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So You Want to Be an Entrepreneur?

The goal of the Paul J. ’69 and Kathleen M. Severino Center for Technological Entrepreneurship at Rensselaer is to promote entrepreneurial activity intended to create and develop new technologies. In U.S. society, an idealized version romanticizes entrepreneurs. It seems to jump right past the hard work most have to take long before they achieve success.  Several elements have to come together to launch a new technology-based business. Let’s focus on physical products that you can hold in your hand. The requirements go something like this:

  • To start, find someone who knows something about technology, whether it is engineering or science or computer science, preferably someone who knows a lot about it
  • Generate the right idea at the right time and translate it into the right design
  • Turn it into the right product with the right features that will respond to a need customers have, whether or not they know it
  • Talk to potential customers to see if it interests them
  • Usually, having found that they do not want what you present them but they might go for something related to it, develop the right revised idea for a product and take it back to potential customers to see if the new approach is more attractive
  • If it is, prototype it to get a feel for what it would take to make it
  • Take what you learn from prototyping to determine how to manufacture it for the right cost
  • Figure out how to let potential customers know it exists
  • If it seems like there may be customers, find the right channels to distribute it
  • Identify people willing to distribute it
  • Get purchasing agents at retail or e-tail stores to agree to sell it
  • In retail outlets, make sure it is displayed prominently enough so that people can see it, which means designing attractive packaging to catch people’s eye, so:
  1. Get someone to create the design
  2. Find a company to produce it
  3. Find some entity to put your product into the packaging
  • Somewhere along the way, figure out how much to charge
  • If people start to buy it, develop ways of dealing with issues they may have, like how to handle returns and where to send them (if anywhere) and how
  • If you need help, determine how to find people with the skills you need
  • Find out if they are willing to work for the amount you can afford to pay
  • Figure out how to pay them

Which gets us to an indispensable ingredient, the money to finance all of these steps.  For that:

  1. Figure out where it is going to come from

If you cannot afford to pay for all of it yourself, where will you find the money?

  • Are friends or family willing to lend it to you?
  • Is the bank willing to give you a second mortgage on your home? 
  • Will the bank itself agree to lend it to you? 
  • Are there other sources of finance to tap? 
  • If so, how much interest are you willing or able to pay on the money lent you?
  • How do you even know how much interest you can bear?

Find someone with the financial acumen to track the entire process, follow the amounts of money you are spending at each step, then let you know whether you have enough to pay the bills.

This list makes it seem like a sequential process with one step then leading neatly into the next. In actuality, the activities spill into each other, which means among other things that anyone looking for a nine-to-five job should look elsewhere. And my apologies to entrepreneurs for leaving so many things out. For example, I did not even get into deciding what legal entity your business should be, how to register it, how to insure it, and a host of other such issues. Anyway, you get the idea.  Still think entrepreneurship is glamorous?

Dr. Thomas Begley is dean of the Lally School of Management at Rensselaer Polytechnic Institute.