An Investment Banker's Take On Life: This Oxymoron Could Be Your Parachute

Risk-free entrepreneur. That sounds very much like an oxymoron, right? Risk and entrepreneurship go hand in hand, that's why Don Debelak's book, "The Risk-free Entrepreneur," intrigued me enough yesterday into buying the volume I'm reading now.

I thought I'd share with you just enough flavor of what to expect between the covers of this book based on its introductory chapter, in case you're planning to cross your own Rubicon and still exploring various options outside of employment. The book is designed as a how-to resource guide and, therefore, fairly easy to read. Although I think the book could stand additional editing in order to tighten up some sections and further develop some ideas, on the whole it delivers on its promise.

In Brief: An Outsourcing Business Model

At the heart of what Mr. Debelak calls "OPM (Other People's Money) entrepreneurial approach" is basically an outsourcing business model, where an entrepreneur's outsource partners put up all or most of the money. If you have been around long enough, that may sound counter-intuitive but Mr. Debelak's book has enough anecdotal evidence to show that this business model works.

The business model works for at least two reasons. First, businesses today are increasingly specializing, thereby creating niche opportunities and a profitable space for OPM entrepreneurs. Second, product and business concept cycles have become so much shorter with technology's advances, thus creating demand for outsourced services in order to dramatically shorten introduction times for new product concepts.

How Do You Find Your OPM Concept?

I'm sure this is one of the more difficult questions to answer for most aspiring entrepreneurs. But before looking far, Mr. Debelak advises to look within--your work, your hobbies or an outside interest. Actually, in hindsight, that's what I did when I co-founded an advisory/consultancy partnership last year because I felt that my previous investment banking experience was a good enough pair of legs to stand on. It was serendipity, however, which led our group down the path of knowledge process outsourcing much later. Now, that's the part of my life story which is still being written.

Emerging markets are also a good source of ideas for an OPM business. The problem with emerging markets, however, is that by the time these new trends or markets are trumpeted by media, it's more likely than not that others have gone ahead of you. Mr. Debelak suggests two websites which one should check periodically for new developments in order to be on the cutting edge:

www.gnpd.com -- Global New Products Database, which features new products and concept trends (including services) for 30 major markets and 120 market subcategories.

www.profuturists.com -- Website of the Association of Professional Futurists, a group that provides insight into new trends long before they are noticed by most people in the market.

How Do You Know You've Found A Great OPM Opportunity?

Mr. Debelak lists nine (9) self-explanatory characteristics of a great OPM opportunity. A concept having at least three (3) or four (4) of these characteristics means that it is considered bankable:

High "wow" factor;

Ability to help customers meet their goals;

Clearly understood benefits;

A total solution;

An appeal for customers with passion;

Potentially high margins;

A great price/value relationship;

Substantially higher quality than the competition; and

A strong name or slogan.

Deciding on what business to go into is just the first step on one's journey to financial independence. It takes courage to make the second and succeeding steps. However, to the extent that a workable business model exists which is not capital-intensive and, more importantly, can be structured to be risk-free, the requisite courage for that journey could, hopefully, be summoned more easily.

If you're an investment banker, especially one who has been involved in advisory work like me, you would feel right at home with his ideas (the foregoing has barely scratched the surface). That's because we both know that generating advisory fees is not dependent on the bank's capital. Now, that's the very same feature of Mr. Debelak's business model that's highly appealing to a start-up entrepreneur--little capital, no risk. Who knows, this oxymoron could be your parachute.

(Photo Credit: www.sxc.hu)