The seven principles of entrepreneurship that are worth the company manager

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James D. Price, a professor of business studies at the University of Michigan's business school, said in James Plesse, July 24, that managers of conservative, formal companies should put aside their preconceptions and learn the seven principles that would bring success to passionate entrepreneurs. The following is the original text:

The managers of big companies are very conservative, because shareholders believe that managers should not be as reckless as entrepreneurs, otherwise it will only hurt. After all, business managers need to be accountable to their shareholders, consumers and employees. First of all, to ensure the stable operation of the enterprise, then we need to consider how to further develop and enhance the value of the enterprise.

However, we can still learn from entrepreneurs the wisdom to make big companies benefit. The use of some successful entrepreneurs to think way, can make large enterprises in the greenhouse to cultivate beautiful creative flowers.

The author of this article provides some successful entrepreneur behavior patterns that can be used for reference to improve the operational wisdom of business managers. The author calls it the seven principles of entrepreneur success:

"The Knee ski principle"

"Reshaping the downside skills"

"Not demanding the perfect decision."

"Learn to accept conditional yes"

"Keep in mind that business model innovation is as important as technological innovation"

"Think like a small company."

"Always position and eliminate risk".

Next, let's look at the Seven Principles of Entrepreneurship:

Knee Ski principle (Ski with your knees bent)

People who like alpine skiing know that one of the rules of skiing is to bend the center of gravity when skiing. This ensures that you can adjust to the slope changes at any time to cope with obstacles or other skiers that may appear on the surface, allowing you to navigate gracefully through the hillsides. Conversely, if your knees are stiff, your limbs are tight, and your eyes stare in one direction, it is a painful fall.

When working in a large enterprise, monotonous and repetitive transaction processing can easily cause a person to think rigid. Why not? Because enterprises must develop a set of standard operating procedures, reduce the cost of half of the transaction processing costs, so there is no need to change in day-to-day transactions. But it is this stability that binds you tightly. The reason for the comfort of singleness and predictability is that this poses the lowest risk. It's human nature that makes it impossible for us to escape the security of standardized behavior.

And the founders, in contrast to these stereotypical executives, are like the crazy Alpine skiers who have been blindfolded. If you are an entrepreneur, you must bend your knees and relax your mind. Because you are already prepared for the problems that may arise, and you realize that you will be faced with a potentially catastrophic setback that is essential in the entrepreneurial process. You have to go through a lot of devastating blows, and you don't even know what these setbacks are or when they come in any way.

The mentality relaxes, the center of gravity moves down, helps the Enterprise Manager to accept the change which may appear at any time, simultaneously maintains the enterprise the stable development. Entrepreneurs have prepared themselves for possible setbacks and changes. This flexibility and high resilience in dealing with setbacks and challenges can be beneficial both for adapting to market shifts and for opening up new markets.

Practice the downhill technique (Refine the skill of falling down.)

The first trick that ski coaches teach us is to learn how to glide. This is because downhill is the essence of skiing and the action that causes most people to get hurt. However, the vigorous ski master can always gracefully landing and continue to glide.

Similarly, a successful entrepreneur needs to be able to adapt to the feeling of flying in the air and to land steadily. Entrepreneurship is a constant prediction of what may happen, a graceful adjustment of mindset and continuation. After all, no matter how thoughtful you may be, there are 50% of potential to find that the original plan is not feasible. Worse, only when the problem occurs do you know which part is wrong.

This makes it easy to understand why VCs are more willing to invest in entrepreneurs who have failed. It also explains why most entrepreneurial teams are more willing to hire people who have had entrepreneurial experience (both success and failure) as core managers of the team. The past one or two failures are not the indelible scars of an individual's career, but rather a sign that the person is mature enough to be able to face the crisis calmly.

In order to grow through innovation, large enterprises must try some unknown but challenging areas. Therefore, managers should not be constrained by the fear of failure, but must bear more of the expected risk. We need to keep practicing the downhill technique.

Not demanding the perfect decision (get comfortable with "close enough.")

The vast majority of innovative projects do not see the sun the next day, because the board of companies has nipped them in the bud long before dawn. Why are these innovative projects always premature? This is because the unknowns and risks of innovation make most people feel uneasy. One of the duties of the Enterprise Committee is to obliterate "uncertainty" for the company. As before, executives in the IT industry never worried that they would be fired for purchasing IBM computers. It is always more safe to say "no" to innovation.

However, all successful startups hatch from the bad environment full of unknown, like the solution of a seven variables and six unknowns of algebraic equations, technically, it is impossible to calculate. So the "right" answer is "we can't solve it" unless we have a chance to try enough.

However, "the best is the enemy of good." In the entrepreneur's heart, the best decision is the perfect decision (but you never have enough information and time to solve it). Suboptimal decisions are imperfect but effective, and flexible decisions (like the "ski curtsy" principle). The worst decision to make is to step in or set up a decision committee (and ultimately all decisions will be rejected and you'll accomplish nothing). Entrepreneurs learn to accept suboptimal decisions, roll up their sleeves and collaborate with customers who are in the offing.

Learn to accept conditional Yes (is happy with a "conditional yes.").

In real big companies, managers often get their money ready before they start big projects. After all, no one wants to see $200 million worth of construction projects raising only a few 30 million dollars of site preparation funds.

But in the perilous circle of investment, no sensible would expect a one-off infusion of money. The rules of the world are different! For independent VCs, what they want is a round of "landmark" investment – giving entrepreneurs 9-18 to six months of operating capital to see if they can make the next worthwhile achievement. Only by letting the VCs see your booty will they say yes to you in the future.

The internal entrepreneurship projects of big companies (which we are referring to are risky projects that invent and open new technologies, business models or new markets) should also pursue "milestone" financing. Keep in mind that 50% of new projects will eventually run aground, but you just don't know if your project belongs to the unfortunate 50%. The parent company, which plays the role of VCs, should discuss the financing plan with the internal project team and carefully set milestones for the financing phase. The result: projects that will eventually run aground will not waste the company too much capital, and projects that are truly successful can still be funded.

Keep in mind that business model innovation is as important as technological innovation (Remember that business model innovation is often as important as tech.).

There has never been any statistical or empirical evidence of this, but we can see that in the past Half-century, most companies that have maximized shareholder value have been innovators of business models, not technological innovators. ebay has become the world's largest online auction pool; Amazon has replaced the middleman role in retailing; Dell assembles PCs based on consumer demand; MySpace and Facebook define social networks; HMO and PPO bring new models to Medicare ... While there are new technologies in the example, technology is by no means the strategic factor driving shareholder value growth. Instead, the new business model, supported by technology, makes everything different. Entrepreneurs and professionals should understand this.

Thinking like a small company (think Sgt).

The manager of Fortune 500 was dug into a small technology company that was first created, and unfortunately he packed the "big company" thinking into a suitcase. The sense of responsibility of big-business managers is that he has seen the company grow at a rate of about 50 a year at 50%, as if the mission is calling for more compact project management! His solution? Call the old club's supplier and buy a software solution similar to that of the old club. His ending? 500,000 of dollars in purchase costs, bought a complex project management system with cloud computing. Worse, the expensive "solution" has never worked. The manager was fired and his $500,000 worth of systems were replaced by simpler and cheaper solutions.

Learn the small, cheap and flexible way of thinking for entrepreneurs. "Thinking like a small company" doesn't mean giving up ambitions and dreaming is on the shelf (in fact, I think that start-up ventures are not "small companies" but rather immature world-class companies). By trying again and again, you'll be amazed at how many tricky problems a seemingly shabby amount of money can solve.

"Always position and eliminate risk" (strive to understand and mitigate disorientated.).

Contrary to popular belief, entrepreneurs and VCs are not fools chasing risks. In fact, the best entrepreneurs are very risk-averse and adept at identifying and eliminating the risks of entrepreneurship. Whether it's intuitive or clear thinking, the best entrepreneurs always struggle with risk in their minds--are our products risky? Is there a risk in the market? Is there a risk to finance? Is management risky? This almost crazy obsession is worth a lot of big company managers to learn.

I listed the seven Principles of entrepreneurship here for the company managers to think about. In many cases, though, some of the actions of the founders seem foolhardy and reckless, but they prove to be completely worth emulating. Especially when companies start new projects or enter new markets, follow the example of entrepreneurs who can help you move up the level.