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Private Sector vs Entrepreneurs

Published 05/18/2018

The distinction here is subtle and often contrived.

We’re using it here to differentiate types of clients, but, really, what we’re talking about is a distinction between the types of projects.

When we speak of “entrepreneurs” or “entrepreneurial,” generally, we’re talking about building something new, something that doesn’t exist. We’re inventing something.

Obviously, that fits the model of the typical entrepreneur.

This is the guy or gal who has an idea that’s going to change the world (or at least change their world), revolutionize an industry or solve a complex problem.

Think Facebook.

In instances like this, the idea is the company.

Facebook was an idea for an online social network and that product became the company “Facebook.”

This is our typical entrepreneur client.

On the other hand, there are private sector clients.

For us, these are usually small-to-mid sized industry agnostic companies.

However, most of these clients share many of the traits of an entrepreneur.

Generally, we are originally contracted to solve a problem for this company – to invent something that no one else in their industry is doing or making – to give them a competitive advantage.

Think of this as a type of intrapreneurship.

Much like with an entrepreneur, the project starts with an idea or even just a problem.

And implementing that idea or solving that problem is a collaborative effort between us and the client.

So while the scope might be different – an entrepreneur may want to provide a product for the general public while an intrapreneur is trying to benefit the company – the projects and project approaches are quite similar.

In fact, these projects can often change to traditional projects as they evolve.

To illustrate, let’s explain the other type of private sector project we tackle.

This type or project involves taking something over and fixing or improving it.

We’re not inventing anything here. We’re simply making something better or more efficient.

For example, a doctor’s office may have had custom appointment scheduling software written for them by an in-house developer or another firm.

For whatever reason, the software grew old and now needs to be re-tooled.

The doctor’s office can hire us to do just that.

Now, let’s circle back to our earlier point about how these projects can change from one type to another.

Let’s take the appointment scheduling software and say that a doctor’s office has this idea for a completely new type of appointment scheduling software.

Maybe this is a mobile app that can sense your biorhythmic feedback and can automatically schedule an appointment with your doctor if the app senses you’re getting sick.

As you can see, this idea could come from a single person looking to revolutionize the medical industry or a single office that wants to better service their patients.

The point is, the project starts as an idea only.

In a collaborative effort, we build the app with the client (regardless of if that client is a company or a person) and help them launch it.

What happens next is one of the big differences in the type of client.

With an entrepreneur, we know have given them a prototype. The entrepreneurs job is to then illustrated the usefulness of the prototype by getting people to actually use it.

At this point, there is a proof of concept – now that proof of concept needs to be shown to have potential.

If it does, the entrepreneur will be able to raise money from investors to further development and bring the product to the mass market.

With a private sector client, they’re not trying to prove the concept to investors because they have money – and they themselves are the users, so once the prototype is built, we move straight on to the next phase which is incremental changes and tweaks to make the app better and better.

Assuming the entrepreneur is successful in raising investment, both projects generally hit a maintenance/enhancement phase.

This is where the project changes from an “entrepreneurial/intrapreneurial” one to an “improvement” project.

All this is to say that, with subtle differences, the project usually dictates the differences not the client.

But there are some general guidelines

  1. You will only ever get “entrepreneurial” projects from an entrepreneur. These projects may later become “improvement” projects but they never start that way.
  2. You can get both “entrepreneurial” and “improvement” projects from private sector clients.
  3. Entrepreneurial projects, if successful, will eventually become improvement projects
  4. Entrepreneurial projects from private sector clients have a better chance of succeeding than entrepreneurial projects from an entrepreneur because the scope is smaller and the projects are already funded.
  5. If you’re working on an entrepreneurial project for an entrepreneur, expect a long break in work between the completion of the prototype and the go-to market phase because the entrepreneur will have to prove the concept and raise money for it.

Finally, if you’re still struggling to see the difference between “entrepreneurial” and “improvement” projects, it might help to think of it in terms of construction.

An entrepreneurial project would be like building a new house on an empty lot.

An improvement project would be more like a remodel or a repair – like fixing the roof.

Both types of projects are important and lucrative, but both require a different approach and methodology.

For companies like ours, it’s a good idea to keep a healthy mix of both to diversify your portfolio.

Entrepreneurial projects have a much higher upside in terms of revenue but also carry much more risk. You’re not getting paid a lot up front, so if the project fails, you don’t make a lot of money. At the same time, your contracts are backloaded, so if the project is a success, you get a healthy return.

Improvement projects are much more straight forward. The upside isn’t nearly as big but neither is the risk.