Entrepreneurship: Dark Side Revealed

Entrepreneurship: Dark Side Revealed

Introduction

Every entrepreneur dreams of becoming a leader for others, has an earnest need of creating a unique identity for him and a compelling dream to create a better future. There are exactly no two same entrepreneur. Some have been brought up in loving families, others might have survived abusive ones. Some are married, others being single. Many are brilliant students while others are incorrigible cut-ups. Over-all everyone has a healthy tolerance for risk, appetite for change and challenge, and strength from important matter in life which is not money always.

There are many sources of difference like educational, cultural, social environment and family tradition. But in the end, it's their overconfidence that drives them to be entrepreneurs. The super-achiever entrepreneur get up each morning for two primary reasons: (1) to improve the very meaning of life (2) to perform this in a manner which reflects they are "the best and the brightest."

There's a even one more reason to it. Many successful entrepreneurs become coaches and advisers for the next generation of go-getters in their fields. A decent return on investment is acceptable to a normal person but what they really want is realization of vision --even if it means fighting through rejection and failure.

There are four characteristics that may hold disruptive implications for entrepreneurs:

•     Overbearing need for control
•          Sense of distrust
•     Overriding desire for success
•     Unrealistic optimism

Relevance

It is very important to understand for a future entrepreneur what it takes to overcome those obstacles which would provide a clearer view of their own chances of entrepreneurial success. Entrepreneurial personality is hard to hear but a handful of core attributes can explain the obvious differences between entrepreneurs and the rest. These differences are so vital that our economy depends on them.

Some entrepreneurial characteristics when taken to their extreme exhibit a ‘dark side’ of entrepreneurship which could result in destructive behaviours. The rewards, successes, and achievements of entrepreneurs are a great one to listen. However, there is a ‘dark’ side of entrepreneurship. This entrepreneurial profile may or may not have a destructive line that exists within the energetic drive of successful entrepreneurs. There are a number of major traits that characterize this dark side.

Need for control

Entrepreneurs are driven by a strong desire to control both their venture and their destiny. They have a preoccupied notion with controlling everything. Entrepreneur’s obsession for control and autonomy may cause entrepreneurs to work in structured situations only when they have created the structure on their terms. It is as such in India entrepreneurs are either early entrants in 20s or in late 30s. The notion of family commitment is very strong. 

Sense of distrust

Entrepreneurs try to anticipate and act on developments that others will recognize too late. This state can result in their focusing on trivial things, causing them to lose sight of reality, distort reasoning and logic and take destructive actions. E-commerce boom is a classical example of this nature. In India, today there are numerous E-commerce companies but barring the few top ones all are in losses.

Desire for success

The entrepreneur’s ego is involved in the desire for success. He rises up as a defiant person. He creatively acts to succeed and takes pride in demonstrating that success. There lies the seeds of possible destructiveness. It leads to the danger that the individual will become more important than the venture itself. It's their overconfidence in their ability. Their risk avoidance is superseded by their confidence.

External optimism

Entrepreneurs maintain a high level of enthusiasm that gives off an external optimism that allows others to believe in them during rough periods. However, this optimistic attitude can lead to a fantasy approach to the business. A self-deceptive state may arise in which the entrepreneur ignores trends, facts and reports and deludes him- or herself into thinking everything will turn out fine. 

Entrepreneurs with low capabilities and high optimism enter ventures, they're likely to fail in the end because they have overestimated their abilities. For example, look at the airline industry. There's much uncertainty, and it's volatile. Still, we see a lot of entrants into it because they think they understand the industry. They think they have a higher ability then the other guys. They say, "I will be the next Southwest Airlines." Of course, [the venture] is a failure for the entrepreneur, but the average person benefits. Overconfidence encourages [entrepreneurs] to enter an uncertain industry, and their low ability in it may lead to failure. But without that, the average person wouldn't enjoy the creativity of the entrepreneur and their innovations that lead to lower prices due to competition

Stress

In order to achieve their goals, however, entrepreneurs are willing to tolerate stress (see STRESS). It is important to recognize four causes of entrepreneurial stress: (1) loneliness; (2) immersion in business; (3) people problems; and (4) the need to achieve.

Risk

Starting or buying a new business involves risk, and the higher the rewards, the greater the risk entrepreneurs usually face. This is why entrepreneurs need to evaluate risk very carefully. There are a number of different types of risk faced by entrepreneurs. 

These can be grouped into four basic areas: (1) financial risk; (2) career risk; (3) family and social risk; and (4) psychic risk. 

Conventional wisdom assumes entrepreneurs have great risk tolerance compared to the rest of us, in controlled experiments that tracked attitudes to risk, we consistently found that they aren't really that different. In some cases, they're even more risk averse, and yet they continue to bear risk. Entrepreneurs, like everybody else, hate uncontrollable risks, but on the other hand, they're overconfident in their own abilities -- they think they can control their abilities in a random drawing of people. They think they're above the average. Entrepreneurs appear to be risk seeking with respect to their ability. For example, if there are two industries and one has a high cost of ability uncertainty and the other has a low cost of ability uncertainty, the entrepreneur will choose the first case because of his overconfidence

HEALTHY EGO : A Different Perspective

Entrepreneurs need a very healthy ego to succeed. Many might be self-effacing and humble. But there still has to be a deep-seeded, positive sense of self and ego. Few might call it drive. That is a part of it. One must have courage and belief in his own abilities. Natural leadership qualities and a desire to lead are driven by ego. Without a healthy ego entrepreneurs don’t have the necessary internal reserves to survive the daily rigors of startup life. 

But they generally are not attached to huge egos without the parallel humbleness that should come with it and the recognition that any real success involves multiple factors. It’s very rare that one person can take all the credit (or all the blame). A successful person openly recognizes that other factors impacted their success like luck, for example. Entrepreneurs like other people have healthy ego, the kind of ego that helped drive that person to succeed without putting them over the edge.

They are the types of people whom people want to work with. They believe they would be successful no matter what. They don’t flaunt that on a regular basis. They acknowledge others for their success. On a contrary when they’re not successful, they accept it whole heartedly and just move on.

Egos do get in the way of success. It becomes ugly. It gets personal. That’s when ego is at its worse. Phrases like “he said, she said” or “that can’t work together”. Egos at that level need to be put aside for the greater good.

There are only two possibilities according to these souls. They either believe they can be hugely successful or they don’t. If they don’t they try to analyse the reason for the same. It might just be there, a tiny spark of ego just waiting to explode. If you do believe you can be hugely successful, that’s great, you’ve got the makings of an entrepreneur. But don’t get caught in your own ego. Don’t get overwhelmed by your “greatness”. Use that inherent quality of ego (which too few people truly possess) and leverage it. Hilariously there are entrepreneurial ventures even to solve this problem. One of them is foundrs.com. They have developed a Co-Founder Equity Calculator to help startups to resolve on the issues of CEO selection among the founder members. 

CONCLUSION

It is not possible for everyone to start a business. Keeping aside the perceived risks to your personal finances, lifestyle and career, some folks find it difficult to cope with the thought of failure. Damaging one’s personal brand (basically, the ego) is a devastating thought. But it can be managed before, during, and even after your entrepreneurial experience.

The primary concern for most non-entrepreneurs is the fear of failure. If they fail they would become known as the guy who couldn’t cut it on his own. They are worried that others will view them as an utter failure. They might lose whatever credibility they had before. They think that their old industry contacts may question their competence. Even finding a job after failure in business might be difficult.

The fact is that going out on your own is one of the most difficult decisions one can make. You are putting yourself on the line for a shot at a better life. Most people will respect that, even if you fail. Those that don’t are probably envious because they don’t have the spine to do it themselves. For those who choose to think less of you for striving for independence, just remember that they likely have a tendency to cut everyone down for one thing or another – somehow it just makes them feel better about themselves.

Most people will be impressed at your willingness to try. In general, entrepreneurs hold high esteem in our society, even those that don’t quite succeed the first time out. It is important to avoid the mistake of disappearing once you commit to your startup full-time. One should be in touch with their professional contacts, including employers, colleagues, and clients. Not only can these relationships provide references for your new venture, but they will keep you connected to the outside world. Most fear of failure is in our own heads, and maintaining communication with others who believe in your abilities and ideas can go a long way in mitigating the risk to your personal brand.

The trick to coping with possible failure comes down to how you handle it. For successful entrepreneurs, failure is good news – now they know what not to do. A vast majority of the most successful business owners failed multiple times before finding the right formula. Fortunately, much of the information they had to learn by trial and error is now readily available to help you succeed that much sooner.

If your first startup does fail, do not let it destroy your will for independence. If anything, a business failure should provide enough valuable lessons to send you eagerly back to the lab to get to work on the next idea. If you have to go back to work for someone else, the relationships you maintained during your startup should be good references for finding a decent job. Those that supported you likely respect the characteristics that make you an entrepreneur and see their value in the workplace.

The best defense against ego or personal brand damage is just not to fail. True entrepreneurs are rabidly risk-averse – they will do whatever it takes to remove risk from their ventures. The more work you put into the front end of your business idea, the more you increase your odds of success.

REFRENCES

1.    Entrepreneurship A South Asian Perspective By Mr. D.F.Kuratko and  Mr. T.V.Rao

2.    Entrepreneurial Perspective by South-Western, a division of Thomson Learning. 

Websites like www.foundrs.com.