti­at­ing entre­pren­eurs from small busi­ness own­ers: A con­cep­tu­al­iz­a­tion. The Academy of Man­age­ment Review 9(2): 354–359.

Cas­srels, D. (2000) Shar­ing the bene­fits. The Cour­ier Mail: 28.

Cun­ning­ham, J. B. and Lis­cheron, J. (1991) Defin­ing entre­pren­eur­ship. Journal of Small Busi­ness Man­age­ment 29(1): 45–61.

Drucker, P. F. (1985) Innov­a­tion and Entre­pren­eur­ship. New York: HarperCollins.

Feather, N. (1989) Atti­tudes towards the high achiever: The fall of the tall poppy. Aus­tralian Journal of Psy­cho­logy 41: 239–267.

Hyslop, A. (1986)  Aus­tralian Dic­tion­ary of Bio­graphy vol. 10, chap. Myer, Simcha Baevski (Sid­ney) (1878–1934). Mel­bourne Uni­ver­sity Press, 657–660.

Lewis, S. (2008) Por­trait of a First Lady. The Daily Tele­graph: 123.

Lifi­man, M. (1999) A cen­tury of Myer Phil­an­thropy.

Mouly, V. S. and Sank­aran, J. K. (2002) The enact­ment of envy within organ­iz­a­tions. The Journal of Applied Beha­vi­oral Sci­ence 38(1): 36–56.

Neil, E. L. (1920) Import­ant pro­nounce­ment by Myer’s. Argus: 18.

Patrick, A. and Hamer, B. (1986) Aus­tralian Dic­tion­ary of Bio­graphy, vol. 10, chap. McPh­er­son, Sir Wil­liam Mur­ray (1865 — 1932). Mel­bourne Uni­ver­sity Press, 359–360.

Pech, R. J. (2009) Entre­pren­eur­ial Cour­age, Auda­city and Genius Chapter 15: Our Con­clu­sions. Frenchs Forest, Aus­tralia: Pear­son Edu­ca­tion Australia.

Pech, R. J. and Cameron, A. (2006) An entre­pren­eur­ial decision pro­cess model describ­ing oppor­tun­ity recog­ni­tion. European Journal of Innov­a­tion Man­age­ment 9(1): 61–78.

Pet­ra­kis, P. E. (2005) Risk per­cep­tion, risk propensity and entre­pren­eur­ial beha­viour: The Greek case. Journal of Amer­ican Academy of Busi­ness 7(1): 233–242.

Stut­ley, R. (2007) The Defin­it­ive Busi­ness Plan. 2nd ed. Har­low, UK: Pear­son Education.

White, C. (2004) Stra­tegic Man­age­ment. Pel­grave Mac­mil­lan, Hound­mills, Basing­s­toke, England.

Wren, D. (2005) The His­tory of Man­age­ment Thought. 5th ed. Hoboken: John Wiley and Sons Inc.