During a recent visit to an entrepreneurship conference in another city, I happened to eavesdrop on a fascinating conversation in the hotel bar at the end of the evening, between Dr. Abraham, a kind of world-weary experienced entrepreneur and a young, energetic hot venture capitalist named Doug.
The first part of the conversation covered the fact that 80 to 90 percent of startups fail, despite anyone’s best efforts. Following that, the conversation then turned to why.
The new round of drinks arrived, and Dr. Abraham began. “First of all, let’s get one thing straight: being an entrepreneur is not a craft, it’s an art. It’s not something that can be taught or learned—it’s something that comes from a combination of gut instinct and experience.”
“What the heck are you talking about?” Doug demanded.
“An art is something that has an x quality about it, a je ne sais quoi—something that can’t quite be defined. Whereas a craft is something that results from specific, definite steps. For example, medicine was once an art—but today, with everything that is known and taught, it can be precisely learned by anyone with the aptitude for it. The same could be said for architecture, which was once a total art, but today can be learned as a craft.”
“But entrepreneurship is a craft! It’s taught in universities all over the world!”
“Well, something is taught in universities all over the world. But let’s take the word of someone who would know. I take it you’ve heard of Steve Blank?
“Sure–an incredible entrepreneur.”
“That he is. But he’s also a professor of entrepreneurship at Stanford, who also lectures at UC Berkeley, Columbia University and Caltech. But to my point: he recently made the statement that ‘becoming an entrepreneur is not material for a lecture; a founder is not a job because there’s no manual out there for it.’”
“What did he mean?”
“We’d have to ask him. But I can tell you that from my standpoint of experience, it means that a real entrepreneur must have incredible capabilities in several very important areas. I’ll give you some examples:
- He must be like a ship’s captain, capable of mastering the vessel through rough times.
- He must also be like a battle-hardened general, leading his troops to out-maneuver competitors.
- He must be like a chaplain, who counsels wounded soldiers in the heat of battle.
- He must be like an evangelist who travels the world, preaching the benefits of his product or service.
- He must be a kind of doctor, who can fix up parts of his company when they are broken.
- He must also must be like a treasurer who can, at the drop of a hat, create vital liquidity.”
“But even those things can be learned!” Doug insisted.
“Sure—if you have the many years it would take, you could theoretically learn each one of them. But then it takes another run of years to learn which of these hats to wear when—and to conduct your organization by knowing fully which function does what. Those years of experience teach vital lessons—not necessarily through succeeding, but mostly through failure.
Dr. Abraham continued. “Not every human has all of these qualities—in fact, it’s relatively few. Since you deal with entrepreneurs all the time, I’ll go ahead and ask you: How many people do you know who have all of these qualities available and can think and operate with them? And using them, have an entire growing enterprise under control without losing composure?”
“Well…not many, I suppose,” Doug said.
“Correct. Most people that we listen to—in fact, most people speaking at this conference—are expert in one area. We come to events like this to listen to experts. And that brings up another point—you cannot be an entrepreneur and rely on experts. It’s fine to get advice from them—but you must learn these fields of endeavor, these areas of expertise, yourself. Otherwise you’ll never have enough understanding to truly lead an enterprise.
“But…” Doug started to say.
Dr. Abraham raised a hand, interrupting Doug. “I’m not finished. Now let’s talk about another very important quality.
“Today—in fact, right here at this conference—there are a great many who desire one single quality of entrepreneurship: freedom! The freedom to create your own life, be your own boss. But as we learn from Thomas Mann, the other side of freedom is responsibility. It is a two-sided coin. You cannot have one without the other.
“Now I ask you: How many aspiring entrepreneurs came to this conference ready to take total responsibility for their startups? To really assume the risk? Compared with: How many aspiring entrepreneurs came to this conference with great ideas—but seeking someone else who would bear all the financial burden and responsibility, whether or not the business failed or succeeded?”
“Well,” Doug said. “I’m guessing most fall into the second category, based on all the ones I’m meeting with.”
“Of course! It’s why you yourself came here—looking for someone with a great idea into which you could invest your fund. But they must be willing to give up a great deal to obtain that funding—and they are, simply because they don’t want to take that responsibility. They want the freedom, but they sure don’t want the risk, which can be crushing.”
Doug regarded Dr. Abraham. “So just assuming that I take what you’re saying as true—what qualities, then, does an entrepreneur actually need to succeed?”
“Well,” Dr. Abraham replied. “Even if someone were to take the decades it would require to learn each and everyone of the area I have described, including that of taking responsibility—being a real entrepreneur is even more than that.”
“More than that?” Doug exclaimed. “You’re kidding!”
“No I’m not. You see, all of these areas, every single one, are encompassed within a person’s character. They have a precise instinct, utilizing all of these skills and characteristics, of how to do it. This is why so many companies fail—the leader just doesn’t have the considerable character and maturity it takes to lead. Amazingly, you sometimes have young people that have such character and can lead a company to glory. More often, the young don’t’ have it and neither do the old.”
Doug asked, “So does that mean a person shouldn’t even try?”
“No! I never said that. For more often than not, a person will discover he has abilities and skills he never dreamed of until he does try. None of those who have succeeded, would have if they hadn’t tried.”
There was a silence. Then Doug asked, “Is there more?”
Dr. Abraham smiled, raising his empty glass.
Doug chuckled. “It’s going to cost me another drink, isn’t it?”
Join us next week to see where this conversation went next.