The Timmons Model of Entrepreneurship considers opportunities, teams, and resources as the three critical factors available to an entrepreneur that holds the success of the organization and also depends on the ability of the entrepreneur to balance these critical factors.
ODDS OF SUCCESS
The Timmons model bases itself on the entrepreneur. The entrepreneur searches for an opportunity, and on finding it, shapes the opportunity into a high-potential venture by drawing up a team and gathering the required resources to start a business that capitalizes on the opportunity. In the process of starting the business, the entrepreneur risks his or her career, personal cash flow and net worth. The model bases itself on the premise that the entrepreneur earns rewards in commensuration with the risk and effort involved in starting or financing the business.
And that’s how the Timmons Model of Entrepreneurship works in approaching the success of every organization and even small businesses.
Describing the three Critical Factors
The Opportunity Factor
The Timmons model of entrepreneurship believes that entrepreneurship is opportunity driven, or that the market shapes the opportunity. A good idea is not necessarily a good business opportunity and the underlying market demand determines the potential of the idea. An idea becomes viable only when it remains anchored in products or services that create or add value to customers, and remains attractive, durable, and timely.
The Team Factor
Once the entrepreneur identifies an opportunity, he or she works to start a business by putting together the team and gathering the required resources. The size and nature of the opportunity determines the size and shape of the team.
The Timmons model places special importance on the team and considers a good team as indispensable for success. A bad team can waste a great idea. Among all resources, only a good team can unlock a higher potential with any opportunity and manage the pressures related to growth.
The two major roles of the team, relative to the other critical factors are:
- Removing the ambiguity and uncertainty of the opportunity by applying creativity.
- Providing leadership to manage the available resources in the most effective manner by interacting with exogenous forces and the capital market context that keeps changing constantly.
The Resources Factor
The Timmons model discounts the popular notion than extensive resources reduce the risk of starting a venture and encourages bootstrapping or starting with the bare minimal requirements as a way to attain competitive advantages.
The advantages of bootstrapping include:
- Driving down market cost
- Instilling discipline and leanness in the organization
- Encouraging creative resources to achieve more with the limited amount of money and other resources available
Some of the practical applications of such bootstrapping methods include leasing instead of buying equipment, working out of a garage instead of rented space, and the like.
Like the formation of the team, the size and type of opportunity determine the level and extent of resources required. While good resources remain scarce, businesses with high potential opportunities and a good management team will have no problem attracting money and other resources.
The entrepreneur works to “minimize and control” rather than “maximize and own.” The role of the entrepreneur in managing the resources include building a good resource base to draw from when required and drawing up a business plan through a “fit and balance” method that balances the available resource with the opportunity and the potential of the team.