At any rate, below is an excerpt that involves a rather powerful metaphor that is applicable I think to those of us in other fields and walks of life and struggles.
How do you define entrepreneurship?
I take a broad view of it. The traditional definition -- founding an entity designed to make money -- is too narrow for me. I see entrepreneurship as more of a life concept. We all make choices about how we live our lives. You can take a paint-by-numbers approach, or you can start with a blank canvas. When you paint by numbers, the end result is guaranteed. You know what it's going to be, and it might be good, but it will never be a masterpiece. Starting with a blank canvas is the only way to get a masterpiece, but you could also blow up. So, are you going to pick the paint-by-numbers kit or the blank canvas? That's a life question, not a business question.
It has to do with your ability to handle risk, no?
Not risk. Ambiguity. People confuse the two. My students used to come to me at Stanford and say, "I'd really like to do something on my own, but I'm just not ready to take that much risk. So I took the job with IBM." And I would say, "You're not ready for risk? What's the first thing you learn about investing? Never put all your eggs in one basket. You've just put all your eggs in one basket that is held by somebody else." As an entrepreneur, you know what the risks are. You see them. You understand them. You manage them. If you join someone else's company, you may not know those risks, and not because they don't exist. You just can't see them, and so you can't manage them. That's a much more exposed position than the entrepreneur faces. But there's lower ambiguity on the paint-by-numbers path: very clear but more risky. The entrepreneurial path: very ambiguous but less risk. Of course, the truth is that it's all ambiguous, anyway. If you think you can predict the future, you're crazy.
I don't know many people who feel they can predict the future these days.
We've had a wake-up call. Some people had it sooner than others. After the bubble burst in 2000, I was talking about the ideas in Good to Great with some portfolio companies of venture capitalists. They said, "This is all very interesting. But we're running out of cash. The bubble's burst. We're going to die. What does your research have to say to us?" Frankly, I had nothing to say except, "Gee, bummer." But as I thought about it, I realized those technology companies were experiencing something that was going to happen to everybody, only most of us didn't know it yet.
An image popped into my head. It was a climbing analogy. Most people are in the comfort of base camp, and they can go on doing what they're doing even if there is a big storm. But the people who wake up high on that mountain in a howling storm are in grave danger, like the technology people after the bubble burst. It hit me that we're all heading up there, whether we like it or not. We're heading into a world characterized by big events, big forces, massive storms. We're going to be vulnerable little specks high on the mountain when the storm hits out of nowhere. And if we're not prepared, we're going to die up there. Or we're going to be in real serious trouble.
How do you prepare for something you can't see coming?
That was the question. I thought, OK. We need to understand what separates those who do well from those who don't do well when the world spins completely out of our control. How are we going to study this question? This was in 2002. We decided to look at the 50 best-performing IPOs since 1970-72 and see how they did 15 years out. They were small and vulnerable when they came into the world. We'd ask them, "What did you do on that mountain? How did you do so well?" Of course, we found others that didn't do as well. We just finished six years of what we call our turbulence research.
That was a great question to be asking in 2002. It's what everyone is wondering about today.
We are now, I think, having to adjust to dealing with a world that is going to be ferocious. We don't have any practice with that. People like me who grew up in the postwar period are not practiced at the volatilities, the turbulence, the uncertainties of the world that will probably define the second half of my life.
You sound pessimistic.
No. It is only in times like these that you get a chance to show your strength. In the end, I think we need to have absolute faith in our ability to deal with whatever is thrown at us. And we need to have a complete, realistic paranoia that a lot can be thrown at us. It's our ability to put those two contradictory ideas together: We need to be prepared for what we can't predict and, at the same time, have this total, unwavering faith that we will find a way to deal with all of it. And I believe we will. I don't believe the world will treat us well, but we will figure out how to do very well.
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Comments:
Jim Collins Good To Great was required reading for one of my seminary courses on leadership. It provided a great basis for conversation about leadership within the Church. Of course, many of us (including me) bristled at taking a business research project and applying its findings to church leadership, but I did learn some lessons there, and I see some insights in this article that can be gleaned by those who are in church leadership today.