The Four-Gate Model of Entrepreneurship

ILLUSTRATION BY RUTH MACAPAGAL

Entrepreneurs must navigate four gates to reach the “House of Prosperity,” which is the desired outcome of entrepreneurs: the promise of financial independence, personal freedom and the realization of their deepest desires. These gates or hurdles that entrepreneurs need to overcome to attain business success are (1) the preparation gate, (2) the marketing gate, (3) the execution gate and (4) the self-leadership gate. The Four-Gate Model outlines a step-by-step journey that every entrepreneur must undertake.

Even if entrepreneurs have passed through the first gate, they must navigate subsequent gates for sustained success. For instance, a well-prepared plan (Gate 1) that is poorly or inadequately executed (Gate 3) can result in disastrous consequences. Failing to progress through any gate disrupts momentum, underscoring the significance of self-leadership or the final gate, which is dependent on personal discipline. Given its indispensability, investors often scrutinize entrepreneurs’ personal qualities to gauge their emotional and adversity quotients. The ability to execute and bounce back from challenges is a crucial trait observed among successful entrepreneurs.

Preparation (Gate 1) should be complemented by execution (Gate 3). Without an action orientation (or sometimes being too much of a perfectionist) to implement, there will be inertia and therefore, many missed opportunities.

In between preparation and execution is marketing (Gate 2). Without good marketing, businesses will struggle to connect with their target audience, unable to differentiate their offering or incapable of effectively communicating their value proposition—all impacting their ability to attract and retain customers.

Self-leadership (Gate 4) becomes particularly evident during a crisis, as exemplified during the COVID-19 pandemic in 2020. Without self-leadership, individuals will struggle in dealing with challenges effectively. Leaders should remain resilient and agile amidst obstacles and in constantly changing environments.

The gatekeepers

In each gate, there are gatekeepers with different interests and expectations. “CEO” is sometimes an acronym for (managing) customers, employees and owners. The entrepreneur-CEO needs to find a good balance based on what is valuable to each party.

The gatekeepers are:

• Preparation: Owners and stockholders interested in profit and dividend.
• Marketing: Customers interested in quality and good price.
• Execution: Employees interested in high pay and work-life balance.
•  Self-leadership: One’s self interested in fulfillment.

Reaching the destination, known as the House of Prosperity, is not always linear. It stands as the embodiment of the goals and symbols of business and personal success for every aspiring entrepreneur. It is important to stress that this model of prosperity has eluded most entrepreneurs for lack of balance and foresight and must be emphasized early for the awareness of aspiring entrepreneurs.

The 12Ms to successful entrepreneurship

Each of the four gates has 3Ms to make up a total of 12Ms as shown below.

Preparation

• Money: The cash (or equivalent) component that creates the cycle of wealth conversion and prosperity.
• Model: The business model or the big-picture plan to generate sales revenues, profit, cash flow and growth, as well as the blueprint on how to scale up.
• Mentors: The experienced advisers who can add value to the entrepreneur by giving sound guidance to increase competency, lessen risks and help open more opportunities for the entrepreneur to succeed.

Marketing

• Mindset: It is about beliefs—that innovation is better than commoditization, that being an “innopreneur” is better than being just an entrepreneur.
• Market: The set of buyers that an entrepreneur focuses attention on, starting from a beachhead market in the beginning, and then adjacent markets for future expansion.
• Message: The brand positioning that will be communicated to persuade the target customers to buy.

Execution

• Machinery: An organization structure that can deliver the value planned.
• Methods: Systems and processes that provide the entrepreneur information and control.
•  Management skills: The ability to carry out the plans through people, rewards and leadership.

Self-leadership

• Moving forward: Having the grit to continue the business despite obstacles.
• Mission: The purpose or the reason why the business exists beyond making profit.
• Mastery: Building capabilities, knowing the nuts and bolts of the business well and eliminating gaps in the know-how.

4 types of intelligence

Each of the four clusters is linked to four types of quotients (or intelligence) needed by entrepreneurs.

• Preparation: intelligence quotient (IQ), the capacity to think and reason;
• Marketing: creativity quotient (CQ), the capacity to innovate;
• Execution: emotional quotient (EQ), the capacity to sense and empathize; and
• Self-leadership: adversity quotient (AQ), the capacity to recover and make progress.

In the entrepreneurial landscape, success relies on a delicate interplay of four essential quotients. It does not mean that IQ is only needed at the preparation gate or CQ is only needed during the marketing gate, though it may be that these specific capacities will be needed most during a particular gate. The same goes with EQ and AQ. For bigger business ventures, one way of solving lack of capacity is to get business partners who can oversee some functions. For instance, one can oversee finance, another can be in marketing and another in execution or operations. It is rare that one person possesses all the capacities.

4 areas of negligence

While starting to be an entrepreneur may be easy, succeeding as one is not. It is not enough to learn about the key factors for business success. Entrepreneurs need to be aware of possible negligence in certain areas that can be barriers to sustainable progress in their businesses.

A failure in preparation is typically associated with the failure to source, to sense and to socialize. Instead of careful deliberation, focused reflections and purposeful networking and relationship building that could be powerful sources of information, assumptions are substituted and unchallenged, and fatal shortcuts are resorted to.

A failure in marketing is typically associated with the failure to converse, to differentiate and to communicate. Instead of being customer-centric, personal preferences and uninspired works are promoted. Standard testing of concepts and messages is not done, perhaps due to the proponent blindly falling in love with his or her own idea too much.

A failure in execution is typically associated with the failure to organize, systematize and humanize. Instead of increasing needed capabilities and reducing uncertainties, relevant data (especially when not readily available) is not sought or pursued. When implementation is left to inexperienced people, when there are delays due to analysis paralysis, or when stakeholders are constantly treated in transactional mode, instead of building relationships—expect that the strategy will fail because of poor implementation.

A failure in self-leadership is typically associated with the failure to learn, lead and love, and this includes not just love for others but also for one’s self. Instead of evaluating and redirecting until things are done right, there are people who limit themselves and their own potential. — Contributed

Josiah Go is chair and chief innovation strategist of Mansmith and Fielders Inc. Josiah Go, Chiqui Escareal-Go and Calel Gosingtian are coauthors of the book “Entrepreneurship: The Four-Gate Model,” officially endorsed by Go Negosyo and JCI Manila, which will be launched on Oct. 11, 6 p.m. at the mid-level east wing of Shangri-La Mall, Mandaluyong. It is open to the public but registration is required via https://bit.ly/4GateModel.