Carey International Business Career Club at Johns Hopkins University. Moderated by James Calvin, Ph.D., Associate Professor at the Johns Hopkins Carey Business School, my fellow panelists included Drew Durban, Co-Founder of Anza Technologies, Neelima Grover, Founder and Chairman of The QED Group, and Barbara Moller, President and Founder of Paper to Pearls. I enjoyed the conversation with the attendees and my fellow panelists and while several good points were made during the course of the forum, there are a few worth mentioning in this blog.
As a result of the difficult economic climate, many business students are considering starting their own business ventures upon graduation. While it may be obvious to most people, it is important to focus a business on an area where the entrepreneur is passionate and finds motivating. Many people have the misconception that business is not personal. They are grossly incorrect. When you immerse yourself in your venture by working 16 hours a day, seven days a week and sacrifice your time with your friends and family, business IS personal. An entrepreneur will fail if they cannot find the passion and motivation to sustain their energy, efforts, and carry themselves through the tough times (and there will be a lot of rough spots where you question the reasons for starting your venture, finding value in your efforts or managing the stress caused by unforeseen viability and success of the venture).
Since the focus of the forum was on social entrepreneurship (I prefer the term “responsible business”), the panelists were asked about the challenges of doing business in developing nations, some of which have serious corruption problems and lack of governance or physical infrastructure. The panel uniformly replied the importance of a vast knowledge of the local culture and unique nuances. I have conducted business worldwide and I learned early in my career that every country possesses an uniqueness about it. As an entrepreneur, my operational strategy, product or service and value proposition must take the unique cultural nuances into consideration.
The financial bottom line is not always the primary focus of doing business in developing markets; social return on investment (SROI) often takes an essential role in defining the value of a business venture. The Wikipedia definition of SROI “is a principles-based method for measuring extra-financial value (i.e., environmental and social value not currently reflected in conventional financial accounts) relative to resources invested. It can be used by any entity to evaluate impact on stakeholders, identify ways to improve performance, and enhance the performance of investments.” While businesses adhering to responsible practices are mindful of the SROI, they tend to neglect the financial ROI. In other words, businesses, for-profit and nonprofits alike, must establish a revenue model that will produce a steady stream of cash flow to sustain operations and promote business growth.
A key mistake many businesses make is their failure to differentiate themselves from the competition or invest in a comprehensive branding and marketing strategy. I am in the early stages of launching a business venture where there currently exists little competition. However, I have to assume the marketplace will see an influx of competitors and I will need to convince my customer that my service is superior. This cannot be done through innovation alone. It is essential to create brand value and effectively market this brand to current and potential customers alike.
Lastly, it takes a highly motivated and well-organized team for any venture to succeed. From my experiences with for-profit and nonprofit ventures, I learned the importance of having the right people involved who believes in the business mission, supports the objectives, assists in the creation of the product or service, and understands the value proposition. In addition to leading the right team, it is essential to have good mentors and advisors whom an entrepreneur can receive feedback to their ideas or provide objective advice that will help the entrepreneur succeed. Furthermore, in my ventures, not only have I learned to utilize my strengths, it is equally important to realize my weaknesses and find people (mentors, managers or support staff) that will provide a unique value to the business team.
I invite you to contribute your own ideas or share your experiences in the comment section below.