shark Tank Startup tips Startups

Are You Creating a Startup or a Hobby?

Time after time, fans of TV’s Shark Tank have seen Mark Cuban and the other sharks question whether a presenter is actually pursuing a hobby rather than starting a business. In seven years of helping veterans with their startup ideas, I’ve run across several aspiring entrepreneurs who confused the two.

One was John Foxtrot (name disguised). John had twice served in combat zones. He was a very skilled first responder and seemed to do best when the situation was at its worst. John started every morning with a bagel for breakfast and was well known among his friends as a bagel lover.

After reading a magazine article on independent bagel shops, John decided to open one in his hometown, despite having no background in food service or retailing. John believed that his love of bagels and his sheer force of willpower would lead him to success.

John’s plan was a disaster in the making. He lacked the needed skill base to become a successful ‘bagel-preneur.’ John could have bridged this gap by pursuing a bagel franchise such as Einstein Bros. because franchisors train their franchisees how to run a business. But John’s fierce independent streak made him insistent on ‘going it alone.’ Worse yet, John was ignoring the unique and rare capabilities that he possessed. His crisis management skills would be of little use in a tame business setting like bagel making, but they could provide him with a competitive advantage in a setting where such skills are critical, such as an ambulance service.

In sharp contrast to John Foxtrot is Jasmine Echo. Jasmine was an expert in logistics. After 10 years of running a supply shop for her unit and coordinating all aspects of international distribution from air to land to sea, she was ready to hang up her combat boots. As she considered how to leverage her extensive experience and love of logistics, she thought about going to work for a major shipping company until she read a magazine on franchising. She noticed that a national retail logistics company was offering to waive the franchise fee for veterans. Her expertise made her very qualified to run such a business.

The main lesson here is that simply having a passion for an activity will not allow a person to build a successful business around that activity. Luckily, most people have more than one interest. Building a business around a passion that is also accompanied by the needed business skills is a great way to go. Jasmine Echo was fortunate in this regard because she enjoyed logistics and had extensive logistics skills. In John Foxtrot’s case, making doughy treats in his spare time would have been the wisest way to satisfy his passion for bagels.

 

This article is adapted from Blass, F.R. & Ketchen, D.J. 2014. So, you want to be an entrepreneur? Lessons from the Entrepreneurship Bootcamp for Veterans with Disabilities. Business Horizons, 57, 5-9.