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Is Entrepreneurship Dead?  The Argument Part 4: Entrepreneurship vs. Management
Blog / Entrepreneurs / Dec 30, 2015 / Posted by Nikolaus Kimla / 4876

Is Entrepreneurship Dead? The Argument Part 4: Entrepreneurship vs. Management

I took a trip recently to visit an entrepreneurship conference in another city. On the evening of the first day, while having a nightcap in the hotel bar, I happened to eavesdrop on a fascinating conversation between Dr. Abraham, a 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. Next, it went through exactly why they fail; it became very obvious that despite statements to the contrary, not everyone is cut out to be an entrepreneur. After that, Dr. Abraham elaborated on the first vital element of a startup business.

Now the talk took fascinating turn, and I was sure that this was not the first time such an argument had taken place.

Doug attempted to take the conversation to its next seemingly logical place, “An entrepreneur needs a great product as a first step. So after that, wouldn’t it then be just a matter of managing the company correctly so that it grows? And by that logic, if you trained someone to be a manager, if somehow they could get hold of a great product, wouldn’t they be an entrepreneur?”

Dr. Abraham raised his hand. “Not so fast. While that might seem logical and true, it really isn’t. Management and entrepreneurship are very different pursuits. Do you recall our conversation about the difference between an art and a craft?

“I do,” Doug said. “A craft is something that can be taught and learned, while an art is one part keen instinct, and another great part successful experience in different areas.”

“Correct,” Dr. Abraham said. “And therein lies the difference between an entrepreneur and a manager. As we covered earlier this evening, entrepreneurship is an art, not a craft. It is not something that can be taught. Management, on the other hand, can be taught.

“You ask if management training could make someone an entrepreneur. Well another aspect of being an entrepreneur we covered earlier was that of taking risks. An entrepreneur will go much further in taking risks than any manager would. For example, I have a good friend who, when he saw that his business idea could really succeed, pulled up stakes, left his home country of Austria, and moved his family and his business to the US. It was a huge risk. How many managers do you know that would be willing to take that kind of risk?”

“Um…none,” Doug replied.

“Exactly. Taking risk is but one of the many qualities an entrepreneur has, that a manager doesn’t.

“Let’s take a look at some of these financial firm managers that make millions or even billions—and even if they’re fired, they have severance packages that set them for life. How much of their own risk to they have to take? None! All of the risk they are taking belongs to the company, not them.

“An entrepreneur, on the other hand, rises and falls with the success or failure of the firm. If the firm goes down, the entrepreneur goes down with it. They don’t have the option of a golden parachute like a manager might. And often if an entrepreneur dies, so does the business; it’s fighting force is gone.

“Sometimes an entrepreneur will even die as a result of their own product—like in the case of Jimi Heselden, the entrepreneur who owned Segway, who died running a Segway off of a cliff.”

“Yikes!” Doug exclaimed. Then he said, “Well, you are right at least in one respect. I know from the standpoint of VC that we often have to put in our own management team when we invest in a company—just because the entrepreneur involved isn’t a good manager.”

“Unfortunately that’s true,” Dr. Abraham said. “Sometimes an entrepreneur is too focused on the future—the next product or the next project—and isn’t paying enough attention to the current one. They’ve actually lost interest in the present. Hence a manager coming in will keep that current company running and continuing to be a success, and will prevent the entrepreneur from spending VC funds on some new wild and unproven idea.”

“So is there such a thing as an entrepreneur that can manage?” Doug asked.

“It’s somewhat rare, but yes. I’ve actually been managing my company the whole while. My friend from Austria has also successfully managed his enterprise.

“An entrepreneur would do well, though, to hire a proven manager when they get to the point of needing it. Since they are such different roles, the entrepreneur—and the company—would be greatly served by separating out the ‘hats’ of management and entrepreneurship. That way management can see to the day-to-day achieving of revenue goals, and the entrepreneur can move on to other projects and products, which is what they’re good at.”

There was a silence. Then Doug said, “So is that it, then? We’ve basically covered everything that an entrepreneur would have to know?”

Dr. Abraham burst out laughing. “The impatience of the young! Thinks we have covered a lifetime of learning and experience in roughly an hour! Is it that you have someone you need to meet? A young lady, perhaps?”

Doug blushed slightly. “Well, not really.” He frowned. “Is there more you can tell me? Really?”


Join us next week to see where this conversation went next.

About Author

CEO and partner of and the uptime ITechnologies, which I founded in 1994 and has since played a significant role in the development of the IT-environment. pipeliner is the most innovative sales CRM management solution on the market. Pipeliner was designed by sales professionals for sales professionals and helps close the gap between the requirements of C-level executives for transparency and the day-to-day operational needs of field and inside sales. I am also the founder and Initiator of the independent economic platform GO-AHEAD!, which orientates itself on the principles of a free marketplace in terms of liberal and social responsibility. Connecting people, the trust of business leadership in terms of values such as freedom, self-responsibility, and entrepreneurial spirit, and strengthening their awareness in order to create a dynamic boost within the economy triggered through spontaneity, all stand for the initial ideas surrounding GO-AHEAD! I studied in Los Angeles and Vienna and received my Masters's Degree in 1994. I am married and have 3 children My Specialties are in: Sales Management, Sales CRM Software, CRM Cloud Solutions, SAAS, Business Strategy, Software Development, "Pipeline Management", Social responsibility, outbound sales, b2b sales, inside sales, sales strategy, lead generation, sales process, entrepreneurship, coaching, mentoring, speaker, opportunity management, lead management, Austrian School of Economics

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