Can the State Help Build Great Entrepreneurs?
By: Steve Masur
I have been speaking recently at a lot of entrepreneurship programs and have toured a lot of incubators and accelerators this year, starting with the MIT Media Lab. The above question has been nagging at me.
I am skeptical about state entrepreneurship programs, because my experience is that the benefit from them has tended to flow to the few and the cool, meaning, people who were already well connected going in, and not necessarily everyone. I think when you are spending state money, the benefit should go to everyone. But generally speaking, it seems odd to me that you would spend state money on entrepreneurship, because ultimately entrepreneurship is about making money for yourself, and the thinking that says “just give me a little help, and then I can make it on my own,” does not tend to encourage people to make it on their own quickly, instead, they just keep asking for help. A great many VCs have found this out as well.
Regarding the schools and the science of entrepreneurship, there is some science, for example learning the mechanics of managing money and resources, learning some basic relevant law, so you know how to play within the rules, but I don’t think entrepreneurship is really a science, it is a discipline, like skiing, or poker, or sailing, or chess. At a certain point, winning becomes about trial and error, and learning how to play the game, and learning the discipline the way YOU do it, not someone else. So for this, a lot of hypothetical learning does not really get you there. Trial and error gets you there. Learning from your failures gets you there. Trying, while also observing the moves of other people you respect helps you to steal some understanding and tricks that help you play your game better than you currently do. So like other disciplines, the best thing is to move quickly out of the classroom and the science of it all to actually trying things, and establishing a coaching relationship with your mentors. This way you can develop your skills in the discipline, and they can observe and point out the areas where you could improve. I have found that with the best entrepreneurs, or people who do any discipline, this coaching process never ends, because even at the very top of entrepreneurship, or at the pro sports level for that matter, it is still valuable to have someone you trust and respect watching what you do objectively and giving you their opinions from the outside of how to improve.
So to my mind, the way we currently do things works well. We have one to two year business schools in which you cram in learning the small amount of the science of business there is to learn, looking for opportunities that light your entrepreneurial fire, and meeting colleagues who will be valuable to you later, and may even serve as your outside observers and mentors. Then you are thrust out into the world to try and fail, or succeed. You can try it on your own if that is your style, or you can take on partners, a board of directors and investment that the board seats usually bring, so that you have invested in people focused on your success or failure. There are people who catch the soul fire of entrepreneurship and stick with the game however they decide to play it (big organization, small organization, service business, product business, ultralight, etc), and there are people who quit and sometimes become terrific employees in other people’s organizations.
I am an entrepreneur. I have run a service business for almost 20 years. No school taught me how to win at this. Failure and success taught me. I always want to improve. I remain hungry for the advice of people I respect to look at what I am doing and tell me where they think I am doing poorly or well.
I have been thinking a lot about Carol Bartz recently. She was given an unbelievable opportunity. Yahoo had (and has) almost a third of all traffic on the internet. This puts Yahoo in a position to compete positively against even Google, and certainly against the major media companies. Where I think Carol went wrong is that she never owned the opportunity as a entrepreneur. She approached it as a technocratic employee. In other words, she internalized the mantra of “I must maintain excellence, and do my job to the highest standard,” instead of, “I must go out there and seize this win away from everyone else who is competing for it.” Yahoo was (and is) screwing up on a massive scale. Technocratic employee heads needed to roll, and the good CEO needed to figure out which ones, and what to do in each segment of the business afterwards. Instead, Carol made “safe” moves, and preserved bad internal politics. This is evident even in her final text message which was sent out to employees; she talked about the great people with whom she worked, and the job she did on behalf of the board. She ultimately never took responsibility for the failure. It would have been better if she said, “Sorry guys, I pushed it as hard as I could and failed. I’ve learned a lot. I’m going to meditate on it to think through what I could have done differently. I’ll see you in the market in a few months and I hope you’ll work with me in the next venture.”
So in studying adjustments to the entrepreneurial process, please don’t teach people that entrepreneurship is a science and that they should be good technocratic employees who adhere to a predetermined standard. This will never produce good entrepreneurs. Instead, push them out into the world to fail or succeed, and learn the ropes by trying. This has the chance of creating great entrepreneurs.