(By Gil Gerretsen) Why do people go into business for themselves? It’s not just a simple yearning to find freedom from an incompetent boss. It’s more than an opportunity to satisfy a dream. Today, it is the only way for innovators to get their due.
In an age where technology and information is available to all people quickly and easily, entrepreneurs now have powers and capabilities equal to businesses many time their size. In fact, a company’s small size, simplicity and responsiveness is rapidly becoming a key competitive advantage.
Why is this true? Because a trend towards mediocrity and bureaucracy creeps into almost every business as it grows. No matter how enlightened their management, the employees never exercise entrepreneurial decisiveness. In a frenzy for legitimacy and stature within and without the organization, the most productive people are often penalized while the least-effective are often paid more than they are worth.
Truth be told, most people care more about status (what other people think about them) than they do about money. It feels good to be a “hotshot” and many people are willing to work for less money in exchange for more recognition.
Obviously, not everyone can be a hotshot, so the majority often end up doing much of the actual daily work. However, they end up feeling so overworked, under-compensated, and under-appreciated that they must often be paid more than the task is worth, just to keep them with the company. Almost every business needs productive worker bees!
As an outgrowth of that reality, fully compensating a true innovator would cause too much envy and strife while throwing the company’s entire pay scheme out of whack. It would tear the place apart!
This means that within most organizations, the innovator will never receive his or her just reward. Proper recognition is even less likely since the existing power structure is frequently unwilling to share the limelight. This is basic human nature in today’s “me first” environment.
Generally, the more you interact with co-workers, the less you are rewarded for superior performance. For example, people who sell cars spend a lot of time with colleagues and get to keep less than a quarter of the profits they help generate. Realtors are much more independent and get to keep about half of the profits. Entrepreneurs, who are often lone wolves, get to keep ALL the profit!
That is why so many people are now cashing in on the knowledge boom as consultants and freelancers. Talented individuals are able to contract or sell their skills and technical services to other companies, including former employers. But since they are now outside the corporate hierarchy, their compensation or fees can move closer to market value.
Daring innovators would be smart to start their own enterprise. However, there is a risk! It is not enough to be good at what you do. You must be recognized as being a champion or a guru! That’s because prospective customers will expend the effort to seek out the best person they can find to help them with a problem. Therefore, the key to being a champion is to confidently focus on being recognized as the biggest fish in the right pond. And, the bigger the pond, the more you command in compensation.
As an entrepreneur, you must always play to win and be the best at what you do. Simply being “above average” is not enough. Here’s why. Ask anyone you know to quickly list all the soft drink brands they can think of. The first one or two will come easily. After four or five, people start struggling. Yet, if you visit in the grocery store, you will see dozens of different brands. Coke and Pepsi dominate the soft drink market. For most people, those are the best and others get little consideration. Likewise, if you are not perceived as “the best”, you will be relegated to becoming an “also ran” unless you can capture a dominant presence in a defined pond of your choosing.
Everyone wants access to the best. Few people want to settle for second best. So even slight differences can provide great marketplace leverage. You must find a way to position yourself, your business, or your product as the best in some clear area of focus. If you can’t find an area where you are number one, then you will be traveling on a very rough road indeed.
Be realistic about how you stack up against your competitors before you jump into the fray, but allow for the power of enthusiasm as well. A bit of self-delusion actually seems to help the cause. People who are too realistic or pessimistic are seldom the most successful. If you are optimistic about your skills and chances, you are more likely to keep on trying until you win. And you can’t win unless you keep on trying to master the challenges you’ll face each day. You can’t give up!
To be the biggest fish in your pond, you must know exactly where you excel. Then champion your cause more frequently and visibly than everyone else. You can’t always wait for safe waters of your choosing. To thrive in an unpredictable world requires confidence and a measure of daring coupled with true skills. That means you need a bit of an “unrealistic” belief in yourself. It can become a self-fulfilling prophecy.