Sunday, November 21, 2010

250. An English Literature graduate

I felt that this English literature graduate in her 30s must have loved literature in order to study this subject in her university. A vet must love veterinary medicine to study this subject and then become a real vet. However this literature graduate did not practise her craft in the sense that I would expect her to write and author books. She has no children and so would have much more time than those successful authors. I guess she has no motivation or passion.

Passion is important but will not sustain you in being successful. Without passion, you will not need be successful.

I refer to an article written by Mr Ho Kwon Ping, Executive Chairman, Banyan Tree Holdings Limited in the Straits Times, Nov 15, 2010 Page B11 - Our new generation of entrepreneurs - can they make it big?

He said that passion is necessary but will not be a sufficient attribute for success. Cash flow is the highest priority in an enterprise and that comes from long hours of hard work if the start up does not fail. If it succeeds, how do you scale up your business to become global?

It is well known that less than 20% of start ups will succeed. This failure rate of 80% is especially true in a free and competitive economy of Singapore. Nobody can predict which start up will succeed or fail. First ventures are seldom successful and the entrepreneur needs to use this failure as a learning lesson.

1. Does sustainability when successful depend on scalability? "The search for scalability is the holy grail of entrepreneurs," Mr Ho wrote. Therefore successful small business must leave Singapore which is a very small domestic market and into the streets.

2. Street-smarts - whatever they mean, is another important attribute for sustainability. IPC, a computer company and Creative Technology are 2 examples of early successes which could not be sustained overseas. Yeo Hiap Seng and Osim acquired a seafood canning company and consumer gifts chain respectively but had written off their investment. Niche markets may be successful as in Coffeemix in West Asia, Breadtalk and some foodcourt operators in China and Asian shopping malls. Olam is being a bridge using their supply chain expertise in commodity processing to bring commodities from the developing world to developed markets.

Find a niche to excel and focus on innovations as product life spans are short in information technology or consumer products which are dominated by global giants where scale is critical.

To globalise, change your mindset by not comparing things done in Singapore. Respect and promote a culture of diversity to be resilient when you manage externai businesses.

No destination but a journey. Size and success in a business can dissppear quickly due to lak of attention and hubris. One-trick companies don't succeed in the long term.

In reply to the question in the essay, Mr Ho said that our entrepreneurs can make it big but only a few of them. Practice makes perfect and failure begets sucess.

Sometimes, it may just be better to be an employee, in my opinion as enterprises have a high failure rate even though they are successful. A small number of vet surgeries have had closed down but more than 40 have been opened in recent years. It will take a long time to succeed. There is no short cut in any enterprise.

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