Entrepreneurship is a skill as well as an art. It refers to skills related to careful planning, shrewd handling of limited resources, clear vision and thinking and, moreover, a positive attitude that will help to tide over the turbulent periods in the growth chart of a company launched.
The world of business and entrepreneurship is visualized in general as being enveloped by factors like high funds, available resources, inventive brain, and luck. Any normal person interested in starting a venture experiences a period of uncertainty and qualms regarding its future success. Paul’s misgivings about his abilities is a common state of mind experienced by most would-be entrepreneurs. Experts and researches have termed these stereotyped notions about entrepreneurship as myths.
Paul’s primary doubt relates to his ability to be an inventor and to come up with a breakthrough invention that would find a ready market. This, in fact, is a common myth which says that entrepreneurs take off with an invention. This myth termed in the jargon of the business world is the High Tech Invention Myth coined by National Commission on Entrepreneurs (NCOE). They say that the most successful businessmen start their firms having a breakthrough invention that is usually something technological by nature. They further add that “having a breakthrough invention, a unique product or a radically new process is not a necessary element at the beginning of successful growth companies. Paul’s entrepreneurship thus is in no way dependent on the success of his inventions. Rather inventions are not an essential requirement for starting a business.
Paul’s second doubt is related to his capital which is understandable. It is a commonplace belief that starting a trade involves huge sums of venture capital which may be to the tune of millions. This is in fact another myth associated with starting a venture. According to Scott Shane, Professor of Entrepreneur Studies at CaseWestern ReserveUniversity, “It is a myth that it takes a lot of money to finance a new business.” The NCOE terms it as The Venture Capital Myth. As the myth goes, the most successful businessmen establish their companies having millions as venture capital in order to develop and realize their idea, hire employees and buy supplies. NCOE feels that venture capital is rather uncommon among the most successful business companies being in their early periods of development. As reported by NCOE, in the year 1999, fewer than 4000 of the about 700,000 new companies created used venture capital to start up. That means that less than 1 percent of all the newly developed businesses were founded with the help of venture capital. The founders of Microsoft, Bill Gates and Paul Allen, failed to provide venture capital when they decided to start their company in the year 1975.
Paul’s hesitation to venture forth on account of a capital of $ 50,000 is unjustified, for with careful planning and strategies of borrowing, renting space instead of buying and paying commissions instead of salaries may see him through the infancy stage of the growth of his company. Scott Shane feels that initial capital of $ 25,000 is enough for a startup.
Paul’s overall thinking and attitude is clouded by the lack of confidence in himself and in his abilities. He is in the grip of a failure phobia which has spread its tentacles over his intention to take a plunge. Paul is also a victim of the stereotype related to starting a business in America that has been observed by Vivek Wadhway in The Washington Post, July 29th 2011 issue, “Mix a brainy college dropout, a garage - incubated idea and a powerful venture capitalist, stir well, and you get the latest Silicon Valley Powerhouse.”
The real magic lies in Paul being a doer and tinkerer.