Thomas Edison once said that he had not failed, but just found 10,000 ways that didn’t work. He also said that he didn’t want to invent anything that wouldn’t sell, because sales are proof of utility, and utility is success. express hr
Upwardly mobile entrepreneurs start enterprises to transform innovative ideas into products and/or services that are attractive in large markets. One reason for doing so is to create wealth. Another reason is to make a statement by creating a product and/or service that delivers value and makes a difference in the marketplace. Yet another reason is to make a contribution to society and leave a legacy regardless of whether they create wealth for themselves or not.
High-tech enterprises usually have to be upwardly mobile. This is because the capital requirements for product, market, and infrastructure development require large markets that have enough critical mass to generate a return on investment. It is hard to generate a basic income from an upwardly mobile enterprise in the emerging and growth stages unless the idea is so compelling that it can attract capital to fuel growth early on.
Over the long haul, upwardly mobile enterprises can generate significant wealth as demonstrated by the energy providers, such as Exxon Mobil and Royal Dutch Shell. However, they can have downturns too as demonstrated in the automotive industry by Chrysler, Ford, and General Motors. Coca-Cola is an upwardly mobile enterprise with hugh brand equity.
Some upwardly mobile enterprises are unable to reach large markets but default to becoming lifestyle enterprises in a scaled down form.
Many lifestyle entrepreneurs and owners either start or acquire enterprises to provide a basic income to sustain themselves. This is a risky approach unless the owner puts the customers’ wants and needs ahead of their own, and has sufficient working capital to survive until the enterprise makes a profit, if at all. These enterprises are found on Main Street as automotive body and repair shops, gas stations, restaurants, retail stores, and service providers. Many famous names such as Albertsons, Kroger, Macy’s, Marriott, Walgreens, and Wal-Mart began as lifestyle enterprises.
Without attractive products and/or services, building empires of enterprises is a waste of capital, as is building enterprises on hope – it takes a compelling value proposition to achieve product and enterprise institutionalization, although convenience and quality of service can be differentiators also.
A lifestyle enterprise can migrate to an upwardly mobile enterprise if there is demand for its products and/or services in multiple markets. Franchising provides a way of transforming a lifestyle enterprise into an upwardly mobile by applying the duplicable principle to enable expansion in multiple markets. Kentucky Fried Chicken, Holiday Inn, and McDonald’s reached multiple markets in this way.
Whatever the approach, founding entrepreneurs and owners strive to see their products and/or services and enterprises become permanent features of society, and to earn a return on their investment of time and money. Ideally the enterprise will become sustainable over time. Permanence is a condition of lasting indefinitely, but not necessarily forever.
Products and/or services become institutionalized within society or in a community over time if customers in the marketplace adopt, use, and rely upon them on an ongoing basis, regardless of the effort to promote them. If the products and/or services become institutionalized, then the enterprise that produces and sells them becomes institutionalized too. If not, the products and/or services and the enterprise will eventually blend into the background. For example, products from Campbell’s, Colgate-Palmolive, Heinz, Johnson & Johnson, Procter & Gamble, and Unilever are institutionalized, as are the enterprises themselves.