The most overrated thing in entrepreneurship — By Bill Aulet

MIT Sloan Senior Lecturer Bill Aulet

MIT Sloan Senior Lecturer Bill Aulet

From The Strathclyde Business School Blog

In 2013, I wrote a light piece for Forbes about the “Six Whopping Lies Told About Entrepreneurs” but in hindsight I left out the biggest myth of all about entrepreneurship itself.  The single most overrated, and yet common, belief about entrepreneurship is that the idea is paramount.

Yes, an idea is necessary, but it is so much less important than the discipline and process with which the idea is pursued. And, interestingly, all of these are even less important than the quality of the founding team.

The belief that the idea is important becomes invalidated when you work with successful entrepreneurs and begin to see a common pattern emerge: how an original idea morphs and evolves over time as the team does primary market research and starts to focus on customer needs, rather than their initial eureka moment. This observation is borne out in recent research by Professor Matt Marx of MIT, summarized in “Shooting for Startup Success? Take a Detour,” showing that for successful entrepreneurs, the idea they originally started out with is rarely the same as what they ended up succeeding with.

AuletEntrepreneurship Success Pie v3

The idea of a better search engine wasn’t novel before Google got started; its value creation was all in the high-quality execution.  Similarly, the concept of an electric car was not new when Elon Musk started Tesla, yet it has experienced unprecedented success while others before and since have failed.  Likewise for the smartphone and Apple.

Image by Marius Ursache

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The roadblock to commercialisation — Thomas Allen and Rory O’Shea

MIT Sloan Professor Thomas Allen

MIT Sloan Visiting Asst. Professor Rory O'Shea

MIT Sloan Visiting Asst. Professor Rory O’Shea

From Financial Times

Knowledge and innovation generated at universities can lead to the creation of high-impact spin-off businesses. Whether it is through the licensing of intellectual property, partnerships or other informal arrangements, the tech transfer process can play a critical role in shaping new industries and regional economic development.

Research by Eesley and Miller and Eesley and Roberts has demonstrated the role Stanford University has played in shaping the development of Silicon Valley and MIT’s contribution to building a world-class innovation hub in the Kendall Square district of Cambridge, Massachusetts.

While those are examples of successful academic-industry-government ecosystems, the technology transfer system at many universities in the US and Europe is in need of a major overhaul. Its focus is historically rooted in revenue generation rather than in helping innovation. Technology transfer offices in many universities can act as bottlenecks rather than partners in knowledge transfer for economic and societal good.

Read the full post at The Financial Times.

Thomas J. Allen is the Howard W. Johnson Professor of Management, Emeritus and Professor of Organizations Studies at the MIT Sloan School of Management.

Dr Rory O’Shea is a Visiting Assistant Professor in Innovation and Entrepreneurship at the MIT Sloan School of Management. He also serves as a faculty member at the Smurfit Graduate School of Business, UCD.

How to get employees to be more entrepreneurial — Deborah Ancona

MIT Sloan Prof. Deborah Ancona

MIT Sloan Prof. Deborah Ancona

From Fortune

Organizational change has never been easy, but in the past it was a little more straightforward. Fifty years ago, companies followed a basic blueprint. They had heroic leaders — a CEO and an elite top layer of management — who had tremendous authority and made all the important decisions. When they wanted to make a change, they set a direction and it cascaded down through the firm.

Today things are different. As companies compete more on speed, agility, and innovation, decision-making needs to get pushed down. Sure, there remain some old-school companies that rely solely on top-down leadership. But in an increasing number of firms, leadership is shared across the organization, often in teams. Command and control is out; collaboration and teamwork are in.

These are positive developments, but they don’t make organizational change any easier to pull off. The key for managers is to create an environment where teams and individuals — even those lower in the organization — have the latitude and autonomy to recommend and try out new ideas, be it a new environmental initiative, a new technology, or a way to seize some new opportunity in a different market. The goal is an entrepreneurial workforce at all levels of the company. Here are some ways to achieve that:

Think beyond the official job title.

Managers tend to put employees into neat little boxes according to their place on the corporate organizational chart. But these boxes make it hard for someone lower down in the organization, without an official title, to vet and test a new idea. There’s a prevailing attitude of: “We need a formal manager to do that.” To combat that tendency when assigning people to projects, consider who has the passion, knowledge, and networks to succeed — independent of that person’s title. If this is not politically possible, then think about creating two-person teams or small groups that include people with the necessary expertise.

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Think like a founder before becoming one — Elaine Chen

MIT Sloan Senior Lecturer Elaine Chen

MIT Sloan Senior Lecturer Elaine Chen

From Xconomy

February 2014 will go down in history as a month with two huge startup exits: Nest (acquired by Google for a whopping $3.2 billion) and WhatsApp (acquired by Facebook for an even more whopping $19 billion).

If you haven’t caught the startup bug, there’s a good chance you will have caught it after this. What’s everybody waiting for? Let’s all go start companies!

Lest everybody get carried away with these success stories, let’s look at some statistics. In May 2013, Paul Graham, founder of Y Combinator—arguably the most prestigious incubator in the U.S.—tweeted an interesting piece of data: 37 of the 511 YC companies to date had valuations of, or had sold for, $40 million or more. That’s great for the companies in the list (which includes Dropbox). But what about the 474 left off the list?

Not to be a wet blanket, but this statistic basically says an elite startup, incubated by the best of the best, has a less than 1 in 10 chance of becoming a big success.

Read the full post at Xconomy.

Elaine Chen is a Senior Lecturer in the Martin Trust Center for Entrepreneurship.

Business schools should be transformed to drive entrepreneurism — Rory O’Shea

MIT Sloan Visiting Asst. Prof. Rory O'Shea

MIT Sloan Visiting Asst. Prof. Rory O’Shea

From Entrepreneur

As we continue to recover from a global recession and look to the future, it’s imperative that we build more entrepreneurial-driven academic institutions. Not only will this provide the foundation for much-needed innovation, it also will strengthen economies by providing jobs and fostering sustainable growth in enterprises.

Lessons can be learned from universities around the world about accelerating entrepreneurship. They can provide the model for how to create clusters of commercially successful startups around research-driven institutions. However, the success of that model largely depends on the role of the business school within that university setting.

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