Parallel Universe: Mongolia's Brand of Entrepreneurship
Guest Post by Dan Bierenbaum, senior researcher at the Batten Institute at U.Va.’s Darden School of Business.
There’s an entrepreneur I know in Ulaanbaatar, Mongolia’s capital, whom I’ll call Nergui. After starting his first mining company just over 15 years ago, he has launched and remains the majority owner of 25 different businesses including ventures in mining, agriculture, media, education, and hospitality. That’s a rate of almost two new businesses a year. He’s not just a serial entrepreneur; he’s a parallel entrepreneur. And Nergui is hardly alone – today Ulaanbaatar is teeming with entrepreneurs like him who are involved in three, four, or more ventures at once.
What’s behind Mongolia’s brand of entrepreneurship? Partly, it’s the simple economics of growth. Even though Mongolia’s infrastructure remains poor and basic services limited, the country is emerging as one of the top growth stories of the decade, largely due to its massive, untapped mining wealth. Most of these resources, including rich deposits of copper, coal, gold, iron ore, silver, uranium, and molybdenum, remain in the ground, but some estimate the total worth to be close to $2 trillion. For an economy that generates about $8 billion in GDP and a population that stands at roughly 2.8 million people, this latent subterranean wealth is formidable, and foreign investors are falling over themselves to get a piece of the action.
A high-growth environment paired with a relatively low level of economic development creates countless opportunities for Mongolians with the hustle and connections to launch new businesses. Since few products are manufactured in Mongolia, many local entrepreneurs get their start in trading, from clothes and electronics to bigger ticket items, like construction and mining equipment. With some cash in hand they often parlay their trading success into even more lucrative opportunities, such as real estate or mining. A foothold established in one or two businesses makes launching the next one, two, or five that much easier by leveraging their existing customer/supplier networks and revenue base. Step by step these parallel entrepreneurs are in the process of furiously building the foundations for a transformed Mongolian economy.
Nergui’s strategy presents a stark contrast to entrepreneurs on this side of the globe where the standard practice is to pick one venture at a time and pursue it with laser focus. It’s certainly true that successful new businesses in Western markets often require a higher level of innovation than those in Mongolia, so it’s understandable that entrepreneurs here typically don’t try to balance three or four new businesses at one time. But closing the door on new opportunities just because one path has already been selected could limit an entrepreneur’s potential in the end. Maybe the next pivot in one business could be inspired by developments in a second concurrent venture. Or, if one hits a dead end, another is already underway to pick up the slack.
Ultimately there are only so many hours in a day and an entrepreneur can delegate and outsource only so much when building a new business. But parallel venturers from Mongolia should inspire entrepreneurs in the West not to narrow their sights too soon on one prized result. Who knows where the next idea or new direction might come from? I’m sure Nergui might have a few suggestions.
There’s an entrepreneur I know in Ulaanbaatar, Mongolia’s capital, whom I’ll call Nergui. After starting his first mining company just over 15 years ago, he has launched and remains the majority owner of 25 different businesses including ventures in mining, agriculture, media, education, and hospitality. That’s a rate of almost two new businesses a year. He’s not just a serial entrepreneur; he’s a parallel entrepreneur. And Nergui is hardly alone – today Ulaanbaatar is teeming with entrepreneurs like him who are involved in three, four, or more ventures at once.
What’s behind Mongolia’s brand of entrepreneurship? Partly, it’s the simple economics of growth. Even though Mongolia’s infrastructure remains poor and basic services limited, the country is emerging as one of the top growth stories of the decade, largely due to its massive, untapped mining wealth. Most of these resources, including rich deposits of copper, coal, gold, iron ore, silver, uranium, and molybdenum, remain in the ground, but some estimate the total worth to be close to $2 trillion. For an economy that generates about $8 billion in GDP and a population that stands at roughly 2.8 million people, this latent subterranean wealth is formidable, and foreign investors are falling over themselves to get a piece of the action.
A high-growth environment paired with a relatively low level of economic development creates countless opportunities for Mongolians with the hustle and connections to launch new businesses. Since few products are manufactured in Mongolia, many local entrepreneurs get their start in trading, from clothes and electronics to bigger ticket items, like construction and mining equipment. With some cash in hand they often parlay their trading success into even more lucrative opportunities, such as real estate or mining. A foothold established in one or two businesses makes launching the next one, two, or five that much easier by leveraging their existing customer/supplier networks and revenue base. Step by step these parallel entrepreneurs are in the process of furiously building the foundations for a transformed Mongolian economy.
Nergui’s strategy presents a stark contrast to entrepreneurs on this side of the globe where the standard practice is to pick one venture at a time and pursue it with laser focus. It’s certainly true that successful new businesses in Western markets often require a higher level of innovation than those in Mongolia, so it’s understandable that entrepreneurs here typically don’t try to balance three or four new businesses at one time. But closing the door on new opportunities just because one path has already been selected could limit an entrepreneur’s potential in the end. Maybe the next pivot in one business could be inspired by developments in a second concurrent venture. Or, if one hits a dead end, another is already underway to pick up the slack.
Ultimately there are only so many hours in a day and an entrepreneur can delegate and outsource only so much when building a new business. But parallel venturers from Mongolia should inspire entrepreneurs in the West not to narrow their sights too soon on one prized result. Who knows where the next idea or new direction might come from? I’m sure Nergui might have a few suggestions.
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