Entrepreneurship is a trendy buzzword that has spawned stacks of international bestsellers in bookshops, attracted huge traffic on acclaimed online blogs, TV shows e.t.c and for the most part, it’s all well and good. What is ironic about this trend for somebody observant enough, though, is that the romanticized idea of entrepreneurship is exploding in countries possessing very little in terms of entrepreneurship spirit. You will be surprised to know that the true embodiment of entrepreneurship is much closer to home, where it’s practiced as a subconscious survival hack.
A 2015 report by Global Entrepreneurship Monitor (GEM) turned the popular school of thought on it’s head when it came to light that Uganda took first prize as the most entrepreneurial country in the world. Perhaps even more remarkable was that at 28.1%, Uganda’s entrepreneurial rate was almost double that of first runner-up, Thailand which came in at 16.7%. To put this in contrast, Italy and Japan have an enterpreneurial rate of a mere 1.3% whereas German and Russia are at 2.3% and 2.4% respectively.
Uganda is nevertheless an interesting case study. Despite the unusually high entrepreneurship spirit, a great many businesses often fold before clocking 42 months. Although more will rise in their place, common sense dictates that a good business-minded individual should give pause and try to analyse why so many businesses fail and how they can do different. And this for this reason that this post came to be.
Patrick McGinnis and the 10% Entrepreneur phenomenon
Recently, we honoured an invitation by Fenix International (of the solar power fame) to attend an entrepreneurship talk hosted by Patrick McGinnis. McGinnis is a venture capitalist, part-time entrepreneur, global keynote speaker and the author of the international bestseller, “The 10% Enterpreneur. Live Your Dreams Without Quitting Your Day Job”.
In his book, McGinnis provides an insight into the world of venture capitalism and entrepreneurship, basing on 15 years of experience as an investor in 22 startups in the United States, Latin America and Europe. Credited by the Boston Magazine for coining the term FOMO -Fear Of Missing Out-, McGinnis discusses a novel approach to entrepreneurship that should appeal to first timers and seasoned entrepreneurs alike.
The 10% entrepreneur is somebody who spends at least 10% of their time and if possible 10% of their money investing in and advising, or even starting new companies. Keeping in mind that roughly 75% of startups don’t out-rightly generate income until the situation has stabilized, we hypothesize that Ugandan entrepreneurs would increase the lifespan of their businesses or even move on to new ones without sacrificing their livelihood using this approach. The entrepreneurs are advised to hold onto their traditional day jobs and only allocate 10% of their time and income on the side projects. These jobs in turn provide the stability and fallback needed to attain substantial entrepreneurial growth.
Technology as a driver for entrepreneurship
Millennials are often scolded for spending abnormally long hours on social media each day. Or on phone, making all manner of calls. What people might not realize is that in keeping in touch with various friends and acquaintances, we are building networks on the biggest social networks in the history of mankind. Gone are the days when running a business meant renting office space and a landline. More and more people are reveling in the flexibility of conducting business in the comfort of their homes with little or no startup income. Years ago, websites that cost thousands of dollars to build now go for as little as $5 a month. Many are carrying out Patrick McGinnis’s 10% entrepreneurship ideal on the side as they hold down an 8 to 5 job.
Quotable: Consider the extent to which personal technology is now woven into the fabric of our personal and professional lives. Technology is ubiquitous, it’s cheap, and it is only getting cheaper. This has clear implications for anyone who has dreamed of doing something entrepreneurial. With so many of the critical resources that employers once provided now squarely in the hands of individuals, you no longer need to rely on someone else to supply you with technology, connectivity, or labor. You can provide them for yourself and you can do so on a minimal budget. For the first time in history, you can work on whatever your want at the time and location of your choosing. As long as you’ve got an Internet connection, a smartphone, and perhaps a laptop, you’re in business. As a result, it’s never been cheaper and easier to start and manage a company and there’s never been a better time to be an entrepreneur
The world is changing quickly. We are far more connected that we used to be. Anywhere in the world talent can connect people. Don’t be afraid to think big and find something you’re excited about. Start small and don’t forget to think big.~ Patrick J. McGinnis, author of The 10% Entrepreneur
5 Types of Entrepreneur
McGinnis talks five major types of an entrepreneur that somebody starting out can choose to be:
- Angel Investor: Someone who invests their money in exchange for ownership in the company.
- The Advisor: Someone who invests time and mentors an entrepreneur.
- The Founder: One who founds the startup and manages it.
- The Aficionado: Someone with a passion in which they invest money and time.
- 110% Entrepreneur: Someone whose sole livelihood is the enterprise.
5 reasons to become a 10% entreprenuer
- Downside protection: A 10% entrepreneur has a fallback plan B if things go wrong at their day job. With this investment, they will have sustenance as they look for another job, if at all they don’t become full-time entrepreneurs.
- Upside Opportunity: Such a small-time investment is suitable for who are not actively involved in entrepreneurship or don’t know how to be involved. When opportunity knocks, a 10% is a calculated risk which doesn’t jeopardize their current employment.
- Make life richer and more interesting: Somebody engaged in 10% entrepreneurship breaks the monotony of slaving away at the same boring job everyday. They will cut down on senseless office politics and gossip, and make better use of their time to map out more constructive projects.
- Learn what it means to be an entrepreneur: Studies have shown that it’s hard to teach one to be an entrepreneur. Learning to be one is best done by hands on experience. Failure would only be another lesson on how not to do certain things thus contributing to your experience.
- Be more effective at your day job: A 10% entrepreneur brings back all the lessons they learn as an entrepreneur. The experience they get is an added bonus to their qualifications and often, employers will reward entrepreneurship in the company.
How to become a 10% Entrepreneur
A 10% entrepreneur is 33% less likely to fail compared to those who are all in. A stable job has an added advantage of cushioning failures as an entrepreneur. According to Patrick McGinnis, becoming a 10% entrepreneur depends on three factors:
Resources: Time and financial capital are some of the vital resources required for a 10% entrepreneur to succeed. The entrepreneur also has to play to their strength, doing what they are good at. A clear demarcation should be put in place so as not to divert company resources in pursuit of private endeavours. The day job comes first as it’s what is helping to bankroll the 10% investment.
Investment Process: An entrepreneur ought to do their homework before committing to a project. Important questions they need to ask themselves include: Does the business make sense? Is it a good idea? Is it profitable? A enterpreneur should also clearly understand his and his partners’s roles to foster efficiency.
Network: Networking is the glue that holds it all together. A network involves all people the entrepreneur knows who might be potential partners or clients in the enterprise. A network eases the search for capable employees and helps to break into new markets. This same network provides you with entrepreneurship opportunities to invest in.