Entrepreneurs: The Bad Kind And The Good March 2010

There is a bad kind of entrepreneur. While entrepreneurs are largely credited with taking important risks in moving society into new territory and trying to bring to life risky, new ideas, not all entrepreneurs provide a fairly-priced, quality product. Occasionally there will be the entrepreneur that is impatient and goes after money with no understanding of his market of choice. Here is how I came to these realizations:

Back in February I got to my Entrepreneurship Initiative class one day and we were presented with a guest speaker. Our speaker told us of how he started a huge trucking company and how he had recently dropped out of college with one remaining semester to pursue his new web design firm that he had started. He had no background in web design and he didn’t know how to even go about it at first; but he quickly became motivated, learned a little bit about the industry, and hired a friend of his with a little bit of web design experience. The overall attitude of the teacher and class toward him were praise and respect for having crossed lines into a new industry and starting something new, even though he didn’t know how. This lack of experience and learning how to do something you don’t know how to do based purely on motivation were praised, and I don’t blame the class one bit for praising him. I was one of the people that thought it was very respectable what he had done. In fact, I offered him my resume at the end of class to see if he needed any help given my web design background.

But then I went online and saw his company’s portfolio. I was shocked. I was offended that a company would pay someone thousands of dollars to create such a basic, mediocre, web 1.0 website. I honestly do not mean to be overly critical of the firm: they were good businessmen and they knew how to find their clients well. Perhaps even too well. I could have made websites of far better quality in just a few hours, for far less than $10,000.

A couple months later, the speaker emailed me saying that he needed help and was looking to hire. I thought I might be able to help, though I wasn’t really looking for a job. I rather enjoy the web development job that I have now. I got there and talked to the speaker and his buddy that did the web design portion of the sites. It turned out that the speaker/firm owner still had no knowledge of even basic web development. From the moment we got into talking about web design, the main guy didn’t really appear to have a clue what I was talking about when I got into the technical skills. The web designer kept claiming to have been in my shoes four years ago, and said he saw himself as me in four years, yet he didn’t seem to understand half of the technical stuff I was talking about. I’m sorry buddy, you may be four years older than me, but you have no idea how to make a high quality website. At this point I realized that their egos had soared high above their levels of skill, and I had no more desire to even help out.

I had discovered that starting a business completely outside of your field of expertise is not always the best thing for society. While people may offer you a lot of money for it, you have to understand that you might not yet be up to the industry standards. You might actually be ripping people off with inferior quality due to your inexperience.

I am a huge supporter of entrepreneurship and I do recognize its importance in society. I recognize that every success did start as nothing more than an idea. Often even a sketch on a napkin. I get that. I know you have to start somewhere. But this guy’s firm was trying to enter into what economists call a perfectly competitive market. In such a market, standards of quality are well defined and there is a certain level of quality that should be kept if you are to provide your customer with the best product that is possible. Other web design firms have proven that a higher quality website is possible to make for far less than $10,000. Your customer may not be aware of this, but it is your duty to inform them. This is not to say that the speaker’s firm was not purposefully ripping off customers. This is only to say that you must be careful, especially in a perfectly competitive market, that you have a good understanding of what the standards are, and you make sure that you are providing your customers with just as good a product as the next guy.

Now I do love that he was trying. I love his entrepreneurial spirit, but he really ought to have surrounded himself with some people that had strong web design backgrounds, knew the market well, and understood the standards of quality.