The DNA of an entrepreneur

Most people are too terrified to start their own venture. Blame it on the effect of mainstream management teaching or the social stigma of failure, ordinary entrepreneurs worry too much even before they start. According to Prof Stuart Read, expert entrepreneurs have some common traits which are: look at what you can control, failing cheap (affordable loss), learning from failures and then start all over again.

Who is Read? Apart from teaching marketing at IMD Business School in Lausanne on Lake Geneva in Switzerland, Read has nearly 20 years of industry experience, having participated in the creation of six high technology start–up firms. Four of the firms started by Read were acquired by Sun Microsystems and Lotus Development Corporation. Two are publicly traded. Is that the goal entrepreneurs should chase? He disagrees, vehemently nodding his almost bald head.

“Rather than success, the definition of failure is probably more important. If you have venture capital in your company and failure for you is not having an initial public offering (IPO), 99 per cent of firms don't go for an IPO. If you define failure as being close to bankruptcy, then the rate of failure is less. But, if you look at failure as ceasing business operations, then 90 per cent of businesses are perhaps successful,” says Read, who teaches four programmes at IMD, drawing curiosity from students waiting for their mocha at coffee shop inside the IIM-Bangalore campus.

While it may take 10,000 hours to be an expert, Read and four co-authors of their new book Effectual Entrepreneurship (publisher: Routledge) believe that entrepreneurial success is not innate - it can be taught. “Our message in one word would be START.

Conventional teaching approaches entrepreneurship with market research, business plans and then takes an action based on the data. Our research on 70+ case briefs of entrepreneurs across industries, geographies and time show that expert entrepreneurs don't rely on forecasts. They are more bothered on the effects they can create,” says Read.

Derived from the practices employed by expert entrepreneurs, effectuation – the foundation of the book - is a set of heuristics that describe how people make decisions and take action in situations of true uncertainty. The amount of research that went into this book has been created over 12 years. In a sense, Read and his co-authors Saras Sarasvathy, Nick Dew, Robert Wiltbank and Anne-Valérie Ohlsson don't say anything out-of-the world in this 240 page paperback with 27.4 x 21.6 x 0.6 cm dimensions. “We seek to dispel common misconceptions about entrepreneurship, as well as fears faced by every entrepreneur. You don't need a billion-dollar market to start a successful venture; you need a space where things are growing. That’s a good starting point,” said Read.

The underlying principles are the same ones that enabled Josiah Wedgwood in the eighteenth century shape a pottery business into an enduring brand, helped Earl Bakken transform his college job into MedTronic, and allowed Mohammed Yunus to transform the lives of millions of women in Bangladesh.

“Expert entrepreneurs may feel its obvious (the messages in the book). But to a lot of the world, these are entirely new. All of us can be master chess players but we don't. The good news is expertise is learn-able. By playing, by being beaten and by figuring why they were beaten - ordinary people become chess masters. Entrepreneurship is not as difficult as it is made out to be,” feels Read.

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