“How to go to the city is not difficult when we come to build capacity first.” – thinkUP
Entrepreneurial creativity and capacity building are the sine qua non of business development. Building capacity for creativity to thrive is the capital requirement for entrepreneurial success. Creative thinking is the foundation of entrepreneurship. Capacity building on the other hand, is the foundation of business success.
At age 21, Steve Jobs sold his Volkswagen bus for $1,500, while Steve Wozniak sold his Hewlett-Packard calculator for $500. Together, the sales provided the funds for their initial venture. With this capital, Jobs and Wozniak embarked on producing the Apple I, introduced on April Fool’s Day in 1976. A local computer dealer placed a substantial order for 100 units for $50,000, a significant milestone for the fledgling company. To meet this demand, they purchased parts on credit, giving them a tight time frame of one month to fulfill the order.
Leveraging the support of family and friends, they completed the order, earning their first revenue and narrowly managing to pay off the parts suppliers with just a day to spare. They later met Armas Clifford “Mike” Markkula, a former manager at Fairchild Semiconductor International and Intel, who played a crucial role in the company’s development.
Markkula assisted in crafting a business plan and invested $92,000, in addition to helping arrange a $250,000 credit line. The Apple I, marketed for $666.66 each, earned the company around $774,000. Following the launch of the Apple II, Apple’s sales skyrocketed to $139 million, three years after its release. The pivotal moment for Apple came in 1980 when it became a publicly traded company.
On its first day of trading, Apple’s market value reached $1.2 billion. By the end of the day, the market capitalisation stood at $1.8 billion, a remarkable achievement considering the company started in Jobs’ garage. In 1983, Jobs recruited John Sculley from Pepsi-Cola to be CEO of Apple. The following year, they released the Macintosh, marketing it as part of a counterculture lifestyle.
Despite its positive sales and superior performance to IBM’s PCs, the Macintosh struggled with compatibility issues with IBM systems. Because of internal disagreements and strategic differences, Jobs was eventually phased out of the company he co-founded and left Apple in 1985. Jobs returned to Apple as CEO in 1997. He played a pivotal role in reviving the company, which was facing financial turmoil and was said to be on the verge of bankruptcy.
Over the years, Apple transformed from a personal computer company to a leader in cutting-edge digital products. By the time of Jobs’ death in 2011, Apple had achieved a market value of $391 billion.
Leadership is the ability to set goals and also create rules. It is the capacity to see that goals are accomplished and rules are followed. Building entrepreneurial capacity requires leadership competence in four critical areas as follows:
- Creative competence
- Administrative competence
- Financial competence
- Economic competence
- Creative competence: The ability to create something of value is a unique gift common to innovators and entrepreneurs. Lack of creativity is lack of originality, and lack of originality is lack of identity. Before capacity building, finding one’s entrepreneurial identity is crucial. Find your entrepreneurial identity and ensure your brand is well defined conceptually before your business is positioned commercially. Even though creativity is in the same measure globally, be sure to find your path and become a pathological creative.
Walt Disney was told he lacked creativity
One of the most creative geniuses of the 20th Century was once fired from a newspaper because he was told he lacked creativity. Trying to persevere, Disney formed his first animation company, which was called Laugh-O-Gram Films. He raised $15,000 for the company but eventually was forced to close Laugh-O-Gram, following the close of an important distributor partner. Desperate and out of money, Disney found his way to Hollywood and faced even more criticism and failure until finally, his first classic films started to skyrocket in popularity.
Entrepreneurial capacity building requires tenacity for creativity to thrive. Entrepreneurial identity is a force of creativity and a function of vision.
- Administrative competence: Everything rises and falls on capacity building. Entrepreneurship is the ability to create, manage and operate a new business and bears all of its risk with a view to earn profits. A person who develops new business and undertakes all risks and challenges associated with it is termed as Entrepreneur. Administrative competence is the ability to organize both human and non-human resources to manage a business. Without work nothing appears. Without teamwork, nothing prospers. Businesses that prosper have strong entrepreneurial capacity, that is, a robust human and non-human capital. The capital requirement for business success is administrative competence. Without entrepreneurial creativity, nothing appears. Without administrative capacity, nothing prospers. Business administration is largely about setting business goals and creating rules that drive business process.
- Financial competence: “Before you invest, investigate.” I would rather put it this way – investigate before you invest in Gates or Dangote. Don’t just save money, make money work for you. Entrepreneurs don’t only know how to make money; they equally know how to make money work for them. Financially intelligent entrepreneurs know how to make money first (secure) and also, make money last (endure). Capacity building in the area of finance not only helps entrepreneurs make informed decisions economically, it also gives feathers to creativity.
Financial literacy is the possession of skills, knowledge and behaviours that allow an individual to make informed decisions regarding money.
- Economic competence: A mono economy is no economy. Lifestyle entrepreneurs produce creativity, while legacy entrepreneurs create products. Building entrepreneurial capacity in the area of economic competence is knowing what to produce, how to produce and when to produce. It is more cost effective for a firm to produce a wider variety of goods or services in tandem rather than producing each good independently. This is referred to as economies of scope. Economies of scope are “efficiencies formed by variety, not volume.” In the field of economics, “economies” is synonymous with cost savings and “scope” is synonymous with broadening production/service.
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