Why is entrepreneurship important in today's world
More courage to be entrepreneurial
Startups are always happy to be offered loans for their growth plans. A reason for many bankruptcies? After all, fixed costs for interest payments leave little room for lean spells. What is your advice to the company founders in this regard?
Faltin: I recommend every founder to think through his idea concept in such a way that he can get by with as little outside capital as possible. A good way of doing this is building it from components. The use of components, one could also call them ›purchased service packages‹, radically changes the problem of “implementing” the business concept. This significantly reduces the start-up risks, because the founder uses them to access established, routine units that are already working with large, efficient company sizes and a high level of professionalism. He also benefits from their knowledge. Your own company can grow, but the core operated by the founder himself remains small - and therefore manageable and manageable. In the components, the implementation is professionally delegated and "implementation" is reduced to the combination of components. This increases the (so far low) chances of survival of start-ups considerably. Almost no investment is required; This eliminates the time-consuming search for investors. In principle, variable costs only occur when orders are actually received.
Do you always have to have a particularly ingenious invention to be self-employed in order to be successful? In your experience, which ideas have a long-term market presence?
Faltin: Experience shows that inventors are often not good entrepreneurs at all. Start-ups that try to build on a concept of ideas instead of following the prevailing doctrine have a good chance of success. You start with simple but well-thought-out, elaborated ideas that require relatively little financial resources. You work in a division of labor and put together the entrepreneurial concept from existing components if possible. These new companies can be seen as a kind of ›experimental entrepreneurship‹ that contrasts the prevailing understanding of start-up with practical alternatives. I call these start-ups ›concept-creative start-ups‹.
Many people interested in self-employment have concerns about taking this step because they fear that they don't understand enough about business administration or that they don't have enough time for things like accounting in addition to dealing with the product. Can you allay these concerns?
Faltin: Anita Roddick, the founder of the ›Body Shop‹ said "If I had gone to a business school, I would never have founded the company." An essential point to be successful as an entrepreneur is to separate the company administration from the creative part of the entrepreneur. This creativity seldom goes hand in hand with business administration. Therefore, as founders, you should separate the areas of ›Entrepreneurship‹ and ›Business Administration‹ and hand over management. Otherwise you rub yourself too quickly in everyday business - in other words: the company administration - and lose sight of the entrepreneurial concept. Modern societies are based on the division of labor. So why do we require the founder to continue to be proficient in all business, legal and social functions?
Potential company founders often hear that they have absolutely no idea of the product they have chosen in practice and that they would therefore fail. Do you have examples that contradict the opinion?
Faltin: I am such an example myself. I had always been a coffee drinker, had no idea about tea. And yet I noticed that tea is exorbitantly expensive in Germany, even compared to other European countries. From this observation I founded the 'tea campaign'. Even if I first had to learn what makes a good tea, I am convinced that the outside view in particular contributed to the success of the tea campaign. I was not burdened by conventional images of how the tea trade worked until then.
How should company founders approach their idea in order to be successful in the long term? Are extensive business plans the way to success?
Faltin: There may be founders who have business plans to help them sort out their thoughts. I consider it worthless for working out the idea. Business plans concentrate very strongly on the economic dimension, make projections that no one can calculate in advance with the best will in the world. From a statistical point of view, 70 percent of the assumptions do not apply in practice. They also often prevent flexibility.
In your very readable book you speak of ›Entrepreneurship‹ when it comes to founders. What does this term express that is not expressed in the German word ›Unternehmensgründer‹?
Faltin: Entrepreneurship names the creative, innovative part of a start-up. Carefully thinking through something, arriving at a new solution and putting this new into practice by founding a company is the job of the entrepreneur. Many start-ups of today are shaped by the creativity and ideas of their founders, less by capital and technology. The latter are terms that one likes to associate with the words ›entrepreneur‹ and ›entrepreneurship‹ and have nothing to do with the concept-creative start-ups I am talking about.
What does good entrepreneurial design have to achieve in order to be successful with it?
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