Entrepreneurs Of All Kinds Elements Of The New Venture Entrepreneur Experience

Description
In this detailed outline concerning entrepreneurs of all kinds elements of the new venture entrepreneur experience.

BABSON ENTREPRENEUR EXPERIENCE LAB
in partnership with the Business Innovation Factory
CHRISTINE COSTELLO • HEIDI NECK • ROBERT WILLIAMS
VOL. 1
ELEMENTS OF THE NEW VENTURE
ENTREPRENEUR EXPERIENCE
ENTREPRENEURS OF ALL KINDS™
The Babson Entrepreneur Experience Lab, a partnership between Babson College and the Business Innovation
Factory (BIF), is a platform that puts the voice and experience of real world entrepreneurs at the center of an
ongoing efort to design, develop and test new education and support solutions for entrepreneurs of all kinds.
By deeply understanding the experiences of entrepreneurs and also engaging them in the conceptual development
of wholly new experiences, the Lab is developing solutions through the lens of entrepreneurs themselves, and using
this understanding to develop a platform for experimentation.
Visit the Lab portal for a downloadable PDF of this report and the Elements of the Entrepreneurs Inside Experience
report, a complete library of entrepreneur video stories, and an interactive era analysis charting the history of
entrepreneurship in the United States.
elab.businessinnovationfactory.com
BABSON ENTREPRENEUR EXPERIENCE LAB
in partnership with the Business Innovation Factory
CHRISTINE COSTELLO • HEIDI NECK • ROBERT WILLIAMS
VOL. 1
ELEMENTS OF THE NEW VENTURE
ENTREPRENEUR EXPERIENCE
ENTREPRENEURS OF ALL KINDS™
// elements of the entrepreneur experience
04 04
Stories shape our
perceptions
of entrepreneurs...
Stories shape our
perceptions
of entrepreneurs...
// elements of the entrepreneur experience
04
how they’re born,
not made...
how they’re born,
not made...
// elements of the entrepreneur experience
06 06
alone in his garage
with the brilliant
startup idea...
alone in his garage
with the brilliant
startup idea...
// elements of the entrepreneur experience
06
reaching overnight
success and
unimaginable wealth...
reaching overnight
success and
unimaginable wealth...
// elements of the entrepreneur experience
08 08
for just the few and
(very) famous.
for just the few and
(very) famous.
// elements of the entrepreneur experience
08
It’s time for a
new narrative.
It’s time for a
new narrative.
10 10
At the heart of the Babson/BIF collaboration is a belief in entrepreneurs of all kinds—that we all can learn to practice
entrepreneurship, and do so in various contexts. However, our current de?nitions of entrepreneurship and our well-
intended but insufcient support systems won’t get us where we need to go fast enough. The rhetoric is out there—our
economic future depends on entrepreneurship—but today’s narrative mythologizes super heroes—entrepreneurs who
are born, not made; geniuses with the brilliant idea working alone in the garage; stars achieving fame and unimaginable
fortune literally overnight. They’re fearless, iconic, and irreplaceable. Their celebrity status so well-known around the
world, we call them by name. Mark Zuckerberg, Bill Gates. The late Steve Jobs. They’re the few, but their story becomes
the single story
1
of entrepreneurship, a stereotype that few can personally identify with; one that does little to represent
the realities of today’s entrepreneur experience.
In the United States, 12.3% of the population is a nascent entrepreneur or owner of a business less than three years
old—roughly 22 million people between the ages of 18-64.
2
Who are they? Where and how do they experience
entrepreneurship? If, as recent studies suggest
3
, this number is in decline, how can we encourage more people to
choose an entrepreneurial path? The Babson Entrepreneur Experience Lab aims to address these issues by focusing on
the realities of entrepreneurship today through the lens of entrepreneurs themselves.
Our work starts with the understanding that we need a new, more expansive narrative of what entrepreneurship is and
can be. We can no longer think our way into an uncertain, unknowable future—we have to act. We know that action
is at the root of entrepreneurship and that entrepreneurship, a powerful word, when practiced can and has changed
ENTREPRENEURS OF ALL KINDS
TM
“We are all entrepreneurs, only too few people get to practice it.”
—Muhammad Yunus
11
1 “The single story creates stereotypes, and the problem with stereotypes is not that they are untrue, but that they are incomplete. They make one story become the only story.” (Chimamanda Ngozi Adichie )
2 Total early-stage Entrepreneurial Activity (TEA); Percentage of 18-64 population who are either a nascent entrepreneur or owner-manager of a new business as reported by the Global Entrepreneurship Monitor (GEM) using
data from the Global Entrepreneurship Research Association (GERA). http://www.gemconsortium.org/visualizations
3 Lynn, Barry C. and Lina Khan, “The slow-motion collapse of American Entrepreneurship.” Washington Monthly, July/August 2012
4 Elements of the New Venture Entrepreneur Experience, elab.businessinnovationfactory.com
the world. We see how many individuals throughout our nation practice it, yet don’t even realize they do. We want to
develop a deeper understanding of the entrepreneur experience in order to help extend entrepreneurship to the many,
not the few. In our work, we develop empathy not only for the new venture entrepreneurs (NVE) but also for those
individuals employed within organizations—the entrepreneurs inside (EI). We tell the stories of Entrepreneurs of All
Kinds—those individuals or groups who think and act entrepreneurially, who can transform opportunity into reality and
create economic and social value for themselves and for others.
In our ?rst phase of lab activity, the Babson/BIF Lab team engaged new venture entrepreneurs from well-known
entrepreneurial hotspots and their lesser-known counterparts throughout the United States to create a ?rst person,
national characterization of the new venture creation experience.
4
We recognized an interesting phenomenon
beginning to develop—many individuals and institutions consider entrepreneurial thinking and acting as a vital life skill.
In our second phase (the focus of this report), the team sought out entrepreneurs creating value inside a diverse mix of
organizations. Insights emerging from the work reveal opportunities for intervention and innovation. We are now working
to identify and establish experimentation environments in the domains of new venture creation and organizations. This
work will lay the foundation for systemic experimentation, where programs and services for today’s entrepreneurs and
future generations of entrepreneurs can be developed and tested within an integrated, real world environment.
// elements of the entrepreneur experience
12 12

INTRODUCTION
Elements of the Entrepreneur Experience
Nine fundamental elements covering the experience of Entrepreneurs of All Kinds
TM
Emerging research insights from engagement with those practicing in the traditional context of
starting new businesses (new venture entrepreneurs) and those working within existing organizations
(entrepreneurs inside) are grouped into a set of nine fundamental categories, what we call Elements
of the Entrepreneur Experience. The elements are not meant to be exhaustive—the contemporary
entrepreneur experience is far too complex to properly capture in a single study or document. Instead,
the elements call attention to converging insights critical to the overall entrepreneur experience and
point to opportunities for how we teach and support entrepreneurs of all kinds.
This report, the second in a two volume set, describes the experiences of EI—those thinking and acting
entrepreneurially within organizations.
12
// elements of the entrepreneur experience
12

13
Identity
Self-image—identifying with the
entrepreneurial path as a viable and
attainable possibility for oneself.
Storytelling
Stories—the universal language—
enlist and teach others, and create and
communicate the intangible, a vision.
Community
The need for membership, where
common experiences, purpose, values
and behaviors can be shared.
Uncertainty
Behavior that allows one to “act
to know” when the situation is
(currently) unknowable.
Team
The role of others in
ideation and execution.
Social Capital
Acceptance into social networks
that amplify reputation, trust,
currency and leverage.
Investment
Commitment of resources
and/or support to capture a
new opportunity.
Ecosystem
The factors in a speci?c context or
environment that heighten or diminish
entrepreneurial activity.
Learning/Relearning
The experience of gaining
knowledge and eliminating habits
that no longer serve.
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Elements of the New Venture Entrepreneur Experience
The rhetoric is out there—our economic future depends on entrepreneurship—but we can’t get there with the current national
narrative. Within the current story, entrepreneurship is viewed as central to just a few advanced markets such as technology and
health care; is con?ned to known places of activity such as university labs, incubators or Silicon Valley; is so narrowly de?ned that
only a few are recognized as entrepreneurs; is largely absent from our education and work force development systems; and relies
on well-trodden 20th century support environments, platforms, and tools.
The stories we tell ourselves and those we see throughout popular media shape our common understanding of entrepreneurship
and tend to perpetuate myths that limit entrepreneurial activity and in some cases preclude individuals from envisioning
entrepreneurship as a viable path. The dominant entrepreneurship narrative is still the lone individual with the brilliant idea who,
against tremendous odds, makes it big; the home-run at the bottom of the ninth. The founder myth focuses on and bestows celebrity
status on a relatively small set of highly successful, rich, predominantly male, technology-focused entrepreneurs. This narrative
permeates and has come to de?ne much of the entrepreneurial culture in the United States. For instance, the VC funding model,
which de?ned the funding landscape for many years, is built around the search for high-growth home-runs, the proverbial “next
Google.” A similar attitude guides current incubator and accelerator models, which focus almost exclusively on fast, high-growth
companies to the exclusion of others. However, the majority of entrepreneurs fall outside this narrative. As one entrepreneur put
it, “There is nothing wrong with a $10 million company.” Yet, relatively few actually embrace this fact.
As we engaged the participants in this study, several insights emerged around the actual experiences of new venture entrepreneurs.
Identity as an entreprenuer is not something that comes immediately to all people—many building businesses don’t think of or
refer to themselves as entrepreneurs. Turns out for many, identifying as an entrepreneur is less important than identifying with
the entrepreneurship path. It’s critical that people see the creation of their own opportunities as a viable and attainable possibility
for themselves.
Once the path is seen, the motivations and entry points are diverse—a diversity not accurately represented by the search for a
single de?nition of what an entrepreneur is and who can be one.
Entrepreneurs everywhere understand the need for community and peer groups in the practice of entrepreneurship. The openness
and pay-it-forward culture evident within these communities is deeply engrained. Yet, for all the openness and accessibility
present in these communities, cliques do exist—exclusive, segregated groups that require speci?c quali?cations for membership.
Segregation can prove bene?cial (entrepreneurs can share common interests, views, purposes, and patterns of behavior), but it
14
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can also be pejorative and perpetuate diferences between sectors and groups that belittle some entrepreneurs in favor of others,
and prevent broad sharing of innovative approaches to support one another.
Despite the rise of social media and mobile technologies, entrepreneurship remains place-based. Many people startup and
practice where they live, drawing from their local resources. Others choose location with intent, based on a place’s entrepreneurial
reputation or its “feel.” All cite the need for face-to-face encounters. Places develop ecosystems over time—interactions of people,
organizations, and infrastructure—which combine to heighten or diminish entrepreneurial activity. But ecosystems provide much
more than resources. They de?ne the entrepreneurial culture of a place. Places where this culture is local, visible, and accessible
in the day-to-day interactions of entrepreneurs make it much easier for people to identify with the entrepreneurial path, but new
ecosystems who merely copy risk the creation of an entrepreneurship monoculture.
Entrepreneurs are literally surrounded by stories—it’s the universal language of entrepreneurship. Stories convey lessons learned
and allow entrepreneurs to create and communicate the intangible, but many do not have the necessary storytelling or story
decoding skills to avoid pitfalls and misdirection. All entrepreneurs hear stories about failure. Businesses will fail, and accepting
this, and learning from others about that experience or steps to prevent it is a central component of being an entrepreneur. But,
the predominant use of the term ‘failure’ is really framing another important aspect of entrepreneurship that’s little understood
and discussed in entrepreneurship circles. The practice of entrepreneurship requires iteration and experimentation, but many are
simply not wired for iteration.
In some ways, nearly the entire entrepreneur experience can be understood by looking deeply at what and how they learn. An
entrepreneur’s education is largely informal. Precedents and proxies bridge gaps in individual experience but practice is key—
learning is inseparable from doing.
All entrepreneurs fnd fund raising, networking and team building to be a challenge. While money is now more accessible than
ever before, navigating the money landscape from self-funding to venture capital is still one of the most taxing elements of the
entrepreneur experience. Networking is another space where some entrepreneurs excel and others struggle. A mechanism for
building social capital—a trusted network of people through which you gain access to knowledge, resources, talent, and any
number of things—the lack of social capital can thwart even the most passionate entrepreneur. In the pursuit of a great idea
or funding for a venture, many entrepreneurs tend to overlook the value of their teams and the impact that teams have on the
viability and success of their venture.
15
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16 16
// elements of the entrepreneur experience
16
Research Methodology
Elements of the
Entrepreneur Experience
The Experience Imperative
About the Lab
About the Partners
Acknowledgements
CONTENTS
// elements of the entrepreneur experience
18
Six months. Over 250 entrepreneurs from familiar entrepreneurship hotspots
and their lesser-known counterparts. A ?rst-person, national characterization
of entrepreneurship.
How do people actually experience entrepreneurship? This was the central question we sought to address in
the ?rst phase of research in the Babson Entrepreneur Experience Lab. To discover the answer, we modeled
our approach on thinking like a designer. Using a human-centered design process—one that begins by
including the very people we are designing for—we were able to walk in the shoes of entrepreneurs, to listen
to their stories, and to see their world as they see it. The research plan integrated a core set of ethnographic
methods that ensured signi?cant exposure to the people, places, and things that make up the entrepreneur’s
experience.
RESEARCH
METHODOLOGY
INTERVIEWS (126)
individual, group and expert—were the primary means of
eliciting the voice of the entrepreneur. Using a semi-structured
interview protocol, a broad range of topics were addressed
with study participants including self-identi?cation, venture
background and lifecycle, teams, funding and resourcing,
networks and community, education and support systems.
SHADOWING & OBSERVATION (105)
provided the opportunity to track an individual’s experience
and their shifting needs over the course of several hours, and
to understand the activities and behaviors of entrepreneurs in
a variety of contexts by directly observing daily participation
?rst-hand.
SELF-DOCUMENTATION (22)
extended the reach of the research team by putting reporting tools
into the hands of entrepreneurs so they could frame important
aspects of their experience, environment, and relationships as
they see it, unin?uenced by our presence.
All research activities took place in the feld or remotely through an online research platform. With feldwork,
we were able to interact with participants at a single point in time in the same location. With “webwork,” we
could bring a group of entrepreneurs from diferent places and of diferent types into one environment and
engage them in a variety of research activities, asynchronously, over a period of weeks. The two approaches
combined gave us deep insight into the entrepreneur experience.
To get the appropriate mix of entrepreneurs, we chose ecosystems and entry points as the primary criteria
for participant recruitment. With little consensus in the literature and no generally accepted framework to
quantify and compare ecosystems across geographies, entrepreneurial activity was used as a gauge for the
relative strength of entrepreneurship ecosystems and as a basis for selecting locations in which to conduct our
research. With no generally accepted defnition of an entrepreneur, we worked towards a mix of traditional
startups, family businesses, social enterprises, franchises and business acquisitions to ensure an appropriate
diversity and range of experiences for optimal insight generation.
18
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18
// elements of the entrepreneurial experience
ENTREPRENEUR TYPE - The majority of entrepreneurs, a full 70 percent, were engaged
in nascent or new businesses (startups). 16 percent were building social ventures either
non-pro?t or for pro?t. The remaining 14 percent of entrepreneurs were engaged in a
franchise, family business or acquired business.
* All numbers shown are based on entrepreneurs who participated in interviews, shadow
sessions or self-documentation activities.
RESEARCH METHODOLOGY
SEATTLE
BAY AREA
AUSTIN
ATLANTA
GULF COAST
PROVIDENCE
BOSTON
OMAHA
ECOSYSTEM SELECTION - To choose ?eld locations, we
relied on the Kaufman Index of Entrepreneurial Activity
1996-2009 and New Business Clustering in U.S. Counties,
1990-2006. We cross-referenced the index of state
activity with the index of metropolitan statistical areas
(MSAs) and selected eight total ecosystems (evenly split
between strong and weak systems) to comprise a broad
geographic distribution.
WEAK
STRONG URBAN: 59%
NON-URBAN: 41%
19
8
26 38
41
SOCIAL & NONPROFIT
FAMILY BUSINESS
ACQUISITION
FRANCHISE
TRADITIONAL STARTUP
DEMOGRAPHICS - Slightly over 1?3 of the participants were women entrepreneurs and nearly ¼
were minority entrepreneurs. 64 percent of participants were between the ages of 25-50 with 15
percent under 25 (including several entrepreneurs under the age of 18) and 21 percent over the
age of 55. We also engaged dozens of experts or other stakeholders in the ecosystem to round out
our understanding of the entrepreneur’s experience.
AGE
MINORITY
WOMEN
25 - 50 UNDER 25
OVER 50
22%
33%
15%
64%
21%
5%
70%
16%
5%
4%
19
ELEMENTS
OF THE
EXPERIENCE
WHAT’S IN A
NAME?
01
STORYTELLING
02
THE “WE” OF
ENTREPRENEURSHIP
09
COMMUNITIES
OR CLIQUES?
03
YOU’RE PROBABLY
WRONG
06
LEARNING IS
LARGELY INFORMAL
07
05
THE (SOCIAL)
NETWORK IS
EVERYTHING
04
THE IMPORTANCE
OF PLACE
08
PRE-FUNDING
STRESS DISORDER
IDENTITY STORYTELLING COMMUNITY
ECOSYSTEM
SOCIAL CAPITAL
UNCERTAINTY
LEARNING/RELEARNING INVESTMENT TEAM
WHAT’S IN A
NAME?
01
23
IDENTITY
IDENTIFYING
PATH
WITH THE
ENTREPRENEURSHIP
For entrepreneurial activity to increase, it’s critical that people see the
role of the entrepreneur as a viable path and an attainable possibility
for themselves. Common stereotypes of entrepreneurship–white, male,
tech-centric, VC-backed, and high-growth–crop up again and again. In this
version, entrepreneurship seems out of reach for many. Most people know this
isn’t the whole story, but see few other representative experiences to identify
with. In the absence of visible alternatives, some adapt and express themselves
through current systems and languages, while others struggle to ?nd identities
and communities that support their roles and ventures.
24
identity
NO SINGLE DEFINITION
The question “What is an Entrepreneur?” seems
deceptively simple. But getting insight into people’s values
and beliefs about this core question is incredibly important
if we hope to help more people choose entrepreneurship
as a path. Even among communities of self-identi?ed
entrepreneurs, there are no clear de?nitions expressing,
what exactly, an entrepreneur is or who they consider
to be one. For many, the term ‘entrepreneur’ connotes
ideas of risk, creativity, ownership and leadership, and
the drive to start and build new things. But, ‘founder,’
entrepreneur,’ ‘CEO,’ and ‘small business owner’ are all
terms used interchangeably or in combination to capture
diferent aspects of entrepreneurship. For instance, when
asked to explain what the title ‘entrepreneur’ meant to
them, participants came back with a wide range of
responses. One said that it’s a person who “owns many
businesses or investments that make money for them;”
another said “a creator of new things;” one felt the term
should be reserved only for those bringing innovation to
the marketplace; a few felt the title has lost meaning
through overuse; and yet another said that “entrepreneur
for me is more a state of mind; a way of thinking through
things.” And when participants were asked to select
the term that best describes their role, the results were
incredibly varied with just as many people choosing the
term founder over entrepreneur to denote the diference
between developing an idea and taking it into production.
// what’s in a name?
25
26 26
IDENTITIES, NOT IDENTITY
Despite the lack of defnition (or possibly due to it), crafting an identity requires learning how to navigate the identity politics
at work in the entrepreneur experience. People carefully construct diferent identities to gain credibility and acceptance
into diferent communities critical for marshalling resources and support around an entrepreneurial endeavor. For many
entrepreneurs, it’s not a matter of a single identity but rather a set of overlapping identities that are used in diferent
situations. On one hand, de?ning oneself a particular way can open doors. If you state you’re an entrepreneur, you might
be more likely to gain access to classes at the local incubator. But identity can also close down options–if you state you’re
a social entrepreneur, you may not be able to access resources at the local tech-centric incubator, even if you would in fact
bene?t from those resources.
Joy, who founded a consulting frm focused on social innovation, describes it by saying that some days she wakes up as a
small business owner, some days she’s a woman entrepreneur, other days she’s a social entrepreneur, and some days she’s
just a working mom. While all these roles capture some aspects of her experience, how she chooses to describe herself
depends largely on who she’s talking with and what resources she’s seeking. Another entrepreneur, Meg, has a similar
experience where she tailors the description of herself and her venture in accordance to her audience. In some cases, she
?nds it best to describe herself as a small business owner and in other cases as the founder of a web-based marketplace
for ideas and tools. In both of these examples, communicating diferent identities and gaining acceptance into diferent
communities is a critical tool for developing social capital and access to resources.
ENTRY POINTS
How do people get started in the frst place? There are two primary ways that people frst start down the entrepreneurial
path. Many begin with the desire to be an entrepreneur and then go searching for an idea that will help them realize that
ambition. People who want to be their own boss or have more control over their lives, who want to work with a speci?c
team, or who want to build the company they always wanted to work for fall into this group. As an entry point, this group
identi?es strongly as entrepreneurs.
Others begin with an idea and slowly ?nd their way to an entrepreneur identity. This group includes people who are trying
to solve a particular problem, who stumble across an idea, who want to answer a question like “why can’t I do ‘X,’” who
make a discovery while tinkering with technology or realize they’re making more money on their side projects. For this
group, building identity is less straightforward and they tend to identify more with their industry or core subject area.
These aren’t hard and fast divisions, and, once on the path, these two groups converge very quickly. For instance, Laura,
a single Mom and business owner who had no intentions to be an entrepreneur, stumbled across an idea that she literally
couldn’t quit—an online marketplace for Twitter tools. First, she tried to sell the idea and her consulting ?rm to another
company. When that didn’t work, she spent months trying to ignore the idea. Finally, she had to give in. She took the
plunge—announced the venture, hunted for resources, and applied to a local accelerator program.
ENTREPRENEUR
OPPORTUNITIES
SOCIAL ENTREPRENEUR’S IDENTITY CRISIS
Perhaps no one is experiencing identity confusion and con?ict more acutely than people in the social entrepreneurship
space. What was once a clear distinction between for-proft (ventures creating economic value) and not-for-proft
(ventures creating social value) is fast disappearing. In the past, identifying oneself as a not-for-pro?t established
genuineness within the philanthropic community by signaling commitment to the creation of social value over turning
a pro?t. It also made it difcult to be taken seriously by the broader entrepreneur and business community. One non-
pro?t founder said that when he told people at business conferences that he ran a nonpro?t they treated him like he
had some sort of handicap.
Today, social entrepreneurs can choose for-pro?t status as well, but the choice can leave them adrift on both sides—
where identifying as a for-pro?t social venture often undermines their social credibility and the availability and access
to philanthropic support resources, it also creates equal disadvantage with funders and support resources who cannot
qualify the social venture along well-established for-pro?t evaluation categories and criteria.
This identity crisis can also be a major source of tension for individuals and within teams. When Kevin, Robbie, and
their two founding partners initially launched their travel abroad program as a nonpro?t, establishing the importance
of the social-mission was paramount and they wanted access to the world of nonpro?t funding and grants that they
were familiar with. However, from the beginning the Atlanta team wanted to run a self-sustaining business and quickly
found the nonpro?t status limiting. The decision to transition towards a for-pro?t business model was tough for the
close knit team—some felt they were abandoning their credibility, others saw the potential of bringing their mission
to more people. Tom, another social entrepreneur in Atlanta, ran into great difculty signing on partners to help his
charitable meals venture get of the ground. Non-proft groups did not want to associate themselves with a for-proft
organization. To realize his idea, Tom eventually felt he had to donate the nascent venture to a non-pro?t so they could
get the funding and necessary resources.
27
How can we re?ect and leverage the
true diversity of entrepreneur identity
without resorting to stereotypes?
What stories and tools can we
develop to help more people in
a variety of work contexts see
entrepreneurship as a path?
How can we create more useful
descriptions that empower rather
than isolate social entrepreneurs?
How can we build support around
entrepreneur’s diverse motivations
and entry points?
28
// elements of the entrepreneur experience
STORYTELLING
02
29
STORYTELLING
THE UNIVERSAL
LANGUAGE OF ENTREPRENEURSHIP
Entrepreneurs are literally surrounded by stories—they are an integral component of
culture and deeply embedded in the entrepreneur’s experience. Stories enlist others,
create community, and are vehicles for deep social connection. Stories are critical learning
tools that help emerging entrepreneurs assimilate the experiences of others—they are the
next best substitute for actual experience. Consider the value of mentors who essentially
provide stories from their own experience. Similarly, networking events, workshops, and
conferences are chie?y an opportunity for entrepreneurs to gather and to learn from each
other’s stories. Since one of the most fundamental jobs for entrepreneurs is convincing
others to believe in something that does not yet fully exist, storytelling is also a critical
tool for promotion—for creating and communicating a vision that compels others to join
or to lend their support in the efort.
Stories are also mechanisms that perpetuate stereotypes and myths about
entrepreneurship. Powerful and easy to relate to, not everyone is equipped with the best
storytelling and story deciphering skills. Extracting knowledge and lessons from stories
can be tough, resulting in missteps and misdirection. In their telling, it’s also easy to create
a “reality distortion ?eld,” a term attributed to Steve Jobs that refers to storytelling as an
activity that convinces yourself and others to believe anything is possible. In this mode,
storytelling can distort the proportion and degree of efort and cause entrepreneurs to
dismiss signals that suggest a needed change in direction.
30
storytelling
When pitching to investors or simply explaining their
venture to others, many entrepreneurs fall into the trap
of focusing too heavily on the idea and the technical
details of their work. This focus on the details obscures
the more fundamental question, which is “Why should
I care?” Technical profciency is important, but creating
an emotional connection should take priority. Some
entrepreneurs, particularly serial entrepreneurs, realize
the importance of engaging people emotionally in the
vision before getting into the speci?cs. Being able to convey
where you started, what steps you’ve taken to overcome
challenges, and where you’re headed can help win people
to your side. One entrepreneur described this process as
creating a sense of inevitability: this is going to happen and
therefore one should join. It’s about making it believable.
Eileen, a serial entrepreneur in San Francisco who created a
LEARNING FROM OTHERS’ STORIES
Stories are useful learning tools because they’re the closest approximation to actual experience—a
way of drawing on others’ experiences and the knowledge that comes with them. The importance
of this mode of learning can be seen in the prevalence of stories across the entrepreneurial culture.
At the Midwest region’s signature entrepreneurship conference, Big Omaha, a host of entrepreneurs
share stories from their experiences; the new book from a preeminent startup accelerator is a
collection of stories from alumni; and the current crop of technology startup accelerators are all built
around mentorship which is, in fact, based in stories.

In talking about launching his company after a Three Day Startup (3DS) weekend, Mike, a young Austin
entrepreneur building a Facebook app that lets students study together, said simply that “knowledge
and foresight for us, at least at this stage, is more important than capital. I never crashed a company
before, but many of the people in the [3DS] audience and the entrepreneurs there have both started
companies and crashed them. And there’s experiences that come from that, and understanding how
things work, what to do and what not to do.”
POWERFUL TOOLS FOR CONNECTING AND CONVINCING
publishing platform that allows anyone to make their own
books, explicitly recognizes the importance of storytelling.
“There are times when I think I should change my title to
chief storyteller because we are in the business of story.
That is the business of our business and I’m also a huge
believer in the power of story to capture the emotional
impact of what you’re trying to do. And when you’re out
trying to raise money, facts and ?gures are necessary
because that gives people con?dence that you’ll be able to
execute. But the facts and ?gures alone don’t tell them why
it is that you’re going to change the world.”
31
32
CRAFTING THE RIGHT STORY
Even when the importance of storytelling is recognized,
?guring out how to craft the right story for the right
audience is challenging. When you’re fully immersed in
the entrepreneur experience, there’s difculty in removing
yourself from the day-to-day enough to tell the story in a
way that resonates with others. Jacob and Susan started
a community co-working space in Seattle when it was a
very novel idea and spent a long time ?guring out how to
describe their business. “It would be interesting to look at
the language we’ve used to describe our business over the
years.… We had a really good feeling about the business
we wanted to start.... but we didn’t always have the
language. The easy part was knowing it, the hard part was
explaining it to people.... It was a constant challenge but
we know our language now.”
Dan, a social entrepreneur from Providence who founded
a sustainable tea company right out of college, recounted
that alongside an entrepreneurship course, the most
valuable course he took in college was one focused on
public speaking and persuasive communication. He didn’t
know it at the time, but the ability to convincingly explain
his venture and vision has been vitally important every step
of the way.
REALITY DISTORTION FIELDS AND OTHER PITFALLS
Where creating a sense of inevitably is important, some entrepreneurs (to their detriment) fall into a “reality
distortion ?eld,” where they get caught up in the myth of what they want their venture to be versus what it’s
actually becoming. There’s a ?ne line between productive naiveté and being unrealistic. If the power and comfort
of the story is too great, there is the risk of being blind to the reality, overlooking changes that need to be made,
and missing opportunities to pivot.
Similarly, since stories are the primary currency of mentorship, being able to ascertain what aspects of a
particular story are most germane to a particular challenge is both critical and rather difcult. When learning
from mentors and others, entrepreneurs can often stray from the path or become bogged down ?guring out
which advice to take and which advice to ignore.
Doug, a physician turned entrepreneur in Omaha, faced this issue when he “took advice” from several diferent
people and ended up with a completely diferent business model for his patient communications startup than he
originally intended. “The advice I was getting was sincere, probably well-educated, but now I feel like that was
a mistake to take that advice the way that I did.”
OPPORTUNITIES
How can we empower entrepreneurs
with better storytelling skills?
Can we codify the core elements of an
entrepreneur’s story?
How can we explicitly teach both
storytelling and evaluation of stories
as part of the entrepreneurship
method?
How can we shift our narrative from
“pitching” to storytelling?
How can we create new platforms for
entrepreneurs to share their stories?
33
34
COMMUNITIES
OR CLIQUES?
03
35
COMMUNITY
36
AND SEGREGATION AMONGST
OPENNESS
ENTREPRENEURS
In talking with entrepreneurs, we heard about and observed over and over again the
importance of community and peer groups. Entrepreneurs ?nd great value in drawing
on shared experience, learning from others facing similar obstacles, or getting help
from those that ‘get you.’ Within a community, there is also an amazing sense of
benevolence where people are very willing to help each other; very much a pay-it-
forward attitude. For instance, we encountered entrepreneurs who were only a few
months into a particular venture that were already opening their space to and mentoring
younger, aspiring entrepreneurs. Yet for all the openness and accessibility evident
in entrepreneurial communities, they could just as well be described as cliques—
exclusive, segregated groups that require speci?c quali?cations for membership.
While this segregation can prove bene?cial (a community where entrepreneurs can
share common interests, views, purposes, and patterns of behavior), it can also be
pejorative and perpetuate diferences between sectors and groups that belittle some
entrepreneurs in favor of others, and prevent broad sharing of innovative approaches
to support entrepreneurs.
36
community
ZIPCAR
ECOMMERCE
PLATFORMS
KNOWN DELIVERY UNKNOWN DELIVERY
U
N
K
N
O
W
N

P
R
O
D
U
C
T
K
N
O
W
N

P
R
O
D
U
C
T
RECYCLING VEGGIE OIL
FOR HEATING
ONLINE COMMUNITIES FOR
MARKET RESEARCH
CUSTOM SELF-PUBLISHING AND
BOOK MAKING PLATFORM
APPLE
NONVIOLENT STREETWORKERS
FOR COMMUNITY DEVELOPMENT
TEXTBOOK APPS &
EDUCATIONAL SOFTWARE
SUSTAINABLE MATERIALS
DATABASE & CONSULTING
SOCIAL MEDIA
MANAGEMENT PLATFORMS
CUSTOMER SERVICE
REVIEW APPS
SOCIAL NETWORKING BASED
CORPORATE WELLNESS PROGRAMS
ONLINE MARKETPLACE FOR
CUSTOM-MADE PRODUCTS
HEALTHY MEAL
DELIVERY SERVICE
REVENUE-BASED
Investment FUND
HEALTH GYM
FRANCHISE
WEB HOSTING FOR
ENTREPRENEURS
ONLINE MARKETPLACE
FOR LIFT TICKETS
GOURMET DONUT
SHOP
FINANCIAL PLANNING
FRANCHISE
LANDSCAPING AND
NURSERY
SMALL BUSINESS
MARKETING CONSULTING
CRAFT GIN
DISTILLERY
STARTUP
ACCELERATOR
SUSTAINABLE
TEA
EYE-TRACKING SOFTWARE
FOR USER EXPERIENCE
SUSTAINABLY PRODUCED
DESIGNER T-SHIRTS
ELECTRIC CARS
LED LIGHTING
3-D IMAGING
TECHNOLOGY
GROUPON
VONAGE
As this matrix shows, when plotting a number of the research participant’s ventures by known or unknown product, and known or unknown delivery channel,
normal segregation of businesses with “nothing in common” break down and new relationships emerge.
// communities or cliques?
37
38
KNOWN/UNKNOWN MODELS
One way to map the relationships between diferent
types of ventures is by looking at their basic business
models and then breaking them out according to known
or unknown products and known or unknown delivery
channels (known or unknown to the marketplace).
When plotted on a simple 2x2 matrix some interesting
relationships begin to emerge. Small business startups
generally tend to congregate towards the bottom left
quadrant. While they are creating something new with
their ventures, they tend to be working with known
products or services and known methods of delivery.
The upper right hand corner is home to a few truly
innovative companies that are creating new products
and delivering them through new markets or platform.
It’s no surprise that there aren’t many ventures
located in this quadrant. What’s more interesting is the
close relationship between some ventures that initially
seem to be entirely diferent.
THE DONUT SHOP AND THE WEB STARTUP
Sublime Donuts of Atlanta is a relatively new venture founded by Kamal, a career baker in his late 20s who, while
working at an industrial-scale bakery, saw a small, defunct donut shop for lease and decided to follow his dream of
building his own business. His donuts are by no means ordinary; they’re unique, gourmet donuts that have caught the
eye of the local foodie scene. But in general, the founder is working with a known product (a donut) and a known means
of delivery (a donut shop); he’s squarely in the known/known quadrant.
Around the same time, two guys in Silicon Valley, who had been working for a large discount travel web site, launched
a new web startup to sell discounted lift tickets to ski resorts via an online marketplace. On one hand, this seems to be
a rather novel business–no one else is building a platform for discount lift tickets online. On the other hand, lift tickets
certainly aren’t new and, at this point in time, selling discounted services and products through online marketplaces is
also a relatively established business model and method of delivery. The internet startup ?nds itself much closer to the
known/known quadrant and the donut shop than might have seemed true at ?rst glance. This is not to downplay either
startup or suggest that there aren’t diferences, but it does suggest that more points of commonality exist between
seemingly disparate ventures.
“You’re asking the
wrong person... I
don’t really know
what’s available
to entrepreneurs
of other stripes
around here.”
TAKEAWAYS
SEEING THE SIMILARITIES
Entrepreneurs are noticing across ventures there are often more similarities than diferences and these similarities
are under appreciated. Working to see the similarities opens up new avenues for improved entrepreneurial support.
First, support services often tend to be either too general or too speci?c. They’re aimed at everyone and therefore
not very useful or they’re specifc to a particular group. Many entrepreneurs pointed out that there are a common
set of challenges that all startups face and a set of services and resources that all startups need. As Radhika, CEO
of a customer buying pattern analytic software startup in Atlanta put it: “Most companies need the same things:
HR, insurance, fax and email, web site, basic marketing, et cetera....These simple things can be shared or easily
provided, like a company in a box. Then the entrepreneur can focus on the idea.”
Second, recognizing similarities opens up new opportunities for learning across diferent sectors. This was made
clear by the participants in the remote study. The study participants comprised a broad range of types of startups,
from consumer products, to nonproft social ventures, to consultants. When asked to refect upon what they
learned from participating in the study, many entrepreneurs admitted being surprised by the similarities in their
experiences and by how much they learned from engaging with other types of entrepreneurs. “I think the real
gain to be had is from the others in the community, and the opportunity and possibility of gaining insights into the
experiences and thought processes of others. There is a lot to be learned from others who are in the trenches, even
if they are fghting a diferent sort of battle.”
OPPORTUNITIES
What can we do to facilitate
more productive cross-discipline
interactions?
How can we create linkages between
entrepreneur communities so
learning can be more broadly shared?
How can we connect various
cities and regions in the national
entrepreneur landscape?
How can we democratize
entrepreneurship? Can we expand
our de?nition of communities beyond
startups to include entrepreneurs of
all kinds, sizes and work situations?
39
40
THE IMPORTANCE
OF PLACE
04
41
ECOSYSTEM
ECOSYSTEMS PROVIDE MORE THAN RESOURCES.
THEY DEFINE ENTREPRENEURIAL
CULTURE.
Despite the ubiquity of digital technology and increased mobility both physical
and virtual, entrepreneurship remains very place-based. Many people startup
and practice where they live, drawing from whatever resources exist within
their local area. Others choose location with intent, based on a place’s
entrepreneurial reputation or the “feel.” We can draw a circle around the
interactions of people, organizations, and infrastructure and look at how they
combine to heighten or diminish entrepreneurial activity; in any particular
place, there might be several of these circles or ecosystems.
Ecosystems by nature are place-based. In thinking about ecosystem
development, the focus is often on institutions and resources, but the less
tangible notion of culture is equally, if not more, important. To cultivate
an entrepreneurial culture, the ecosystem needs to be local, visible, and
accessible in the day-to-day interactions of entrepreneurs.
42
// the importance of place
43
ecosystem
In a few places, entrepreneurial culture is quite visible whether it’s seen on the backs of people wearing t-shirts that advertise startup programs or at cafes who gladly
accommodate entrepreneurs and their meetings, or in startup storefronts and highly-coveted events. (Images clockwise: University Cafe in Palo Alto, CA, Groupon
billboard seen on US 101 towards San Francisco, startup storefronts in Mountain View, CA, Startup Weekend t-shirt seen in San Francisco and co-working sidewalk
advertisement in Seattle.)
44
CREATING CULTURE
Around the country, entrepreneurs cited numerous
examples of what makes for a great environment.
Along with networks, capital and mentorship, all
mention cultural aspects of the place where they’re
building their ventures. People need to see what’s
possible. In places like Silicon Valley, San Francisco,
and Austin, the culture of entrepreneurship is visible
in the environment. In Mountain View, the fast food
and retail signs you’d expect to see on the strip are
replaced with startup names. In Austin, cofee shops
cater to entrepreneurs by setting up communal
conference rooms with self-service sign-up sheets.
In Omaha, co-working spaces advertise on the
street to those looking for a place to join others
as they work outside of the established system of
jobs and employment. Entrepreneurs like a place
with a density and proximity of entrepreneurial
communities. In some locations, entrepreneurs
literally bump into each other in the street. In
other locations, the event scene provides multiple
opportunities to meet and network with other
entrepreneurs. A sense of afliation is important.
Places where starting a business is the norm create
a strong sense of community, identity and purpose.
And entrepreneurs are very aware that it takes
generations who succeed and fail, and who reinvest
in their local ecosystem to build the appropriate
culture.
THE MULTIPLICITY OF ECOSYSTEMS
Entrepreneurs form communities organized around sectors or knowledge areas that have diferent
needs and behaviors. For instance, in a particular region there might be entrepreneurs working in
life science, gaming and food. Developing a strong gaming ecosystem, a life-science ecosystem, and
a food ecosystem, creates a density of entrepreneurs within a place. While diferent communities
do have diferent needs, there is value placed in some degree of cross-pollination and the strongest
ecosystems support healthy connections across a variety of communities.
Entrepreneurs often move between cities and regions. Ecosystems that provide seamless
entrepreneurial services and support at city, region and state levels are tremendously helpful.
Laura, a social media entrepreneur, found this out when she moved her startup to Cambridge,
Massachusetts from Boston because public transportation issues were making it impossible for her
employees to get work. Rather than the cities working together to support her and her company, she
found them creating a culture of competition.
LOOK AT WHAT YOU’VE GOT
Working within a system that’s short on people, organizations, infrastructure and culture, can make
entrepreneurship a very isolating experience. Early on, Mark, a founder of two e-commerce startups
turned VC, felt that others around him in Omaha were immersed in a culture of success through
employment. The norm was securing a high-level position in a big corporation. Others found his
entrepreneurial behavior to be highly risky, if not borderline crazy.
Entrepreneurs and other stakeholders who assess, catalog, and disseminate information on
the existing organizations and resources within a place provide a clear picture of the local
entrepreneurship ecosystem and a platform for enabling people to easily see and access these
myriad resources. In the process, entrepreneurs themselves and other stakeholders in the system
learn to be collaborative, transparent and proactive in growing their unique ecosystem.
When Hall launched the Austin Entrepreneur Network his goal was not to create an entrepreneurial
network from scratch but rather to catalog and connect the existing organizations and resources
within Austin. Another stakeholder in the Austin community, Bijoy, visually mapped the scene and
used this map to link particular resources to components of the entrepreneurial process. And in
Nebraska, the founder of a fan analytics application recalls how the entrepreneur community in
Omaha was really galvanized by a single person taking the initiative to connect isolated elements
within the ecosystem.
OPPORTUNITIES
Can we make entrepreneurship more
visible in mainstream environments
and systems?
Can ecosystems be created with
intention?
How can we empower entrepreneurs
and other stakeholders to highlight
and leverage existing resources—
to gather rather than create?
How can we better connect less
developed with more developed
ecosystems?
How can we create a sense of an
entrepreneurial place in larger
enterprises and institutions?
45
46
// stories from the entrepreneurial experience
the (social)
network is
everything
05
47
SOCIAL CAPITAL
48
SOCIAL CAPITAL
USING
TO AMPLIFY INDIVIDUAL EFFORT.
Everyone knows that networking is a conspicuous component of the entrepreneur
experience, but the spectacle and connotations can obscure the true value. Networking
is fundamentally about building social capital and creating trusted communities
through which you have access to an extended body of actual and potential resources.
Entrepreneurship is inherently unpredictable and it’s nearly impossible to forecast what
obstacles and hurdles will arise. By encompassing a range of individuals and experiences,
a robust social network enables one to more easily adapt to unforeseen issues and create
opportunities for serendipity. In fact, social capital is the most important tool for accessing
the full range of critical resources necessary for entrepreneurs. This includes funding, but
also knowledge, talent, expertise, community membership, and experience. In short, it’s
a way to amplify individual capabilities.
In addition to developing broad networks, entrepreneurs cited the importance of smaller,
more intentional micro-networks. These could be groups based on mutual interest or an
accelerator program, but they involve pooling collective resources for mutual bene?t.
These networks become a place to quickly say “I’ve got a question about X, what should
I do?” and access the trusted expertise of others.
In the continual process of building social capital, there’s a turning point where
entrepreneurs transition from having to proactively reach out through their networks and
actually begin to draw resources towards themselves. This transition requires experience,
reputation, and demonstrated success. But with traction and a body of social capital, the
resources begin to move towards you.
48
// the (social) network is everything
48
1ST
49
TRACK RECORDS ATTRACT SOCIAL CAPITAL
social capital
Serial entrepreneurs possess a distinct advantage by
having existing and well developed social networks
from which to draw. To start a venture with an
established network and not have to work as hard
to build social capital at each stage of a venture
is immensely valuable. Moreover, prior startup
success (and even sometimes failure) generates
signi?cant social capital in and of itself. Having a
track record, especially a successful track record,
can nearly guarantee a degree of success in the
early stages of a new venture. People are far more
likely to extend resources and support. Alongside
having practiced entrepreneurship, this is a primary
reason why the process becomes easier and more
?uid with time.
For instance, Diane runs one of the fastest growing
companies in Massachusetts, a company that ofers
an innovative web-based marketing research platform
for engaging customer communities. In the beginning,
fund raising and garnering support was tricky as the
company experienced slow or nonexistent growth for
many years. However, today Diane is heralded as one
of the state’s top entrepreneurs and, as a result, has
a large stock of social capital. “I can have a lousy idea
and most of those twelve VCs would give me money
this time. I’ve been there and done that. Now they
may not love the idea, but ultimately I think could get
funding for a bad idea now.” She
has social capital to burn.
“I was fortunate...
I had started other
companies and
I knew a lot
of people.”
WITHOUT ROBUST NETWORKS, ENTREPRENEURSHIP IS MUCH MORE DIFFICULT
The ?ip side is that without robust networks and access
to potential networks, entrepreneurship is much more
difcult. If social capital is a way for entrepreneurs to
build and access experience they don’t have, then not
having a rich network to draw on can undermine their
ability to overcome obstacles. This is the most striking
feature of weak ecosystems. Entrepreneurs don’t
work in a vacuum and social networks are critical
for both envisioning new ventures and for achieving
success. So if you’re an entrepreneur practicing in a
place where access to potential resources, expertise,
and other entrepreneurs is limited from the beginning,
then the challenge to build and grow a company is that
much more difcult. Laura, an entrepreneur herself,
works with an organization supporting emerging
entrepreneurs in Texas border cities, areas known to
be economically depressed. According to her, the most
limiting factor in these areas is the lack of resources
within the ecosystem. It’s tough to get started because
there are very few role models inspiring and modeling
productive entrepreneurship. And then there is very
little local support for emerging entrepreneurs. As one
example, Laura explains that “you could have creative
ideas, but again your network of people, even if they
think you have a great idea, might not have available
cash of $150,000. Whereas your suburban, white man
with his parents and where he grew up.... private
school, his network has that kind of cash. He still has
to have a good idea, but at least his network has that
kind of cash to get him going.”
50
MICRO-SOCIAL NETWORKS = INSTANT ACCESS
Micro-social networks are shortcuts to the full range of resources required in navigating the entrepreneur
experience. Despite social media networks, face-to-face interactions are still key to building social networks, and
events are one of the prime draws for this activity. However, many entrepreneurs cited the pitfalls of too much
networking. In cities with robust ecosystems, there are often so many networking events that they can hinder
productive activity and make it difcult to create opportunities for truly purposeful networking.
Herein lies the distinct advantage of being accepted into a micro-social network such as an technology startup
accelerator program—it creates instant access to a network rich with resources and social capital and confers
credibility and status within the community. Brian, a young entrepreneur and recent transplant to Silicon Valley,
gained instant access to an incredibly valuable network through his participation in the YCombinator and 500
Startups accelerator programs. (It’s not uncommon for entrepreneurs to hang out in more than one accelerator/
incubator program ofcially or unofcially). Within weeks he developed multiple micro-networks that are a rich
source of knowledge, capital, and further connections for his proprietary eye tracking technology venture. “It’s
an unbelievable experience in that you’re presenting to people–the net worth of that room is more money than
you’ll ever see in your life.... Then you have this big networking experience and that’s where you get a ton of
introductions.... where you generate your buzz and that’s where people write about you.... The connections we
made there are immensely, immensely valuable.”
OPPORTUNITIES
How can we help entrepreneurs
gain access to useful micro-
networks?
How can we build stronger
networks for peer mentorship?
How can ?rst timers develop
social capital more quickly?
How can we create non-competitive
entrepreneurial networks and
communities for sharing?
51
52
YOU’RE PROBABLY
WRONG
06
53
UNCERTAINTY
We heard countless stories that describe the central role failure plays in the
entrepreneur experience. To be innovative entrepreneurs are told they must not only
celebrate success, but also expect and embrace failure. To fail early and often. There’s
an important value lesson in this, but one that gets lost in translation. Businesses will
fail, and accepting this, and learning from others about the experience of ‘crashing’ a
company or steps to prevent it is a central component of being an entrepreneur. But,
the predominant use of the term ‘failure’ is really framing another important aspect
of entrepreneurship that’s little understood and discussed in entrepreneurial circles.
The entrepreneur experience is rarely smooth or predictable. It requires iteration and
experimentation. Yet, the language given to describe this aspect of the experience
is centered around the concept of failure: setbacks, false starts, wrong turns, and
mistakes. Many entrepreneurs are not wired for iteration. Past educational or
corporate experiences do not help them prepare for, learn from or respond to taking a
venture creation step. At its core, iteration is a cyclic process of prototyping, testing,
analyzing, and re?nement. It’s a way of building knowledge through experimentation:
try something, see what happens, learn from it, and then adapt or pivot. Framed as
failure, entrepreneurs develop fear for this part of the experience. Reframing it as
intentional iteration allows entrepreneurs to develop the skills needed to respond to
the uncertainty they face.
REFRAMING
AS INTENTIONAL
ITERATION
FAILURE
54
// you’re probably wrong uncertainty
DE-EDUCATION
Recognizing that ingrained behaviors may not be of help to an entrepreneur is the ?rst step towards
adopting the right mindset. Un-learning habits from prior educational or corporate experiences
is necessary, especially where these previous habits con?ict with the fast, iterative nature of
the entrepreneur experience. For instance, Michael, an entrepreneur working in San Francisco,
has spent most of his professional life working in corporate software development. With his new
venture, a mobile application development platform, he’s realizing that tendencies and habits from
his prior experience may be preventing him from launching with anything but the “perfect product.”
Sitting next to a younger entrepreneur who went from initial idea to ?rst, and admittedly imperfect,
product launch within three months, Michael realizes he’s struggling to un-learn these habits and to
manage the tension of wanting to do it right and launching early to get feedback.
PLANNING TO PIVOT
Every venture starts of with an idea that will change and develop over time. A major pitfall is the
temptation to overly commit or stick with a particular idea even in the face of certain setbacks.
Entrepreneurs often talk about the importance of identifying a mission that is likely to stay
consistent even while the scope changes as the venture grows, as customers engage with it, and as
it is infuenced by the ecosystem. Developing a mission and guiding vision that is malleable enough
to accommodate and even anticipate inevitable pivots is critical for success. All ideas change, and
entrepreneurs need to keep an open mind towards their capacity to pivot.
Rajiv’s Rhode Island venture went from being a local nonproft focused on raising awareness around
health and wellness to a for-proft venture that ofers social employee wellness platforms to Fortune
500 companies across the country. From his perspective, they’ve always had a commitment to a
basic vision, yet how they execute and achieve that vision is still an open and ongoing question. “You
go out there and start something. You know you’re in the right space. We wanted to be in health and
wellness, we wanted to be in community development, bringing people together. Along the way you
?nd you start to move down a pathway and identify opportunities.”
LAUNCH
LAUNCH
55
DE-RISKING
Laura, founder of an online marketplace for Twitter tools described a primary business failure
strategy as that of de-risking. By identifying all the ways her venture might fail, recognizing which of
these she had some control over, and then incrementally working to address those issues, she was
able to reduce her risk and learn about her product and market iteratively.
“An entrepreneur’s job is to dive headfrst into a really, really risky undertaking and systematically
de-risk it. Identify what are the six main ways this could fail, and what can I do about... OK, three of
them I can’t control, but these three I can. Let me make progress towards that.... And so, I just kept
working all the angles of, well, I can’t do anything about this risk, but I can do something about this.”
THE BOOTSTRAP MODEL
Although commonly used as shorthand for simply
not seeking outside funding, bootstrapping is a
distinct methodology that centers on constant
iteration and leveraging constraint to fuel
innovation. As opposed to the VC model of writing
a business plan, raising capital from investors,
growing quickly, and then aiming for a relatively
fast exit, bootstrapping focuses on shorter
cycles of iteration that enables business models
to emerge from the process itself. It’s a slower,
more organic approach that fully embraces
experimentation and its associated lessons as
the core of the entrepreneur experience. As a
methodology, it reframes failure as an essential
and productive activity. While the Bootstrapping
movement is often seen as an alternative to the
VC model, the truth is that most entrepreneurs,
both historically and at present, are in fact
bootstrappers. Most entrepreneurs don’t take
outside money, are constantly working with
signi?cant resource constraints, and are always
iterating and experimenting with their business
model.
Leo, a serial entrepreneur based in Austin, works
a full-time job while he steadily iterates his new
venture, a donation site that allows people to
round up purchase costs and donate money to
selected social organizations, towards launch.
Leo understands that change in his product and
business is inevitable and plans for it. “A very
large percentage of what I start with changes.
We refned the strategy. Interviewed donors. Got
educated. Got [the] idea out there. Got feedback.
Incorporated the feedback we think is important.
Circle back to make sure new ideas are the right
ones. We know what we launch will need to
change again... You adapt. You grow. You listen.”
56
PORTFOLIO OF OPPORTUNITIES
Another form of iteration was seen in entrepreneurs who are developing a portfolio of ideas.
Instead of focusing solely on one idea, there are individuals actively advancing multiple ventures
simultaneously. In other cases, entrepreneurs are designing ventures that create the working
conditions and infrastructure for developing a portfolio of ideas centered on a particular space
or industry.
For instance, Mike, the founder of a civic software development company in Seattle, describes
his venture as a laboratory that is opportunity driven. He intentionally cultivates a culture of
experimentation, so that while they’re focused on civic software they’re free to identify and
respond to a host of diferent social problems within that space. “If we fnd the opportunity
there’s some gap in the market that we can get a strong ROI on our particular development
skills, consumer Internet skills, then we’ll go jump at that and scale it.... The diference
between a product and a company is that a company is a machine that you’re building that can
listen to the market and adapt and change from the original ideas.”
OPPORTUNITIES
What would happen if we just stopped
using the word failure?
How can we teach entrepreneurs
a method of iteration and
experimentation—how to prepare for
it, manage it and learn from it?
How can we teach entrepreneurs to
systematically manage a portfolio
of opportunities as a form of
experimentation and iteration?
How can we help large organizations
to adapt their own training to embrace
entrepreneurial behavior?
57
58
LEARNING IS
LARGELY INFORMAL
07
59
LEARNING/
RELEARNING
To be an entrepreneur is to navigate a never-ending series of questions
where the learning curve is steep and long. In fact, nearly the entire
entrepreneur experience can be understood by looking deeply at what
and how entrepreneurs learn. What’s most striking here is that despite
the availability of formal entrepreneurship education programs
—especially at the undergraduate and post-graduate levels—the
majority of learning occurs informally. It comes from talking with peers
and mentors, studying precedents and following existing models,
listening to stories, and practicing.
The importance of informal learning is due in part to the messy and
complex nature of entrepreneurship; individual experiences are often
unique enough that formalized knowledge feels overly generalized.
But it’s also due to the fact that much entrepreneurial knowledge is
tacit and experiential in nature—it’s “know how” rather than “know
what;” it’s learning that’s inseparable from doing.
*”Living in the Question” is a phrase we frst heard from entrepreneur/philosopher Bijoy Goswami of Boot-
strap Austin. For more on Bijoy’s use this concept to teach entrepreneurship see: www.bijoygoswami.com.
LIVING
IN A QUESTION
60
// learning is laregly informal
Business
Core
Experiential
{
K
n
o
w
l
e
d
g
e
Precedent
learning from models and
those who came before
Practice
learning by doing and
experimenting
Proxies
learning by using some-
one else’s expertise
learning/relearning
legal information, business models and business plans,
management practices, and a host of other things. It’s
the basic things one needs to know when navigating
the discipline of entrepreneurship independent of core
knowledge. It’s also the place where most entrepreneurs
have the biggest gaps in their knowledge. Many
entrepreneurs come into entrepreneurship with a lot
of core knowledge but don’t actually know how the
components of business are integrated into a functioning
organization designed to generate value.
Experiential knowledge is the knowledge that actually
underlies most of what entrepreneurs do. This might
include knowing how to best pitch a venture to diferent
audiences, hiring the ?rst addition to the core team, or
learning how to distinguish good advice from bad. This
knowledge undoubtedly overlaps with core and business
knowledge, but it is the knowledge best learned through
demonstration and practice. Certainly entrepreneurs
can read all sorts of books about pitching ventures to
potential investors, but an entrepreneur will undoubtedly
know how to do this better after watching others and
having practiced pitching some 100 times themselves.
Assessing and building knowledge across all three
areas is a critical component of the experience. As one
entrepreneur put it, “the most important thing to being
a successful entrepreneur is to be able to reach and
respond to new information.”
Broadly speaking, entrepreneurs need to continually
assess and build knowledge across three diferent areas:
core knowledge, business knowledge, and experiential
knowledge. Core knowledge is the basic knowledge
around an entrepreneur’s product, service, or ?eld. For
instance, this might be knowledge about eye-tracking
software, green building technology, or pizza making.
For many entrepreneurs, this is knowledge they bring
from prior experience and is often the impetus for
entrepreneurship in the ?rst place.
Business knowledge includes all the codi?ed knowledge
around launching and managing business; it’s what
people learn in business school. This includes such things
as balance sheets, valuations, capital structures, basic
THREE TYPES OF KNOWLEDGE BUILDING
61
KNOWING WHAT CAME BEFORE
Another key method for learning is looking to precedent. Entrepreneurs ?nd others using similar models or
those who have gone through similar experiences and ask: “How did you do this?” Learning this way occurs
at many scales from analyzing an existing business model to asking another entrepreneur in their co-working
space where she got T-shirts printed. Mentors are critical sources in this learning process as are the stories
that other entrepreneurs tell about their challenges and experiences. Through precedents, entrepreneurs
learn how others dealt with similar problems.
An example of this is Rachel, an Atlanta entrepreneur who founded an online team/project management tool.
Her primary process is seeking out advice from mentors at every stage of the process. When she frst began
and was looking for funding, she actively sought out the single female entrepreneur who had successfully
raised capital for a tech business in her city. Further down the road, when she was confronting the question
of how to increase sales she used the same process—seeking out companies that had previously been in her
place and were now quadruple in sales—and reached out directly to the founders for advice.
KNOWLEDGE IN OTHER PEOPLES HEADS
Entrepreneurs build knowledge by pulling someone in who holds the knowledge they need. These “experts”
are used as knowledge proxies. This is another way in which mentors and peer-mentors are important. But
it is also one of the primary reasons for adding more members to a team. As ventures grow and pick up
momentum, there is less need for generality and more need for speci?city. The entrepreneur can’t herself
learn or master (let alone implement) all aspects of the venture, so she includes people on the team who do
have that knowledge.
After building out and testing his venture’s basic educational software package, Michael faced the question of
how to really grow and expand their business and oferings. From multiple meetings with mentors, friends,
and potential investors, Michael realized that what they were missing from the team was someone with
knowledge and experience with business development and growth. Rather than take on this additional
challenge and responsibility himself, the obvious decision was to hire a full-time business development
person with close ties to the company. Through this proxy, Michael cleared the hurdle of not knowing enough
about business development.
YOU’RE FOUR STEPS AHEAD OF ME.
BIZ
DEV
FOUNDER
I WANT TO
KNOW HOW
YOU GOT THERE.
62
GET OUT THERE AND TRY IT
In the end, it all comes down to practice. Practice is by
far the most cited and most signi?cant means of building
knowledge. This is, in part, because of the experiential
nature of entrepreneurship, but also because of its
complexity; it’s hard to anticipate all that one might
need to know. So many entrepreneurs act and learn and
then repeat the cycle again. This is the obvious reason
why serial entrepreneurs tend to be successful—they’ve
literally had the chance to practice entrepreneurship in
diferent contexts. Mike from Atlanta has a successful track
record as an entrepreneur and has advised innumerable
other companies along the way. Mike is confdent enough
in his experience and skill as an entrepreneur that he’s
currently launching an electric car venture—an area
that’s largely outside his core expertise. But he has
practice convening and managing large teams of people,
raising funds for diferent types of ventures, and working
with novel technologies in unknown industries. From
his perspective, his experience working in a variety of
contexts gives him the ability to build this new company.
1
2
3
4
SOLD BUSINESS
NEW SIDE PROJECT
BUY BUSINESS SPIN OUT
NEW COMPANY
VENTURE
VENTURE
VENTURE
VENTURE
“Right now, for us,
knowledge and foresight
in the entrepreneurial
space is more important
than capital... I mean,
I’ve never crashed a
company before.”
Mimicry, the art of imitation, can also be a fundamental tool for learning and advancement. Many entrepreneurs regularly
attempt to mimic more experienced entrepreneurs and borrow existing practices. In some sense, mentors are a tool
for mimicry. It’s quite common for aspiring artists and designers to learn by copying famous works. It’s no diferent for
entrepreneurs. This is a major appeal of franchising; it provides a model to follow where one can immediately practice what
others have already done. It can be seen in the recent wave of new accelerators—programs that help ?rst-time tech startup
founders further develop their pre-seed stage companies—cropping up in cities across the US. When Dave, a founder of a
web content management system, saw an opportunity to help tech startups in Atlanta, he didn’t think twice about emulating
the YCombinator model—a highly acclaimed Silicon Valley accelerator program—and created a local accelerator that mimics
its Bay Area counterpart. Mimicry can also turn into a cloning activity where entrepreneurs chase trending industries and
replicate a wildly successful startup. The vast number of Groupon clones is testament to this.
63
// learning is laregly informal learning/relearning
Entrepreneurship is fast-paced and all consuming. Many
will tell you they rarely have time to re?ect on what
they’re actually learning and experiencing out there
in the trenches; that forward motion almost always
trumps refection. Myrna, a commercial photographer in
New York states it this way, “Well I tend to analyze in
the moment and move forward. I don’t really sit down
and re?ect per se. I am also quite good at cutting loses
IT’S ALL ABOUT FORWARD MOTION
and re-evaluating when I see something is not working.
Reading about other past experiences, yes, its great to
gain insight. For myself, I try to be more a ‘learner’ and
‘doer’ than re?ecting.”
A number of entrepreneurs are turning to formal
mentors and personal coaches to provide a mechanism
for re?ection. Steve, an Austin entrepreneur developing
new LED lighting technologies and products, has weekly
check-ins with an executive coach. In these sessions,
Steve is held accountable to re?ect on the past week,
assess progress towards identi?ed priorities, and plan
for the upcoming week. The coach provides Steve the
opportunity to actively re?ect on his experiences in
a productive manner. For Steve, these sessions are
immensely valuable.
64
65
IMPORTANCE OF PRIOR EXPERIENCE
The majority of entrepreneurs in the study had built up a diverse set of experiences prior to becoming
entrepreneurs. Not surprising. Entrepreneurs are the ultimate generalists, able to jump from business strategy
to product development to fund raising to talent development to customer service. So it’s no wonder that
individuals who have worked in a variety of diferent contexts and assumed a variety of diferent roles make
strong entrepreneurs.
Take Seattle entrepreneur Mike, for example, who prior to founding a venture for developing civic software,
studied science and history, built a small web development company, was a software developer, and worked at
Microsoft in organizational and software strategy. By the time Mike was ready to hop on the entrepreneurship path
he had already built up the experience and literally practiced in all the core areas of his venture.
OPPORTUNITIES
How can we create new educational
models that recognize and support
the three types of knowledge
building?
How can we help people practice in
a variety of contexts or roles before
launching their venture?
How can we enhance education
practices that incorporate the type of
experiential learning that is so critical
to the entrepreneur experience?
How can we teach re?ection
as a critical practice within the
entrepreneurship method?
PHYSICS & HISTORY STUDENT
ENTREPRENEURSHIP PATH
66
PRE-FUNDING
STRESS DISORDER
08
67
INVESTMENT
MONEY
IS NOW MORE ACCESSIBLE
THAN EVER BEFORE.
GETTING IT IS STILL TRAUMATIC.
The traditional entrepreneur capital continuum is undergoing dramatic transformation
where both traditional players and new entrants are challenging the accepted models
for funding entrepreneurs. In this changing landscape—driven in large part by the falling
costs of technology—there is now more money that is more easily available in smaller
amounts for early stage entrepreneurs. There are also a growing number of new models
and tools for connecting entrepreneurs and investors as well as new models for structuring
deals between the two. In many ways, the funding landscape is more democratic and
hospitable than ever before.
Nevertheless, fund raising is one of the most difcult and emotionally taxing elements of
the entrepreneur experience, whether one is in the majority of entrepreneurs who self-
fund or with those seeking capital investment. For self-funders, the very real experiences
of living of credit cards, borrowing from friends or family, re-mortgaging property,
tapping into retirement accounts, securing loans from a much tightened banking system,
or juggling multiple jobs are sources of constant stress. Those seeking capital investments
?nd themselves on a Homeric quest with potentially dozens of unsuccessful meetings and
enormous amounts of time taken away from the real work of building their venture. In the
end, it often still comes down to who you know and the social capital you’ve developed.
So despite the dramatic changes to the funding landscape, raising funds remains an
immensely exhausting experience for most entrepreneurs.
68
investment
TAPPING THE COMMUNITY
In response to difculties of fund raising, a number of new funding models are emerging that leverage “crowds” or
communities as funding sources. Sites like Kickstarter and Profounder enable entrepreneurs to seek investments
from a large unknown online community. These tools level the playing ?eld, focus attention on the merit of a
venture, and, in some cases, enable entrepreneurs to completely sidestep the traditional funding landscape. The
founders of Cofee Joulies, patent-pending cofee temperature regulation “beans,” initially posted their product
on Kickstarter hoping to raise enough money for a frst round production. The entrepreneurs (dubbed the Two
Daves), to their surprise ended up raising over $300K from hundreds of individual donors and future customers.
With this funding, they’ve initiated manufacturing of their product in upstate New York and already have 8000
pre-orders to ?ll.
Another recent funding option takes a diferent approach, one that relies on micro-social networks. For instance,
the Baylor Angel Network is comprised largely of Baylor Alumni interested in investing in early stage companies
and staying engaged with their alma mater. Students carry out due diligence and much of the technical work
thereby making it easier for new and smaller scale angel investors to become involved. The Designer Fund, the
brainchild of Enrique Allen founder of 500Startups in Silicon Valley, is a community of internet and technology
designers who formed to create a platform of investment, mentorship and resourcing speci?cally for designer
founder companies.
TRANSPARENCY AND ACCESS
Part of the challenge in chasing traditional funding
sources is ?guring out how to connect with the right
sources. Aspiring entrepreneurs might have incredibly
robust social networks, but if it doesn’t include
investors suited to their venture they’re still going to
struggle. This struggle cuts the other way as well; many
investors have trouble with deal ?ow where they have
little expertise. AngelList is one solution for removing
barriers to access and exclusivity in the process of
?nding angel investors. An online platform, both angel
investors and startups post detailed information about
themselves allowing both sides more transparency,
choice, and access than ever before.
// pre-funding stress disorder
69
NEW TERMS
The traditional funding models largely rely on equity where investors own a stake in the company
and typically wait many years in anticipation of a big payof. In one of his frst early stage
investments Dan realized that the company could do everything right–increase revenues, secure
funding from a venture capital frm, and fnally be acquired by a major company–and yet he,
the angel investor, could still have nothing to show for it. “With everything going right, it’s still
hard to make it work as an angel investor.” Dan is now launching a new investment fund built
around revenue-sharing rather than equity. In this model, his frm ofers investment in exchange
for a percentage of future revenue. So instead of looking for the next home-run, he invests in a
company’s pro?tability. Think small ball investing.
IT’S STILL ALL ABOUT WHO YOU KNOW
Despite all the new models and increased visibility and accessibility of early-stage investors, success in fund
raising still depends on who you know. Having the social capital and networks to secure personal introductions
to potential investors makes all the diference in the world. Many entrepreneurs have just given up on the visible
world of startup funding–the angel investor meetings, the pitching competitions, etc–arguing that all investments
come through personal connections. Investing in startups is extremely risky and unpredictable, so anything that
increases investor confdence, especially a recommendation from a friend, can make a diference. This is a place
where serial entrepreneurs have a signi?cant advantage. Having a proven track record and the networks from
previous ventures makes the funding process dramatically diferent. Multiple serial entrepreneurs believed they
could easily raise money based on their track record, even if the underlying idea was really bad.
On the other hand, not having robust social networks is a major impediment to securing capital. This is particularly
true for entrepreneurs coming from under served or poor communities whose personal networks do not include
wealthy individuals. Likewise for immigrants who leave their social networks behind. Having immigrated from
Africa, Bennett, an Omaha entrepreneur who started a solid waste and recycling business, recounts the difculty
of not knowing people and not having a family name to rely on or family to reach out to for ?nancial support. He
also nearly lost a critical client early on because the client “didn’t know him.” Fortunately, his banker stepped in
to vouch for his credibility.
70
THE SQUARE PEGS
Investors invest in what they know, so for entrepreneurs who fall outside of or in-between
traditional categories, funding is even more challenging. These individuals must be very
resourceful and often resort to elaborate schemes to secure the necessary funding. With her
for-proft social venture focused on maternal health, Meg found that many foundations were
unwilling to grant funding to for-proft entities. To access this funding, Meg had to contract an
independent nonpro?t to complete the work for her venture. Similarly, Raymond’s company is
designing new products in the musical instrument business, a space where there are relatively
few educated or interested investors. This has meant dozens of meetings, great feedback on
their pitch and business plans, and yet no funding.
THE GRIND
Nothing elicits groans like asking entrepreneurs about fund raising. Even successful serial entrepreneurs have bad
stories about their experiences tracking down funding for their venture. For most, fund raising is a lengthy process
that takes valuable time away from building their venture and involves countless more setbacks and frustrations than
successes. This is true for even those who largely turn away from traditional fund raising and bootstrap their ventures
through friends, family members, and their own funds. There’s an entire class of entrepreneurs who continue to work
full-time jobs while building their ventures at night. Others are engaged in a continuous dance to secure resources to
keep the venture moving forward.
In the lead-up to the fnancial crisis, Doug, who bootstrapped his marketing company from the beginning, took out a line
of equity on his house to ?oat the company through a couple of tough months. The continued success of the business
came down to a single major contract. The extra capital from the house helped him secure the contract, but if he hadn’t
succeeded, Doug would have lost more than just his business.
M
ORTGAGED
9-5 JOB
40 ANGELS
SBA
FRIENDS &
FAMILY
OPPORTUNITIES
How can we continue to create
new funding models appropriate to
contemporary entrepreneurs?
How can we better equip
entrepreneurs to approach and
cope with fund raising?
How can we make clear the variety of
funding options available?
How can we educate investors about
opportunities outside their area of
expertise?
How can we create funding models
that work for non-traditional
ventures, the square pegs?
71
72
the “we” of
entrepreneurship
09
73
TEAM
In the pursuit of a great idea or funding for a venture, many entrepreneurs overlook the value of
their teams and the impact that teams have on the viability and success of their venture. Similarly
when we talk about entrepreneurship we often focus on the individual when in fact most new
venture creation is highly collaborative. Even a sole proprietor depends on a host of other people.
There is more than just an ‘I’ in entrepreneurship.
The importance and challenge of teams take many entrepreneurs by surprise; many are under
prepared and surprised when people-related issues take center stage. Finding co-founders,
maintaining relationships, building teams, and ?ring people are among the most challenging
(and potentially rewarding) experiences facing entrepreneurs. A good team can pivot past a
mediocre idea, re-adjust in the face of setbacks, and support one another through a bumpy ride.
But problems within teams can hold a venture back as easily as lack of capital or other resources.
Relationships among team members in startups are so important and challenging in large part
because startups are intense and emotional experiences. This intensity ups the stakes for team
members. And it’s important to note that entrepreneurial teams extend beyond co-founders and
early hires. Rather they include all the mentors, customers, family members, and others who
help co-create with the entrepreneur. Recognizing the role of other people and empowering
entrepreneurs to better deal with teams is critical for understanding and improving the
entrepreneur experience.
VALUE
& IMPACT
RECOGNIZING THE
OF TEAMS.
74
// the “we” of entrepreneurship team
EXTENDED NOTION OF TEAM
Some participants were asked to draw a simple map of
the key relationships sustaining their ventures. Instead
of just depicting employees and co-founders, the maps
all feature the individual entrepreneur as a central
character in a much larger collection of people and
institutions. That is, the people and relationships integral
to the venture extends beyond a formal core team to
include friends, family, mentors, investors, teachers,
customers, and even religious communities. These
maps make clear the extent to which entrepreneurship
is a collaborative endeavor.
Some entrepreneurs, particularly college students,
have a more developed and more diverse set of
relationships. For the students, being associated with
a school gives them access to an “instant network” of
peer entrepreneurs, student talent, mentors/advisors,
and faculty. For entrepreneurs not afliated with a
university or similar institution, these relationship
maps place more emphasis on social relationships like
spouses, family, friends, and churches.
In addition to showing who is important, many
of the relationship maps provide insight into how
entrepreneurs understand these relationships. In the
relationship map featured above, Jim, an architectural
software entrepreneur in Boston, sees all relationships
as diferent types of feedback loops. “[There are]
feedback loops to create a feature set in the product that
is warranted in the market. Feedback loops for pricing
[that’s] acceptable to our VARS and end users. Feedback
loops from [the] social media/marketing perspective
so we are not releasing into a vacuum. Many, many
loops...” With a business focused on developing a
particular technology and software platform, all
relationships contribute something towards that goal.
Whether it’s potential clients, state legislature, or family,
each of these interactions is an opportunity for feedback
and continual improvement of the venture.
75
It’s well known that investors are attracted to a
team over an idea, but entrepreneurs don’t always
recognize this. With an intense focus on the business
model, the product, marketing, customer acquisition,
and launch, team building can become secondary
and this can come back to harm a venture. Many
entrepreneurs admitted that they were too focused
on the idea when, in fact, their team ended up being
the most important aspect of their venture. As its
been said, “ideas are a dime a dozen;” it’s execution
that truly separates successful entrepreneurs. And
the key element for execution is the combination of
core and extended teams.
At the most basic level, core teams are critical
because starting a business is a serious undertaking
and having others to share the work and emotional
burden is incredibly valuable. If the team has the
right experience, is well-functioning, and able to
adapt to change, it means they can shape ideas that
much faster and cover more ground. If the team
is lacking these attributes, a venture can ?nd itself
bogged down in managing team dynamics at the
expense of forward progress.
Rich, a ?rst time entrepreneur developing an service
to connect food lovers and local, emerging chef
talent, thinks in terms of ‘we,’ but admits he’s been
so focused on the idea, that he feels they’ve lost time
getting an MVP (Minimum Viable Product) out into the
market. Rich and his college roommate have always
talked about “getting together to do something,” but
it took several years for the conditions to be right
for both of them. After a positive experience at a
startup weekend event which included meeting new
team members, they’ve set up shop in Seattle where
they’re working through diferent business model
ideas and adapting a preliminary idea for launch.
Mike, a serial entrepreneur In Atlanta developing
electric cars, knew he’d need both technology and
automotive expertise and sought out “the best and
the brightest.” “I have a tendency to try and ?nd
those folks because I don’t have any ego ownership
and having to be the guy that has the idea.... If
they’re the best and the brightest, I’ll ?gure out a way
to make them part of the team and make it work.”
PEOPLE ARE MORE IMPORTANT THAN IDEAS
“... when you have four
or five people working
in close proximity
together, there’s a kind
of Vulcan mind meld
going on...”
76
BUILDING A QUALITY TEAM IS JUST PLAIN HARD
Building a quality team is one of the most challenging aspects of the entrepreneur experience and there are
two places where this challenge is most acute. The ?rst is ?nding and selecting core team members in the early
stages of a venture. Finding people with similar character, commitment, and work styles is more important
than expertise or abilities. Finding people with the requisite technical skills is unquestionably important,
but people’s ability to commit to the vision and work as part of uni?ed team far outweighs the question
of ability. Many entrepreneurs recognized in hindsight that they did not fully appreciate the importance of
this insight and admitted that this it was the source of many subsequent con?icts. And of course, these are
among the hardest qualities to judge before actually working with someone. It’s relatively easy to ascertain
whether someone can code. It’s quite difcult to know what people will be like to work with after the 40th
unsuccessful investors meeting when everyone is efectively working for free and one of the co-founders is
advocating a signi?cant change of course for the venture.
Even having built a strong team, there is still a lot of hard work required to maintain those relationships.
Ongoing team synergy takes concerted efort on the part of the founder, co-founders, and early members of
the team. Again, this was an aspect of the experience that many felt surprised by and largely unprepared for.
For example, Mike and Seth, CEO and CFO of an
online marketplace that connects people looking
for custom home furnishings with crafts people who
make them, bought their business in Cambridge,
MA, they had an immediate need for a full team
of developers and sales staf.
Like many entrepreneurs, they
started by hiring their friends
thinking it would great to work
with people they already knew.
However, they quickly realized
that some of these people were
not the right ?t or the best
people to be working on the
venture. “Which means you have
to ?re people. You have to ?re
people that you love, that have
contributed a ton to the company
because they no longer ?t with where the company is going.”
OPPORTUNITIES
How can we help entrepreneurs
understand and take advantage of an
extended notion of teams?
How can we teach entrepreneurs
about both building and maintaining
quality teams, especially as their
ventures grow?
How do we teach entrepreneurs to
better accommodate and resolve
con?icts among team members?
77 .
78
THE ENTREPRENEUR
(EXPERIENCE) IMPERATIVE
To create a groundswell of entrepreneurship, we need to rethink what entrepreneurship is and what it can be. Entrepreneurs
transform opportunity into reality and create economic and social value for themselves and for others. While we’re supportive
of entrepreneurial behavior in the world of start-ups, we haven’t successfully translated or sponsored that behavior inside
organizations. The experiences of new venture creators and entrepreneurs inside (those thinking and acting entrepreneurially
within organizations) show us the method is the same even if the contexts and currencies vary. The table to the right depicts some
of those contextual diferences and begins to examine how each element of the entrepreneur experience is weighted diferently.
By deeply understanding the experiences of entrepreneurs of all kinds and engaging both new venture entrepreneurs and
entrepreneurs inside in the conceptual development of wholly new experiences, we are advancing entrepreneurship as a natural
behavior for problem-solving and creating, one that can be translated into the workplace or the world. .
79
Identity
Community
Storytelling
Ecosystem
Social Capital
Uncertainty
Learning and
Relearning
Investment
Team
NEW VENTURE ENTREPRENEURS ENTREPRENEURS INSIDE ELEMENT
NVE construct identities to gain credibility and acceptance
into speci?c startup communities.
EIs manage two identities, their ofcial and unofcial
roles (of org chart).
Life as an EI is also lonely. It’s hard to ?nd “your tribe”
within many organizations. Few tend to look outside their
industry or domain.
Stories are “progressively disclosed” to build buy-in for
their idea. Stories are a tool for convincing and alignment.
Push boundaries of cultural “norms.” They must cultivate
skills to know the tacit components of the org ecosystem
in order to succeed.
Social capital is critical for EIs to create “spaces of per-
mission”—loss of social capital is the biggest and most
real risk.
EI must distinguish two types of opposition—resistance
to change that can kill new ideas prematurely versus that
which shapes ideas. EI must learn to balance their vision
and that of the organization’s.
Little to no tools for learning inside. Books play a big
role as do journals and industry-based conferences and
workshops.
EI need investment beyond funds—they need executive
support and the investment of other’s time.
EI often have little control over who their team members
will be. Creating a sense of ownership and participation
along with a sponsor to run block and tackle for the team
is critical.
The practice of entrepreneurship can be isolating so NVE
and have any number of face-to-face and technology
channels to connect.
Stories as a tool for learning, sharing, and assimilating
into the entrepreneurship culture.
Physical places where entrepreneurial culture is local,
visible, and accessible in day-to-day interactions creates
a draw for and density of NVE.
Focus on purposeful networks. Acceptance into a micro-net-
work (e.g. tech startup accelerator program) creates instant
access to social capital and confers credibility and status.
Reframing failure as intentional iteration allows NVE to
develop the skills needed to respond to uncertainty.
Opposition is used to shape ideas.
Practice is key—learning is inseparable from doing. Tra-
ditional education or corporate experience necessitates
unlearning or relearning.
NVE experience pre-funding stress disorder—fundrais-
ing remains one of the most taxing elements of the
experience.
Many NVE are underprepared when people-related issues
take center stage. A good team can pivot past a mediocre
idea, garner investment, and provide support through a
bumpy ride.
80
ABOUT THE ENTREPRENEUR
EXPERIENCE LAB
The Babson Entrepreneur Experience Lab, a partnership between Babson College and the Business Innovation
Factory (BIF), is a platform that puts the voice and experience of real world entrepreneurs at the center of an
ongoing efort to design, develop and test new education and support solutions for entrepreneurs of all kinds. At the
heart of our collaboration is the belief that there is a better way; that our current de?nitions of entrepreneurship,
our narrow focus on the famous and few, and our well-intended but insufcient support systems won’t get us
where we need to go fast enough. By deeply understanding the experiences of entrepreneurs and also engaging
them in the conceptual development of wholly new experiences, the Lab is developing new thinking about the
entrepreneur experience through the lens of entrepreneurs themselves, and using this understanding to develop
a platform for experimentation. The Lab rests on its partners’ key capabilities: deep knowledge of entrepreneurs
and entrepreneurship education, human-centered research, systems thinking, connections to entrepreneurial
communities, digital storytelling, participatory design and experimentation, and community engagement through
an open platform.
As we continue to build on our research and move into experimentation—testing opportunities that help individuals,
organizations, and communities unleash more entrepreneurial activity—we invite partners, sponsors, and investors
who want to go up this learning curve with us to engage with the Lab. If you are passionate and want to accelerate
experimentation in entrepreneurship, email us at [email protected] or [email protected].
81
ABOUT THE PARTNERS
Babson College is the educator, convener, and thought leader for Entrepreneurship of All Kinds.
TM
The College
is a dynamic living and learning laboratory, where students, faculty, and staf work together to address the
real-world problems of business and society—while at the same time evolving our methods and advancing our
programs. We shape the leaders our world needs most: those with strong functional knowledge and the skills
and vision to navigate change, accommodate ambiguity, surmount complexity, and motivate teams in a common
purpose to create economic and social value. As we have for nearly a half-century, Babson continues to advance
Entrepreneurial Thought and Action® as the most positive force on the planet for generating sustainable economic
and social value. // For information, visit www.babson.edu
An independent, non-pro?t organization created in 2004, The Business Innovation Factory (BIF), creates real-
world laboratories where organizations can design, prototype and test new models for delivering value. BIF’s
mission is to enable business model and system-level innovation in areas of high-social impact, including health
care, education, energy and entrepreneurship. Through its programs, projects and events, BIF has created a
national network of innovators who are passionate about radically rethinking how value is delivered across the
public and private sectors. // For information, visit www.businessinnovationfactory.com
82
ACKNOWLEDGEMENTS
We’d like to take a moment to recognize the “we” behind this body of work. Without the collective help of all
those who took time out of their very busy lives to speak with us, to invite us to spend time in their world, to
point us toward critical resources and people, to spend long hours in the ?eld or in front of a whiteboard, or
to critique the emerging content, this report would not exist.
The report was written by Christine Costello, Design Director, Business Innovation Factory; Heidi Neck,
Jefry A. Timmons Professor of Entrepreneurial Studies, Babson College; and Robert Williams, Design
Lead, Business Innovation Factory; with the invaluable feedback and contributions from the following: Len
Schlesinger, President, Babson College, Shahid Ansari, Provost, and Saul Kaplan, Chief Catalyst, Business
Innovation Factory, for their incredible vision and sustained support of the lab; the Babson College Advisory
Board (Candida Brush, Chair, Entrepreneurship Division; Director, Arthur M. Blank Center for Entrepre-
neurship and Paul T. Babson Professor of Entrepreneurship; Elaine Eisenman, Dean of Babson Executive
Education; Sebastian Fixson, Assistant Professor of Technology and Operations Management; Erik Noyes,
Assistant Professor of Entrepreneurship; and Jay Rao, Professor of Technology and Operations Manage-
ment), for their wealth of knowledge and oversight; Lisa DiCarlo and Payaal Patel, for their contributions
to the ethnographic ?eldwork; Heather Jones and the team at Revelation Global for helping us make the
most of a new research tool; the BIF team (Jef Drury, Interactive Designer; James Hamar, Digital Media
Specialist; Sam Kowalczyk, Digital Media Generalist; and Tejae Santos, Lab Associate), for their eforts in
the design, storytelling and execution of the work.
Multiple resources were used to locate potential study participants including but not limited to Chambers of
Commerce, Inc.’s 500/5000 list, news and online media, university and university research labs, academic
teaching associations, economic development agencies, Small Business Administration, entrepreneur and
professional associations, entrepreneur community organizations, BIF and Babson networks, and confer-
ences. All participants were screened to ensure they met study criteria.
To those entrepreneurs and experts in the ?eld who participated in the study (see following page), we can-
not thank you enough for sharing your experiences and observations. With you as our guide, we take a step
forward to understand and address the challenges you face.
The following images used in this report are available in the
public domain and freely-licensed to anyone. The Wikimedia
Commons database itself and the images in it are licensed
under the Creative Commons Attribution/Share-Alike License.
All images from Stock.xchng (SXC) adhere to the SXC Image
License Agreement. Use of these images in no way suggests
that the authors endorse or use our work.
Page 4: Superman. www.fickr.com/photos/xurble/376591423.
Page 5: Baby. Photo by Andrew C. stock.xchng.
Page 6: The HP garage at 367-369 Addison Avenue in Palo
Alto, California. © BrokenSphere / Wikimedia Commons
Page 7: Wall Street. Sign at Broad and Wall in NY. Photo by
Robert Linder. stock.xchng.
Page 8: Mark Zuckerberg, Facebook Developer Garage Paris.
Photo by Ludovic Toinel; Bill Gates, www.fickr.com/photos/
oninnovation/4996229285/; Steve Jobs, www.fickr.com/
photos/acaben/541326656.
IMAGE CREDITS
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BENNETT ACHIGBU • BMAKK GROUP // KARINA AGUIRRE • CHEERS ME UP // KRISTINE ALLEN • ZOINK TECH RENTALS // MARK ALLIO • MASSACHUSETTS SMALL BUSINESS DEVELOPMENT
CENTER // JOY ANDERSON • CRITERION VENTURES // ARJUN DEV ARORA • RETARGETER // JOSHUA BAER • CAPITAL FACTORY // ROSS BAIRD • GRAY GHOST VENTURES // RICHARD BANFIELD
AND CHRIS MERRILL• FRESH TILLED SOIL // STEVE BARCIK • FIREFLY LED LIGHTING // DAVID BAUMGARTEN • BAUMGARTENS // Q BECK • FAMIGO // JOE BENINATO • TELLO // JODIE LYNN
BODUCH • MUCH ADO MARKETING // TONY BOND • PRIMERICA // JENNIFER BONNET • NEXSPENSE // LAURA BOSWORTH-BUCHER • EDCO VENTURES // CONNIE BOURASSA SHAW •
CENTER FOR INNOVATION AND ENTREPRENEURSHIP, UNIVERSITY OF WASHINGTON // NICK BOWDEN • MINDMIXER // RICHARD BRANDT • JOURNALIST AND AUTHOR // DOUGLAS H. BROWN
• BROWN BAG MARKETING // TINA CANNON • PETSMD // KRISTIN CARNEY • CUBIT PLANNING // AMY CARRIER • FENWAY VENTURES, FENWAY HIGH SCHOOL // KEVIN L. CASTELLO • BAYLOR
ANGEL INVESTORS // TOM CHAPMAN • GREATER OMAHA CHAMBER OF COMMERCE // BILL CHORBA • HAPPY COMPUTERS // WAYNE D. CLARK • DRIFTWOOD DISTILLERY // JIM CLIFTON •
THERIX MEDICAL DEVELOPMENT // DAVID CUMMINGS • HANNON HILL AND SHOTPUT VENTURES // ANNE DEGROOT AND BILL MARTIN• EPIVAX // LUC DESLAURIERS • FRANNET // ANTHONY
DILUGLIO • ART OF STRENGTH (AOS) // KATE EMERY • WALKER SYSTEMS SUPPORT // JASON EVANISH • GREENHORN CONNECT // SUSAN EVANS AND JACOB SAYLES • OFFICE NOMADS //
ALEX FRIEDBERG • STUDENT, BABSON COLLEGE // LARA FELTIN • BIZNIK // JODY FENNEL • ABUNDANT CLOSET // LAURA FITTON • ONEFORTY // HOPE FLAMMER • VOICEQUILT // HERB
FLUITT • HFLUITT & ASSOCIATES // JIM FOSTER • POINTKNOWN // MARNA FRIEDMAN • WRITEFULLY INVITING // CHARLES E. FUQUA, JR. • FOUR SEASONS LAWN CARE // SONIA GAILLARD •
ENTREPRENEURSHIP CENTER AT ST. MICHAELS CATHOLIC ACADEMY (SMCA) // MICHELLE GIRASOLE • FRESH LLC // EILEEN GITTINS • BLURB // MICHAEL GOFF • COCOAFISH // BIJOY GOSWAMI
• BOOTSTRAP AUSTIN // KAMAL GRANT • SUBLIME DONUTS // MATT GRIGSBY • ECOLECT AND ANCHOR // HOWARD GROSS • INDUSTRIAL MANUFACTURING SERIAL ENTREPRENEUR // TENY
ODED GROSS • THE INSTITUTE FOR THE STUDY AND PRACTICE OF NON-VIOLENCE // JEREMY GUILLORY • 3 DAY STARTUP (3DS) // PENDERY HAINES • FLUFF YOUR STUFF // LINDSEY HARPER
• SWAYABLE // PAULA HARRIS • PRINCESS HOUSE // JASON D. HARRY • LUCIDUX // MARK HASEBROOCK • DUNDEE VENTURE CAPITAL // SABRINA HENRIQUES • 1221 GRANT SERVICES //
DIANE HESSAN • COMMUNISPACE // CHARLES M. HOLLAND • HILL LEAD TO READ // JONATHAN HOSSEINI • KENARI NEIGHBORHOOD FOOD SYSTEMS // DEB ICE • 3 WAY RACING // MATT AND
KATE JENNINGS • FARMSTEAD, LA LAITERIE // KEVIN D. JOHNSON • JOHNSON MEDIA // OWEN JOHNSON AND ALLAN TEAR• BETASPRING // NIKKENA L. JOSEPH • ASPIRING ENTREPRENEUR,
EMORY UNIVERSITY // DAWN KANNE • DAWN’S DESIGNS // DANIEL KEELAN • NEXT STEP CAPITAL PARTNERS // TAYLOR KEEN • CREIGHTON UNIVERSITY AT THE SCHOOL OF BUSINESS // ROBERT
KENNEDY III • RKCS LEARNING SOLUTIONS // MICHAEL KEOTTING • HOOT.ME // JI KIM • DIJIPOP // KEVIN KOSLOSKY • EVOLUTION COMBAT METHODS // KEVIN KOYM • TECH RANCH AUSTIN
// BRIAN KRAUSZ • GAZEHAWK // DR. RAJIV KUMAR • SHAPE UP THE NATION // RICHARD LENGSAVATH • BIG STOVE // CASSANDRA AND JASON LIN • T.G. I. F. (TURN GREASE INTO FUEL) //
JANICE L. MABRY • JACKSON COUNTY BUSINESS INCUBATOR // DAN MACCOMBIE • RUNA TEA // JANIS MACAHALA • PALADIN PARTNERS // ERIC PATRICK MARR • THE LEXONOMICS GROUP
// HALL T. MARTIN • AUSTIN ENTREPRENEUR NETWORK // MIKE MATHIEU • FRONT SEAT // FUMI MATSUMOTO • ALLURENT // DR. MICHAEL MAYRATH AND MOHAN NIHALANI • GET YA
LEARN ON (GYLO) // CHERIE AND BILL MCBRIDE • KNOWLIN JEWELRY // RAYMOND MCGLAMERY • DARE MUSIC GROUP // MIKE MCQUARY • WHEEGO // SHEILA MEDINA • PLEXUS SLIM
// TERRI MENDOZA • COUNSELING // THOMAS MIRANDA AND AL LOPEZ • ECONOMIC GROWTH BUSINESS INCUBATOR (EGBI) // MICHELLE MORGAN • THE HUB ATLANTA // DR. DOUGLAS
MORIN • MEDLETTERS // JORDAN MOTZKIN • BIG BOX FARMS // MAXWELL MOZES • STUDENT, EMERSON COLLEGE // TOM MURPHY • CHEF AND SOCIAL ENTREPRENEUR // HEATHER
NELSON • ENTREPRENEURSHIP PROGRAM MANAGER, METRO COMMUNITY COLLEGE // CHRISSIE NOVAK • RISE GLOBAL // MATTHEW DOYLE OLSON • STUDENT< COLLEGE OF THE ATLANTIC //
RACHEL ORSTON • COTHRIVE // LAUREN O’BRIEN • EMBRACED ATLANTA // KELLY RAMIREZ • SOCIAL VENTURE PARTNERS RHODE ISLAND (SVPRI) // LEO RAMIREZ JR. • MINIDONATIONS //
GAYLE REAUME • THE MONEY ACADEMY // KAI ROSTCHECK • INTERNET MARKETING GUY // MIKE SALGUERO AND SETH ROSEN • CUSTOM MADE // RAHMIN SARABI • (UN)CLASSES // DAVE
SCHAPPELL • TEACH STREET // RON SCHEIDERMAN • LIFTOPIA // KEVIN SCOTT AND ROBBIE REESE • GLOBAL LEAD // ALEXANDER SHEARER • O2 MEDIA // JEFF SLOTBOSKI AND DUSTY
DAVIDSON • SILICON PRAIRIE NEWS // BILL STALLWORTH • HOPE CDA // VINCENT STUDER • STUDER ENTERPRISE // MYRNA SUAREZ • TWIN B PHOTOGRAPHY // RADHIKA SUBRAMANIAN
• EMCIEN // / BETH TAYLOR • LIONHEART ASSURANCE // KERRY TAYLOR • PUNCH GYM, AOS FRANCHISE // TEXAS VENTURE LABS // CARLA THOMPSON • SHARP SKIRTS // LAWTON URSEY •
INDIE PEACE // JIT VAITHA • LEAPFROG ACADEMY // CAROLINE VAN SICKLE • PRETTY IN MY POCKET // JEFF VARASANO • VARASANO’S PIZZA // SARA VELA • HELP ATTACK // CAMILA VOLKL
• VOLKL DESIGN // PETE WALSH • PEAK PERFORMANCE COACHING // MICHAEL WALTRIP AND LAWRENCE LEE • PARC STARTUP // JON WASHBURN • DAILY TICKET // LANCE WEATHERBY •
ATLANTA TECH DEVELOPMENT CENTER // STEPHEN WHITT • THE INNOVATION CENTER // SYLVIA WILDFIRE • ONCALL MEDIC // TONUA WILLIAMS • SURGI SNUGGLY // JANEE WILSON-KEY •
EMORY COLLEGE STUDENT AND FRANCHISE OWNER // JIMMY WINTER • ROCKDEX // MEG WIRTH • MATERNOVA // ALEXANDER WONG • GETCONTACTINFO //
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