There was a study done in the early 20th century of all the entrepreneurs who entered the automobile industry around the same time as Henry Ford there were something like 500 automotive companies that got funded had the internal combustion engine had the technology and had the vision. Sixty percent of them folded within a couple of years.
You know how people always talk about how vision is the key to entrepreneurship and perseverance and really seeing what other people don’t see? We can actually redeem a fair amount of that folk wisdom.
Except in very narrow cases where there’s breakthrough science that needs patent production worrying about competitors is a waste of time. If you can’t out iterate someone who is trying to copy you you’re toast anyway.
Famous pivot stories are often failures but you don’t need to fail before you pivot. All a pivot is is a change is strategy without a change in vision. Whenever entrepreneurs see a new way to achieve their vision – a way to be more successful – they have to remain nimble enough to take it.
Entrepreneurs always pitch their idea as ‘the X of Y’ so this is going to be ‘the Microsoft of food.’ And yet disruptive innovations usually don’t have that character. Most of the time if something seems like a good idea it probably isn’t.
Learning to see waste and systematically eliminate it has allowed lean companies such as Toyota to dominate entire industries. Lean thinking defines value as ‘providing benefit to the customer’ anything else is waste.
Science and vision are not opposites or even at odds. They need each other. I sometimes hear other startup folks say something along the lines of: ‘If entrepreneurship was a science then anyone could do it.’ I’d like to point out that even science is a science and still very few people can do it let alone do it well.
I can’t say I’m not grateful to have journalists writing about me as a genius. But I know it’s not true. I’m not confused. I understand that success comes through a lot of failure and a lot of very embarrassing failure. People want to create the next Facebook but they are too afraid to create the next Facemash.
Our educational system is not preparing people for the 21st Century. Failure is an essential part of entrepreneurship. If you work hard you can get an ‘A’ pretty much guaranteed but in entrepreneurship that’s not how it works.
Start-ups make so many mistakes that the challenge to identify the root cause of a failure is tough. But believing in your own plan is probably the worst.
The attributes for entrepreneurs cut both ways. You need the ability to ignore inconvenient facts and see the world as it should be and not as it is. This inspires people to take huge leaps of faith. But this blindness to facts can be a liability too. The characteristics that help entrepreneurs succeed can also lead to their failure.
Customers don’t know what they want. There’s plenty of good psychology research that shows that people are not able to accurately predict how they would behave in the future. So asking them ‘Would you buy my product if it had these three features?’ or ‘How would you react if we changed our product this way?’ is a waste of time. They don’t know.
The United States is locked in a new arms race for that most precious resource – the future entrepreneurs upon whom economic growth depends. Substantial research shows that immigrants play a key role in American job creation.
Here in Silicon Valley I have taken part in hundreds of conversations trying to convince people to dive in and become entrepreneurs. All too often innovators with good safe jobs are unwilling to put their family’s access to health care at risk by walking away from company-backed medical insurance.
There is much that public policy can do to support American entrepreneurs. Health insurance reform will make it easier for entrepreneurs to take a chance on a new business without putting their family’s health at risk. Tort reform will make it easier to take prudent risks on new products in a number of sectors.