Last weekend was quite a busy one with some travelling and other programs, hence the late post. Nevertheless I’m now shooting a quick blog regarding some paradoxes in entrepreneurship. By the fact that you are reading this blog, I assume you know the meaning of the word paradox anyway. However, in case that word has never passed by or near you, simply google it and there you are! Thanks to the technological advances of today, people no longer have to carry along some humongous books called dictionaries to check out meanings and uses of some words. If you don’t have access to the internet, you better pray and also do something about it because if you don’t, the world might leave you forever.
There are paradoxical or contradictory issues in entrepreneurship that sometimes makes people think entrepreneurs are stupid. You know, one thing about this word stupidity is that it defines behaviors, actions, thoughts and words that appear to lack common sense or intelligence. The issue is that common sense itself may not be common. So, there are situations where a layman may judge an entrepreneur as stupid and lacking intelligence, yet the situations make a lot of sense while walking on the entrepreneurial avenue. So, this is a state of wisdom in an entrepreneur’s stupidity, or alternatively an entrepreneur’s apparent stupidity actually being intelligence due to the paradoxical or contrasting circumstances.
So, what are these paradoxes that make entrepreneurs stinkingly rich?
- Spending money like the world is ending – instead of saving it. Now, many of us grow up being advised to save money. Usually the link between saving and investing those savings in lucrative businesses or investment is lacking. Sometimes there is the wrong perception that having some big sums of money stashed away in some bank accounts is a smart move, yet we know that many bank accounts pay the worst interest rates. Where is the paradox here? Entrepreneurs sometimes spend money like the world is ending. I mean, spending until they drop. Why? They intentionally break the saving rule and spend instead because they are aware of potential future returns. This is why they spend what they have saved and even go to what other people have saved through banks. Just give that reckless (in wisdom) spender time, and you most likely will see correspond big profits and riches over the years. Isn’t this an interesting paradox? The trick is in the nature of spending. Entrepreneurs invest while others consume!
- Investing in apparent uncertainty and risk, including borrowing money for start-ups. Another principal paradox is the investments entrepreneurs make in the face of uncertainty, risk etc. The situation is even made worse when the business concerned is a new venture or start-up with many untested variables. Many business situations are not proven but rely on assumptions. The future is not tested, and it is the future and not history. Entrepreneurs face risks heads on. Do you understand what I’m meaning here? These might all appear stupid and unintelligent to a bystander. Common sense says you should avoid risk and play safe. Risk is bad, so most would say. You need to be careful and exercise caution in what you do. Isn’t it? How can you for example borrow huge sums of money to put in a new business, many would argue? However, a smart entrepreneur rides on the back of this paradox and makes good profits with time. Don’t you agree with me? The ‘stupidity’ translates into riches. Come on!
- Walking a path that probably nobody has walked before. Again, there are entrepreneurial journeys that oftentimes require walking in the jungle – facing thorns and wild animals – for a while before you connect to the smooth and golden entrepreneurial avenue. Now, only the stupid and unintelligent leave the comfortable and safe environment to move to the discomfort and danger of the wild. Isn’t it? Where are the paradox and the resulting money then? It is in discovering new but valuable things in the wilderness before you come back to your ‘senses’. Things that people will run for. Things that people will easily part with money for. Do you get the point? Therefore, this unknown path could lead to something good. When this something good comes, the ‘stupid’ one who went looking for it will have more returns than the ones who played safe and never followed that new, lonely and unknown road.
- Assembling and working with a team of people you don’t even know. My dear entrepreneur, if you have never known one creature that is very difficult to understand, it is man. This is why it’s a great blessing to have authentic people around you. When you see people that have managed to organize a good number of people to work together towards common goals and objectives, you need to appreciate and respect that person. Many people play it safe and relate with only people they know. It makes sense. Isn’t it? The entrepreneur does the contrary. This is where the paradox is. He does the opposite including inviting, working with and trusting people he has not met before and probably has very little clue about who they are. Forget about all these recruitment background checks blah blah blah! In many cases, you don’t actually know very well the people you engage and start working with, and yet working with these people could give your enterprise a significant edge and competitive advantage that sets it apart. Are we still together?
- Continuing to spend money in a loss-making business. There is wisdom in patience but some situations make patience appear very unintelligent. This is another paradox that can make an entrepreneur stinkingly rich. Why? Many businesses do not make money immediately, and this could make some rational thinking people quickly run away before the business starts making economic sense. What does an entrepreneur do? He sticks around ‘unintelligently’ and weathers the storms, until the storm passes over. This can be equated to the eagle that flies out and rises in the midst of the storm, contrary to other birds that run to safety in such situations. Nevertheless, which bird always has the upper hand? It is always the eagle. It is the king of the birds. By the time the storm is over, the eagle is as ready as ever to take on new challenges. This is another example of an apparent stupidity translating into great gains.
- Over-believing in yourself and avoiding self-depreciation. Finally, it is common sense and intelligence to self-depreciate. It is decent and society does not like cocky people generally. The entrepreneur does the opposite often. Come on! The entrepreneur has to promote himself, his business ideas, products and services, investment pitch etc. Isn’t this a paradox? However, what happens after the entrepreneur has managed to get money to invest after a successful pitch aimed at attracting funding? What happens when he has successfully promoted his business idea including his products and services, to the extent that the market cannot simply do without it? Doesn’t this paradox and stupid behavior translate into stinking riches? I leave that to you.
Ok. Didn’t I say at the beginning today that I was going to be brief? I think I have indeed gone beyond brief. Here is the closing then, with a swift ending.
Yours in entrepreneurship,
The Wise Entrepreneur