The ‘entrepreneurisms’ necessary for success

  • There is a difference between self-confidence and self-efficacy
  • Malaysian entrepreneurs seem to have a clear sense of right and wrong

The ‘entrepreneurisms’ necessary for successWE identified ‘entrepreneurisms’ as behaviours that successful entrepreneurs exhibit, either as individuals or as part of a team.
We then went out and polled a whole lot of entrepreneurs for their views on the subject, and found their feedback to be consistent with our findings.
The Nine Entrepreneurisms (9Es) are: Self-Efficacy, Risk-Taking, Passion, Learning, Realism, Persuasiveness, Opportunism, Innovation and Energy-Action-Bias.
READ ALSO: In the Trenches with the D50: Startups are not one-man shows
Self-Efficacy, not self-confidence
We find that the term ‘self-confidence’ is too generic, ill-defined, and associated with shyness and introversion, not ability.
Hence we prefer ‘Self-Efficacy,’ which is a must-have or basic requirement, since without competence or ability you are not going to be able to build a product or service.
Efficacy means the ability to produce a desired or intended result. Self-Efficacy, then, means one’s personal conviction about one’s ability to produce a desired or intended result.
It is also to be expected that the 9Es may at times oppose each other, besides occasionally imposing conflicting forces on the organisation itself.
Inasmuch as risk-taking involves a ‘tinted’ reality, an entrepreneur who is too realistic may have difficulty going ahead full-throttle, or seizing opportunities.
Passion can also place one in a ‘zone’ which may prevent seeing other opportunities or even reality itself, or can push one to develop a ‘killer instinct.’
The combination of passion and persuasiveness provide one with a clear Energy-Action-Bias, to pursue a venture or initiative to its logical conclusion, perhaps missing out on new or pivot opportunities.
And that is where Learning comes in.
The importance of Learning

The ‘entrepreneurisms’ necessary for success

We recently wrote of how entrepreneurs are able to join the dots and form a business frame. The successful ones achieve longevity with a robust business frame that evolves with changing business needs.
How does one do that? Well, by having a ‘Learning’ mind-set. A great example of learning can be seen with Ikea, which was founded in 1943 by Ingvar Kamprad. Today, Ikea has over 360 stores worldwide.
Its innovation started in 1956 when it ‘invented’ flat packaging. Significant though it was, this packing technique, which has been copied the world over, was pretty much the only invention it came up with.
However, what it has done, with a Passion, is to learn and understand the customer – people who want a one-stop, buy-everything solution from a retailer to furnish an entire home.
Ikea makes simple products well, and infuses creative elements, but mainly develops items that appeal to the broader market so that products can be manufactured in huge volumes at reduced prices.
Ikea continually seeks to understand what consumers want and how they live. In its stores, it sets up model apartments, kitchens, bedrooms, etc., to provide a real and fuss-free shopping experience.
There is no secret to what it does and how it does it, yet no other company has emerged as a competitor!
We recently met with Raj Lorenz, group chief executive officer GHL Systems Bhd, which is listed on the main market of Bursa Malaysia.
The company created waves in October 2013 when Creador, run by Brahmal Vasudevan, took a 20% stake and joined with Simon Loh to acquire ePay Asia Ltd in February 2014.
Loh had launched ePay in Malaysia years ago – in 1999, at the time the first company to offer online top-ups for prepaid phones through terminals in 7-Eleven and other retail outlets.
Loh today holds 38% of GHL and Brahmal’s Creador has 28%, and together they are redirecting the business of the merged entity.
GHL stock was trading at about RM0.25 for most of 2012-2013, peaked in May 2015 at RM1.24 and is now trading at the RM0.80 level. [RM1 = US$0.24 at current rates]
Whilst existing banking stocks are being hit by nervous investors, as a result of what we call the ‘Uberisation’ of the industry, there seems to be a lot of interest in online payment and settlement platforms.
The fintech (financial technology) sector continues to draw interest from investors. Internationally, Square Inc (founded 2009 and listing in 2015) has emerged as a credible competitor to PayPal.
There is also Dwolla Inc (founded 2008) and Stripe Inc (founded 2010), companies which are typically vying for customers who are not adequately served by traditional banks.
In China, the AliPay and Tencent payment platforms dominate the landscape. Apple, through Apple Pay, also wants a bigger slice of the payments market.
Banks, with their high cost structure and legacy systems, have struggled to reach down the pyramid, leaving the door open for these startups.
Another major factor supporting the growth of these startups in the United States is the open regulatory environment. Outside the United States, few countries offer much wiggle room as specific regulatory approval is required for initiatives like these.
Therefore the pace of change here is going to be slow – actually, very slow – giving local banks more time to adapt.
What is GHL trying to do?
The ‘entrepreneurisms’ necessary for successFor many years, GHL was selling credit-card terminals – the ones behind the checkout counters at most stores. It had a line of terminals from different suppliers, so as to get a match with the acquiring bank for the lowest fee.
This hardware sales terminal business, coupled with a failed expansion into China, left GHL with a weak business frame. In fact, it lost money for four straight years from 2008 to 2011, when it had a staggering loss of RM26.05 million.
Raj (pic) joined in September 2011 to lead the transformation, and according to him, “It took two years working with my team to get our +600 staff, who were so used to selling hardware terminals to banks and retailers, to understand we were now in the business of acquiring merchants off our own back.”
Pivoting the business meant developing a risk assessment capability, which Raj was familiar with, given his background with Citibank and then eNETS in Singapore.
“Risk assessment, fraud detection, and managing chargebacks were all new skill sets and functionalities that we developed inhouse – not without considerable investment and effort,” he said.
“We have returned to profitability, with good numbers growing year-on-year for three years now,” he added.
GHL is now a major player in Malaysia and the Philippines and a footprint across Asean (the Association of South-East Asian Nations), a feat it achieved with a focus on execution – or what we refer to as an ‘Energy-Action-Bias.’
Passion or competence?
The ‘entrepreneurisms’ necessary for successYou will probably have read quotes on this subject from Richard Branson (pic), who speaks a lot about the need to follow your passion. Quite rightly, Branson does not say that if you follow your passion you will be successful!
Ben Horowitz, cofounder of Andreessen-Horowitz, put this message across very eloquently at the 2015 Columbia University commencement address.
Horowitz makes a strong case for not following one’s passion, and says, “Has anybody ever watched American Idol? Just because you love singing doesn’t mean you should be a professional singer.”
Instead, one should focus on one’s competence, which is why Self-Efficacy and Realism are two of the 9Es.
Malaysia’s national ICT custodian Multimedia Development Corp (MDeC) recently arranged for us to meet some entrepreneurs, and we found that they have all stayed closely focused on the core competence of their founder or teams.
One such entrepreneur was Clement Loh, who started his career with NCR serving the banking sector, who recalls that his first job in the 1980s was to design a dragon, the logo for Hong Leong Bank which was to be displayed on its ATMs (automated teller machines).
“At the time, that was a really tough job and it took me a month,” he recalls.
Isn’t it remarkable that today, this exercise would take someone less than 10 minutes?
After working for several years, Loh felt burnt out and took a six-month sabbatical in South Africa: “I wanted to think about what to do next.”
Given his experience with banking systems and his network, it was logical to target this industry. He teamed up with his school buddy Joel Choo to found eProtea in 2000 and later Finexus, its outsourcing arm.
They started off by providing banks with software for their central bank reporting needs.
It has been 17 years and business continues to grow. They now offer a repertoire of banking solutions from card management and regulatory reporting, to ATM, POS (point of sale) switching, and payments.
Together, Loh and Choo own the company and have a staff of 250, of whom 70 are based outside Malaysia, providing banking solutions to almost all of the 60+ financial institutions in Malaysia. They also serve a number of other financial institutions in Asean.
When asked about where his perseverance comes from, Loh, a person of faith, says “on bended knees,” and this, he says, keeps him on the “straight and narrow” path.
Entrepreneurs and moral choices
Azrin Mohd Noor credits his upbringing for instilling in him the desire to succeed. His father, Mohd Noor Abdullah, a former Court of Appeal judge, inspired Azrin to work hard, stay focussed, and keep a high moral standing.
After obtaining a legal degree, Azrin spent his early years with Measat Broadcasting (now known as Astro) and was responsible for putting together its sports and game shows.
He went into business for himself, building Sedania Group from scratch. He listed Sedania Innovator Bhd in June 2015 on the ACE market of Bursa Malaysia.
Sedania offers airtime sharing, credit top-ups, transfers and requests via its mobile apps ShareShare, GreenBilling, MobileConcierge and As-Sidq, etc.
In conversation with Azrin, a spiritual person, he speaks of a transformative personal experience in performing his haj (pilgrimage) and the issue of morality in business. He says, “If you lose your ethics, your credibility is at stake. Make the right moral choices and take care of those around you.”
Not all entrepreneurs take this approach.
There are several stories of the ruthlessness of Bill Gates and the scheming mind of Steve Jobs.
Paul Allen, Microsoft cofounder, has been public in his criticism of Gates. He complained that when Steve Ballmer was hired by Gates in 1980, Ballmer was given more than the agreed number of shares.
Gates subsequently topped up Ballmer’s shares with his own. When Allen was scaling back time spent at work while receiving treatment for cancer, Gates wanted to buy him out on the cheap!
It was only when Steve Wozniak was shown the biography Steve Jobs by Walter Isaacson that he realised that Jobs had cheated him out of his share of the fee (and bonus) paid by Atari for a game he had developed.
Jobs also infamously denied he was the father of Lisa Nicole Brennan with on-off girlfriend Chrissan Brenan, and only reached a settlement with her prior to the Apple IPO (initial public offering).
Passion can lead to a killer instinct
The ‘entrepreneurisms’ necessary for successThere is no denying that Gates (pic) and Jobs were extremely passionate about promoting both personal and company interests. There was a passion to win!
The 2015 scandal over Volkswagen Group (VW) installing illegal software to control engine emissions in order to pass EPA (Environmental Protection Agency) standards is perhaps another illustration of a killer-instinct.
Did the ambition of being the ‘world’s No 1 automaker’ of chief executive officer Martin Winterkorn, and chairman of the Supervisory Board Ferdinand Piech, drive the heads of their R&D (research and development) teams to install illegal software in order to have a competitive car?
Winterkorn’s parting statement in September 2015 was: “I am shocked by the events of the past few days. Above all, I am stunned that misconduct on such a scale was possible in the Volkswagen Group.”
Was he, really? As an employee, his interests were not as closely aligned to the company as the entrepreneurs we spoke with, who have a huge part of their net wealth invested in their companies.
When management is driven by greed
Were VW’s leadership team driven by a killer-instinct or pure greed? We think the latter, but these are extreme examples of a killer instinct, or plain greed.
Typically, US entrepreneurs don’t get into a debate on morality, hence the comment by Malcolm Gladwell: “The greatest entrepreneurs are ‘amoral’ because they are completely single minded and obsessively-focused on the health of their enterprise.”
We will leave you to be the judge of this. However, it is comforting to know that our local entrepreneurs have a clear sense of right and wrong, and have said, “When it becomes about money, that’s the end of entrepreneurship.”
Anwar Jumabhoy & Srikrishna Vadrevu are passionate about bringing entrepreneurship into large companies through the adoption of the ‘nine entrepreneurisms’ which they have identified. Their book, Beyond Corporate Entrepreneurship, is due to be released in 2016. #9entrepreneurisms
Related Stories:
Startup slugfest: Business model vs business ‘frame’
How to prevent Volkswagen-like scandals in the future
Moral character wins in business too
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