The adage says, "Timing is everything." And this adage is continuously proven true in the big, momentous events of our lives as well as the small, mundane events. The point in time and space at which we venture into activity will have an influence on the extent to which those activities result in successful outcomes.
But, of course, whether consciously or unconsciously, we all realize that timing matters. The knowledge that a sense of timing is necessary to success has particular implications for venturing into a new business. As successful enterprisers have prospected and incubated business ideas, they have no doubt carefully selected just the right time to enter the flow of their industry and market.Is the timing right?
Similarly, you are asking yourself the question: "When is the right time to start my business?" The answer to this question is critically important, and perhaps that is why the answer is also overwhelmingly complex. The answer certainly requires a solid foundation of industry and market information that must come from trustworthy primary and secondary sources. But information on its own does not answer the timing question; judgment or business savvy is required to make sense of industry and market information. In as much, the decision as to the best time for starting a business is dependent upon the unique context in which any particular business idea is placed. However, a prospective venturer could enhance his or her perspective of that specialized context by better understanding the nature of what "entrepreneurship" means and how entrepreneurship influences the flow of business activity.
The nature of entrepreneurship
The term "entrepreneur" is a French word which literally translates into an "undertaker." In the early 1800s, the French economist,
J.B. Say, coined this word for use in the study of enterprise. Say's definition suggests that entrepreneurship is the shifting of resources from areas of low productivity to areas of higher productivity and greater yield.
Herein, entrepreneurship is grounded in the concept and practice of change. This change occursthrough the process known as innovation. Notice that the word "innovation" translates into "the process of introducing something new." this notion of innovation is shared by Schumpeter's view of entrepreneurship as "the creating of new combinations."
But the term "new" is relative. Some have reminded us that "there is nothing new under the sun." Hence, innovations must be considered in two different forms: radical and routine. Radical innovation represents the major revolutionary breakthroughs which have major impacts on society. On the other hand, routine innovation represents change of an evolutionary nature which has an incremental impact on society.
Patterns of innovation
These forms of radical and routine innovation are the means by which patterns of business activity take place. From a macro-perspective, we discover that the flow of economic history has been molded from the cycles of radical and routine innovations.
Economic history has passed through what could be called four "Ages": the hunter/gatherer, agricultural, mercantile and industrial. History is presently on the verge of a fifth age which, at the risk of premature identification, has been labeled the service age.
Each of these ages has been preceded by an entrepreneurial period which created a new paradigm of thought and action. For example: the hunter/gatherer age was preceded by a period of entrepreneurial construction in which tools and weapons were innovated; the agricultural age was preceded by irrigation; the mercantile age was preceded by transportation; and the industrial age was preceded by radical innovation of mechanization.
The cycle begins with a radical innovation. As the ideas and practices advance, innovation within each age become more routine. Until, once again, a new radical innovation opens the door to a different cycle of business activity.
Is now the time?
The lesson to be learned from the nature of entrepreneurial activity is that certain time periods are more susceptible to radical or routine innovation than others. Over the past several decades, our economy has been coping with a period of entrepreneurial change brought by advancements in communication and information technologies. We are approaching the final stages of radical innovation in this entrepreneurial period. After this period of change, innovations will become of a routine nature during the upcoming service age.
Since competitive advantage accrues to the organization with the most well-established competitive position, this prospective ventures with radical innovations should move now to improve their chances at strategic success.
Steven Maranville is a consultant and teaching fellow in strategic management at the University of Utah.