What are the characteristics of an entrepreneur? What are the risks? H. Irving Grousbeck explains.
Irv Grousbeck (Photo by David Robert Elliott)
For nearly 30 years at Stanford, and for several more at Harvard, H. Irving Grousbeck has taught and counseled countless women and men as they moved along the entrepreneurial path. After graduating from Harvard’s MBA program, he cofounded Continental Cablevision (later Media One) in 1964, and has since served on numerous for-profit and not-for-profit boards. He is currently a principal owner of the Boston Celtics. He was founding co-director (with Charles Holloway) of the Center for Entrepreneurial Studies in 1996, and recently stepped down from that position while continuing to teach. Earlier this year, he discussed the traits of successful entrepreneurs, and how they might think about the many challenges that they and others put in front of them.
One of the hallmarks of your talks is that you use quotations. Let’s start with something you’ve said before, and I’m paraphrasing: “If you choose to go down the entrepreneurial path, ignore the naysayers.” Who are the naysayers?
They can take many forms. Some are people who think that younger MBA would-be entrepreneurs don’t have judgment that’s well enough refined to make good choices about what kind of business to go into, or to make critical managerial decisions. Or those who think you first need to work your way up in a larger, more structured enterprise to have the right kind of experience to run a company. Others include those who think that people shouldn’t be an entrepreneur early in their lives, when they might have student debt or otherwise not have the financial footing to cope with the risks of starting a company.
So, how do you ignore the naysayers?
One of the emboldening things about our geographic area is that there are many path-breakers for the students to look at, read about, even talk to — since they oftentimes speak at the school, especially if they’re alums. An aspirant can look at them and say, “What qualities did they have when they were 27 that I don’t have? If they’ve done it, why can’t I?”
That suggests that some naysayers are within the students’ own minds.
Absolutely — the internal demons. We all have them, especially when you’re taking a nontraditional path, though it’s hard to say that entrepreneurship is nontraditional here in Silicon Valley. Still, fewer than 25% of our graduates immediately go into “entrepreneurial companies,” meaning their own or somebody else’s startup or early growth company. Statistically, more than 75% go to medium-sized or large companies.
What personal characteristics does someone need to take the entrepreneurial route?
One is a certain sense of self-confidence. Another is a need for independence and self-expression — someone who says, “I’m just not that excited by the career paths I see available working for somebody else.” Care for detail — I think that most entrepreneurs are more particular in their thinking than they’re given credit for. Or, if they are broad generalists, they’re usually smart enough to partner with somebody who will pick up the grass that they cut, in effect. They also realize there is no single personality profile of a successful entrepreneur. Venturers come in all personality types.
For aspiring entrepreneurs today, what are the real risks they face?
Some people say, “Oh, if you fail you’ll be doomed.” But thinking more carefully, is there going to be a time when a failed entrepreneur doesn’t have food, clothing, or shelter? The answer is clearly no — not if he or she has acted with integrity. Nowhere is it written that the entrepreneur should be the supplier of capital.
In terms of the stigma of failing, are you permanently impaired in your career if you’ve had an entrepreneurial failure? Certainly that answer is also no — the record is replete with failed entrepreneurs who have immediately received plenty of job offers. Even if it takes you 2 years to fail, and you then get re-employed, do those 2 years you’ve “lost” against your peer group working for a big company put you behind a 40-year career?
I think the single biggest risk is constitutional unemployability, a feeling of, “I’ve seen what it’s like to run my own company, even though my venture didn’t work out. Now am I going to be happy somewhere else working my way through the chairs?” I’m probably going to be more unhappy than if I hadn’t had the entrepreneurial failure.
What if you’re 40 or 50 or 60 — is there still an entrepreneurial path?
I think you have to recognize the blend of pluses and minuses you bring. You have better judgment. You have a lot of experience versus somebody who’s 25. You have a maturity, which is related to, but not necessarily the same as, experience. However, you don’t have as much energy. You’re more set in your ways. I think that the person in mid-career who still plans to do it should realize that it’s very possible. There are many such people who have become successful entrepreneurs.
You yourself were an entrepreneur for many years. In that time what’s changed in the entrepreneurial landscape?
The way some industries have evolved, and new industries emerged, make the opportunity set look dramatically different from 40 or 50 years ago. Right now, the barriers to entry are lower. You don’t need to marshal investors and go find a company to start or buy — you can design an app from your dorm room, for example. But there seems to be more competition than there used to be. And, those factors occurring together are consistent with economic theory.
Looking back to when you studied at Harvard, what’s the difference between an entrepreneurial student then and now?
An entrepreneurial student then was an odd duck, indeed — at least at Harvard. At that time Harvard and other top schools stated openly that they were a training ground for future managers of corporate America. The question was, “Who are you going to work for?” not “What are you going to do?” Now it has flipped, particularly at Stanford. Many new entrepreneurial paths have been opened and even become well traveled.
Was there a time when people didn’t know enough about entrepreneurship to even understand that it could be taught?
I still get the question, though much less frequently now than I used to, “Can entrepreneurship be taught?” It’s clear that the answer is yes. I also get, “Can you teach people to become entrepreneurs?” And my answer is that we are not trying to teach people to become entrepreneurs; we are helping them to make more informed career choices. There’s plenty known about the corporate path. We’re trying to produce some measure of equality of information about what it’s like to be an entrepreneur so that students, instead of choosing between the known and the unknown, can pick between two relative knowns.
Here’s another quotation, again paraphrased: “Regret for what you have done can be tempered by time. Regret for what you have not done is inconsolable.” What are you telling us?
This idea really means a lot to me. I feel it on an emotional level. One alumnus came to me last spring — he was 40 or 41 — and said, “I’m locked into my life. I actually don’t like getting up in the morning and going to work. However, my work is respected. It’s looked on as challenging. My peers like me. I feel I’m contributing to the firm. But I hate it because I am not in charge, and often don’t agree with corporate decisions. I’ve always wanted to run a company, and I really wish I had done it when I graduated from business school 15 years ago. That was the time I should have ventured out, or soon thereafter. But each year I kept getting wooed, and now my ship has sailed.” Those regrets are palpable.
What did you tell him?
I told him that there is still a path if he wants to try to find it. However, it is not without peril and some dislocation and potential discomfort. First, he needs to explore what it is he wants to do, and how that would translate into his day-to-day and week-to-week existence, as well as that of his wife and children. And when he figures that out, there is no reason for him to say that he regrets never having done it because he could still do it. But it’s hard to argue with the fact that it would have been a lot simpler earlier.
You’ve said that, “Any definition of a successful life must include service to others.” Why?
It is part of the values philosophy: I’ve been given a lot that I didn’t earn, so doesn’t that create an obligation in me to help? Now, you can say, “Well, you earned some of it.” Yes, a small portion. But I had nothing to do with where or when I was born, nor with the genetic makeup and extraordinary education I was given. So I believe that of those to whom much has been given, much is expected. And I tell my students that’s how I feel.