Journeys to Entrepreneurship

A team breaks it down at a StartUp Weekend event in Seattle earlier this year

Not long ago, New York Times columnist Thomas Friedman translated today’s zeitgeist, declaring that it’s never been a better time to be an entrepreneur.

Friedman shows how the innovation and energy emanating from entrepreneurship is vital to our economic future. Entrepreneurship skills are needed not just in startups, but increasingly in multinationals, small businesses, social enterprises, nonprofits and communities. Startup Everything is coming.

If this is true, and I believe it is, then we need to ensure multiple points of entry for people to develop and apply their entrepreneurial abilities.

I recently learned about customer journey maps from Anne Yurasek at FioPartners. While we didn’t call it this, we completed a similar process at 21inc. Several participants in our leadership program were using their experience to launch ventures. These were great outcomes and we wanted to encourage more. We designed five archetypes of typical participants, mapped their potential journey to entrepreneurship and explored how we could improve our program to catalyze and accelerate that journey.

Given the reliance many regions (and countries) are placing on entrepreneurship, an exhaustive mapping exercise to discover and categorize the various ways people experiment with and plunge into entrepreneurship would be of huge value.

There’s interesting research on why people become entrepreneurs. Author Scott Shane shows that only 1/3 of entrepreneurs actively search for an idea. Almost 56% get their ideas from working in the same industry they start their business in. Surrounding people with entrepreneurs also helps (this explains, in part, why I took the plunge and why 21inc’s programs have the outcomes they do).

I haven’t yet seen all that's known about why people become entrepreneurs collected in one place. If anyone knows a good source please pass it along. That’s the book I want to read this holiday season. I'm writing from France so any reading is going to happen between wine, croissants and pain au chocolate!

Lessons from Constraint

Humans have an uncanny ability to believe they're above average. Psychologists have a word for this, illusory superiority. According to Wikipedia, it's when people overestimate their positive qualities and underestimate their negative ones.

In one study analyzing driving safety and skill, 93% of US drivers put themselves in the top 50% for skill and 88% thought they were in the top 50% for safety. One survey of faculty at the University of Nebraska found that 68% rated themselves in the top 25% for teaching ability

People who strongly identify with certain groups can do the same. In more than a few conversations I’ve heard successful business people compare themselves favorably to other professions. Haven’t earned your chops in business (and not fake business, like HR or law)? Then you don’t have chops.

I've been thinking about this because I'm meeting with a lot of private sector people and interested in positions there. What skills did I develop running a nonprofit that might help me jump to the other side?

Creativity and Resourcefulness

One significant difference between a private and nonprofit enterprise is resources. Nonprofits live in a looking-glass universe where money doesn’t act like money. It forces nonprofit leaders to be extremely creative and resourceful to get the job done.

Don’t have big marketing budgets? Recruit a team of student volunteers to phone bank and promote events. Need great web content? Leverage relationships with companies for high-definition video cameras and let creative interns make content. 

Management

Many management gurus talk about motivating people to where they would want to work for free. I wish I even had the option to pay! The best volunteer driven organizations, like the Harvest Jazz and Blues Festival that utilize over 1000 volunteers, build a community with their volunteer base. It becomes the cool thing to do.

Motivating volunteers relies on trust, persuasion, a compelling mission, shared effort, and a clear understanding about why someone is motivated to act. The fundamentals of good management.

Long-Term Relationships

An entrepreneur friend once said that he was impressed with my patience and ability to balance the needs of many difficult and diverse stakeholders. Nonprofit leaders by definition have multiple masters. They walk a fine balance creating value for both the customer AND serving the donor, neither of which are homogeneous groups. 

Nancy Lublin of DoSomething.org makes a strong case for the marketing prowess of nonprofits. In an a review of her book in the Economist, she says that nonprofits focus on long-term relationship building based on "frequent contact, repeatedly saying thank you and sending updates through newsletters. This contrasts sharply with the one-off transactional approach to customers that is all too common in the business world."

Nonprofits live in a world of constraints that require us to draw upon a diverse range of abilities and constantly innovate. Don’t tell the business guys, but these are the high-skill high-touch abilities in highest demand. There is more than one way to earn your chops.

The Powers to Combine

Who would have thought that one of the best ways to start a company was at a conference?

Startup Weekend has proven its worth. With 381 completed events that have launched 4,272 enterprises, this young organization now receives millions in funding from Google, the Bill and Melinda Gates Foundation, Kauffman Foundation, and support from Startup America. Startup Weekend’s themes are also venturing further away from its comfort zone of starting mobile app companies, and into education and other sectors.

Startup Weekend is just one example. Other novel ways to combine people and ideas include DemoCamp, ChangeCamp, open-space techniques, Village Capital, Accelerators, and Seedhack. Underlying their success and popularity is new thinking in how diverse individuals combine to learn and create things (from companies to better public services and personal development). Many organizations are integrating these insights into programming with positive results. For example, last week’s Economist had an article on Harvard Business School's new experiential leadership curriculum, FIELD.

We’re in a fascinating period where the ways individuals combine has undergone a revolution from 1.0 (broadcasting) to 2.0 (engagement), just like the web. These new experiences are part conference, part classroom and part action leaning, wrapped together with facilitation, technology and purpose.

The forefront of these efforts is where people gather in spaces specifically designed and carefully curated to support innovation. Spaces like the Center for Social Innovation in Toronto, The Hub (especially in San Francisco) and the Box Office in Providence are leading the way.

It's interesting that while there remains excitement for online only communities, these events gain ascendance. It's recognition that learning is social. And when some of best ideas are at the intersection of fields, ideas and sectors, face to face is still needed to push limits and create magic.

Building a community or building a company?

I’ve recently become involved with an exciting initiative in Connecticut, reSET, aimed at promoting and encouraging social enterprise in the state and beyond. It’s an exciting space to be in. Business leaders are recognizing that increasing their organization’s social performance increases economic performance. And nonprofit leaders are recognizing that increasing their organization’s economic performance increases social performance.

As entrepreneur and former Venture Capitalist Garrett Melby says,“I believe this is a big movement. There are a lot of people with a lot of money to put to work. They want to inject meaning in their professional endeavors.”

Being good is challenging. The field is in a state of flux. Social enterprise and hybrids (part nonprofit part forprofit) are new organizational animals. Legal structures like B-corporations and For-Benefits to support a shared purpose are still being created.

My involvement with reSET has led to thoughts on how social entrepreneurs launch ventures in this flux.  John Roy at last year’s Face 2 Face conference said that in his experience, launching a social venture is more difficult than a private one. Success relies on not only a solid product and operations. It also requires significantly altered relationships and behavior.

The best way to change behavior is to engage people in a community around a certain idea. I believe a large part of our success launching 21inc came from building a strong, purposeful community. I tried to not miss an opportunity to speak or meet anyone willing to discuss our plans. Many others made presentations and networked the idea using that old fashioned tactic of face to face conversations. We were able to explain our ideas, our business model, and our social and economic goals.

Once it was time to launch, many key players were on board in official and informal ways. People wanted to belong to the community and be part of our work. We organized events so that the community was reinforced and strengthened. The community also gave critical feedback that we had to address or risk losing members. This led to innovation and trust we could leverage; trust that held us accountable.

We learned a ton too. We didn't always meet the interests of our community. Especially early on, we couldn't define the boundaries of our community. Nor did we initially have a coherent idea of what we wanted the community to be.

Growing a community has long been the way nonprofits operated (think about how they engage volunteers). Businesses have more recently jumped on the bandwagon. The November issue of Harvard Business Review devote their feature stories to explaining why good companies perform great. Harley Davidson, Teach for America and Picaroons are exemplary community building organizations. 

Whether a forprofit or nonprofit, achieving results in the social space like decreasing poverty and saving the environment are largely based on changing behaviors, not simply buying decisions. Creating the social capital and the underlying trust inherent in well built communities can be the difference between a successful launch and not launching at all.

Add Magnesium

Ignore for a moment that this video is clearly fake -- it’s amazing what a little magnesium can do.

I’ve been thinking about what makes breakthrough learning experiences after a conversation this week with one of my favorite professors at Harvard’s Kennedy School. Like the magnesium sulfate in the video, what ingredient (or ingredients) deliver the explosive combination that leave participants more capable of creating their desired future?

At 21inc, we spent copious amounts of time thinking about this and, to kill the recipe metaphor, continuously looking for and mixing different ingredients to bake a better leadership program. Earlier this year I hired a researcher to comb through our survey data and match it against “better practices.”

Some of the findings were obvious. For example, content mattered. This meant ensuring the topics we covered were relevant to the motivations and aspirations of our emerging leaders. How the content is taught mattered. We were very intentional about not only who engaged with the leaders, but how they engaged. This was true for action learning, peer to peer conversations and the traditional class room model. As we became aware of effective styles we worked with speakers and guests to make sure they understood what we were learning.

Having a safe space and a supportive peer network mattered. In all similar programs and experiences that I’ve either looked at or participated in, the peer network and relationship building is usually considered one of, if not the top takeaway.

Which brings me back to Harvard. Harvard’s educational decisions often spark national trends. Recent changes to undergrad curriculum, or the business school’s adoption of the case method are good examples.

During my chat, this professor said the PAE (the capstone project for the school's Masters program) and other executive education programs are undergoing seriously reflection. Harvard's professional schools in particular are experiencing pressure from students and alumni to better prepare them for the workforce. If there was any trend, he said, the schools are turning away from traditional lectures and cases to team based experiential or action learning.  

What interested and perplexed the professor was that despite much thought and study into program design, students, even executive education students (i.e older and more experienced), weren't relying on their student peers to help overcome professional (and sometimes personal) challenges. Relationships and peer networks don't capture their potential without these conversations. 

I remember the moment I realized that simply putting smart and driven people in a room won't create the powerful learning experience we desired. One of our selected leaders was putting together a forum on economic development in her region and asked if she could use the group and larger 21inc community to help with the project. She wasn’t asking for time in the schedule, she wasn’t asking for me to do anything, she was seeking permission to have a very specific and personal conversation with her peers.

Having designed the program, the realization hit hard. I had missed a very big piece of what would make this a successful leadership experience (fortunately, it was also early in our journey). 

Creating the safe space wasn’t enough. We needed to give permission and explicitly state what the group is for. How to use their new relationships and the bigger network. This conversation can be inspiring and liberating. It can come from the group itself and have lasting impacts on the experience, deepening relationships being built. But it has to be done.

The magnesium of good leadership programming is how participants engage with one another. We learned the lesson and never forgot it. In the hospitality suite after just the first session of our last program, the Emerging Leaders Summit, one of the leaders told me that he was surprised and happy with how safe he felt and what he was sharing with his peers. He had no idea how much we needed to learn to get him there.

Entrepreneurship, Act I

In some corners entrepreneurship has reached cult status.

A couple years ago I was attending a fancy gala, having a drink in the hotel bar with some colleagues, most of whom owned a business. Another friend came over wanting to introduce someone to us. She did so according to whether or not we were an entrepreneur.

“This is Chris, he’s an entrepreneur. This is Dave, he’s an entrepreneur…”

For her, the act of owning a business and being an entrepreneur were synonymous. And being an entrepreneur/business owner brought undeniable status. The fact that I had co-founded and led a social enterprise only got me halfway; I was introduced as a “sort-of entrepreneur.” Another friend who was finishing her PhD on participatory policy development was disparagingly introduced as an “activist,” clearly a lower human form than entrepreneur.

The economic slowdown, stagnant growth rates, and economic shifts has rightly moved the spotlight to entrepreneurs and startups. 100% of net job growth comes from new companies. (There’s plenty of important nuance to this statistic if you want it.)

I’m on the entrepreneurship bandwagon, cheerleading the need for more. But we don’t do ourselves any favors by limiting entrepreneurship to business owners and then claiming the entrepreneur is an advanced human form. We need a broader definition. Fortunately, research backs up this case.

The first person to coin the term entrepreneur, the French economist J. B. Say, didn't constrain his definition. Around 1800 he noted that “the entrepreneur shifts economic resources out of an area of lower and into an area of higher productivity and greater yield.” More recently, Duke University’s J. Gregory Dees defined an entrepreneur as someone who “mobilizes resources beyond their control to create value.” 

The act of entrepreneurship - creating value - isn't an indelible character trait. Moreover, with this definition every business person isn't an entrepreneur if resources are not shifted to higher output activities. (Did the new pizza place down the road reinvent takeout? Probably not.) This definition of entrepreneurship can be applied to all sectors of society. It focuses on specific actions and behaviors. And behavior is something that can be taught and practiced. 

Maybe then it's better to think of entrepreneurship as existing along a spectrum. On one end are what New York University Professor Paul Light calls the 24/7 type A entrepreneurs. In the middle are entrepreneurial teams, and on the other end are large and bureaucratic institutions. Entrepreneurial people are found alone, in teams or mired deep inside institutions. What they all have in common, in the words of Peter Drucker, is that they are “always searching for change, responding to it, and exploiting it as an opportunity.” 

Promoting all kinds of entrepreneurship (social, economic, civic, team, organizational) wherever it arises is our urgent priority. It will create jobs, fight poverty, and improve our quality of life. 

Lets keep the cult but open up membership.

Start Me Up

Starting and building an organization is a test of perseverance, motivation and patience. After reaching the other side, having time to reflect on that experience is a luxury and opportunity that I wish more people could indulge. Since moving to Connecticut a couple weeks ago, I’ve been reliving the first 5 years of 21inc – reading through journal entries, meeting minutes, and emails to better understand what happened, why it happened, and what I can take to the next challenge.

I’m obviously biased but the questions we were grappling with are fascinating, and I can’t help but see connections to current economic and social challenges. Canada’s Globe and Mail, for example, just produced a special report on giving, focusing on the challenges facing the country’s charities. The same winds sweeping through Canada are disrupting the social space around the world – greater accountability demanded from donors; innovations in finance, technology and business models; demographic change altering trends in giving and volunteering.

The founders of 21inc discerned what was needed in Atlantic Canada and acted quickly with one solution (next generation leadership development) to problems (economic decline and social malaise) that require many.

Like our colleagues in the private sector, we had to compete to survive. We had to create demand for a product that previously had no market. We won and lost battles in the war for talent. And like our colleagues in social innovation trying to change the world, we developed a business model with two customers, donors and participants. We thought long and hard about how to measure success and engaged the ecosystem in our effort. We built capacity however possible, mostly with volunteers and through partnerships. We learned (and too often re-learned) where to leverage volunteers and where to rely on staff.   

21inc’s field of leadership development, according to a few recent conversations, is a field in growth mode. It is finding resonance in previously guilded professions. And the techniques and processes so valuable in developing people are being applied to the world of start-ups, innovation and entrepreneurship.

This blog is my tool to help reflect and learn the lessons from this experience. And because there is an increasing number of people and organizations out there trying to make an impact, I hope it will be interesting for many. While the focus will be on leadership, entrepreneurship and social innovation, it may slide into musical tangents or rants about the weather. I’ll try to keep the latter to a modest frequency.