Jaroslav Kaplan, a prominent figure in the world of entrepreneurship, is on a mission to reshape the way we think about business. In this interview, we delve into his research, insights, and recently published book, 'Business Incognita'. Through a dynamic dialogue, we explore the fundamental layers of entrepreneurial activity, the chronic pains entrepreneurs face today, and the central concept of the entrepreneurial task.
Jaroslav, how would you like readers to remember you?
I consider myself a researcher of entrepreneurial thinking. Here, a historical analogy comes to mind. Today, it's hard to believe, but the greatest trade route in human history, the "Silk Road," had the right to exist only thanks to the false assumption that there is no other way for the movement of goods from Asia to Europe. This misconception provided the Silk Road with 15 centuries of competitive advantages. The analogy with entrepreneurship is that many entrepreneurs think that they have no other way for business development – and I’m sure there is one.
In recent years, you have been researching the causes of frequent ruin of companies, including the reasons for the collapse of huge business empires. Could you quickly list the fundamental mistakes of budding entrepreneurs and business empires?
Yes, this is a really difficult question, but this is also a question of survival for many entrepreneurs, so I'll elaborate on it. My research began with approximately the same question as the "Business Intellect" project. It started with the fact that I set myself the goal to find the reason for the high mortality rate in entrepreneurship. I was haunted by the question of why only 3 out of 10 entrepreneurs make it to their tenth anniversary. These numbers vary by country and industry, but the trend is generally the same.
Albert Einstein wrote: “It is impossible to solve a problem with the same level at which it arose. We need to rise above this problem, taking it to the next level.” If this is so, then where is that next level on which we can solve the problem? This is where I started my research seven years ago.
I'll start with the fact that in any entrepreneurial activity, there are three different "layers" of activity.
Can you elaborate on these "layers" of entrepreneurial activity?
Of course. With these layers, there is a fundamentally different logic for the entire set of activities. On the first layer, which I call the “resource” level, entrepreneurs focus on transforming available resources into products, such as raw materials, machines, capital, and labour. Here, the entrepreneur's main focus is on utilising available resources to obtain a product, without much consideration for consumer needs or market dynamics.
Then comes the second layer, the "designer" level. It’s where entrepreneurs realize that the methods used in the resource layer are not universal but depend on specific conditions. Entrepreneurs on this level design their business systems based on various factors and begin to recognize the boundaries and constraints of their activities.
At the third level, which I call the “exploratory” level, entrepreneurs realize that they need something more to sustain the business. They must discover patterns that allow them to describe and predict changes in the entire field of activity within which their business system is located.
What do you believe is the main source of chronic pain for entrepreneurs today?
Well, entrepreneurs today have more than enough challenges to deal with. I don't think the pain itself is what entrepreneurs should avoid. There are contact sports like boxing and karate, where pain is part of the game. The real question is whether you can address and solve this pain. The problem lies in the fact that entrepreneurs often cannot do anything about their chronic "pains," which can become a hindrance to their success.
If I had to answer this question briefly, I would say that the main reason for these chronic "pains" is the decrease in the ability of entrepreneurs to effectively create a high perception of the value of their products and services for consumers.
Can you tell us more about your recently published book, "Business Incognita: How to push the boundaries of entrepreneurial thinking," and the ideas within?
Certainly. The main idea of the book is that there is no point in trying to change what entrepreneurs do without changing their thinking. It's like having a liver transplant for an alcoholic without changing his lifestyle.
Our thinking and our perspective on any problem determine the quality of our decisions and the quality of our lives. The book aims to help entrepreneurs understand the natural laws governing entrepreneurship, enabling them to diagnose problems and make informed decisions in a dynamic business environment.
The central concept of the book is the "entrepreneurial challenge." This task is unique and has its own, unique solution that depends on the specific context in which it exists. This distinguishes entrepreneurial tasks from others and in addition the correct formulation of this task is a key component of business success.
Could you summarise the central idea embedded in the entrepreneurial task?
The central idea of the entrepreneurial task is that it revolves around the perceived value of products and services by consumers. As soon as clients stop perceiving a product as valuable, the business activity ends. The main paradox is that a businessman cannot succeed if there is no product, but even having a product does not guarantee its value to consumers.
It turns out that most entrepreneurial stories do not survive because either there is no product, or the product loses its perceived value in the eyes of consumers.
So, the main idea embedded in the entrepreneurial task is the factor of consumer perception of the value of products and services. This perception is subjective and constantly changes with time.
What, in your opinion, is the key to business sustainability in the modern era?
The key to business sustainability is in continuously delivering value that resonates with consumers. Entrepreneurship is an ongoing process of ensuring that your offerings remain valuable, as consumer preferences and market dynamics evolve.
Sustainability comes from the ability to adapt, innovate, and deliver something that customers will perceive as valuable, be it a product or service. Here I want to emphasise that we are talking about consumer perception of the value of products, and not about products themselves, in a vacuum, without linking to their consumers and the entrepreneur.
Could you tell us more about your mission in the world of entrepreneurship and the impact you hope to make?
My mission is to help entrepreneurs shift their thinking. The book "Business Incognita" is just the first step in a series of works designed to provide entrepreneurs with the knowledge of natural laws governing entrepreneurship. By understanding these laws, entrepreneurs can better diagnose problems, make informed decisions, and build enduring and successful businesses. I want to contribute to a world where more entrepreneurs thrive, more businesses succeed, and ultimately, more value is created for society.
Your insights are truly enlightening. Thank you for sharing your perspective and research on entrepreneurial thinking. We look forward to the positive impact your work will have on the world of entrepreneurship.
Thank you. I'm excited to continue this journey and hope to inspire entrepreneurs to embrace the challenges and opportunities of the modern business landscape.
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