UM Innovation

A few weeks ago, I attended the UM Innovation Showcase to check out some of the groundbreaking new technologies UM faculty and students are working on. Interestingly, both the keynote speaker and the private equity investors that I spoke with all remarked on the same thing - how early stage most of the technologies were, and the huge amount of risk and uncertainty that is involved in bringing such nascent technologies to market. It occurred to me that this sort of high risk/high reward type of innovation often overshadows smaller, more incremental, but less risky innovation that goes on all around us all the time. It's sort of like comparing baseball players - you have the sluggers who hit for a lower average but are always "swinging for the fences," and the smaller guys who hit for a higher average, have less power, but are more likely to get on base. Both are critical to the team's success, but most of the attention goes to the slugger because everyone like to see the home runs.

The Problem With Lawyers

I've often noticed that lawyers seem like the unhappiest professionals that I deal with, and hardly a week goes by without a law student contacting me because they are graduating and have decided they don't want to be a lawyer, or they never wanted to be a lawyer in the first place. This video illustrates why!

NFIB Small Business Trends

I've been seeing a lot of discussion in the blogosphere about NFIB's latest report on Small Business Economic Trends (see full report here). On the surface, it's not a pretty picture. Business owners are not optimistic about the future, aren't making capital investments, and don't plan to begin hiring any time soon. Of course, depending on your political slant, you interpret this information very differently. The Right claims that business owners are worried about an onerous regulatory regime and higher taxes/health care costs. The Left sees it as the inevitable hangover of the Great Bush Recession which could be cured by further fiscal stimulus. However, it's been occurring to me lately that persistently high unemployment may not be due to economic cycles so much as a structural readjustment in the nature of work that has been long hypothesized. My experience working with and speaking to entrepreneurs leads me to believe that they are not hiring because they simply don't have to. Technology (in particular web 2.0 applications) has made outsourcing easier than ever, and far flung networks of contractors very manageable. New productivity tools have greatly simplified administrative tasks, or rendered them obsolete. Since administrative positions (mailroom clerks, secretaries) have traditionally formed the gateway to white collar work, we may need to rethink how we prepare young people to enter the workforce. We may also have to adjust their expectations of what their futures will be like. I'm going to expand on these thoughts in future posts, but I will say that I don't think this is all negative. People who are prepared for the new workplace reality will have the opportunity for really exciting, fulfilling, and flexible careers. Of course, the unprepared face a lot of painful uncertainty.

Matchfounders

I just came across a beta site that has a fascinating premise - when live, it promises to connect company founders with potential team members that both have needed skills and share their goals. This got me thinking that putting together the founding team may be one of the most difficult and important tasks that an entrepreneur faces. One approach is to stock up on friends & family, and this can work very well, or it can lead to conflicts, hurt feelings and "groupthink." On the other hand, taking a mercenary approach & bringing in founding members based on complementary skills is also problematic. Everyone may come together and work toward a common goal like The Dirty Dozen or The Magnificent Seven. On the other hand, it may end up more like The Commitments. I'm not sure there is a "best practice" for founding team formation, but I'll be interested to see if the "matchmaking" approach works.

The Myth of the "Entrepreneurial Personality"

My wife just sent me this article from the NYT about "hypomanic" entrepreneurs who seem to teeter on the edge of being brilliant and mentally illness. It reminded me once again about our deep seeded societal notion that successful entrepreneurs have a special personality type - charismatic, risk taking, hard charging, passionate yet abrasive, etc. This is usually evidenced by cherry picking certain famous entrepreneurs (Steve Jobs! Henry Ford!), while ignoring the vast majority of successful entrepreneurs who don't act this way at all.

I've met and read about thousands of successful entrepreneurs over the years and I can't point to any personality trait they tend to share in common. They all work hard, are passionate about what they do, etc. But I've found that that their success usually has much more to do with execution than whatever their brilliant idea was, which often turns out to not be so brilliant when it gets right down to it.

Personally, I wouldn't invest a dime in the young man in the article who wants to "build the game layer on top of the world." That doesn't mean he won't succeed - maybe he will. After all, I also won't be buying a lottery ticket on my way home tonight.

Where do Good Ideas Come From?

I just came across this short video previewing Steven Johnson's new book, Where Good Ideas Come From: http://www.amazon.com/gp/mpd/permalink/m3O3C2EO0XITMC. It is very cool - if you like the UPS commercials with the whiteboard guy, you'll love this. But he also raises two great points that come up again and again in my classes - the myth of the brilliant flash of insight, and the need for collaboration and hard work to turn a great idea into a viable business opportunity. I'm looking forward to getting the book in October when it's released.

What does an Entrepreneur's Brain Look Like

OK - I'm a sucker for graphics of entrepreneurial cognition, but this one's really good. Found in a random web search. I'm putting it on my home page!

True Entrepreneurs...

Just to illustrate my point that entrepreneurship is context-independent, check out this photo from this weekend's flower show at Fairchild Gardens. Maybe it's just because it was a warm day in Miami and I was thirsty, but it struck me that those guys know how to sell water bottles!

UM Business Plan Competition

Sorry for the lapse in posts - when I started this blog I committed to myself to post at least once a week. However - as usual - reality intruded. In this case, reality took the form of the University of Miami Business Plan Competition, which I organize. It turned out to be a great event, with a group of very successful entrepreneurs and investors providing excellent advice and feedback to some very innovative and enthusiastic students who worked very hard on their plans and presentations. The fact that these students represent the next generation of business leaders gives me hope that we may work our way out of the current economic and political mess we are in after all.

Healthcare Reform for Entrepreneurs

Healthcare reform has been covered by the media, both mainstream and "new," as largely a political issue - a horse race with "winners" and "losers." Some business publications have looked at its impact on small business, but again one gets conflicting information depending on who one decides to listen to. But this view largely ignores the impact of this legislation from an entrepreneurial perspective. Entrepreneurs are looking for opportunities, and one great source of opportunity is change. This legislation will make major changes to a large sector of the economy. Like my smart friends who have used the extended recession as a bargain hunting opportunity instead of crying about decreased sales, now is the time to figure out how to position yourself to take advantage of the opportunities that will present themselves.

What is Your "Net Promoter Score?"

Last week, my Entrepreneurial Consulting classes were lucky enough to have a visit from Bain & Co. Fellow Fred Reichheld. Fred has developed a simple but powerful metric of customer loyalty that he calls the "net promoter score" (NPS). The score is calculated by asking customers on a scale of one to ten how likely they would be to recommend the company to a friend. Subtract Detractors (scores of 1 - 6) from Promoters (9s and 10s), and you get your NPS. Fred's research has shown that high NPS companies grow much faster than low NPS companies. Thinking in terms of NPS leads firms to adopt a strategy of delighting customers at all times. The most common question from the classes is "this is so simple - why doesn't every company do it? A very good questions indeed. It occurred to me during the presentation that startup firms, who are desperate to differentiate themselves from their larger competitors, actually have an advantage in customer service because they are much closer to their customers. Startups would be wise to take customer loyalty very, very seriously as they develop their strategies.

Interesting Contest

As I said in my first post, I am always on the lookout for a good entrepreneurially-focused blog, and I might have found one thanks to Barry Ritholtz. It is called I, Cringely by tech veteran Bob Cringely. Seems pretty interesting. I was attracted to it because of Cringley's Not in Silicon Valley Startup Tour. Bob is teaming with the Kauffman Foundation to find the top 100 startups not located in Silicon Valley. A worthy goal, and I hope a number of South Florida Companies make the list. Plus, with a name like Cringely, he must be cool.

What is Entrepreneurship?

We have been redesigning the entry about the entrepreneurship major in the UM Bulletin this week, so it is a perfect time to start the discussion of what I mean when I say "Entrepreneurship." The old entry in the bulletin said "The ENT major is primarily designed for students who intend to start and/or manage their

own business." The rest of the faculty and I agreed that this was a limited and outdated view. Our new description is " The entrepreneurship major prepares students to engage in the process of value creation, regardless of organizational context. Students will develop a holistic view of organizational creation and change that is applicable to either starting a new venture (for profit or nonprofit), or working effectively within an existing organization."

Note that we feel strongly that entrepreneurship is context-independent. i.e. it doesn't relate to starting a business. Starting a business is just one instance of entrepreneurial activity.  

What is "A Foolish Inconsistency?"

A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines. - Ralph Waldo Emerson, "Self Reliance"


This has been one of my favorite sayings since I was a teenager. Back then, I was reading stuff like Zen and the Art of Motorcycle Maintenance, and Emerson's message of nonconformity and finding one's own path in life resonated deeply with me. As I have gotten older, and have dedicated my life to working with and studying entrepreneurs, Emerson's words strike me as describing the exact opposite mindset to that of a real entrepreneur. Entrepreneurs almost be definition do not follow the beaten path. This is not because they are "counter-culture" or "non-conformist," but because they don't think like other people. Entrepreneurs do not see this inconsistent behavior as risky because they have a strong belief in what they are doing. What would be intolerable to them is following the same consistent path that everyone else does. So they are deliberately inconsistent. Does that make them foolish?

Welcome to my Blog!

This is the first post of my new blog, so I'm going to use my first few posts to talk a little bit about who I am, what I'm planning to cover here, and why I've decided to embark on this journey. As for me, you can read my Google profile, or look at my biography and CV on my web site, but the essence of it is this - my undergraduate educational background was in biology with a concentration in evolution, behavior and ecology. After a 12 year career in finance ending as a Director at Charles Schwab & Co. (and earning an MBA on the side), I returned to academia to pursue a Ph.D. in strategic management and entrepreneurship at the University of Oregon. I wrote my dissertation on the emergence and evolution of nanotechnology as a distinct organizational field. I am currently Director of Entrepreneurship Programs for the University of Miami School of Business Administration.

I believe that my position and background give me a unique perspective on entrepreneurship and the entrepreneurial process that may be of interest to some. For one thing, half of my career has been in business and half in academia. That means I understand and can speak to both of those constituencies. It is a unending source of amazement to me that businesspeople and the academics who dedicate their lives to studying business have so little to say to each other. This is especially true among entrepreneurs, who often believe that no one who hasn't been through what they have can possibly understand them; and entrepreneurship scholars, who often use arcane econometric models that serve no practical purpose in order to publish in top journals and advance their careers. I understand both of these perspectives, but don't agree with either. One of the things I hope to do with this blog is to argue for a new type of entrepreneurship research that is both useful to practice and sheds important theoretical light on who entrepreneurs are and what place they hold in society.

Secondly, I would like to focus on what entrepreneurship is, which is a specific way of thinking and viewing the world (I will post exactly what I mean by this in the near future). For historical reasons that I will also address shortly, our views of entrepreneurship tend to be economic - jobs and wealth created, industries destroyed or transformed, etc. There is nothing wrong with this, but it does get away from the actual act of being entrepreneurial, which is just as creative an act as any artistic endeavor, and often does not involve a profit motive at all.

Thirdly, I don't think I am alone in believing that we are living in very troubled times, and that we seem to be right on the edge of disaster on a number of fronts. I don't pretend to have all of the answers, but I do believe strongly that entrepreneurs and acting entrepreneurially is a large part of the solution, and I want to promote this view.

Finally, I've been looking around for a while and I just haven't found other blogs that address these issues. Maybe I'm not looking in the right place. If you know of any, let me know and I'll gladly link to them.

As I get rolling with this thing, please feel free to comment on anything I post, good or bad. Assuming I don't get ridiculous amounts of spam or hate mail, I'll post all comments without moderating.