Opus is involved in a number of entrepreneurial ventures. Some start-ups succeed and many fail. What makes the difference? The conventional model for a company start-up is to have an idea and create a business plan that identifies the market opportunity and financing requirements.
Recent studies have shown however that successful new companies follow a different model. From Babson College comes the Timmons Model of Entrepreneurship that starts with identifying market opportunities, then assembling the appropriate team, and finally “bootstrapping” – starting with a bare minimum of financial requirements.
Identifying the market opportunity is the critical first step. Just a good idea is not necessarily a business opportunity. An idea is only useful if it creates real, communicable products or services that add value to the customer. The concept has to be timely and long-lasting (remember pet rocks?).
Assembling a good team is critical to success. Great teams are rare and difficult for the entrepreneur to find, yet average groups will not often succeed. The team must have the creativity to specify and solidify the initial opportunity, which always has some ambiguity to it. Then limited resources must be effectively managed for maximum benefit.
The Timmons model and other current thinking conclude that acquiring extensive capital resources is not necessarily critical for success. Bootstrapping has several advantages including requiring a lean organization that is more nimble and versatile. “Necessity is the mother of invention” and limited resources can force new and creative processes that provide a competitive advantage. Obviously, certain opportunities require huge capital requirements but they are only a small percentage of start-ups.
Many entrepreneurs feel that they need all of the major resources in place before starting a new venture. The reality is that market opportunity, a good team, and financial resources rarely align perfectly and the entrepreneur has to manage the entire effort so adequate resources are available at the right time. But it starts with identifying and specifying a market opportunity and assembling the first few critical team members.
