Entries from Feb 2010 ↓

Are Entrepreneurs Born or Made: Does it really matter?

Photo of Lemonade Stand Entrepreneur

Yesterday Vivek Wadhwa who has recently become one of my favorite authors on startup-related topics wrote a somewhat inflammatory post on TechCrunch entitled "Can Entrepreneurs Be Made?" In it he asserts that entrepeneurs are made, not born, and it’s somewhat inflammatory because he calls out Jason Calcanis, Fred Wilson, and other Silicon Valley VCs as being wrong in their previously stated beliefs that what drives someone to be a great entrepreneur is innate, and thus that they are born.

In reaction Mark Suster, a entrepreneur-turned-VC and another of my favorite authors on startup-topics, responded with "Entrepreneurship: Nature vs. Nurture? A Religious Debate." Mark takes issue with Vivek’s thesis citing his experience and intuition as a recent father and calls out Vivek’s use of stats by implying his was based on a "faulty model" although he does state up front his point-of-view is "purely subjective." Mark goes on to presume Vivek may have "used hyperbole to get more readers" (which might be true though I’d expect that the TechCruch editors are more likely to be the culprit there…) and then complains about Vivek "attempting to “prove" unprovable facts (based on) this kind of data manipulation."

I have incredible respect for Mark but I can’t help but sense a tiny bit of defensiveness in his post. As a VC Mark makes decisions every day that will have profound effect on the lives of entrepreneurs and their families and fortunes. But it’s not uncommon that a subconscious defensive reaction is triggered when evidence comes to light that indicates a person’s important decisions might have been made on faulty criteria (see: choice-supportive bias, post-purchase rationalization and escalation of commitment.) I’m not saying  Mark is wrong (or that he is right) but it felt like he was being defensive (as I have been recently.) Even so, if Mark was being defensive I’ll willingly give him a pass because it’s hard to overcome that which makes one human.

Back to the debate at hand; I sit on the fence. While I don’t know which perspective is correct I think the focus on this debate is actually harmful.

I assume that Mark shares Vivek goals and the goals of many others which are "…to boost economic growth by increasing the number of successful high-growth startups."If true then escalation of this nature/nurture debate is taking the eye off the ball.

If Mark and those who strongly believe in the nature convince policy decision makers they are correct then chances are those policy decision makers won’t explore subtlety. If there’s nothing we can do to cultivate entrepreneurs since they’ll bubble up to be recognized on their own, why do anything? Game over.

Wouldn’t it be better to look past the debate and instead focus on cultivating and educating entrepreneurs regardless of if they are made or born? Google has spawned a huge number of startups; were they all born?  Maybe they were; Goggle has had many other employees who have not gone on to launch startups. But the fact that Google has spawned so many and most other companies in other regions haven’t proves (at least to me) that a strong catalyst results in more latent entrepreneurs taking action and launching innovative companies. When such a catalyst doesn’t exist those latent innovative entrepreneurs continue to do what their experience and environment present to them as options: be an intrapraneur climbing the corporate ladder or launch a replicative business.

In Atlanta where I’ve lived most my life, the holy grail for many is to work for one of the eleven (11) Fortune 500 companies that litter our landscape. As a graduate of Georgia Tech, one of the better technology schools in the nation and one that houses a very active state-funded accellerator, the majority of students aspire to work for one of those big companies because that’s the local culture. That’s what students talk about and that’s what the administration talks about. Going to work for a big company is what is expected of successful Georgia Tech graduates.

Most people aspire to the level of their peers. If their peers are not launching innovative startups the majority don’t even think to launch innovative startups. To say the vast majority of students who attend Stanford where many of those ex-Googlers who are now launching startups attended are genetically predesposed to be entrepreneurial whereas the vast majority of students who attend Georgia Tech (a top 10 ranked educational institution itself) are not strikes me as a bit too much confirmation bias.

As an aside: I think having so many Fortune 500 companies in Atlanta might be much more of a curse than a blessing. We have over 50 interactive agenies locally and they mostly suckle on the teets of these companies rather than aspire to create the next Google and drive real economic growth in the region instead. The people running these interactive agencies are entrepreneurs but the local culture and entrepreneurial patterns they are familiar with has had then focus on replication and not innovation. And sadly our local Fortune 500 companies do almost nothing I am aware of to foster startup innovation in our region.

Consider Shaquille O’Neal, one of the most dominant players in the history of the NBA. Would O’Neal have ever been drafted by the Orlando Magic if he had never met Dale Brown in Europe who was LSU’s men’s basketball coach at that time? Consider Sergey Brin and Larry Page. Would they have acheived Google’s level success had Sergey’s parents never left Moscow or if Terry Winograd had discouraged Page from analysing the link structure of the web? Clearly people who launch successful innovative startups are influenced by their life paths, their peers, their mentors, the options they are presented by society and a huge amount of luck, no?

Put another way, what’s the likelyhood that situated in remote villages in Africa or in the Amazon there are not 100s of would-be Shaqs who, without opportunity, will never be discovered? How many young car enthusiasts might end up being a leading NASCAR driver if they only had the ability to try? What if every University throughout the country had the startup culture and experienced startup advisors found at Stanford?  What if government money across the nation spent on economic development was less focused on the zero-sum game of getting a large employer to relocate from another region and instead were focused on encouraging and supporting entrepreneurs to launch innovative startups?

I’m a rarity from Georgia Tech; I started my first real business about a year and a half before I graduated. But that was after working as a co-op student for many quarters at both Owens-Corning Fiberglass and later at IBM. When I started IBM I was completely enamored with them. After two work quarters though I left IBM thoroughly disgusted and started co-oping with a small consulting firm. It was there after watching my employer fumble I came to realize I could easily join forces with a co-worker and we could run our own business. Since then I’ve run many businesses, a few of which have done well and one that grew very rapidly over five years. During that entire time I can honestly say I had few if any real mentors and thus made more mistakes than any one person should be allowed to make! Had I had a better experience at IBM or had the owners of the consulting firm I worked for not been incompetent I might never have become an entrepreneur; it was my life experiences that moved me in that direction instead. And I’m certain I would have been far more successful entrepreneur had I had a better startup education and quality mentors along the way.

Still I won’t argue being an entrepreneur is purely experiential. I also won’t argue it’s all in the genes. But I will argue that in the grand scheme it just doesn’t matter.

What matters it that there is almost certainly a huge pool of untapped latent innovative entrepreneurs who could transition into active entrepreneurs launching high-growth startups. As Azeem Azhar wrote on the subject:

There are those who may have many pop out of the womb on the far end of the distribution, but emerge in cultures where the things that can make one an entrepreneur are not valued. The pastiche of this would be the high-performing child who is driven back to the fat-middle of law or consulting by school, college and parental pressure. I am sure this group keeps many a psychiatrist and divorce lawyer in business as they hit their forties and reality dawns.

How about we discuss how latent innovative entrepreneurs can get the encouragement, mentoring and other forms of support that are crucial. And since "swinging the bat" more often results in more "home runs" let’s find ways to minimize the potential of finanical devastation of a simple "strike out"to encourage more prospective entrepreneurs to "swing" once and/or to swing more often. And as Samidh Chakrabarti asserts, let’s get more people to pursue their passions as innovative startups by helping them see it as an option and by providing education in the skill sets needed by would be successes but are only obvious to most after they’ve failed.

So why don’t we stop this fruitless back and forth about nature vs. nuture and (at least from a public policy perspective) instead focus on finding and cultivating latent innovative entrepreneurs?

P.S. Fred Wilson, another VC I greatly admire, wrote on this topic back on the 19th in his post "Nature vs Nurture and Entrepreneurship." I wonder where he stands now on the idea of encouraging more latent innovative entrepreneurs vs. continuing the nature/nuture debate?