ENT 101

Developing an entrepreneurial mindset

C. Chris OfonyeluDepartment of Economics, AAUA

May 7, 2015.

“When you determine what you want, you have made the most important

decision of your life. You have to know what you want in order to

attain it.” Douglas Lurton

PreambleIn the recent study by the Federal Ministry of

Education, it was found that:53% of Graduates in Nigeria are currently

unemployed;30% of Graduates are underemployed3% are running a business (self employed)69% of the Graduates give “there is no job” as

their major reasons for being unemployed.In the Western world:90% of them aspire for self-fulfillment, self-

accomplishment, self-achievement and self-reliance.

Unemployment has become a reality in Nigeria and is a world problem

Entrepreneurship is a vision to solving this malaise

Being an entrepreneur implies identifying opportunity related to needs satisfaction and converting the need to economic value

In effect, such activities must contribute positively to the society

• In general, successful entrepreneur have a positive image about themselves and have a ‘can-do’ spirit.

• The associated characteristics traits of successful entrepreneurs includes goal orientation, self confidence, ambition, delay of gratification, hard work, acceptance of responsibility, versatile and technical competence.

• In Rick Warren Purpose-Driven Life, these traits were summarized as SHAPE, meaning:

S – Spiritual gifting – your supernatural giftsH – Heart – what you have passion forA – Ability – what you can do better than other

people P – Personality – extrovert or introvert, intuitive or

factual, feeling or judging, etc. E – Experience – something from your background,

family, education, culture, etc.

“The simple man adapts himself to the world; the entrepreneur adopts the world to

himself.”

Life will not give you what you deserve but what you ask for. Thus, you have to demand for it

The place does not make you but you make the place.

The tone in these quotes derive from the mindset.

• In this, where the ordinary person perceives a problem, the entrepreneur sees an opportunity to add value and make profit.

The mindset of an entrepreneur can be seen in the following short stories.

Two sales men were sent to a very remote and backward country to sell shoes. On getting there, each saw the inhabitants walking around on bare feet. For the two salesmen, it was different reactions. For one, “there is no market for shoes here, because the people walk around on bare feet”. But for the other, there is an unlimited demand because everyone in the country needs a pair of shoes”. What is inherent in this story is that the second salesman has the SHAPE of an entrepreneur but this is lacking in the first.

Kola Ibitolu and Tope Akiolu were both graduates of University of Ibadan from Economics and Sociology Departments respectively. Both happen attended a job interview around the popular bank street of Lagos. Having waited four hours for in the huge crowd invited for the eleven openings of the bank, they became tired, and were hungry. So Kola went out for food but Tope remained in order not to miss the interview in case it becomes his turn so soon. In the course of searching for a nearby restaurant, Kola discovered the closest was over 500 meters away from the mainland. So, while eating at the restaurant, an idea came to him of the hurdles the workers around would have been passing through every day to take their lunch. Motivated by the need, he never returned to the interview and went to procure an open van which he turned to a mobile restaurant. That action was his hit. Today, he has three of such outlets and Tope though did the interview but was not still not employed till date.

o Another equally interesting story goes like this:While enjoying a vacation in Florida, Dr. Hauck wondered about the sand on the beaches where he sat. At night he took a mineral light out to explore and saw an interesting fluorescence. He decided to ship samples off to a lab and discovered it contained important elements for atomic use. He used his connections in Washington D.C. to get permission to mine the sands along the east coast of Florida which provided him with hafnium, a metallic element which is used for control rods, the safety valves for nuclear reactors. Others sat on the sand too, but they just didn't ask themselves any questions!

- culled from Bamiro (2014)

• It is the perception of opportunity by entrepreneur that has led to one of the traditional definitions of the entrepreneur as creative and innovative.

• It is commonly thought that the entrepreneur’s creativity leads him to breaking new grounds by doing new things or to discovering an innovative way of doing what other people are already doing.

Some FactsIn Nigeria, the majority of (young) entrepreneurs

source their start-up finance from family and friendsE.g. Dangote started with a N200,000 loan from his uncle (Sanusi Abdulkadir) at age 21 in 1978.Folu Ayeni started with personal saving of N15000 in 1997 by the wife to start the tantalizer business

The ability to secure finance depend on the viability of the intended business and how creditors are convinced to want to share in the risk of the venture

The list of wet blanket ideas from Bamiro (2014) will captivate us:

• Drill for oil? You mean drill into the ground to try and find oil? You’re crazy.” Drillers who Edwin L. Drake tried to enlist to his project to drill for oil in 1959.

• “This ‘telephone’ has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.” Western Union internal memo, 1876.

• “The wireless music box has no imaginable commercial value. Who would pay for a message sent to nobody in particular?” David Sarnoff’s associates in response to his urgings for investment in the radio in the 1920’s.

• “The concept is interesting and well-formed, but in order to earn better than a ‘C,’ the idea must be feasible”. A Yale University management professor in response to Fred Smith’s paper proposing reliable overnight delivery service. Smith went on to found Federal Express Corp.

• “Who the hell wants to hear actors talk?” H.M. Warner, Warner Brothers, 1927.

• “We don’t like their sound and Guitar Music is on way out”. Decca Recording Co. rejecting the Beatles,1962.

• “Heavier than air flying machines are impossible”. Lord Kelvin, president, Royal Society, 1895.

• “If I had thought about it, I wouldn’t have done the experiment. The literature was full of examples that you can’t do this”. Spencer Silva on the work that led to the unique adhesives for 3-M “post-it” Notepads.

• “Professor Goddard does not know the relation between action and reaction and the need to have something better than a vacuum against which to react. He seems to lack the basic knowledge ladled out in high schools.” 1921 New York Times editorial about Robert Goddard’s revolutionary rocket work.

• “You want to have consistent an uniform muscle development across all of your muscles? It can’t be done. It’s just a fact of life. You just have to accept inconsistent muscle development as an unalterable condition of weight training.” Response to Arthur Jones, who solved the unsolvable problem by inventing Nautilus.

• “I think there’s a world market for about five computers.” Thomas J Watson, Chairman of the Board, IBM.

• “The bomb will never go off. I speak as an expert in explosives.” Admiral William Leahy, US Atomic Bomb Project. [And, of course, the bombs more than went off!]

• “Airplanes are interesting toys but of no military value.” Marechal Ferdinand Foch, Professor of Strategy, Ecole Superieure de Guerre.

• “Man will never reach the moon regardless of all future scientific advances.” Dr. Lee De Forest, inventor of the vacuum tube and the father of television.

• “Everything that can be invented has been invented.” Charles H. Duell, Commissioner, US office of patents, 1899.

• A major lesson from the first story is that the second salesman saw the opportunity the first never saw.

• A successful entrepreneur has a clear and communicable vision of the opportunity he wants to create or exploit.

• When the two salesmen got to the field, the mindset of the first saw disappointment while the second saw opportunity.

• In the second story, Kola saw the opportunity and pursued it but Tope was held to a no risk venture. No risk, no venture, no success.

In AAUA, I look forward to a time, when students with interest in transport would walk up to the Vice Chancellor to sign a 10-year contract to manage the transport system of the University:

Acquire good spacious buses to fleet the campus in the short term and save students from the stress of long waiting and queuing time losses.

These rooks around the university have limited our landmass, and constitute a structural constraint to our expansion. Thus, we need innovation to unbound this limitation

I look forward to the time when students after undergoing this course would walk up to the Vice Chancellor with ideas on how to level these rocks, and transform the chippings to inestimable wealth.

The rocks have wealth content – minerals components of economic values

I look forward to when this campus would take charge of her markets – in pure water, baking, graduation gowns, servicing of vehicles, printing press, etc, in a PP arrangement

• The novelty with which Ekiti State Governor, Ayo Fayose possessed the minds (votes) of the electorates to delivery the majority votes to him in 2015 general election is still very green. This feat could not have been without from a talented ‘political innovator’

• This same innovations have moved the likes of Pastors Adeboye, Kumuyi, Olukoya, Bishop Oyedepo, and Fr. Mbaka to swelling the ranks of Christianity in Nigeria and sustaining spiritual exploits against the occult alters of darkness in the country.

What is Entrepreneurial mindset ? A specific state of mind which orientates human

conduct towards entrepreneurial activities and outcomes

A mindset that draws individual to seeing opportunities in disappointments; and innovation and/or new value creation in the existing status quo

The mind set that is unsatisfied with the existing equilibrium and seeks to destroy it and impose a higher one, that is more beneficial/profitable to all

The mind set that is creative, innovative and value enhancing is the referred to here.- It is the passion within that fans the flame of entrepreneurship to limelight.

The succeeding table highlight the activity level of entrepreneurial motivations in Nigeria.

Primarily, most entrepreneurial set up are motivated by the need to improve opportunity and/or out of necessity.

In the developed worlds, about 10% of the population chooses to become entrepreneurs rather than seek employment (Karnani (2007)).

Bianchi (2007) suggests that in economically developed countries people tend to become entrepreneurs by choice, while in the poor economies people start businesses out of necessity, owing to the lack of employment opportunities.

The implication is that with economic development the share of entrepreneurs in the economically active population is likely to decrease as those who were forced to run small businesses find better jobs.

Why an entrepreneurship Mindset?Life does not give you what you deserve but

what you ask for; having an entrepreneurial mindset enables you to take much from life.

The simple man adapts himself to the world; the man of value adapts the world to himself. All of the world progress depends on the man of value.

- the man of value here is the entrepreneur, and it is the mindset that thermostats the world

around him.

What are the benefits of acquiring entrepreneurial mindset?

The entrepreneurship in an enterprise is in the ability of the initiator to nurture it into survival and long term existence by adapting to new innovations and developments.

The key benefit of entrepreneurial mindset to new entrants is on proper focusing

While passion may lead you to start your own business, it is your commitment that will keep you going and allow you to persevere through the difficult times ahead.These two case studies would suffice:

The case of a local entrepreneur Christian Ofonyelu, a local manufacturer of bread-

buns/chinchin/pie. Began in Ikare in 1994 with less than N20,000. Total, duplicated in Anambra and River states, with assets deep in million over a ten-year span and presently employs has a staff strength of over 200 workers across the states

The case of a state entrepreneur Innoson Chukwuma, from a local auto/motorcycle

spare part seller, to a manufacturer of motorcycle and vehicle in Nnewi, Anambra state.

Business failure is not shameful, but provides rich lessons for entrepreneur

This list of 15 Nigerian entrepreneurs that never finished school would be helpful in seeing the heights attained by these entrepreneurs become they had the right mindset.

Late Alhaji Alhassan Dantata – Kolanut trader. He was the wealthiest man in West Africa during his time. He started the Dantata dynasty and his descendants are some of the richest people in Nigeria (Dangote / Dantata family).

Olorogun Michael Ibru – founder of the Ibru Organization and head of one of the richest family in Nigeria.

Orji Uzor Kalu – billionaire founder of Slok Group. He was rusticated from university for his participation in a student protest. Though he was later granted Amnesty by the school authority, he rejected it and chose to become an entrepreneur.

High Chief Olu Benson Lulu Briggs – silent billionaire founder of Moni Pulo.

Femi Otedola – Chairman of Forte Oil, SeaForce, etc (largest diesel importer in Nigeria, also owns the largest fleet of ships)

Rasaq Okoya – founder of Eleganza Group. Did not attend university

Cosmos Maduka – founder of Coscharis Group (sole distributor of BMW vehicles in West Africa), dropped out of elementary school

Cletus Madubugwu Ibeto – founder of the Ibeto Group (Petrochemicals, Cement manufacturing)

Innocent Ifediaso Chukwuma – Founder of Innoson Group, manufacturers of IVM motors and Innoson Plastics

Sir Tony Ezenna – CEO of Orange Drugs, Inherited a patent shop from his father and grew it into a conglomerate.

Vincent Obianodo – founder, The Young Shall Grow Motors (the largest transport company in Nigeria), RockView Hotels.

Emmanuel Isichei Ugochukwo Ojei – Nuel Ojei Holdings LTD (Sole distributor of Mazda, Nuel Autos, Emo Oil). Did not attend university

Ladi Delano – CEO of Bakrie Delano, (a $1billion investment firm). Did not attend high institution

Bode Akindele – (Modandola Group). Did not attend high institution.

Michael Collins Ifeanyi Enebeli Ajereh (aka Don Jazzy) – famous music producer and co-founder of defunct Mo’Hits Records. Now CEO of Marvin Records. Dropped out of Ambrose Ali University Ekpoma after his first year.

Mrs Folorunsho Alakija – (Famfa Oil) – Richest woman in Africa, did not attend university.

Concluding Remarks• Developing an entrepreneurial mind set

begins with

. Learning how to create ideas and figuring out how to communicate our idea.

. Weber (1930) and Schumpeter (1974) have observed that entrepreneurship are more appreciated during economic depression than in booms.

The future wealth of Nigeria will rest in the hands of men who possess the entrepreneurial mindset.

Thank you!Question and Answers