What inspires entrepreneurs?
24 December 2009
The suggestion that there is an entrepreneurial gene –
that entrepreneurs are born not made, raises interesting questions about what we mean by entrepreneurialism. There are many facets to it and entrepreneurs come in many different forms. Some of the most successful ones do not correspond with the stereotypes of a relish for risk-taking and a nose for business. (As with most nature v nurture debates, what the research actually showed was that there is a tendency for entrepreneurial traits to be inherited, not that children are bound to follow in their fathers’ footsteps.)
The dimension of entrepreneurialism that most interested Joseph Schumpeter was the revolutionary one. Some individuals make a dent in the universe, as Steve Jobs modestly put it – they challenge conventional wisdom, create something completely new and overturn the old order. That revolutionary impulse – and even more so the creative and organizational gifts to makes something special happen – are very rare and not necessarily connected with a strong interest in making money or business management. What spurred the agents of creative destruction I’ve studied more than dreams of riches was a vision of doing something radically different. It is hard to imagine college dropouts like Steve Jobs or Michael Dell following a conventional career or climbing the corporate ladder – they would have been hopeless team players. Without their exceptional intelligence and imagination, they might just have been egotistical, obsessive cranks nobody else would have wanted to work with.
That was pretty much how most of John Sperling’s colleagues at San Jose State University regarded him, when in 1974 he started up the organisation that later became the University of Phoenix. Nobody believed that a 53 year old left-wing teacher and failed union organiser was going to change the face of adult education in America. Sperling just wanted to make a difference to what he called ‘the working community’, not make millions. He knew that he would never get anywhere with what he saw as petty, snobbish, academics, deeply resistant to change, but the only way to win his war with the educational establishment was to found a for-profit university. Twenty-five years later, rather to his surprise, he was a billionaire.
The founders of the three biggest Internet companies, Cisco, eBay and Google, showed little interest in business until their inventions took off. Sandy Lerner and Len Bosniak, moonlighting from their IT support jobs at Stanford, had a mission to help other universities to connect their computer networks using the gizmos they called ciscos. Pierre Omidyar was equally unworldly – he didn’t think about turning his Auction Web community into a business until his Internet Service Provider started charging him $250 a month. Larry Page and Sergey Brin didn’t even set out to create a search engine, let alone a business, until their map of the Web turned into a way of organising the world’s information. None of these pioneers started out with a strategy let alone a business model.
This is not to deny that the prospect of making an enormous fortune did not become a powerful incentive for all these revolutionaries, as for all successful entrepreneurs. But it is interesting that most of them have spent much of their time since giving large parts of their fortunes away to other ways of improving the world – from Sperling’s campaign to legalise drugs to Lerner’s foundation for women writers and Gates’ enormous philanthropic foundation. They have always followed their private passions, some of which happened to turn into businesses. Most market creators, though perhaps not most entrepreneurs, have a touch of the Romantic Economist about them, even those uber-rationalists, Gates and Dell. They certainly have what Keats called negative capability – they are comfortable with uncertainty and can deal with half-knowledge.
In my final post of 2009 I’ll discuss why it is so difficult for mature organisations to become entrepreneurial and why most creative businesses are so poor at management.