How does positive business apply to entrepreneurship?
April 27, 2017
What is positive business? It’s the idea that businesses can and should create not just economic value, but also offer great places to work where employees are treated and paid well, are good neighbors and stewards of the environment, practice sound governance, and help solve societal challenges around the world.
How does that apply to entrepreneurship? For Michigan Ross Lecturer Jim Price, new technology and a connected world have dramatically lowered the barriers to starting a business.
“The art of the possible is there for far more people today than it was even five years ago,” says Price, also entrepreneur-in-residence at the Samuel Zell & Robert H. Lurie Institute for Entrepreneurial Studies. “I think that’s a beautiful thing. In the past, launching a new business really was for the crazy few like me who had an extraordinary appetite for risk and stress. You can do a lot of things now for much less money, in less time, and you don’t have to quit your day job.”
You can learn more about this and other practical ways to apply positive business principles at the 2017 Positive Business Conference, where Price will lead one of the workshops.
From All Or Nothing To Side Hustles
Launching a new business used to be a binary choice — you had to quit your day job early on and jump into the water, often cashing in your 401(k) and maxing out your credit cards in the process.
An entrepreneur often would have to raise a couple of million in early financing just to create a product and generate sales. That put a lot of people in a Catch-22 — the business wasn’t off the ground yet, but they couldn’t raise funding unless venture capital firms and angel investors felt they were “all in.”
“There was a pretty stark personal risk calculation, and it was just too scary for the vast majority of people,” he says.
But what used to cost tens of thousands of dollars in the past now often costs hundreds, or less, thanks to technology advances, Internet connectivity, and cloud-based services. This applies to all businesses — not just tech companies. Inventory management, website creation, point-of-sale systems, and accounting systems often cost 10 times less than they did a decade ago, Price says.
For example, one of Price’s companies spent about $50,000 for a logo and brand identity several years ago. Now he can go to 99designs.com, see samples from artists around the world, contract with one, and get a high-quality product in days for a few hundred dollars. Similarly, the monthly bill for hosting a website or cloud-based software has dropped from thousands to a just few dollars.
“You can get a business or product tested and out to market faster, and for a fraction of the cost than in the past,” Price says. “You fail faster, make adjustments faster, and pivot on a dramatically accelerated pace. That means you spend a lot less of your money and time testing out a new-business idea and getting it launched.”
That opens up options for many more people. Now you can start a new business as a “side hustle” without quitting your full-time job.
“You can effectively launch a startup on the 8 p.m.-midnight shift, after the kids go to bed, and on the weekends,” Price says. “It allows you a lot more latitude getting to the point where you may eventually feel fully comfortable leaving your day job and going all-in. It’s still a lot of work and there’s a steep learning curve, but with lower risk.”
Price now sees entrepreneurship as a career path for some people who wouldn’t have considered it before, a development that has made the new “gig economy”— less full-time work, more contracted tasks — less scary to many. It also allows recent graduates burdened with student debt the chance to try a side hustle startup on top of their full-time job.
“This opens up possibilities for people who don’t have a few hundred thousand in their 401(k) to contribute,” he says.
This article originally appeared in Ross Thought in Action.