Entrepeneur Guru Kenneth Morse “You need Cashflow”

BY: CRISIS OPPORTUNITY Entrepreneur legend and MIT Professor Ken Morse prepared students at Barcelona Business School Esade for the new challenges. Morse restated that the chances are high for entrepreneurs and innovative businesses, but that cash flow requirements will determine the future of business

Ken, who was so kind to send me a personal invitation to join his first lecture at ESADE, surprised me by stating very clear an concise the changed conditions and environment for entrepreneurs. 

Ken sees the crisis offering excellent chances and a much better environmental conditions for entrepreneurs than the "normal times", years ago. That exactly matched my way of perceiving the world. However, I found it remarkable to hear that he recommended moving on without Venture Capital as long as someone could, for a couple of reasons.

The question to "raise VC capital or not" was raised by a young entrepreneur. The VC environment in Spain is quite different from the rest of the world. Ken, who earlier recommended making a good VC case and seizing chances with VC’s early on, stated some of the issues of taking VC money at this moment of time. His argument to wait therefore was based on a mixed set of factors.

First of all, the Spanish VC environment is very diverse, and the risk for some entrepreneurs to focus to strong on the money side could block future business expansion, as the VC would attribute little to the business or even block the business from making business with certain customers.

Secondly Cash flow and job security should have a higher priority that entrepreneurial spirit. Very rarely I have heard this line spoken out as clear at a business school. Ken recommended to hold and utilize the current job to jumpstart the business and to move slowly not hasty. That also matches my experience. Once an entrepreneur in Europe jumps onto a new business bandwagon, his network, his cash flow and his perspectives changes rapidly.

Third, he was adamant about having a first customer, which is absolutely necessary. While during the internet boom all you needed to have was a good idea, you now need to have good customers first. The customer is the missing link, which obviously many start-ups do not have in their portfolio. The time to find the customer and to adapt to his real needs is now becoming a critical factor during this crisis.

All in all chances for Entrepreneurs are high, but nevertheless one should understand that the environment changed. VC money can be an accelerator, but only if the basic requirements of business are diligently met.   

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tags:Ken Morse, ESADE, Business School, Entrepreneur, vc, venture capital, crisis chances, crisis opportunities, recommendations, critical success factors, MIT, entrepreneurship, 

Posted in: Investing