Trump University Entrepreneurship 101: How to Turn Your Idea into a Money Machine, Second Edition

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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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