Emergic: Rajesh Jain's Blog

Emergic: Rajesh Jain's Blog header image 2

Existential Enterprise 101

August 9th, 2004 · No Comments

Dave Pollard writes:

Let’s take a step back and consider what an entrepreneurial business is. It is a (usually small) number of people with a shared idea and a willingness to work together to make that idea commercially viable. That means, according to what they teach you in business school, finding capital, developing your product and then going out looking for customers for it.

This is a recipe for failure. The money you borrow (which in an entrepreneurial business is always horrifically expensive) compromises your control and immediately presents the possibility of the loan being called, and the personal assets securing it being forfeited. And there are a million possible reasons why there could be few, or no, customers for your product. The #1 reason entrepreneurial businesses fold is because they simply run out of cash. The #2 reason is because the owners make one or more fatal decisions, and the most common fatal decision is to produce a product that nobody wants to buy.

Here’s an alternative model, based on what Charles Handy calls Existential Enterprise, and which I have called New Collaborative Enterprise. Its first two principles turn the business school formula upside down:

1. Marketing: Don’t sell or market anything — identify and produce something for which there is a substantial unmet need.
2. Financing: Don’t borrow money or sell part ownership in your business — only spend your own cash or cash you’ve earned.

Tags: Entrepreneurship

0 responses so far ↓

  • There are no comments yet...Kick things off by filling out the form below.

Leave a Comment