Economists and thinkers often talk about GDP/GNP per capita as their discussion parameter when talking about national happiness. FT reported last week of Bhutan’s efforts in finding the the true Gross National Happiness (GNH). It also noted that most of the developed world is now bent on finding ways to maximize not the GDP, but GNH! It’s amazing to note that possibly, money can’t buy happiness.
Some years ago the economist Richard Easterlin showed that, just as would be expected, wealthier people in any given country are more likely to tell a survey-taker that they are happy with their lives than are poorer people in the same country. However, Easterlin also found two other things that don’t fit so well with the economic perspective. First, he found that as countries get richer, beyond the level where basic needs such as food and shelter are met, people don’t report being any happier. For example, although today most Americans surveyed will tell you they are happy with their lives, the fraction of those who say that they are happy is not any higher than it was 40 years ago, when average incomes in the United States were considerably lower and few could even imagine developments like mobile phones or the Internet. Second, he found that–again, once you get above a basic sustenance level–on average, people in rich countries don’t report being all that much happier than people in lower-income countries. The finding that people in rich countries don’t report much greater happiness than those in lower-income countries–even though, in any given country, the rich say they are happier than the poor do–is called the Easterlin paradox, after its discoverer.
Funny – isn’t it, when we put this in perspective where most people seem to be running after getting richer on one hand have always wanted to be satisfied and happy on the other?
There is no denying to the fact that money is very important, however, entertainment per capita is a relevant new benchmark in this economy where we are not totally over with the ripple effects of the depression cycle worse than the Great Depression of 1929. Entertainment has to be associated with a hard form as well as a soft form. Economies and governments have to provide ways for their people to find an easy, inexpensive catharsis to their feelings to let the balance be.
Food for thought: How often do you measure life by the moments that take your breath away?
Entrepreneurship is a combination of three core things (however, please note that it’s not a recipe mix that will always bring out a great entrepreneur – it’s rather more like a perspective of looking at this concept encompassing various aspects of entrepreneurship):
Personality: Includes upbringing of a person, confidence, interpersonal skills, ability to think on the feet and solve issues all the time.
Opportunity: This is the break that one gets to have. Most people I know who are curious to become an entrepreneur seem to be waiting for this perpetually. I don’t think there’s anything such as a big break. Life keeps giving you opportunities all the time, and you can only make good anyone of them if you are ready to. Moreover, an opportunity could be an opportunity for you because of your experience or academic background or interest in a particular domain.
Risk: This is the most interesting part of entrepreneurship. It’s an entrepreneur’s second nature. Risk doesn’t mean going wild with your whims, but actually refers to calculated risks an entrepreneur has to take all the time.
But even with these three, there’s one thing that must be very clear in any business opportunity. That thing is summed up in this one question: “What’s the deal?”
Deal: is all about identifying the core of any business opportunity. It is difficult to focus on this and identify what’s the real deal in a business, but with time, good entrepreneurs command this almost instinctively. I’ll be writing more about “Deals” and deal-making in the coming weeks.
When Michael Porter came up with Generic strategies, it was really a change in thinking. It seemed to be a different viewpoint compelling enough to be considered on its merit. The idea that any business can use one or more of the three core generic strategies (cost, differentiation and focus) came up as a revolutionary concept that consultants often focus on even today.
I often find people coming in asking how they can become the lowest cost provider in their domain of operation and seeking tips to achieve that end. I end up asking them about their businesses only to advise them not to invest their energies to becoming even lower cost provider as it’s not about the lowest cost anymore.
People often intuitively find it difficult to understand that low cost is relative and I keep quoting this example:
Suppose you have a German-educated and trained engineer working in an automotive plant who charges you 200 euros per hour and you also have another engineer from some place like Somalia, who is willing to work at 20 euros. Which one of them is the lower-cost provider?
The answer, my friends, is that you can’t ascertain yes. Most of the people get to the decision before analyzing the question, and say the Somalian engineer is the one, however, I have given no suggestion as to the creativity, productivity and skill set of the engineers yet.
Consider this additional information: If the German engineer finished work on 10 cars per hour, and the Somalian engineer needs 3 hours to finish only one car, how would the answer change now?
The German engineer is averaging you 20 euros per car, whereas the Somalian engineer costs you 60 euros per car. The latter ends up being thrice as costly as the former! Eye opening? Yes.
Moreover, we have not even considered yet the learning curve benefits, incremental quality improvements due to expertise, creativity, long-term relationship development factor, etc. that might accrue as a result of the right choice.
Please note that reference made in the above example was just illustrative and does not imply in any way superiority/inferiority of any person, place or education.
So even if you want the lowest cost, think out-of-the-box to figure out if that’s really the lowest cost solution for you.
Happy Value Buying!
Remember back in school physics laboratory classes, there was one experiment we used to do with prism where a ray of light went through the prism to show complete VIBGYOR set of colors in a white ray. Entrepreneurs often need to develop the ability to become such prisms, wherein they could look through a seemingly simple white-ray-like issues/people/ideas to find out the possible colors within the spectrum.
This is in essence the ability to dissect the individual concept and look at its various dimensions, alongside taking a holistic approach integrating individual components of the situation.
In order to be successful, this ability to sum-the-parts & part-the-sum is very useful. This can be developed and enhanced by careful concentration and keen eye on one’s surroundings, sights & sound. So all it needs is a bit of motivation & a bit of time, and you’re on your way to your ability to looking through the prism glass!