Ideally you want the executive running your company to the entrepreneur of the century but also have industry leading experience, knowledge and skills. Sometimes these are seen as conflicting characteristics: Those with yards of operating experience seem too conservative to be entrepreneurial and the real entrepreneurs have no proven operations experience. Which of these two is the show stopper or the priority for your firm.
Since the dawn of the technology age entrepreneurs have taken on a particularly attractive aura. In an age of revolutionary new business models (by the way, many of which died expensive deaths) entrepreneurs were in high demand. The internet was so new and unpredictable that a premium was put on those with a vision of a new way to make money and the energy to pull it off. Some were incredible successes but as with many things, many of these ideas were dumb when they started and just as dumb when they went under or the entrepreneur fell into one of the many traps along the way. Hats off to the visionaries who really did have it figured out and created a market, sometimes based on an entirely new business model (e-bay, Amazon, Paypal, Salesforce.com, etc.). Names like Jobs, Gates, Ellison, and the next generation of the dot com crowd come to mind. Sadly most of these guys are out of your league on compensation so what are we really looking for? What is the real job we need to get done.
We will all agree we are looking for smarts, energy, leadership and communication skills as basic skills but now we come to entrepreneurship vs. experience. My proposition is that entrepreneurship takes precedence when we are embarking on something that has never been done before. A brand new ecosystem, a new business model that does not yet exist to a target market that is not yet identified (connected as a group of buyers) with an offering that is not understood by the buyers - eBay is a good example of all of these. These opportunities are few and far between and the legal ones are highly risky; there is lots of Faith involved. In the vernacular, you need a wizard who is too stupid to know it can’t be done.
The vast majority of opportunities involve some of these new challenges for the company and they may be an evolution but not a quantum leap in business model for the industry. These are challenges such as a revolutionary new product into an existing market or a new channel or a new customer base, or a new revenue structure, i.e. evolutions of the existing business and not an entirely new business model playing by unknowable rules. This is where the experience of having “done it before” takes center stage.
In the majority of the companies I have been involved with the most common threads across industries in terms of challenges have been these:
Optimizing or expanding on the existing business model
How to re-position the company in the ecosystem for maximum value
How to compete effectively
o What new differentiated products to which marketplaces
o How to launch new product lines into new markets
o How to expand internationally
o How to maximize margins - re-position or redesign the offerings as high value and maintaining a strong price.
o Cost effective selling models
Drastic cost cutting without sacrificing important elements.
So I would propose that term “entrepreneurship” has been hijacked to mean “high risk wizard with a vision”. The kind of opportunity only a Venture Capitalist with a good support system can stomach.
The rest of us grunts are looking for the more traditional wizard, the ones with market experience to make a silk purse out of a sow’s ear.
Your comments for or against are most welcome.