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Making of
Entrepreneurs
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Ahmad Jawad
Managing Director, Rohde & Schwarz, Pakistan
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Though some entrepreneurs are extraordinarily
gifted people. But they don’t have to be
necessarily so to be entrepreneurs. Most
entrepreneurs are just common folks in most
respects. They do, however, have an eye to spot
the needs of people (or organizations) which
again is not an extraordinary trait. What sets them
apart is the clarity of thinking, singularity of
purpose and a near absolute belief in their
capacity to achieve their objective. Incidentally,
that’s also the one and the only way to do the
impossible
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Published, Nov 2008
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Perot became famous when he ran for presidential election as a free lancer
against George Bush and Clinton. But apart this brief flirtation with politics, the
diminutive Texan is every inch an entrepreneur. Using a $1,000 loan from his wife
in 1962, he launched Electronic Data Systems. Perot’s winning idea was that
large corporations and organizations needed data-processing help if they were to
take full advantage of computer technology. When in the mid 60s he won contracts
with two new federal health-care programs, Medicare and Medicaid, EDS was off
and running and Perot was on his way to being one of America’s richest citizens.
Fast rewind to 1817 when Robert Fulton had exclusive privilege to run steamboats
on the Hudson River. A young man named Cornelius Vanderbilt piloted the first
steamboat line to compete with Fulton’s. The state of New York had granted Fulton
an exclusive privilege to run steamboats on the Hudson River, but Cornelius defied
the exclusivity and luckily the Supreme Court ruled in his favor. Despite having
wealthy clients whom he charged quite heavily, Fulton was running losses.
Cornelius could see where the fault was. He felt there was great potential in the
service but the choice of target clients was wrong. He reasoned that instead of
increasing the fare to meet the cost, it would be wiser to lower the fare and attract
more passengers. He cut the standard New York to Albany fare from $3.00 to
$1.00, and finally to nothing! He sold meals on his boats and found he could make
a better profit from full boats of hungry passengers than he could by charging for
the passage. That’s innovative thinking. His competitors also knew that
passengers needed to eat and drink during travels and were also willing to pay a
bit extra. But they did not think beyond that.
Fast forward to 1930, Germany. Electronics was a young field then and there were
few suppliers of RF (Radio Frequency) test and measurement (T&M) equipment in
Germany. Manufacturers developed their own T&M equipment as needed. While
searching for a promising opportunity in the face of crushing unemployment, two
young physicists, Dr. Lothar Rohde and Dr. Hermann Schwarz, met Hans
Handrek, an engineer, who was looking for a T&M solution for new ceramic
materials. Dr. Rohde and Dr. Schwarz provided him with a high-precision
experimental setup that marked the birth of a new business idea. Encouraged by
their first success, in 1933 the two PhDs established the Physico-Technical
Development Laboratory in Munich, offering their services to electronics
companies requiring T&M solutions for RF. Their business quickly evolved from
custom development to the manufacture of ready-to-use T&M equipment. As early
as 1938, the young company already offered more than 100 different products.
Today Rohde & Schwarz is a global group of companies with over 70 facilities
around the world. These two gentlemen could have ended up as ordinary
electronics engineers doing routine jobs. A lot many engineers did end up like that
because fewer could believe in themselves. Fewer had the ability to see beyond
horizon and fewer still could take the risk. But a closer look would reveal that these
are not extraordinary qualities. These are cultivable traits that one does not
necessarily have to be born with. But these very traits made Rohde and Schwarz
what they were; entrepreneurs.
If we analyze the definition of entrepreneurship, we would realize that it does not
necessarily require huge financing, large resources and conducive environs.
Rohde & Schwarz were faced with unemployment and the only significant asset
they had was a mindset that refused to stay put. Doesn’t it imply that many of us
might qualify for this definition? It could be a simple art of presentation like
Starbucks Coffee. It could be a simple way of frying chickens like KFC. But these
Western examples sometimes appear to us as if they are coming from fairyland
and something that cannot be replicated in our environment. It is not so and there
are plenty of success stories to support it. It could be a delicious way of preparing
sweets like Nirala which grew from a Khokha to countrywide outlets and even
reaching to foreign market. It could be introducing a trend of providing a quality
way of living like Bahria Town, which grew from a small unknown housing scheme
to become a huge network of mini-cities. There are many chains of restaurants in
Pakistan that developed from roadside stalls on footpaths. There are bakery
chains that had a very humble start.
My emphasis on humble beginning is to highlight that a lot many people can fall
under the definition of entrepreneurs. It can happen if people would start applying
their mind to explore new possibilities rather than getting in to the fierce
competition for run-of-the-mill jobs.
The question could still be that how do we invent a successful idea? The answer is
that always start understanding the need of people, need of industry, need of
society. The entrepreneurship can be considered in two basic categories;
innovation by creating a new field or service or innovation by improving existing
fields or services. In the above example, Cornelius found that the boats of Fulton
though had fabulous looks. But they were poorly made, burnt too much fuel and
due to poor design were slower. As a result they were out of service much before
the investment demanded. Cornelius built stronger boats with better design so that
they moved faster. His boats not only lasted longer, they also made more trips in
the same period that the poorly designed and slower boats of Fulton did.
Eventually, Cornelius drove Fulton out of business. This lateral thinking you can
develop through a self exercise of placing yourselves into the shoes of a client in
the field which you can understand. Let’s take up one such exercise. First place
yourselves into the shoes of a customer who goes to a restaurant and imagine
what he can expects, desire or might admire during his stay in the restaurant. It
could be a warm reception, immediate attention, nice aroma and environment,
cleanliness, mannerism, personal touch, quick service, guidance while selecting
the menu and quantity of order, light music, hot and fresh food, nice cooking, nice
presentation, complementary variety of Chutnies and crackers, complementary
special flavor tea, provisioning of some innovative activity during the time the
customer is waiting to be served. At the end, warm good bye and later some link
with the customer through SMS or email. How much would it cost to the restaurant
if you came out to find that your car has been dusted and windscreen cleaned?
And what an impact would it have on you? It might look simple but the fact is that
every unsuccessful or low running restaurant must be lacking some of these points.
Same could be true for a number of businesses. Discover for yourself. The
opportunities are all around.
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