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Creativity and the Entrepreneur

In order to succeed in business, the entrepreneur needs to be creative -- not merely in terms of coming up with a potentially innovative business idea, but to keep her business going through good times and bad. Entrepreneurship, you see, is an ongoing creative challenge in which the initial idea is a relatively trivial thing. Indeed, venture capitalists and other serious investors tend to be more interested in the entrepreneurs than their ideas. Investors only want to put their money behind people who have the creative wherewithal to turn ideas into reality, ideally a profitable reality.

Here are a few creative challenges the entrepreneur regularly faces.

The Business Idea

An original business idea may not be the most important act of creativity for an entrepreneur, but an ideas is nevertheless necessary for starting a business -- with a few exceptions. Many entrepreneurs establish restaurants, shops and other traditional businesses based on providing a well established, quality product or service. In most cases, such entrepreneurs do not expect to build growing global business empires. they just want to run successful businesses that provide a decent income. Serious entrepreneurs call such people small business owners rather than entrepreneurs.

Some entrepreneurs acquire ideas for businesses from elsewhere. Microsoft became a global company when it signed a deal with IBM to provide an operating system for IBM's nascent personal computers (the grandparent of the device you are probably reading this on). However, Microsoft bought DOS (the operating system that became the standard for the first generation of PCs) and the intellectual property rights associated with it, from Seattle Computer Products, for just $50,000 in 1980; and promptly licensed it to IBM with an open contract that allowed them to market DOS to other computer manufacturers. It was this deal that eventually turned Bill Gates into a billionaire and Microsoft into one of the world's biggest companies.

Interestingly, many of the most successful entrepreneurs do not launch a radically new product so much as a significantly improved product. Search engines had been around for years when Google came out, but Google's search engine did something that Lycos, Altavista, Excite and other search engines of the early to mid 90s failed to do: it delivered with relevant search results! Friendster, Classmate and Myspace provided social networking sites before Facebook came along. But Facebook somehow managed to connect people better than its predecessors did. Perhaps first movers identify a market and customer desires that enable innovative second movers to barge in and steal the market. But that's just a guess on my part.

Money - or Lack Thereof

Among non-entrepreneurs, there is this idea that they typical entrepreneur gets funding by the sack full from venture capitalists with more money than they know what to do with. The truth is, less than one percent of start-ups in the USA get venture capital funding. If anything, even fewer start-ups outside the USA get venture funding. Other start-ups get funding from angel investors (wealthy individuals who invest money in promising start-ups), but that accounts for less than 16% of US startups (same source as above link); and a few start-ups attract crowd-sourced funding through platforms such as Kickstarter. Nevertheless, more than 80% of all start-ups in the US are reliant on the entrepreneurs' financial resources which typically include personal savings, family loans and small investments from friends.

What this means is the typical start up has limited funding and faces a continuous battle, particularly in early years, to maintain positive cashflow. The entrepreneur cannot buy her way out of trouble, so she has to use creative thinking to solve problems. When something needs to be done, but there is no money with which to do it, the entrepreneur needs to use her creative resources to work out how to do it.

Grabbing Opportunities

Small companies have a lot of flexibility. As a result, if the entrepreneur-founder identifies a relevant opportunity, she can exploit it and modify her business as necessary. Identifying opportunities and visualising how to exploit them is critical to the entrepreneur's success. However, entrepreneurs also need to be careful here. In my experience, many are too quick to see opportunities and over-diversify. Small businesses which do too many different things often fail to do any of them well. Worse, they find it harder to establish a reputation in a particular field, something that is critical to small business success.

I was running a small marketing communications company in Bangkok in the early 1990s. In 1994, I became interested in the Internet. Although it was very new as a commercial entity in those days, I felt it had great potential. I was also intrigued by multimedia -- a related technology. However to offer these services to clients on top of services my company was already offering would not be possible. I only had a team of eight people!

I thought about it some time. I could continue to run a small marketing communications business that delivered quality service, but was one of many in Bangkok. Or, I could launch one of the country's first Internet and multimedia development companies and aim to build a distinct reputation for my company in this new field. The latter option seemed more romantic, but it was also more risky. Would Thai businesses buy into new media (as the Internet and multimedia were then collectively called)?

Nevertheless, I made the decision to phase out the traditional marketing communications (print advertising, brochures, catalogues, sales kits, etc) and focus on new media. As a result, my company became established as a pioneer in new media in Bangkok. It was a good decision. But it could have wrecked my company if it had not worked. An established, large advertising agency could not have made such a move. A small, entrepreneurial company could.

Continuous Innovation

If an entrepreneur succeeds with an innovative new product, she can be sure that other entrepreneurs as well as established companies will promptly build and launch competing products. Usually, those products will be better than hers in some way. As a result, the entrepreneur can never sit still. If her creative idea succeeds as a product, she will need to use creativity to innovate her product on a continuous basis. Sometimes, she may even need to redesign or rethink her product.

The concepts behind companies like Airbnb (which allows people to rent their guestrooms and homes to travellers) and Uber (which connects people who need rides with drivers willing to drive people for a fee) are relatively simple. As they have succeeded, people have launched similar companies, most of which are probably better than Airbnb or Uber on some level. As a result, Airbnb and Uber need to innovate to stay ahead of the competitors. If they do not, they will promptly lose marketshare to the new upstarts.

Handling People Problems with Compassion

Many of my most interesting interactions with people over the years have involved my employees. In the days when I employed people (now, I work alone), I had to deal with alcoholics, emotionally unstable people, bullying, a woman whose mother was dying of cancer and a young man who disappeared (it turned out he was imprisoned for statutory rape). I even had to deal with a ghost sighting in one of the offices! I've had people crying on my shoulder and cursing me -- though never at the same time. I reassured a woman in tears from bullying and whom I felt I should hug in a culture (Thailand) where to do so would have been very inappropriate. Some of these people were great employees. The bully was very competent at her job, but bullying is not something I tolerate.

Dealing with these problems, supporting great people in difficult times, balancing the needs of those people against the needs of the company all require creativity and sensitivity. Moreover, in a small business, quality employees are critical to success while incompetent employees are at best a drain on a very limited budget and at worst a potential disaster. A bad employee can seriously damage the reputation of a small firm or ruin a business relationship with a key supplier.

Dealing with bad employees -- which usually means dismissing them -- is a difficult thing to do; it requires being firm, but compassionate. Repairing the damage caused by an incompetent employee often requires creative thinking.

Very often, the entrepreneur needs to be able to deal with people problems on the spot. When one of your best employees is in tears because her mother has been diagnosed with cancer, you do not have time to Google how to respond to employees facing tragedy. You need to think and respond, not as a friend (because no matter what you think, your employees do not see you as a friend), but as a compassionate and caring employer. You need to be sympathetic, but not push too far. You also need to keep your firm going, when one of your best employees is not at her best. If you only have yourself and three employees and one of them is not doing well, that means 25% of your workforce is not doing well.

In addition to employees, the entrepreneur needs to interact with suppliers, often also small businesses, and customer. Even when customers or suppliers are large organisations, the entrepreneur is often dealing with a specific individual. Good relationships with suppliers can lead to better services and better prices. A good relationship with the CFO's secretary (for example) can help ensure the entrepreneur can get a phone call through to the CFO.

When Things Go Wrong

When things go wrong, and they will, the entrepreneur often has no one she can turn to. She must step in and solve problems herself. Often, there are not simple solutions. Sometimes there are simple solutions, but they could be more damaging than doing nothing. The ability to see a situation in detail, identify the options and visualise which option is the best -- or which option will be least damaging -- requires creativity.

It's a Life Sentence

It seems that being an entrepreneur is a handicap as far as most businesses are concerned. Research has shown that not only are established businesses less likely to hire entrepreneurs than other people, but when they do hire entrepreneurs, they pay them less than others in similar positions. Since many job adverts indicate that the employer is looking for "entrepreneurial self-starters", this is particularly ironic. But, it seems companies are keener to hire people who call themselves entrepreneurial rather than actual entrepreneurs.

Once you become an entrepreneur, it is pretty much a decision for life. If you decide to sell your business or your business goes bankrupt, you will find it difficult to find employment in another company. This means that if one business does not succeed or if you get bored with a business as it matures, you need to use your creativity to devise and launch new businesses from time to time. And you will need to use your creative skills to try to keep those businesses afloat and, ideally, make them profitable.

That said, in my experience, entrepreneurs are different to others. They are driven, continually creative and enjoy challenges that frighten many others. Frankly, most entrepreneurs prefer not to be employed, but to employ




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Jeffrey Baumgartner
Bwiti bvba

Erps-Kwerps (near Leuven & Brussels) Belgium




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