Author: Vikram Rawal, Summer 2020 Alumnus
When you hear the word “entrepreneur”, what comes to mind? Had you asked me this question two years ago I would have given the standard, superficial answer involving flashy cars, lavish lifestyles, and the freedom to do whatever I wanted to do whenever I wanted to do it. At BETA Camp, I learned that the essence of entrepreneurship is so much more than that - and it’s so much more than you.
An entrepreneur, almost by definition, is a risk-taker - someone who sacrifices their time and money in relentless pursuit of a product which, at the beginning, is nothing more than an idea which nags at his or her mind. But while the risks are definitely considerable, the rewards are practically limitless. And while what the entrepreneur stands to gain certainly looks appealing (think $$$), its significance pales in comparison with that of the extraordinary impact which his or her vision can have on society and on the world as a whole.
With that being said, here are three reasons why the world needs more entrepreneurs:
1. Innovation and Competition means better Products
Building a business in an already established market fuels an increase in competitiveness for every company.
However, the actual ability for a new entrant to the market to pose a serious threat to the already established brands depends on the market itself. For instance, in the fast food and drinks industry, you might think that there are a ton of different companies which are constantly competing against each other.
It’s not hard to see that each of the over two hundred brands or so is owned by one of ten different industry giants, such as Coca Cola, PepsiCo, and Nestle, among others.
The food and drink industry is insanely competitive, and you wouldn’t really be justified in trying to enter this market unless you had an absolutely ridiculous amount of capital (in which case I’d probably wonder why you would even bother in the first place). But on the other end of the spectrum, there are more than a few industries which absolutely anyone can succeed in, so long as they have a laptop, an idea, and lots of perseverance. Think programs, web services, a special kind of software - basically anything that doesn’t need a manufacturing plant or a truckload of permits to be legal.
One of these companies - a business that started in the form of two guys in a house with a solution to a common problem - has grown so much that it’s now used by 1.2 million people. And it’s none other than the Canadian e-commerce giant Shopify. When two friends were trying to set up an online store to sell snowboards but were having difficulty setting one up without a reliable platform, they decided to using their programming skills to make one of their own. Eventually, what started as a simple solution to a problem morphed into a product thousands upon thousands of people could use, and that’s exactly what Shopify’s founders took advantage of. For a small price, they would offer a seamless and thoroughly professional web-hosting platform and backend to satisfy small business owners’ requirements. And because their product solved a prevalent problem, it took off.
To make a long story short, today, Shopify has over 5000 employees, and they’ve helped over 500,000 small businesses make more than 40 billion dollars in collective sales. And they owe the majority of their success to what was at the time a relatively unexplored yet promising business idea, and a scalable solution to a problem which their founders stumbled across. Moreover, on top of doing so well for themselves, Shopify has inspired many other companies, such as WordPress, SquareSpace and WooCommerce to enter the market and to offer their own unique product and solution to a common problem. This not only improves the quality of the average product in the market but also broadens the choice for a product based on your specific needs, so it’s a win-win situation.
2. CREATION OF BETTER JOBS AND ECONOMIC GROWTH
Personally, I would argue that while this benefit of starting a business isn’t as discussed as some of the other ones, its importance is extremely underestimated and its presence is often overlooked. According to the Government of Canada, “As of 2017, small businesses employed 8.3 million individuals in Canada, or 69.7 percent of the total private labour force. By comparison, medium-sized businesses employed 2.4 million individuals (19.9 percent of the private labour force) and large businesses employed 1.2 million individuals (10.4 percent of the private labour force).”
The statistics show that small businesses employ a whopping 70% of the private labour force. Personally, I found this to be incredibly surprising since, to be absolutely honest, I don’t really notice small businesses during my daily life as a high-school student. Apparently, kids my age are drawn to household brands and well-established companies over small businesses or startups, and to be fair, you can’t really expect much else.
But make no mistake - small businesses are the unsung heroes of the workforce. In starting a business of your own, not only are you providing consumers with a unique product and customer experience, you’re giving each and every person who works for you what is ultimately an improved quality of life. And it doesn’t stop there - the successful founding of a small business can also cause a chain reaction with regards to spending and networking which will ultimately improve the state of the economy and touch the lives of countless people.
Think about this for a second: Shopify has employed over 5 000 people. And you might be thinking “Okay, that’s not that big a deal”. But look at it this way. For every small business which Shopify has helped to flourish, that small business could hire five more workers to help them cope with the increased demand for their products. Furthermore, in creating what is essentially a fully customizable ecommerce template, Shopify has opened up thousands of informal positions on their app store and such for people who are skilled in programming, graphic design, web development, and the like. The magnitude of that kind of effect on society and on the economy is not easily measurable, but I think it’s safe to say that the numbers don’t tell the whole story.
3. THE BETTERMENT OF SOCIETY
At BETA Camp, one of the most fundamentally important truths I learned was the fact that a successful business must solve a problem. I don’t necessarily mean a problem in the typical sense of “the mistake is over here, let’s fix it” - it can be a gap in the market, or a new take on a product or an industry that other people haven’t thought of. But the bottom line is this - something has to be new.
How revolutionary this new idea is obviously varies from company to company. But beyond fueling the potential for small businesses’ success, a new way of thinking about a pre existing problem can help society and the world as a whole by improving various aspects of everyone’s quality of life. And while the direct effects of this solution can be universally impactful (such as with businesses seeking to stop climate change), many of the benefactors of the solution are so because of the domino effect that usually occurs when people decide to help other people out of good intention more than anything else.
Take, for instance, the case of Vestergaard Frandsen, a Swiss company which started in 1957 with the goal of manufacturing inexpensive tools which could be used to maintain public health in poorer and less fortunate countries. Its mission statement aligned with three of the UN’s Sustainable Development Goals, namely water, public health, and food security, and from their inception the founders made it clear that their top priority was to offer humanitarian aid and to improve people’s lives. Today, the company is best known for the LifeStraw, a portable drinking straw which automatically filters dirt and bacteria from dirty water, thereby making it drinkable. Ultimately, its success can be largely attributed to the company’s good intentions, and they should serve as an excellent model for small businesses.
Lastly, a successful business can donate some of its profits to philanthropic and morally righteous causes. In a climate such as today’s, it is becoming more and more important that there are people who are willing to give a little to help those in need when they need it. Of course, a small business should be trying to keep money in its hands, but as it becomes more and more successful, it can leverage its financial capabilities and the other resources it possesses to contribute to a good cause. When you’re giving consumers products which they can enjoy while putting some of your profits to good use solving some of the world’s most pressing problems, what’s there not to like?