Did you know that 305 million startups are created every year globally? This is an exciting number for entrepreneurship. However, 70 percent of these startups will fail, and many are started with the primary intention of cashing out. So, how do we bring back what I believe is the true heart of entrepreneurship?
In this blog, I want to talk about the concept of sustainable entrepreneurship.
Sustainable entrepreneurship comes through a better understanding of the impact of the two fundamentals of entrepreneurship: Identifying the opportunity and developing a solution, and securing the right resources to deliver the solution.
Identifying The Opportunity:
I started my career as a medical doctor, which automatically aligned me with the healthcare industry. My initial field of work was delivering primary care. Understanding the dynamics of how care was delivered and how it was paid for influenced how I treated my patients. This meant that I was practicing what we call patient-centered care or human-centered care, involving a number of things, including the financial aspect of care delivery. As we all know, health is wealth, and the wealth of our nation is in trouble because we are currently facing a suboptimal life expectancy status.
The U.S. spends the most on health care in the world, and yet our general mortality is rising, with a suboptimal life expectancy. We have a lack of socio-economic responsiveness – the electronic records systems do not properly capture useful data about the patient/individual on poverty, racism, distrust of the medical system, or fracturing of social networks that impact people’s health.
Value based care became my area of expertise after years of working in the managed care space. From this experience, I understood what the issues were with the gaps in human-centered care. After working in Fortune 100 healthcare companies, I founded my 1st company – Medicalincs – which aimed to provide solutions to these gaps in patient-centered healthcare.
Medicalincs is an example of identifying an opportunity and using my own field of expertise to develop a solution.
Securing the Right Resources to Deliver the Solution
Even with a great solution to a known problem, a business cannot succeed without being properly resourced, tying into a need for investors – Venture Capitalists (VC), Private Equity (PE), and loans. Some studies show that small businesses that do not have VC or PE backing are not seeing the same business growth as businesses that do.
Current trends in VC funding show the importance of discernment when choosing financial backing. These trends show a significant increase in investments in later stage businesses (about $30M deal size) than in early ($8M) and seed stage ($1.3M). Why do VCs invest more in later stage businesses, and what does this tell us?
VCs (as expected) need to be mindful of the business risk that comes with seed stage businesses, so they tend toward backing businesses that have shown they have sustained revenue generation and most aspects, sustained profit margins. The problem is that this often excludes micro and small businesses from getting started or scaling.
Although VC funding is needed to water the garden of entrepreneurship, the issue we have is how much of the fruit of the garden a VC wants back as a return on its investment. If this is strictly about cashing in, then the core of entrepreneurship begins to lose its meaning.
This trend leads entrepreneurs to start businesses with the primary intention of selling– as opposed to starting a business that identifies real problems and builds human-centered solutions. Now, having an exit strategy is a great idea, but the foundation of the business start up should be the human-centered solution it offers.
Becoming Sculpted & Entrepreneurship
The opportunity we have now is to re-focus on human-centeredness and look to solve real problems. In my book coming out early next year, I discuss the phenomenon of being Sculpted. By this, I mean – becoming an entrepreneur (or professional) that focuses on sustainable solutions and impact. This is not based on wishful thinking or happenstance – it is intentional, and it is built on a solid foundation. My book highlights the four (4) key dimensions you need to sculpt your way through to becoming a successful executive and entrepreneur – I call it the Sculpture GEMS framework:
- Get clear about “Who” you are as a human
- Explore the “Multidimensions” of you
- Mold your dimensions Cohesively
- Sculpt your way to “Sustainable Success”
Our moral compass is honed using this framework and becomes a vital stimulant for human-centered entrepreneurship. This also helps to determine a compatible VC partner or resource-source partner who shares that mission of sustaining the heart of entrepreneurship and solving real world issues.
Despite some unfavorable trends in business startups, we all have the opportunity to identify needed gaps in the world, offer solutions, and find the right investment partners to come alongside and make those solutions possible. To learn more about how I have strived for sustainable entrepreneurship in my life, you can keep an eye out for my book’s release or check out my other resources at nkemmd.com