The Three Ways To Start a Successful Business
Even in downturns, great businesses get started. That's because entrepreneurs are business physicists of a sort -- they reduce friction.
My writing and reporting suggests that successful entrepreneurs tend to bunch into one of three areas, all of which parallel aspects of physics:
They discover a market desire. Like physicists who find something new thanks to a new kind of instrument, entrepreneurs can take advantage of new technology to create brand new markets. MEMS (microelectromechanical systems) made airbags both possible and cheap. Microarrays and other advances are making medicine something we can personalize. Practical robots emerge, cheap enough for every day use. New materials and production techniques make it possible to create shoes that always fit the same. Heck, the rocket, an excellent tool for physicists, gave us a way to shoot satellites into space, which has spawned communications businesses, location-based businesses and so on.
They ride a platform shift. Shifts in society or technology can create an entirely different way to do business, much as quantum theory created a new understanding of the world, without eliminating classical dynamics. The highway remade American business from the way it was when railroads dominated. The Web has sparked all sorts of entrepreneurial shifting. Entrepreneurs have shifted brick-and-mortar stores, software, and every form of media to the Web, to name just a few.
They solve a problem. You don't have to be a physicist to advance a field by solving a problem. It's perhaps the most obvious opportunity for an entrepreneur, to solve a problem they have themselves or have observed, and realize by doing so they could build a company. I've seen that with software, cellular phone equipment, ethanol production, social entrepreneurs, and the list goes on.
These are the core ways entrepreneurs make a start. Lots of other things that have to happen for business success â€" capital has to be available for investing, the right people need to come together to form a team, the market timing has to work (see my post Would You Rather Be Lucky, Timely or Good?). But it starts with the ideas, and they seem to clump in these categories.
What do you think? Have I missed something? And please, bang on my physics metaphor. The economist Philip Mirowski in "More Heat Than Light" posits that conservation of value (or utility) equates to conservation of energy theory in physics, but that was back in 1989, and while business language is rife with metaphors from evolutionary biology, ones from physics are almost never used.