Business Horizons (2014) 57, 5—9
Available online at www.sciencedirect.com
ScienceDirect www.elsevier.com/locate/bushor
ORGANIZATIONAL PERFORMANCE
So, you want to be an entrepreneur? Lessons from the Entrepreneurship Bootcamp for Veterans with Disabilities F. Randy Blass a,*, David J. Ketchen Jr.b a
College of Business, Florida State University, 821 Academic Way, P.O. Box 3061110, Tallahassee, FL 32306-1110, U.S.A. b Raymond J. Harbert College of Business, Auburn University, 405 W. Magnolia Avenue, Auburn, AL 36849, U.S.A.
KEYWORDS Entrepreneurship; Employment; Sustainable business model; Value proposition; Veterans
Abstract Based on helping dozens of military veterans refine their ideas for starting a business, we identify and discuss a series of potential pitfalls that aspiring entrepreneurs–—veterans and civilians alike–—must avoid in order to be successful. Potential entrepreneurs must not confuse the pursuit of hobbies and self-employment with the act of creating a business. People who wish to build a business around public speaking or consulting need to firmly establish why customers should be willing to pay for their advice. Individuals that seek to develop a new non-profit organization must have a viable value proposition even though they are not pursing a profit motive. Overall, the entrepreneurial ventures that are most likely to succeed are those that (1) are based on a sustainable business model, (2) leverage the entrepreneur’s unique experiences and attributes, and (3) are built around a process or system that enables the venture to prosper even if the entrepreneur leaves the venture. # 2013 Kelley School of Business, Indiana University. Published by Elsevier Inc. All rights reserved.
1. From veteran to ‘vet-repreneur’ According to the latest Department of Labor statistics, nearly 720,000 veterans are seeking work. Additionally, approximately one out of every four of the 2.3 million men and women who have served in uniform since 9/11 has a service-related
* Corresponding author E-mail addresses:
[email protected] (F.R. Blass),
[email protected] (D.J. Ketchen Jr.)
disability. While finding employment is a challenge for veterans in general, this can be even more daunting for disabled veterans. As is often the case with groups that perceive a lack of opportunity in the job market, many disabled veterans turn to entrepreneurship as a mechanism to create their own opportunities. The Entrepreneurship Bootcamp for Veterans with Disabilities (EBV) is a program that helps veterans with service-related disabilities start their own businesses after returning to civilian life. The program is offered free of charge to everyone who is
0007-6813/$ — see front matter # 2013 Kelley School of Business, Indiana University. Published by Elsevier Inc. All rights reserved. http://dx.doi.org/10.1016/j.bushor.2013.09.006
6 admitted. EBV was created in 2007 at Syracuse University and subsequently spread to more than a half dozen other universities. More than 700 veterans have completed the EBV program at one of the host institutions. Randy Blass has been the director of the EBV program at Florida State University (FSU-EBV) since its inception in 2008 and has taught at other EBV locations as well. Prior to his civilian academic career, Randy served 25 years in the U.S. Air Force. Dave Ketchen has been a member of the teaching team for FSU-EBV since 2008. We are both extremely proud to be a part of EBV, an organization that makes a tremendous positive difference in the lives of individuals who have made huge sacrifices for their country. Each EBV student develops an idea for a business over the course of his or her studies and is then provided a year of free support as he/she develops the business. Some of these ideas are brilliant right from the start while others require a great deal of refinement in order to be viable. Having vetted many dozens of business ideas from aspiring ‘vetrepreneurs,’ we have noticed some potential pitfalls that appear regularly within our EBV classes. If these challenges are remedied, new ventures have a much better chance of achieving strong organizational performance. Left unchecked, however, these challenges will undermine an entrepreneurial effort and make success very unlikely. Our goal in writing this Organizational Performance Executive Digest is to help vet-repreneurs in particular and entrepreneurs in general achieve stronger organizational performance within their ventures. We pursue this goal by describing a series of challenges that arise frequently, illustrating the challenges via real, albeit disguised, examples from our EBV students, and explaining how to overcome the challenges. Although these pitfalls were identified within the EBV setting, we believe–—based on our decades of teaching and consulting experience in other settings–—that the resultant lessons can be applied broadly to anyone who seeks to start a business.
ORGANIZATIONAL PERFORMANCE people will pay good money to hear lessons based on harrowing tales. Unfortunately, most people who adopt this mindset ignore two fundamental issues: 1. What unique insights can you provide that others cannot? 2. How will you grab people’s attention in order to stand out from among the masses who wish to be paid speakers and consultants? These questions and others analyzed herein are summarized in Table 1. Our belief is that aspiring entrepreneurs must develop solid answers to these questions in order to maximize their chances of being successful. Susan Alpha is a typical example. Susan had a difficult childhood. As a consequence of her childhood and her military service, she learned a lot about perseverance. When looking at Susan, you would not know that she had faced any unique trials. She was, by all appearances, an average person. Susan’s business idea was to tell her life story–— with emphasis on her difficult childhood and her Table 1. Questions to answer when developing a business idea Questions for all entrepreneurs: Why should a customer choose to spend their money with you rather than with your competitors?
Does your business idea build effectively on your unique skills, personality, or experience?
How will you maintain customer satisfaction with your value proposition over time?
Are you pursuing a hobby or building a business? Could your business continue if you were no longer involved? If the business idea is to become a consultant or motivational speaker: Why is your advice worth buying?
What unique insights can you provide that others cannot?
2. Four frequent pitfalls 2.1. Why is your advice worth buying? Many entrepreneurship-minded veterans aspire to leverage their difficult experiences in order to become motivational speakers and consultants. There is a general perception among such folks that motivational speaking and consulting are easy businesses to enter and that the business model is simple:
How will you grab people’s attention in order to stand out from among the masses who wish to be paid speakers and consultants? If the idea is to start a non-profit organization: Does your non-profit have a sustainable business model?
Why should donors invest their dollars in your organization rather than in some other non-profit?
ORGANIZATIONAL PERFORMANCE time in the military–—and then share what she learned about self-motivation from those experiences. Susan was comfortable speaking to an audience and she was certain that organizations would be willing to hire her as a speaker. However, Susan had yet to be paid to speak to any group. Rocky Bravo was also an aspiring professional speaker. Rocky had a normal childhood. As a young soldier, however, a violent event during combat changed his life and physical appearance forever. When looking at Rocky, it was obvious that he had been through a near-death event: he was permanently disfigured. Rocky’s business idea centered on telling his story of facing death and surviving painful medical procedures in a way that might help audience members put their everyday problems into perspective. Rocky was a dynamic speaker that already had plenty of experience in front of large audiences and television cameras. In fact, Rocky was getting so many requests that his biggest problem was managing his schedule. Unfortunately, there are a lot more ‘Susans’ than there are ‘Rockys’ among the ranks of veterans who wish to become motivational speakers and consultants. Members of the former group assume that their idiosyncratic experiences provide some sort of unique insights that other people want, need, and–—most importantly–—are willing to pay to receive. Although Susan’s experiences profoundly affected her personally, the painful truth is that her story was a fairly common one. Meanwhile, Rocky had certain assets at his disposal that Susan lacked. Rocky’s disfigurement was obviously a horrible turn of events, but it made audiences pay attention to him instantly. Rocky’s charisma also served him well. Not surprisingly, Rocky has been very successful as a motivational speaker while Susan was never able to gain any traction within this line of work.
2.2. A hobby is not a business John Foxtrot had military experience as a corpsman, and he had twice served in combat zones. He was a very skilled first responder and seemed to do best when the situation was at its worst. John started every morning with a bagel for breakfast and was well known among his friends as a bagel lover. After reading a magazine article on independent bagel shops, John decided to open one in his hometown, despite having no background in food service or retailing. John believed that his love of bagels and his sheer force of willpower would lead him to success. John’s plan was a disaster in the making. He lacked the needed skill base to become a successful
7 ‘bagel-preneur.’ John could have bridged this gap by pursuing a bagel franchise because franchisors train their franchisees how to run a business. But John’s fierce independent streak made him insistent on ‘going it alone.’ Worse yet, John was ignoring the unique and rare capabilities that he possessed. His crisis management skills would be of little use in a tame business setting like bagel making, but they could provide him with a competitive advantage in a setting where such skills are critical, such as an ambulance service. In sharp contrast to John Foxtrot is Jasmine Echo. Jasmine was an expert in logistics. After 10 years of running a supply shop for her unit and coordinating all aspects of international distribution from air to land to sea, she was ready to hang up her combat boots. As she considered how to leverage her extensive experience and love of logistics, she thought about going to work for a major shipping company until she read a magazine on franchising. She noticed that a national retail logistics company was offering to waive the franchise fee for veterans. Her expertise made her very qualified to run such a business. The main lesson here is that simply having a passion for an activity will not allow a person to build a successful business around that activity. Luckily, most people have more than one interest. Building a business around a passion that is also accompanied by the needed business skills is a great way to go. Jasmine Echo was fortunate in this regard because she enjoyed logistics and had extensive logistics skills. In John Foxtrot’s case, making doughy treats in his spare time would have been the wisest way to satisfy his passion for bagels.
2.3. Even non-profits must have a value proposition Serving others is a noble calling. Many vets wish to build on their military service by continuing to serve others in the civilian world. Often their hope is to create a non-profit organization that will help other vets make a smooth transition to civilian life. One example is Juan Charlie, who endured a difficult time navigating the myriad of support programs available to soldiers who are leaving military service. There were so many veterans’ initiatives and each had its own stipulations and nuances. After Juan finally navigated the arcane system in order to fill his unique needs, he believed that there had to be a better way. Although Juan lacked any background in advising, he decided that he had enough knowledge to start a non-profit advisory organization that would assist other transitioning veterans. He was convinced that his recent experiences had created valuable knowledge others would seek.
8 Juan felt he just needed to get the word out and donors would support his gallant cause. Heather Delta had a similar set of experiences, but was pursuing a different path from Juan’s in creating her non-profit. Heather realized that the major problem facing transitioning veterans entailed the lack of a ‘one-stop-shop’ clearinghouse for information. Furthermore, Heather recognized that each veteran potentially qualified for different programs depending on a number of variables such as whether he/she had been disabled during his/her service. As Heather considered different options, she realized that a web-based solution could deliver individualized information given the unique variables surrounding a veteran’s service. Based on her own experience in fundraising, Heather had ideas about how the site could be monetized using grants and donor support. She began crafting a message that clearly identified the program and then presented her solution. She was ready to start raising money. Both of these aspiring entrepreneurs had their hearts in the right place, but only Heather Delta was destined for success. Non-profits need money to operate just like traditional businesses do. While Heather had a realistic plan for generating funds, Juan simply hoped and assumed that funds would materialize. Another big problem for Juan was that his idea simply lacked a value proposition. The veterans’ support system that Juan had navigated requires an individualized approach. Juan was not in a position to provide such an approach because all he had to build upon was his own idiosyncratic experience. Meanwhile, Heather planned to construct a computerized system that would match each veteran’s unique situation to the best fitting programs among the many that are available. Such algorithms are a proven process; they have fueled the success of online dating services, for example. Socially-minded entrepreneurs often assume that because a charitable operation is not aimed at generating profits, such an operation does not need a viable business model. In reality, the competition for charitable donations and sponsorships is fierce. There are far more worthy causes than there are donor dollars available to support these causes. Donors therefore target their monies at non-profits they strongly believe are sustainable. Heather Delta’s web-based solution appeared quite likely to be sustainable while Juan Charlie’s operation was surrounded by very difficult questions and few answers.
2.4. Self-employment is not a business Most entrepreneurs seek to create a business with strong short-term and long-term prospects.
ORGANIZATIONAL PERFORMANCE Developing a business that can support the entrepreneur’s family today is important, of course, but building a legacy that can be passed on to one’s children is often a key goal as well. Indeed, many entrepreneurs aim to develop an enterprise that can operate for many decades and without the entrepreneur involved. This is particularly important for the veterans we encounter in the Entrepreneurship Bootcamp for Veterans with Disabilities program: many of these wounded warriors are unsure regarding how long their afflictions will allow them to actively run their businesses. They travel a risky road if their business is entirely dependent on their ongoing involvement. The cases of Edwin Golf and Travis Hotel are instructive. After leaving the military, Edwin Golf discovered that finding a job was very difficult. Edwin then started doing odd jobs for money. He hauled away junk in his truck, repaired a roof, trimmed trees, and mowed lawns. Edwin soon found that mowing lawns could at least provide recurring work, so he focused his effort on getting more lawn service customers. Customers loved Edwin because he was hard working and conscientious. Occasionally, however, Edwin’s war injuries would flare up. This would cost him a day or two of work and would sometimes lead to losing a customer. After a few months, Edwin had enough customers that he was working 6 days a week from dawn to dusk. Edwin was pleased that he was earning enough to cover his bills and he even had a little money left over to start saving. But winter was coming and Edwin knew that he would have to think of something else to do. Snow was rare in his area, so the obvious choice of operating a snow plow would not be viable. After Travis Hotel’s second deployment in 3 years, he returned to his hometown. Travis landed a job stocking shelves at the grocery store where he had worked during high school. Travis often found himself dreaming of owning his own business, but he had no idea what kind of business to pursue. One day, the store manager complained about the poor quality of the nightly janitorial service and noted that she would be happy to pay more for better cleaning. Travis realized that his skills in running his military unit’s motor pool were really just management skills in general. He offered to solve the manager’s problem by starting a commercial cleaning enterprise. Within a few short months, Travis had five accounts and a full-time crew of four people. Although Travis had started the new venture with a mop in his hand, now most of his time is spent bidding on new jobs and managing his team. The contrast between Edwin Golf and Travis Hotel illustrates the distinction between self-employment and entrepreneurship. Self-employment involves an
ORGANIZATIONAL PERFORMANCE individual simply trading his or her time for money. Meanwhile, entrepreneurship is grounded in delivering an innovative solution to a problem, creating an economic exchange around that solution (i.e., a value proposition), and creating a venture that can sustain the delivery of the solution over time. By pursuing self-employment, Edwin Golf had created a trap for himself: with winter coming, he had no way to support himself once people stopped needing lawn care. And if Edwin’s health took a turn for the worse, he would have no way to support himself during warmer weather too. In comparison, Travis Hotel had engaged in entrepreneurship. His cleaning service was a sustainable enterprise that could thrive in the future even if Travis was no longer involved.
3. A road map to entrepreneurial success Several themes emerge from the four pitfalls and eight EBV student examples discussed. Taken together, these themes offer a road map for potential entrepreneurs to follow in order to maximize their chances of success. First, at the core of every successful new venture is a solid value proposition. A value proposition is simply the reason why a customer would choose to spend their money with you rather than with some other organization. In the case of non-profits, the customer is simply the donor or benefactor of funding. The value proposition that a good non-profit delivers is a viable solution to a social problem that a benefactor wishes to address via his or her benevolence, such as Heather Delta’s web-based system. An owner of a profit-making business must answer key questions: Is the value proposition that the product or service is cheaper or better? Perhaps it is unique or tailored to a specific need? Regardless, the product or service must solve a problem for the customer. It should be noted that a good value proposition requires tending and defending, lest it be bested by a rival’s value proposition in the future. For example, Travis Hotel cannot count on having the grocery store as a customer far into the future simply because he filled the store manager’s need for a superior janitorial service. Instead, he needs to maintain and nurture that relationship over time.
9 The second theme that emerges is the merit of leveraging the entrepreneur’s unique characteristics. This is tied closely to the first theme in that if some unique aspect of the entrepreneur’s skills, personality, or experience is a core component of the value proposition, protection is provided because unique qualities can be difficult–—and in some cases nearly impossible–—for a rival to replicate. Aligning the business model with the entrepreneur’s unique personal attributes was a key driver of success for Rocky Bravo and Jasmine Echo. Finally, and with a respectful nod toward selfemployment, successful entrepreneurs develop systems and processes to ensure the quality and delivery of the value proposition, with or without their direct involvement. Perhaps the most difficult lesson for novice entrepreneurs to grasp is the need to work on their business rather than in their business. Entrepreneurs must build teams, secure talent, and develop processes and systems to ensure their product or service remains valued by customers. Ideally, the venture will continue to enjoy strong performance long after the entrepreneur has retired. In closing, we note that passing along lessons learned is the centerpiece of a long-standing military tradition called the ‘de-brief.’ As we look to the future, it is likely that veterans will continue to view entrepreneurship as an attractive path toward independence and opportunity creation. Additionally, veterans will continue to see entrepreneurship as a way to leverage their unique experiences and skills. Our hope in offering this de-brief is that entrepreneurs in general–—and veterans in particular–—will be able to build on the lessons learned by EBV students in order to accelerate their path to successful entrepreneurship.
Acknowledgment The authors gratefully acknowledge the research support provided by the Center for Veteran Outreach at Florida State University and the Lowder Center for Family Business and Entrepreneurship at Auburn University.
