Becoming an entrepreneur requires you to think what no-one has thought yet and develop decision-making skills to make it happen.

Becoming an Entrepreneur: Walking Through the Valley of Darkness

Ian Watson | 3 July 2010
Last Updated | 9 October 2021
2247 words | 11 minutes

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In Australia, the term ‘entrepreneur' has a very mixed heritage that may be responsible for discouraging others from embarking on a new enterprise. Bond and Skase are central to many Australians' view of an entrepreneur and they, Bond, Skase and Entrepreneurs are often cited with venomous derision; so much so that it has even generated the straight-to-video release of equally dubious movies such as Let's Get Skase.

Additionally, many Australians experience a sense of schadenfreude in watching successful public figures fall from grace, even going so far, at times, to assist their fall, in a cultural phenomenon known as the Tall Poppy Syndrome. The Tall Poppy Syndrome is a social levelling phenomenon, related to envy, that is well-known in Australia and New Zealand (Feather, 1989; Mouly and Sankaran, 2002).

Against the backdrop of failed entrepreneur pariahs and a social phenomenon acting to drag the successful toward mediocrity, it can be daunting for the inspired would-be Australian entrepreneur to act on their ideas; particularly because entrepreneurism, despite the bad press entrepreneurs may have received, is often a force for positive change within society.

Let's Get Skase.

Entrepreneurs as contributors

Understanding whether or not you would like to become an entrepreneur greatly depends on what being an entrepreneur means to the individual. The scholarly definition of entrepreneur and entrepreneurism has seen a significant evolution over time. Daniel Wren, in his excellent examination of the History of Management Thought (Wren, 2005: 42), describes the use of entrepreneur, or more literally the word 'undertaker' by Richard Cantillon in 1755 as anyone that bought or made a product at a certain cost to sell at an uncertain price. This definition encompasses almost all those engaged in any commercial enterprise.

Since Cantillon's definition, the distinction between the entrepreneur and the manager has further evolved, possibly as part of the academic drive to develop conceptual dichotomies. Entrepreneurs are seen as those that drive innovation whereas the manager is primarily engaged in imitation (White, 2004).

The view that the entrepreneur is a source of innovation is one presented and supported by the often-quoted and well-regarded Austrian economist Joseph Schumpeter, that the role of the entrepreneur is to drive creative destruction; that is, to reform or revolutionise (Petrakis, 2005; Turner, 2009). The necessity for entrepreneurial activity to be creative or innovative has also led to the conclusion that small business, previously thought to be synonymous with entrepreneurism, need not be entrepreneurial (Carland et al., 1984).

The role of the entrepreneur in creating jobs and consumer value has also been described in great detail, particularly by Peter Drucker who goes on to describe the activity of the entrepreneur as someone that always searches for change, responds to it, and exploits it as an opportunity (Drucker, 1985: 28).

Entrepreneurs take on risks

When the activities of entrepreneurs are watched from afar though media reports it may appear that entrepreneurs are people that take on very large risks. This apparent propensity for taking on risk has been extensively described in the literature (for a summary see Petrakis, 2005). However, studies have not conclusively confirmed that entrepreneurs engage in greater levels of risk-taking behaviour than non-entrepreneurs (Brockhaus, 1980) and for a review and summary of other studies see Busenitz, 1999).

If entrepreneurs, successful or otherwise, make the decision to act upon their innovative ideas despite the prevailing depressed economic conditions, what can the non-entrepreneur learn from the experiences of entrepreneurs to gain the audacity to transition from non-entrepreneurship to entrepreneurship?

This essay seeks to examine two Australian entrepreneurs; Sidney Myer and William McPherson to argue that the prevailing economic conditions, boom or bust, provides an opportunity for the astute entrepreneur.

Additionally, it will be argued that lessons may be learnt from the two examples of entrepreneurs so that the non-entrepreneur may take that walk through the ‘valley of darkness' to emerge a successful entrepreneur on the other side.

Simcha Baevski (Sidney) Myer (1878–1934)

Simcha Baevski was born in Kritchev, Belarus, in 1878, the last of 11 siblings, his mother Koona Dubrusha who ran the family's drapery business and his Father, Israel, a scholarly Talmudist (Lifiman, 1999). After arriving in Australia in 1899, he adopted the name Sidney Myer and, with his brother Elcon, opened a small store in Bendigo, Victoria and began door-to-door sales of fabric and clothes to country housewives (Lifiman, 1999). His attitude, charm and enthusiasm, despite the initial language barrier, led to relatively rapid success and he moved his business to a larger store in Bendigo where he worked on building and improving the Myer Emporium.

He committed himself to world travel to make business contacts, understand emerging fashion trends and marketing methods and eventually took a large, but calculated risk in buying Moffat's Drapery in Melbourne (Anonymous, 1922). Sidney, coming from a background in which scholarly pursuits were valued, became a benefactor of educational and health facilities during the Great Depression and, being an amateur actor, he also became a great supporter of the arts (Lifiman, 1999). He was equally generous to his staff, providing paid holidays, staff share offerings and even providing an elaborate in-store hospital (Hyslop, 1986). He also established the Myer Woollen Mills in Ballarat to deal with difficulties with imports of some of his lines of products (Neil, 1920).

Following his untimely death in 1934 (Anonymous, 1934), Sidney Myer's legacy is one of courage and philanthropy and would most suitably fit within the Great Person school of entrepreneurism described by Cunningham and Lischeron (1991).

William Murray McPherson (1865–1932)

William McPherson was the son of an iron merchant who inherited his business concerns after his father's death in 1888 and his brother's death in 1896 (Patrick and Hamer, 1986). William received a six-year apprenticeship to a metal merchant and machinery import company prior to his inheritance, giving him a good understanding of that business. In later years he, among others, established the Acme Bolt Company which he owned outright by 1905 (Patrick and Hamer, 1986) which eventually became McPherson's Pty Ltd.

His educational and family background provided the basis for his entrepreneurial activities maintaining and growing the business during the Great Depression he did this through a shrewd business manner and an aversion to debt. Throughout his role as a businessman, he interviewed every job applicant and, after going on to serve as Treasurer, and subsequently Premier of Victoria. He ensured that his staff were treated well; providing them with lunch facilities, share offerings and bonuses at a time when this was uncommon (Patrick and Hamer, 1986). William McPherson's profile fits best with the Managerial School of entrepreneurism (Cunningham and Lischeron, 1991).

Defining Characteristics of Entrepreneurs

From the two case studies, and the observations of Peter Drucker (Drucker, 1985), it appears that change is the fuel of entrepreneurs. Though change is all surrounds us all of the time, it takes skill to identify the opportunities offered by that change. To be able to identify change, the above case study examples constantly searched it out. They believed in intellectual improvement and pursuits often travelling around the country or around the world to find new ideas and fresh perspectives.

It may be argued that being politically connected may also foster entrepreneurial activity, as William McPherson certainly had a very close affiliation with politics. This may provide the appearance that it's not what you know but who you know, it could be argued that politics is a profound source of change and being near to and in constant communication with the agents of change means that the entrepreneur is more likely to be able to identify a change in the general environment.

To respond to and exploit an opportunity, it is essential to have a great deal of support. The entrepreneurs above sought out that support from several sources to achieve their goals. They required a support network of families and friends to help guide their values, provide them with initial skills, give them encouragement during times of stress and to cheer them on when they were winning. They required the support of their customers, which they achieved by identifying their needs and meeting them with innovative or more efficient goods and services. They also depended on their staff to ensure that their customers are well looked after, and both Myer and McPherson demonstrated this example in their innovative approaches to valuing their staff. They also needed the support of the community in which they operate, and the aforementioned entrepreneurs are exemplars of not only corporate social responsibility but corporate social benevolence.

It is also possible that entrepreneurs identify and diagnose opportunity differently. While the research for two of the case studies cannot definitively provide an answer to how they identified an opportunity, in each case the next step was to be willing and able to act upon the findings of an opportunity diagnosis (Pech and Cameron, 2006). It is this willingness to take that leap of faith that requires the convergence of a number of factors based on personal attributes of the entrepreneur such as abilities, attitudes, skills and knowledge. It also required an understanding of the environmental obstacles and opportunity factors affecting the new venture such as cultural and community acceptance, social, political and environmental shifts, and resource availability (Pech, 2009).

Key differences between entrepreneurs

The two entrepreneurs cited above came from different educational backgrounds. One started his own enterprises while the other modified the activity of existing enterprises that was inherited. In one case there is a clear example of where the entrepreneur had a good understanding of the need for someone that complemented their own business skills; such as Lee Neil's management skills supporting Sidney Myer. It would appear that the differences outnumber the similarities, which may be of comfort to the non-entrepreneur looking toward embarking on an entrepreneurial enterprise.

Becoming an Entrepreneur

The decision to take the leap and become an entrepreneur is a daunting one, a walk through the valley of darkness as suggested in the title, but each successful entrepreneur has made this journey by being prepared with a map and a torch (a good understanding of their industry and customers), taking each small step at a time, surrounded by supportive family and friends, with enthusiasm for the journey itself.

For a non-entrepreneur to make the transition to entrepreneur, based on the case studies and literature cited in this essay, it is recommended that you start learning to think what no-one has thought yet to identify opportunities but then develop the decision-making skills to evaluate and then map out a way to bring ideas to life. This may be achieved by:

Finding an opportunity that you are passionate about or develop a passion for the opportunity you find.
Developing the abilities skills and knowledge necessary to run a business.
Maintaining a high awareness of change and remain in frequent communication with change agents.
Being aware of the actions of potential competitors.
Enlisting the support of your loved ones and friends.
Understanding your skills and limitations and partner with those that complement your skills.
Planning and mapping out how you will develop the idea and then start the business; a business plan may assist this (Stutley, 2007).
Starting small but plan to grow.
Maintaining a lookout for new opportunities while remaining wary of new threats.
Committing yourself to self-improvement and education and
Being mindful of the support, you receive from your customers, staff and the community and ensuring that you provide support in return.

References

Anderson, F. (2001) Entrepreneurism is not a dirty word. The Courier Mail : 29.
Anonymous (1922) Large Drapery Merger. Argus: 32.
Anonymous (1934) Sidney Myer: Sudden death in Melbourne. The Canberra Times: 1.
Brockhaus, R. H. (1980) Risk taking propensity of entrepreneurs. Academy of Management Journal 23(3): 509-520.
Busenitz, L. W. (1999) Entrepreneurial risk and strategic decision making: It's a matter of perspective. The Journal of Applied Behavioral Science 35(3): 325–340.
Carland, J. W. et al. (1984) Differentiating entrepreneurs from small business owners: A conceptualization. The Academy of Management Review 9(2): 354–359.
Cassrels, D. (2000) Sharing the benefits. The Courier Mail: 28.
Cunningham, J. B. and Lischeron, J. (1991) Defining entrepreneurship. Journal of Small Business Management 29(1): 45–61.
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