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Trump University Entrepreneurship 101: How to Turn Your Idea into a Money Machine, Second Edition by Michael E. Gordon

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c06 JWBT144/Gordon September 16, 2009 12:12 Printer Name: Courier Westford, Westford, MA
TRUMP UNIVERSITY ENTREPRENEURSHIP 101
How about the Future?
Do you envision building a small, comfortable lifestyle company and running
it for the foreseeable future, or would you strive to grow a high-potential
venture quickly, selling your company within 5 to 10 years?
What do these four hows have to do with opportunity recognition and
screening? Simply this: If you would feel successful building a small business
slowly (for starters), make a commitment to yourself right now that you will
go for it. Commit a small sum of money to test your screened opportunity.
Don’t risk a major amount of capital. You will know soon whether you are on
the scent of a real opportunity. Isn’t this the most definitive of all screening
techniques? Let the success itself be the proof. But don’t quit your day job until
you know. So many entrepreneurs get frozen in the headlights like deer in
the middle of the road. They get too analytical about ideas and opportunities,
to the point of inaction. If you can’t know for certain, but your gut says GO
and the potential loss will be small, GO FOR IT. Personally, I am like Ed
and Mellanie. I rely on my gut feeling and passion. I prefer less thinking and
more action. My mind-set is to take one rapid, frugal step in the most likely
direction and then evaluate whether another quick, parsimonious step should
be taken. At some point soon, I have my go/no-go answer without spending
much money.
On the other hand, if success to you means growing a large company
quickly, the risk factors can become very significant. You need to be thor-
ough and analytical in your approach to opportunity recognition. Look
at the relationships among size, growth rate, risk, and capital needs in
Figure 6.3. This four-box matrix indicates that both risk and capital require-
ments increase dramatically when you seek to grow a high-potential venture
quickly. This is the scenario that venture capital investors seek. They want to
invest in high-potential ventures that grow rapidly and that can be harvested
(sold, taken public, or merged) within a 5- to 10-year time frame.
Types of companies that fit into the rapid-growth, high-potential track are
Compaq Computer, Staples, and Home Depot, to name a few. With astute
decisions, hard work, and some luck, your business may someday join this list
of prestigious companies.
Summary
There is a world of difference between an idea and an opportunity. This
chapter describes the nine screening categories to test the difference. The
ideas that emerge from the Opportunity Screening Funnel have the greatest
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