What is at the heart of an entrepreneur? What moves people into opening their own business and taking risks? Employees might think that it’s because entrepreneurs have capital, education, or a lack of obligations like a house or a family. Those can help, but they aren’t the real heart of entrepreneurship.
The key thing that entrepreneurs have is optionality. They have the freedom to keep their options open as much as possible while they achieve their goals, and the ability to respond when changing conditions pull the rug out from under them.
Take Steve Voudouris and his company Turn 5. He started his business in high school after a frustrating experience finding the right aftermarket parts for his Mustang. Now he has a 300-person company that’s been in operation for 15 years focusing on just two car models: Mustangs and Jeep Wranglers.
Did he have a good business idea? Sure. The aftermarket part industry at the time was in dire need of a shakeup. Everything was done by mail order and it was difficult to know if you were ordering the right part. This frustration is what led him to make the business in the first place. He wanted to make a business that catered to the enthusiast rather than the nameless, faceless masses.
But he didn’t take the traditional route of starting a business. In fact, the traditional route of opening a business seems a bit foolish these days. There are better options available with more optionality. For instance:
Do you Really Need College?
College isn’t always the best option, despite what our society tells us. Even 15 years ago the amount of debt that students were taking on was high. Now it’s completely outrageous. But if he had stuck with the traditional route, four years would have passed with no actual work sunk into the business. By not going to school and by avoiding careers that required a college education, he gained a greater array of options than he would have had he gone to college.
The dirty secret of education is that much of the important information you need to succeed in a field can be found easily online. There has never been a better time in history to be a self-learner.
Take Advantage of New Tools
The internet has been and continues to be the great leveler for business entry. The amount of capital needed to open a successful online business is much less than a traditional one. It is also a great disruptor. If the internet can provide an easier way to do an offline task then someone is going to capitalize on it.
The internet also allows people to work from anywhere. This also brings more optionality. If you can live in a low-rent location while you’re setting up your business, you can conserve your capital and have a better chance of success. Don’t underestimate the power of moving to a cheaper location while you get your business off the ground.
Be Willing to Let it Go
Never let a business idea tie you down too hard. You never know when the market is going to change, or if your idea is going to work in the first place. If you cling too tight to something that doesn’t work, then you’ll go down with it. That said, knowing when to let it go is something that takes practice. (Read Seth Godin’s The Dip to learn more about this.)
Improving Optionality
Optionality is a quality of entrepreneurs, not businesses. Many successful business owners have a string of failed businesses left behind them before they find the right one that brings them success. If they stuck with those failing businesses, that would have ended their entrepreneurial dreams.
Likewise, a good entrepreneur can’t afford to be too tied down to their life circumstances. Fear often keeps people tied to their jobs. They’re afraid they won’t be able to make money if they leave, or be able to recover if they fail. Part of optionality is also creating space in your life for things to fail without it affecting you too badly.
If you’re a business owner and you have all your eggs in one basket, or feel like your entire dream of business ownership would collapse in a stiff wind, consider finding ways to build optionality into your life. Become comfortable with chaos and leap ahead into the unknown. Fail to do so, and you could find yourself with no place to go when things fall apart.
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