How can one build a business from nothing? What does it take to build a business from nothing? Schumpeter often speaks of the “inverted pyramid” or business cycle. It takes many layers to come up with a meaningful venture. There must be a catalyst that starts from scratch and gives rise to layers of different enterprises operating beneath it. In the process of building a business from nothing, there must also be a series of steps that are repeated over again, each taken as a distinct stage in the business cycle.
To build a business from nothing is not an easy task. Entrepreneurs face a series of challenges that they must overcome in order to build businesses from nothing. Schumpeter speaks of “a succession of partial successes, each punctuated by a relapse and each topped by a fresh series of failures”, thereby implying that the entrepreneurs are to continue to repeat their mistakes in order to overcome the obstacles that they have encountered. It is this vicious cycle, between failure and recurrence, that keeps entrepreneurs working and pushing themselves to achieve more. The more they fail, the more they seek success and the more they invest time, money, energy, and various resources, resulting in yet another series of failures.
Entrepreneurs do not lack the drive and the desire to build a business from nothing, but the entrepreneurial spirit in them is often unable to translate this passion and drive into the action. There is an explanation why. One of the most important preconditions for entrepreneurship to take place is the presence of a market or potential market. Without such a market, entrepreneurship is just theoretical.
However, if a market does exist, it must be identified and it cannot be treated as a zero-sum game. There has to be room for both profits and losses. This is where the concept of discontinuous production process comes in. Entrepreneurial activity, in its attempt to build a business from nothing, must identify a medium through which profits can be made and losses avoided; otherwise, the enterprise is doomed to fail, regardless of the quality of the product or service that it offers.
In order to identify such a market and create opportunities for entrepreneurship, entrepreneurs need an organizational structure that enables them to take their ideas to market, but also one that will prevent them from repeating the same mistake over again. This organizational structure, which must be both durable and robust enough to withstand the constant onslaught of new and better products or services, is called an organizational structure for entrepreneurship. Thomsen’s basic thesis in his book,” Markets without Models,” is that there is a necessary link between the formation of markets and the emergence of entrepreneurial activity. Thomsen’s model, which he calls the sequential entrepreneurial investment pattern, is intended to provide the conceptual framework on which this link can be drawn.
In conclusion, Thomsen suggests that the continual improvement of a market and its features can propel any enterprise onward to greater heights of success. Entrepreneurs should therefore not aim for a return on all of their initial investment, but rather they should strive to continually improve the features of the market and the production process so that the enterprise can continue to function in the long term. The discontinuous process of entrepreneurship, according to Thomsen, is a key ingredient in this formula. Indeed, the continual improvement of the market by means of improvements in the production process and organization can be instrumental in ensuring the Continuum Theory’s predictions of the future development of the market and thereby the rise of entrepreneurialism.