Advantages And Disadvantages Of Entrepreneurship

guitar-case-485112_640Everybody and their brother wants to start a business, and most of them fail. Why? In my opinion, lots of reasons, but I want to discuss the simple fact that there are advantages and disadvantages of entrepreneurship. Most people simply think about the advantages.

In a recent interview between Steve Case, the co-founder of AOL, and Guy Kawasaki, a name you should recognize, Steve discusses his new book The Third Wave: An Entrepreneurs Vision of the Future. From the interview Steve explains that startups often fail because they are in attack mode against the more established companies. In essence this is not an entrepreneurial stance and therefore does not work well towards the end goal. He further shared why incumbents like AOL eventually fail:

Startups are attackers. They play offense and seek to seize opportunities. Incumbents tend to be defenders, trying to protect the status quo. As companies scale, it gets harder to continue to be an attacker.

I certainly lived that as AOL got large, and especially after we merged with Time Warner. Sadly, we lost our entrepreneurial mojo, but it is possible for incumbents to continue to be agile attackers. In my book, I outline the steps that companies like Google and Amazon have taken to lean into the future and focus on maximizing opportunity, not hedging risk. (You can read the whole interview here.)

An advantage however is that in many instances you can get going for very little money on the front end. John Rampton, contributor at Inc.com recently had this to say in a post titled 101 Businesses You Can Start With Less Than $100.

Have you ever dreamed of starting your own business? If so, what’s holding you back? If not having enough money to get started, then I’ve got some excellent news for you. You can start countless businesses for under a $100.

Over they years I’ve done many odd jobs to pay bills. While it’s not always easy, there are ways that you can put your skills (whatever they are) to work. It doesn’t matter if you’re a handyman or an online marketing expert, you can make extra money on the side.

You may think that’s crazy, but you’ll be convinced after reviewing these 101 business ideas that can actually be launched with less that $100. (You can see the list here.)

Kelly McAdoo is the City Manager & CEO of the City of Hayward in Alameda County, California. She was interviewed recently by Jennifer Maerz for startuplessonslearned.com where she discusses entrepreneurship through start-ups and the government.

Looking for ways to be innovative and creative when it comes to change on the government level can offer clues to businesses in terms of creative entrepreneurship. In this interview Kelly discusses some advantages and disadvantages to this approach:

It’s ironic, but as I’ve talked with others who have been engaged in these types of initiatives in private enterprise, there are many of the same challenges. At the core, we are attempting to change the organizational culture of a large enterprise with all of the associated obstacles and heartburn. For example, we’ve had to deal with getting executive buy-in, creating time and space for people to try working in a different way, and generating a critical mass of people in the organization with the skill sets necessary to move the change forward.

The unique lens applicable to local government is the political and public scrutiny that comes with any new or risky project. This is the beauty of this methodology for me and why it has the potential to be so impactful in local government. Instead of spending hundreds of thousands of taxpayer dollars on major initiatives and failing very publicly, we can spend $5,000-$10,000 on experiments to determine whether we are even on the right track in the first place. (You can read this in full here.)

While there are advantages and disadvantages of entrepreneurship the goal is to be successful in the end. You want to weigh the risks and monitor them carefully. But don’t be afraid to make those risks and take the chance. It’s a bit of a double edged sword to be sure. However, nothing ventured, nothing gained.