Research shows 90% of startups won’t survive five years. Yet, over 5 million businesses are started every new year. This shows that the entrepreneurship spirit is alive, but most times, it is not strategic; to run a successful startup, you don’t only need funding, you need the entrepreneurship function.
What is an Entrepreneurship Function?
You can think of “Entrepreneurship function” as a subset of “Entrepreneurship.” It refers to a set of roles, responsibilities and tasks the startup team uses to drive startup growth. Some of the popular entrepreneurial functions include innovation, resource mobilization and strategic decision making.
Depending on the size of the organization, entrepreneurship function may be performed by several persons. In most startups, the founder is the primary driver of entrepreneurship functions. They set the vision, take the risk and call the shots with respect to the organization’s direction. Founders also mobilize resources that ensure execution runs smoothly.
If a startup has more than one founder, the entrepreneurial functions are usually shared across the co-founders. In such cases, the role of each co-founder is dependent on their unique strengths. Pooling together the strengths of these individuals set up the startup for growth.
As the startup grows, intrapreneurs may begin to play the entrepreneurship function. Intrapreneurs are trusted employees who can hold the fort within your business structure. You could saddle them with tasks like leading teams, innovation, and entrepreneurship. Before committing major tasks to intrapreneurs, it’s best to train them and have a solid reporting structure.
How Does Entrepreneurship Function Affect Modern Startups?
The entrepreneurship function drives startup growth by playing the following roles:
1. Opportunity Identification and Market Growth Analysis
What are the market gaps in your industry? What are the common problems people need solutions to? What processes and operations can be better improved for efficiency in your field? Your answers to these questions are opportunities you should seize as a person playing an entrepreneurship function.
A strong entrepreneurial mindset means turning problems into possibilities. You need keen eyes that see opportunities that are disguised as challenges. Some of the ways to seize these opportunities are:
• Market research and trend analysis
• Customer surveys, interviews, and feedback loops
• Competitive landscape evaluation
As you seek to maximize opportunities, ensure to validate and back them up with data. Find out about the total addressable market, frequency of use and willingness to pay. Such research shouldn’t be a “one-off.” Ensure to conduct them at intervals so that you can notice market changes when they occur.
2. Resource Mobilization
Most startups operate under extreme resource constraints. Don’t be surprised if your journey begins with barely enough cash, minimal assets, or a small team. In that state, entrepreneurship function is important because it helps you to creatively gather resources.
Some of the common resource mobilization tactics include:
• Securing early-stage funding for the startup. You can gather these funds through crowdfunding, bootstrapping, and investors.
• Building lean Minimum viable products
• Forming strategic partnerships.
Resource mobilization leans heavily on your ability to pitch your startup convincingly. You should also master the art of negotiating and optimizing limited resources.
3. Risk Management
As you may have observed, the startup road is filled with lots of uncertainties. You are sometimes faced with ambiguities, sharp changes in customer preferences, the emergence of new competitors, and other surprises. You need to develop the ability to take calculated risks. Failure to take such risks when you should could hinder your startup growth.
As you make bold moves, learn the difference between smart risks and careless risks. Several organizations use risk assessment models to test the waters before diving in. It’s also best to make use of scenario planning and agile testing methods. This helps you to respond better to crises and change business models without hassles.
Entrepreneurship ensures that every risk your startup will take is informed, not careless. It also changes your perspective about failure by presenting it as an avenue to learn. This creates an environment of innovation and entrepreneurship in your startup. As more startups embrace this approach, we will witness a ripple effect in economic development.
Strategic Roles of Entrepreneurship Function in Key Startup Phases
1. Ideation And Pre-Launch Phase
In this phase, the entrepreneurship function is more concerned with generating ideas, discovering the startup’s customers, and conducting feasibility analysis. This is the phase to ask questions about the problems the startup is trying to solve. Then develop unique strategies to solve them and research your early adopters. Researching your early adopters will include researching their preferences, and the best strategies that appeal to them.
2. Early-stage or Launch Phase
This is the execution phase where ideas on paper are translated into actual work. In this phase, the entrepreneurship function is focused on branding, entering the market and navigating initial sales. It is quite usual for you to wear many hats in this phase of the startup growth.
3. Growth and Scaling
At this phase, the entrepreneurship function focuses on dominating the market and scaling the startup. In this phase, you should identify new markets, establish your startup’s culture and values, and have solid structures in place. In this phase, you will rely on structures a lot, but ensure you do not lose the entrepreneurial mindset.
Common Challenges in Exercising Entrepreneurship Functions
The entrepreneurship function is vital to startup growth. However, it has its share of challenges. Some of the most popular challenges in executing entrepreneurship function include:
1. Founder Burnout: This is very common in the early phases of a startup. The relentless pressure of juggling many tasks could drain your energy and lead to mental burnout.
2. Overconfidence Bias: The primary role of the startup leader is to give direction and make the vision believable. In making the vision believable, some founders step into the overconfidence bias. This leads to them believing too much in an idea that lacks market validation.
3. Team Misalignment: Without proper communication and constant review, there could be a misalignment between the team and leadership. This often slows down execution and could tint the brand image.
4. Financial Constraints: After crafting brilliant ideas, it is sometimes difficult to get funding for those ideas. These challenges are sometimes tough to navigate. This makes it important for you to have a solid support system, a voracious appetite for growth and the willingness and humility to restart if you need to.
Conclusion
Deeply seated at the heart of startup success is the entrepreneurship function. It drives innovation, helps you acquire resources, and assists in navigating uncertainties. Startups that embrace the entrepreneurship function don’t just survive; they lead their contemporaries!
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