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10 - Journeys of Entrepreneurship

In this chapter, the authors intend to present a three scenarios to illustrate the ways in which the entrepreneurial angles described in theprevious chapter "may be enacted" in three different industries (publishing, fashion, and video games).

In this chapter, the authors intend to present a three scenarios to illustrate the ways in which the entrepreneurial angles described in theprevious chapter

Conceded, that these three products are all "cultural" artifacts, they do not serve any functional need, consumer tastes are more influential than objective functional characteristics, there are many suppliers in the market, demand is highly elastic, and launching a new product is very risky.

However, they are also industries in which there is a delicate balance between creativity and marketability: a high degree of creativity is needed in order to be commercially successful, but works that are too unconventional or unfamiliar fail to gain acceptance by consumers.

Writing: Nick Hornby

The authors focus on Nick Hornby as a successful writer. In particular, Hornby is frank about the creative process: story ideas are everywhere, constantly presenting themselves to him, and he feels that the key to his success lies in the ability to choose which ideas to pursue and which to abandon.

It's notable that his first work was an anthology of contemporary fiction written by other writers. In selecting stories for the collection, Hornby began to recognize the qualities that made these writers popular with readers. He also recognized that there was a huge gap in the 1980s between literature (quality writing that was a bit to advanced for the average reader) and popular fiction (which was banal fluff) with nothing in between.

He suspected that this represented a massive opportunity to provide books for people of slightly above-average intelligence. He shared this observation with "various people" including executives in the entertainment industry and casual friends, some of whom seemed to agree with his assessment that there was demand, whereas others regarded the idea as too unusual - there was not an established genre, nor marketing mechanisms already in place to sell that sort of thing.

Hornby was "irritated" by the notion that great artists don't care about being commercially successful. The point of art is not to produce an artifact, but to deliver an experience to an audience. An artist who stows his paintings in a closet is just a dabbler, and a writer whose work is never read is wasting his time. But on the other hand, "art" that is dictated by market research fails to impress: it sells as vapid dime-store potboilers, but is not by any means worth pursuing for any reason other than to make money from consumers of little intelligence and even less taste, which is not motivating.

Ultimately, he went with his judgment, working part-time on writing his novel in case the idea didn't work out. His work received success and critical acclaim, to the point that other writers who rode his coattails and produced quality contemporary fiction are generally referred to as being Hornby-esque. He also recognizes that, now that he has made a name for himself, he can take more liberties and does not need to be overly concerned with the market's tastes, but can never completely dismiss the importance of remaining appealing to his readers.

Lessons that Entrepreneurs can learn from this example:

• Be observant to the markets - It is easier to succeed by identifying a need and building a product to serve it than to build a product and then go out looking for needs
• Trust your intuition - A new idea will get mixed reviews. While you should not ignore words of caution, nether should you capitulate (EN: I'd suggest probing at the reasons people react in a certain way and disregarding unsubstantiated opinions, both positive and negative)
• Know your limits - A writer cannot possibly knock out a novel for every idea that strays through his head, nor can an entrepreneur develop every product idea he has.
• Diligence first - To be successful as a dilettante, you must first know the rules to have a sense of which can be bent, which can be broken, and which must be obeyed.
• Success grants latitude - Once you have achieved success and established a name for yourself, you can branch out further. Until you have done so, you need to be cautious.

Fashion: New Zealand

The emergence of New Zealand in the fashion industry came as quite a shock: people who had visited the island nation often remarked on the complete lack of fashion sense, wearing clothing that were not only drab and utilitarian, but utterly disgraceful. And yet, in the past ten years the NZ fashion industry has burst onto the scene, with more than fifty labels that sell domestically and abroad.

One designer credits the remoteness of the NZ market to its success - which was also the reason for its previous absence. People in NZ wore drab clothing because they were not exposed to mass market labels or the world fashion trend - and the same lack of exposure leaves their designers free to experiment and ignore the mass market, and adopt a "different, quite edgy style."

Another characteristic of the NZ market is a wide range of consumer preferences. Previously, this led to clothing being commoditized to the lowest common denominator. Since its rebirth, it has enabled the domestic designers to be highly specialized. Unlike those in more established markets, there are no common set of themes or seasonal color schemes that all designers adopt.

A third aspect is globalization and the diversity of markets. On a worldwide basis, consumers are becoming more daring and creative - people use their clothing not as a way to conform to groups, but express themselves as individuals. And with individuality running rampant, virtually any designer can find an audience that appreciates his work. This allows for dilettantism with very little need for diligence, though practical concerns cannot be altogether abandoned - even people who want to be "individuals" will not accept anything: they want to look distinctive, not ridiculous.

And finally, NZ fashion houses tend to be small. Unlike the mass market, they do not need to produce in massive quantity, but can produce in smaller quantities and still be profitable, such that the price of a failed experiment is modest and absorbable, provided that failures remain relatively few.

As such, designers in the NZ industry focus on finding "deep niches" in the market, to create items that are highly creative and unusual, but which will have some appeal to small numbers of consumers.

There's some description of the productive process, which is assumed to take a different perspective. It's suggested that most design approaches start with a prototype and assume it to be flawed, needing perfection. The NZ process starts with a prototype and assumes it to be successful, chancing only what is needed to make it viable, not perfect.

Some lessons for entrepreneurs are listed:

• Innovation sets boundaries for creativity. Especially in the NZ market, the first priority is that clothing must be comfortable and functional, with visual appeal being second
• Diligence is in the details. The difference between a garment that will flop and one that will succeed is often quite small. Wild ideas should be adapted rather than abandoned.
• Consider the full experience. A garment is worn in daily life to make an impression, but it will not get an opportunity to do so if the customer has a bad "fitting room" experience.

Video Gaming: Codemasters

The video gaming industry has grown up quickly, with the most recent titles being far more sophisticated in graphics, game play, and technology than those of just a few years ago. In today's market, best-selling games have budgets similar to Hollywood movies and legions of designers and programmers.

Codemasters is a British game studio that started with two brothers in their home, and eventually moved to a converted cow shed, and presently is a firm with international offices and a full-time staff of over 800 employees that has won awards for innovative software.

The firm specializes in simulation-based games and is infamous for its obsession with detail. As an example, one racing game includes subtle details such as leaves that swish about as the cars drive past - which sounds simple until you consider that a track may have 5,000 leaf "objects" whose behavior must be programmed. This does not mean the company is chained to reality, but cedes to player expectations (e.g., it would not be feasible for a soldier to jog around a battlefield carrying a rocket launcher and several rounds of ammunition, but it is what players expect).

The developers and designers are so obsessive that the lead designer must often argue in favor of less detail, or finding more efficient ways to do things. It's an interesting contrast that the firm is one of few gaming companies to use its own "engine" (game development platform) rather than buying an engine from another shop. This means that the each time the developers find a better or more efficient way of doing things, it is transferrable to other games built on the same platform. Game designers can then focus on higher level concerns (the theme, the story, the elements of play) that shape the experience of the consumer without being bogged down in the nuts and bolts details.

In the authors' terms, the game designer is the "dilettante" and the game developer is the "diligent," though in the culture of this firm, the diligent are also highly flexible to achieving the desires of the dilettante rather than insisting they constrain their vision to what is already possible.

Another unusual characteristic of Codemasters is that the firm has attempted to keep the "cow shed" culture in which people share ideas freely and collaborate, as opposed to a rigid bureaucracy in which communication is stifled by buffers and collaboration is undermined by departmental agendas. Even though employees become highly specialized, cooperation is critical to achieving overall success.

Some lessons for entrepreneurs:

• Focus on the customer. Especially in highly technical industries, focus shifts to a product-oriented perspective and geeks can become obsessive about details the customer won't even notice.
• Don't overcomplicate. Diligent people have a tendency to heap onto a problem, and need to be mitigated by dilettantes who can simplify it.
• Communicate and Collaborate. Division and specialization of labor can likewise lead to conflicts and disagreements that are ultimately counterproductive.
• Accept Ignorance. Particularly in technology, people cannot be experts in everything and must accept the limitations of their expertise and defer to others. For a non-expert to assume that something is easy or difficult disqualifies much of what is actually possible.

General Remarks

Having explored the three different cases, the authors make some general observations of common features.

• In all instances, creative vision is balanced against the constraints of reality and the desires of the market - albeit to differing degrees.
• Being creative requires taking risks, but the budget for failure is not infinite, so risks should be realistically mitigated, without squelching innovation altogether
• Creativity is not the demesne of lone geniuses working in isolation, but arises from communication and collaboration of many people with diverse skills
• At the highest level, leadership coordinates and supports expertise and encourages people to apply their skills and knowledge in a way that is focused on achieving an outcome