The Constituents of
Entrepreneurial Success
Eugene Pienaar
2015/02/13
USB Executive Development, PO Box 610, Bellville 7535
www.usb-ed.com
Author
Eugene Pienaar
Bio
Eugene Pienaar is a Cum Laude MBA alumnus of the university of Stellenbosch business school. He is
an entrepreneur with multiple successful businesses. He currently owns and manages 3 Rawson
Properties franchises, a bridging finance company called EasyBridge as well as CryoLiving, the first
whole body Cryotherapy treatment facility in South Africa.
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Mr Eugene Brand Pienaar hereafter referred to as the researcher, supervised by Dr
John Morrison, wrote a report in December 2013 titled: “The most prevalent features
impacting on significant financial success amongst repeat entrepreneurs.” The
purpose of the research was to uncover the common denominators shared by
entrepreneurs who have reached exceptional levels of financial success through
their entrepreneurial endeavours.
In fact, the researcher interviewed ten entrepreneurs of which nine were from the
Western Cape Province and one from the United States of America. He investigated
the drivers to such success by considering and comparing attributes and
circumstances that contributed to these individuals’ success while maintaining
perspective of their complete story. The researcher found that all ten of the highly
successful entrepreneurs had three fundamental elements in common that jointly
created significant financial success. He found that those elements were dependent
of each other and could never create a high level of success in isolation.
The first element was financial potential of opportunity which refers to the attributes
and features of the business. This element includes four business features that offer
high financial returns and significant business growth. The first feature is referred to
as Blue Ocean strategy which translates into doing business in uncontested markets.
Entrepreneurs who make use of this feature often specialise in mature and
established industries and find ways to adjust their offerings to make their
competitors irrelevant. Other entrepreneurs make new products and services
available that doesn’t compete in the existing market. The second feature is referred
to as high potential market which translates into the fact that certain markets or
industries are financially more lucrative than the others. Achieving a low level of
market share in these industries could lead to significant and much higher financial
returns than achieving high levels of market share in less lucrative industries. The
third feature is referred to as annuity income which translates into business models
where every new client leads to an income stream for a certain period. The short
term return on investment of such a model is very low but on the long run it
accumulates to a significant life time value. The fourth and last feature of this
element is referred to as scalability which translates into a service’s or product’s
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ability to enter other geographic markets without incurring the additional
proportionate resource costs.
The second element was effectiveness of execution which also consists of four
features. These features together provide the know-how and abilities to execute the
required business specific activities. The first feature is knowledge enabler as it was
found that different kind of businesses required either field specific knowledge or
general business knowledge. The second feature is entrepreneurial skills which
include the ability to sell, new resource skill, leadership skills and innovation skills. All
ten entrepreneurs of this research agreed that these skills were of the greatest
importance which led to their financial success. It was however found that even
though these skills were critical to have within the business, the founder didn’t have
to possess them himself. The third feature is recruit talent which every single
entrepreneur stated to be the main reason of their success and some even stated it
is the most important task they have. The fourth and last feature of this element is
partner skill complement since a range of complementing knowledge and skills are
required to achieve success within a specific business. The two last features refer to
the notion of acquiring the appropriate knowledge and skills into a business or
partnering with the correct individuals.
The third and final element was extent of entrepreneurial action which translates into
the motivational drive entrepreneurs have to pursue opportunities but also
specifically refers to the actual action that they take to achieve their entrepreneurial
goals. This element includes three features of which the first one is called
entrepreneurial drive which is the motivational drive causing individuals to pursue
entrepreneurial opportunities and is at the heart of entrepreneurial success. The
second feature is emotion-driven entrepreneurship and refers to the drive individuals
have due to certain emotions that bring them into the role of the entrepreneur. The
most revealing of these emotions is passion which certain individuals experience as
a result of product or service that they have created. These individuals would do
anything to ensure their product’s or service’s development which would translate
later on into an entrepreneurial success. The third and last feature of this last
element is entrepreneurial leverage which includes items that positively affect the
extent of action entrepreneurs take towards pursuing opportunities. These items are
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limiting your downside, risk perception, no plan B, momentum and entrepreneurial
confidence.
The researcher concluded by acknowledging the limitations of his research by
advising readers to treat his findings as guidelines and as a basis for a richer
understanding of entrepreneurial behaviour. He recognised that, unintentionally, the
sample did not represent a balanced number of male and female participants as well
as an adequate cultural variation. He recommended that future studies should focus
on entrepreneurs who have failed or who have been unable to achieve a high level
of financial success. The concepts in his research could then be tested against these
entrepreneurs’ endeavours. This could give a clearer insight into those concepts and
the impact could be studied as well. The researcher’s findings established that there
is a wide range of different entrepreneurs and suggested that they be studies within
the homogeneous groups they belong to. Groups such as gender specific
entrepreneurs where especially female entrepreneurs have not received enough
academic focus so far or race specific entrepreneurs where black entrepreneurs
being especially applicable in the South African context or even age group specific
entrepreneurs which refers to their life phases. Some of the older entrepreneurs in
the researcher’s study stated that they were driven by the purpose of their business
whereas the younger entrepreneurs were trying to make a mark in the society as a
whole.
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