“We are in the midst of a silent revolution — a triumph of the creative and entrepreneurial spirit of humankind throughout the world. I believe its impact on the 21st century will equal or exceed that of the industrial revolution on the 19th and 20th.”
- Jeffry A.Timmons, “The Entrepreneurial Mind” 1989.

One of my youngest memories is the Hewlett Packard annual company picnic held on the sprawling grass of a Palo Alto park. My brothers and I ate hotdogs and chased around with the rest of the kids whose dads worked for HP. I grew up aspiring to spend my career in the comforting arms of a well-respected multinational firm with great company picnics. During my college years I was gently swept up in a silent revolution that is transforming every aspect of business — the entrepreneurial revolution.

About the time I entered college, there was only one class in starting new ventures at Harvard Business School, which attracted fewer than 100 students. By 1996, that number grew to nine courses drawing 1400 students. Today, Harvard’s program offers more than 25 courses addressing entrepreneurship.

In the 4th issue, Volume 25 of Entrepreneurship Theory and Practice, a journal published by the United States Association for Small Business and Entrepreneurship, Murray B. Low wrote, “The interest in entrepreneurship at business schools continues to grow unabated. It is driven by increasing student demand. At many schools, including several top ranked, entrepreneurship is the hottest area with the largest student enrollment.”

A 1994 Gallup Poll survey showed a full 70 percent of high school seniors said they wanted to own their own businesses with 86 percent reporting a desire to know more about entrepreneurship. Another recent study showed that in the adult population, one out of every 10 is currently attempting to start a business. Sixty-nine percent of INC. 500 entrepreneurs in a Roper Starch poll reported, “I love what I do for a living.”

The August 2000 issue of the Journal of Financial Planning reported that 80 percent of the wealthiest individuals in America were first-generation wealth. Entrepreneurship is recognized as the primary driver of economic development and wealth creation.

I have always followed with interest the “give back” activities of harvested company founders who after cashing out use part of their proceeds to help foster new entrepreneurship. They provide an estimated $60 billion to $80 billion to new ventures in which they invest resources and time. These “Angels” have funded many classrooms, buildings, endowed chairs and athletic facilities.

MBA cases have created folklore heroes of entrepreneurs such as Bill Gates, Michael Dell, Steve Jobs, and Fred Smith. The popular press often refers to these as “bold, creative, persistent, mavericks”. They are portrayed as bigger than life. Their every move is tracked. They now are the basis of several reality TV shows where devoted followers are tested to see if they have “the right stuff.” The images are both compelling and seductive. Many are willing to take great financial and personal risk to be seen and accepted as the mighty entrepreneur.

Do You Have the Right Stuff?
My entire career has been dedicated to entrepreneurship and venture capital. Since graduate school I’ve not held a traditional job. Early luck and success drove me to underestimate its complexity and difficulty. I quickly became an ambassador for entrepreneurship and quickly prescribed it for any career ailment. Having been close to a number of notable successes and spectacular failures, I now have a greater appreciation for the art form and have become a respectful if not awestruck student of entrepreneurship.

Who are the successful entrepreneurs? What do they have in common? What drives them? How are they recognized? What makes the whole process work?

Much early academic research focused on identifying character traits and personality characteristics that distinguish entrepreneurs and predict success. These findings have been inconclusive at best. No “typical” entrepreneur profile has been identified.

Among my successful entrepreneur acquaintances, I have encountered extroverts and introverts; the risk tolerant and intolerant; the creative and not-so-creative; the relentless and the lazy; micro-managers and delegators.

I know entrepreneurs who are articulate, persuading through flawless logic and others who lead from the heart with passion and authenticity.

Entrepreneurs in my experience often defy definition or classification.

Many have inquired about my advice on becoming an entrepreneur and often ask, “What traits must I possess to be a good entrepreneur?”

I used to struggle with this question for I was unaware of any method to assess aptitude or step-by-step method for transitioning to entrepreneurship.

Recently, my answer has been reduced to a single question that is a leading indicator of entrepreneurship, “Will you work for free?”

A “yes” implies commitment, skin in the game, and suggests that life circumstances are conducive to successful entrepreneurship. A “no” may suggest a traditional job may be a better path. Some are unwilling or unable to delay the reward for today’s effort or put the reward at risk.

It’s sometimes difficult to determine, but my sense is that many of the entrepreneurial failures I have seen do not stem from a lack of ability but rather a lack of commitment, persistence, focus or integrity.

Some lives are so full of distraction, conflict and over-commitment that the effort and focus required to succeed is all but impossible.

The perfect entrepreneur might be a single, healthy, debt-free, recently graduated business student, living out of a duffle bag, with no cable TV or hobbies. These types of people only lack seasoned judgment and access to capital.

The Junto Group
Intrigued by the promise of this new idea, I recently organized a group of 30 graduating students, each referred and endorsed by a local business faculty member as a promising and energetic entrepreneur.

I offered to share my entrepreneurship experiences and learning with them over eight weekly, four-hour evening meetings. I designed a set of “boot camp-like” experiences designed to teach concepts of personal entrepreneurship as well as reveal the entrepreneurial aptitudes of each participant.

I proposed to personally finance the business launch of each of the four finalists. At the outset, each was extremely interested and was certainly a self-proclaimed entrepreneur. I anticipated a difficult selection at the final meeting. To my surprise, just over half of these young entrepreneurs withdrew, gave up or quit prior to the final selection. Hardly the entrepreneurial behavior I expected. They either were intimidated by the boot camp or just looked around the room and determined that they did not measure up. The selection process was largely self-administered.

On the first night of the boot camp I asked my lead question, “Will you work for free?” This one question precipitated the withdrawal of all three MBA students. Their student loans, family obligations and opportunity costs forced their decision. They needed jobs. A few weeks later I asked each participant to raise a small sum of money from someone they did not know currently. I lost a couple more. Asking for an investment from strangers is clearly uncomfortable for some. A few weeks later, I asked each participant to sell a product for two weeks. I lost a couple more. Cold-call selling is also uncomfortable for some.

It’s energizing to declare oneself an entrepreneur, but it’s intimidating and uncomfortable for some to actually do the things entrepreneurs must do to be successful.

I’m reminded of the long running educational television program “Watch Mr. Wizard” in which kids experienced various careers in science which they often found scary: “On no, Mr. Wizard, I don’t want to be an entrepreneur any more…”

The surviving four finalists, Will Allred, Clint Carlos, Brent Davis and Ryan Money, are now practicing entrepreneurs building businesses. The group is named Junto (pronounced who-n-toe) and named after the mutual improvement club formed by Benjamin Franklin in 1727.

I see in these young Junto entrepreneurs and others some patterns of behaviors, circumstances and skills that appear to be important in successful entrepreneurship. I note that many of these are somewhat different than the patterns of behaviors, circumstances and skills sought by venture capitalists.

For more information about the Junto Group and to find out how to apply for the 2005 Junto Group spring boot camp, see sidebar two.

Tough, but Worth the Ride
As a managing director at vSpring Capital, I seek extraordinary opportunities and seasoned executives to lead them, which are fundamentally different than the promising startups and the young entrepreneurs who lead them.

As venture capitalists, we invest other people’s money. The market allows us to exist only if we significantly outperform investment alternatives with similar risk profiles. These venture capital performance requirements exceed all but a very few promising startups.

It’s understandable why only 1-2 percent of opportunities presented to VCs receive funding. Most promising startups heralded as successes in the press, winners of innovations awards, fast growth awards and recognized for economic development would be less than successful if measured by the VC yardstick. Young, untried entrepreneurs are a long-shot for venture funding in today’s market. Only about 5 percent of INC 500 companies received venture funding.

In my experience, many entrepreneurs who start businesses lack deep business experience or wealth. They often have the education and family background that provides the encouragement and confidence to launch. Approximately 80 percent of INC 500 founders have college degrees. Few have MBAs. This may reflect in part the perceived opportunity cost of entrepreneurship for those with more employment opportunities and education.

Alertness may be another factor contributing to entrepreneurial success. Some argue that a systematic search for entrepreneurial opportunities is a low-yield activity. Many entrepreneurs formulate business ideas by copying or modifying another business. Still other business plans are derived from on-the-job experience. A resourceful entrepreneur sees dissatisfied customers or unmet process efficiencies while employed. Yet each of these methods of recognizing opportunities implies a certain level of alertness, a tendency to engage with one's environment in the search of new business ideas. This alertness can be indicated by collecting information and talking about business ideas.

Successful entrepreneurs demonstrate a tendency to act. Many times entrepreneurship requires action in the face of uncompleted information. Self-confidence and low concern for the psychological consequences of failure can drive the entrepreneur on. They are less concerned with what others might think if they fail or make a costly decision. They are more comfortable dealing with unforeseen developments and opportunities. They are often required to adapt, to revamp or completely revise their business strategy.

It’s important to think big and focus on a solid opportunity. Developing a business takes time. A successful serial entrepreneur will be able to build 3-5 businesses during the most productive years. It takes as much energy and time to work on a difficult, small business as it does to develop a more promising business with greater potential. It’s important to assess feasibility early, test assumptions and select your business idea with care.

Jeffry A. Timmons, a professor at Babson and prolific author on entrepreneurship, has completed extensive research on entrepreneurs. Timmons reports that entrepreneurs love their work. They find it fulfilling, invigorating, meaningful and energizing. They report the highest levels of satisfaction, pride and challenge. Entrepreneurship is changing the way people work, live and learn. It fuels innovation, economic development and job creation. It holds promise for those seeking self-sufficiency, wealth and a self-determined way of life.

In his book, “New Venture Creation”, Timmons wrote, “Because [entrepreneurship] is opportunity-centered and rewards only talent and performance — and could care less about religion, gender, skin color, social class, national origin, and the like — it enables people to pursue and realize their dreams, to falter and try again, and to seek opportunities that match who they are, what they want to be, and how and where they want to live. No other employer can make that claim.”

Entrepreneurship is truly America’s silent revolution.
To comment on this article or get connected to Utah’s entrepreneurial community, please write to (greg@vspring.com).


Greg Warnock is a founding managing director at vSpring Capital , an early-stage venture capital firm. He has conceived, founded, operated and sold several companies of his own. He is an active angel investor, mentor of entrepreneurs and is currently completing work on his Ph.D. at the University of Utah’s David Eccles School of Business.

Sidebar #1: What Do You Do Now That You Think You Could Be an Entrepreneur?

Even if you are attracted to entrepreneurship and believe you may have the “right stuff”, it’s still unclear how to get started. Unfortunately this endeavor is not very formulaic, it’s more opportunistic and adaptive. Step-by-step approaches are of limited application. So what can one do to begin to see opportunities, assess feasibility and get going? How is progress measured in entrepreneurship?

Get Busy
I have not identified a single strategy that always leads to entrepreneurial success, but I have identified one that always leads to entrepreneurial failure: Failure to start. Start by thinking about the skills and knowledge you have today. Identify your weaknesses and develop a plan to learn and improve. Start by examining the markets and businesses you know. Think about what’s hard about those businesses. What do customers need badly? Where do you see weak product and services? Where are others enjoying unusually large profits? Start by reading about entrepreneurship. Learn the stories of success and failure.

Get Help
I read recently in local author Steven K. Scott’s book “Mentored by a Millionaire” the following quote.

“It is impossible to achieve extraordinary success in any arena without effectively partnering … Show me your past, present and future partners (or lack of them) and I will show you the level of your past achievement and the level of your future success.”

The fact is, the partnering or networking is essential in entrepreneurship. You have to get out there and mix it up, chat up your idea, get energy flowing your way.

Some entrepreneurs become so attached to their current project that they are afraid to talk about it. They ask for confidentiality agreements before each conversation. I think this is a misguided approach. That urge to clutch up and protect should be an indicator that you may be talking to the wrong people. Seek to network with those who want to see you to succeed with or without the current idea — not those who want to see your idea succeed with or without you!

Get Selling
Nothing of real significance has happened in a new business until you sell something to an arms-length customer at “sticker price”. So much is learned in that moment about where you might find customers, how they make purchase decisions, what they are willing to pay and certain perceptions about your company and ideas. Too much time is spent by entrepreneurs writing business plans, printing business cards, decorating offices, building Web sites and so forth. I recommend doing that which is required, and only that which is required, to sell to customers effectively. Sell what you don’t have in stock, sell what you have not developed, and agree to do that which you cannot do yet. Just sell. You will quickly uncover business potential. The rest will come later.

Sidebar #2: The Junto Group

Junto is a program designed to support entrepreneurs in pursuit of their dreams. It identifies entrepreneurs with the greatest probabilities of success. Junto provides experiences and training; financing for business launches; networking opportunities and mentoring. It is a community structured to address each of the risks outlined above. Junto provides this opportunity to many younger entrepreneurs; most are just completing an undergraduate degree.

Entrepreneurship can solve problems, create value, unlock human potential, improve lives and foster independence and confidence. However, it is a career choice with its own risks. Sometimes results can include financial losses, loneliness, public failure and marital stress. These are the risks of entrepreneurship that are not so celebrated in the popular press.

By addressing some fundamental characteristics of typical entrepreneurship, the Junto approach hopes to mitigate some of these risks, which can include...

Too often entrepreneurs have all their eggs in one basket, attaching all their personal or family financial well-being to a single venture.

In my view the primary cause of the crippling financial loss sometimes experienced by entrepreneurs is a tendency to overcommit to a project, not knowing when to pull the plug. The decision to stop investing time and money in a project is far more difficult and impactful than the decision to start.
Collaborating and networking is challenging. Successful entrepreneurship is often the result of collaborations and partnering. Entrepreneurs often find it difficult to develop a network of contacts that can provide this essential resource.

For more information on the Junto program or to apply to join the spring 2005 program, please contact me at (greg@vspring.com), and please reference Junto in the subject line.

Sidebar #3: Resources

As a result of increasing interest in entrepreneurship, there are endless resources available to those who would like to learn more. These lists are by no means exhaustive, but hopefully will be of some help.

Suggested Books
“New Venture Creation” by Jeffry A.Timmons
“The Art of the Start” by Guy Kawasaki
“New Venture Mechanics” by Karl Vesper
“Love is the Killer App” by Tim Sanders
“Gaining and sustaining competitive advantage” by Jay Barney


Online
www.entrepreneurship.com
www.entreworld.com
www.venturecapital.org
www.t2m.com

Organizations
The Wayne Brown Institute
T2M

Mentors
vSpring V|100 list
www.vSpring.com

Miller Business Innovation Center
www.mbic-slcc.org