Entrepreneurs are... lazy?

I’ve seen it argued that “laziness” is one of the most essential traits of some successful entrepreneurs because it leads them to innovate.  They don’t complacently accept “the way it’s done,” if they can figure out an easier, faster way to get the same result.  Shawn Fanning revolutionized music by creating Napster because it was easier – period.   Every song you want, with the click of a mouse?  Sure beats dragging your butt out of bed, leaving your dorm room, catching a ride down to the local record store or mass retailerand actually paying for the CD.  That, folks, is an innovation that can lead to efficiency, expediency and – you guessed it – success.

But it begs the question:

Whether it’s laziness, impatience or simply a refusal to accept the status quo - do these entrepreneurs become successful DESPITE their flaws, or BECAUSE of them?

As the recession teeters between decline and recovery, many new would-be entrepreneurs are created with every massive round of corporate layoffs and every graduating class of students that can’t find a job.  Instead of encouraging them to discover what they love to do and follow it, perhaps we should be encouraging them to discover what they HATE to do – and find a better way to do it.

I’ll be interested to see what aspects of the mundane – tasks we accept as they are because “that’s the way it’s always been done” – are pushed further up the evolutionary ladder by some bright, innovative, creative – and yes,maybe lazy – new entrepreneurs.

What do you think – is “laziness as motivator for entrepreneurial spark” a valid theory?  Disagree with me?

Let me know what you think in the comments.

Entrepreneurial Justice

Judicial activism, Roe Vs. Wade, civil rights, constitutional interpretation – these are all topics that Judge Sonia Sotomayor has been grilled on in determining her fitness to sit on our nation’s highest court. Pretty much since the nomination of Judge Robert Bork, the confirmation process has morphed into a dance of disingenuous rapport and obfuscation that is more about surviving the process than full disclosure.

Senator Lindsey Graham summarized best what the process has devolved into when he stated: “Unless you [Sotomayor] have a complete meltdown, you are going to be confirmed.” How comforting it is that such matters of national interest are a fait accompli.

If however we found a way to return to a civil and intellectually honest process of discovery, I would add to the lens of appraisal topics that you hear of rarely, if ever, yet are arguably of equal social importance as the list above. I am referring to policy matters that are routinely being born or bastardized in response to knee-jerk reactions within the courts of public opinion. Recent examples would include such over reactions as Sarbanes-Oxley or the unfortunate absence but much needed legal reform of our patent laws as well as convoluted responses around immigration.

All of these topics are impacting the engine of entrepreneurship that drives our economy, with significant socioeconomic consequences themselves. Yet, you won’t hear any of our elder statesmen ask a Supreme Court nominee, “What have you observed as the unintended consequences of the Sarbanes-Oxley Act of 2002, and what, if any, remedy would you propose?”  Sadly these matters languish in obscurity because they lack loud, influential financially-organized, advocates to bend the political will of those who stand in judgment. Instead of knocking down the barriers that impede the birth and growth of high-impact entrepreneurial ventures, we perpetuate the status quo because that has become the politically expedient thing to do.

Alas, we can dream of a day in the future when we can have an informed public dialogue around the contribution of immigrant entrepreneurs and its influence on the growth of our economy. We can debate on how the patent laws have not kept up with the pace of innovation and are now actually stifling the commercialization of invaluable intellectual property. And we can have the courage, even in the midst of the worst economic crisis since the Great Depression, to state that oversight and regulation (such as Sarbanes-Oxley) born in haste to placate the uniformed masses is having a chilling and destructive impact to the entrepreneurship that this country was built upon.

Thankfully, Kauffman, the Foundation of Entrepreneurship, is not sitting idly by wringing our hands. We have commissioned the single largest collection of economic research on entrepreneurship that provides the justification for new bold thinking. For policy makers and influencers that are courageous enough to read it and act upon it, we are ready to stand with you to answer those that may challenge with jaundice interpretations. That may however require the rare characteristic of thinking beyond self-interest while understanding that supporting entrepreneurship benefits all of society.

For those hungry for more, stay tuned. This fall we will be launching a movement that will give a voice to this cause. We will rescue entrepreneurship from the status of being the white noise of our economy. We will force upon the public conscious that entrepreneurs birth the new, create the jobs, and generate the wealth that will be required to pay for the sins of our past. Entrepreneurs are leading the recovery and soon everyone can join in this noble effort.

Innovation = Job Creation, it's a simple equation.

We are currently narrowing a field of 30 applicants for 12 availabl Postdoctoral Researcher/Entrepreneurship Fellowships. The basic premise is that we are selecting a dozen incredibly bright folks from science, technology, engineering and medical fields, and we are going to help them accelerate their particular technology of interest into commercial application – technology commercialization as it is known. On a side but related note, we have also partnered with the National Postdoctoral Association to sponsor the Kauffman Foundation Outstanding Postdoctoral Entrepreneur Award and the Emerging Postdoctoral Entrepreneur Award. 

As I had the pleasure of being among those interviewing these incredibly bright individuals, a few things became quite obvious. First, and probably most significantly of any other general characteristic I gleaned, was the high percentage of immigrants. And they came from all over the world – India, Iran, Italy, Finland, Germany, and Scotland just to name a few from my group of interviewees. As it turns out, around 75% of the total field were immigrants. Keeping in mind that applications were from US-based schools, I found this to be astonishing. 

Obviously that speaks well of our schools that there is such demand, but it also speaks to the entrepreneurial ecosystem in this country as most of these individuals see their best path to commercializing their technology is in the U.S. That is not to say, however, that there isn’t much more that we could and should be doing to encourage even more activity, but that is a subject for another post. 

Another interesting observation was how many of these immigrant scholar entrepreneurs are already well along their way to building companies – several of which already employing others. And rest assured that with the innovations they were promoting in the fields of therapeutics, medical devices, environmental controls, etc., we aren’t talking minimum wage, dead-end jobs. 

I know that immigration is touchy subject, and we have certainly published our share of research on this space; but the undeniable fact is that commercializing innovation leads to job creation, which restores the health of our economy. Those that would push out or prevent this source of growth to our economy would be cutting off their xenophobic nose to spite their face. If I had my way, we would staple a green card to each and every diploma from anyone graduating in any of these promising fields. 

After all, they may very well bring the innovation to the market that saves your life some day. And if that day should come, I doubt that you will be overly concerned if it were invented with an Asian, European, or Middle Eastern accent. 

As always, I am happy to hear supporting and opposing views – that’s what the comment button below is for.

The Lost Word on the Economy

While pundits, columnists, economists, and policy makers climb over mountains of financial data, looking for signs of recovery and politically convenient scapegoats upon which we can turn a distracting public focus of populist rage and class warfare, there is a quiet but steady vibration of activity that has the comforting quality of white noise – as well as the anonymity of it too.

This activity however holds many of the keys to our economic recovery yet it struggles to be heard, not unlike the piccolo section of an orchestra. Everyone seems all too eager to focus on the loud drums and trumpets because they are loud. Yet it is the fairer woodwind instruments that take on the more challenging task of adding depth and complexity to a movement. Likewise, entrepreneurs have added depth and vibrancy to our nation’s economy since its founding; yet they are all but non-existent in today’s discourse on policy and stimulus priorities. For example, with over 177,000 words and a price tag of $850B, the stimulus plan makes only one generic use of the word entrepreneur as part of broadband spending.

Quietly and largely underrepresented, entrepreneurs have become the white noise of our economy – nondescript yet comforting and generally assumed to be omnipresent; until such time they are not. They do not stand in line with hat in hand asking for a bail out. They do not take the work and value of others, packaged in incomprehensible get-rich-quick schemes to dump on unsuspecting investors, while lining their own pockets through incredulous compensation plans approved through gross incompetence in the best case, willful misconduct in the worst cases.

They also do not have, with few exceptions, strong and organized lobbies or advocacy groups. Too often, policy makers and others lacking the attention span or intellect to understand the distinction, lump entrepreneurship and small business into one ubiquitous ball of taffy – conveniently stretched when necessary yet easily wrapped and shelved for another day. The previous administration couldn’t pronounce the word entrepreneur; but the Obama Administration appears to be, for the moment at least, missing a golden opportunity. They are looking for a “two-for” by increasing loan guarantees via the SBA. That type of funding is but one small way to support a smaller fraction of the types of high-growth entrepreneurs that will build the companies that will ultimately grow our way out of crisis.

From early entrepreneurial pioneers like Carnegie, Edison, and Ford, our nation’s economic vibrancy and competitive advantage was born by individuals that saw opportunity where others did not, and built companies that employed thousands of individuals providing for the needs of others. And these efforts led a nascent nation from ‘up and comer’ status to the single largest economic power in the world. How distant of a memory that now seems with our own economic destiny abdicated to an international community all too eager to fund our deficits while we complacently turn a blind eye from compromising our own power of self determination.

For those who stand in opposition of wealth creation out of some misguided sense of social justice, please recognize that you can not build a manufacturing empire without employing throngs of people. And while the motive to become wealthy drives many of these people, it is their creation of wealth, the earnings of their companies, and the people and corporate earnings of everyone up and downstream of the supply chain, that pay the taxes that fund all of our ambitions; for better or worse. This wealth creation has also led to another uniquely American endeavor of forming private foundations that have provided immeasurable and invaluable benefit to humanity.

If you are still not convinced, consider that it has been about 1,000 high growth firms, many of which being started in prior recessions, that have led the job growth needed to grow our way out of past recessions. There is more than ample data to justify a significant and long-term prioritization of supporting entrepreneurship. We simply need to have the attention span and discipline to recognize the contribution of entrepreneurs.

Our policy makers need to look past their immediate self interest and awaken to the fact that helping entrepreneurs succeed is the smart thing to do, even if they can’t take credit for it. After all, a vibrant entrepreneurial ecosystem has a multiplier effect (entrepreneurial spawning) that really will put us back on the path of self reliance.

So let’s pull this word, entrepreneurship, out of white noise obscurity. Let’s remember that starting and building great companies that employ people and advance new innovation and productivity, is the surest way for us to pay for a future worth living.

We Get What We Incentivize

Over the last two decades, I have been involved in several entrepreneurial endeavors that employed over a thousand people collectively. I have interviewed and hired many over that period of time, including negotiating compensation packages. The one thing I have learned from doing that is, you get the kind of behavior from people that you incentivize.

This is painfully obvious in the current economic meltdown compliments of a financial industry (and a few others) acting in their own shameless self interest, bent upon immediate gratification at the expense of creating any long-term value. Who could have guessed giving a half million dollar mortgage to a person with little to no income, low or non-existent credit, without any money of consequence as down payment could lead to problems?

Which is to say nothing about leveraging such worthless devices in convoluted credit default swaps bought and sold by ‘experts’ that were either recklessly ignorant about the construct or willfully (and I hope some day to be proven criminally) turning a blind eye, all the while raking in bonuses that were paid independent of the overall profitability of the parent organization. On what planet does that make sense!?

The better question however is how this came to pass? And the answer is not really as complicated as many would like to make it out to be. In most cases, the mortgage industry was incentivizing volume of loan originations over quality. In the get rich quick ethos that led to the fall we all are now bailing out, people were paid for churning paper, regardless of the ability of the applicant to service the debt.

Now all of the blame doesn’t rest there. Political correctness should also get some credit here thanks to the race baiting bombastic rhetoric of policy makers that were shamelessly pandering to the interests of uniformed constituents that made for great uniformed clients - of the very groups that were funding said politicians at the time.

It was all very cozy and encouraged with a wink and a nod; current moral outrage and fist pounding rhetoric notwithstanding. Those who opposed these sleazy practices at the time were labeled racists for not wanting the same American Dream for all citizens. So many retreated lacking the conviction of character to stand up and call it what is was – wrong and ultimately dangerous.

So it is that I am now wary of the so-called stimulus plan, the TARP, and the various and sundry bailouts being handed out. I am concerned that lost in the minutiae is a basic and fundamental discipline of understanding how the individuals that will lead the efforts to rescue these troubled industries will be compensated. The AIG bonus fiasco shined a bright light on this, but we are unfortunately lacking the stamina, and in many cases, the qualified personnel to evaluate such intricacies influencing many other companies bellying up to the public trough.

Imagine if you will, if the SEC would be empowered to pay investigators competitive wages to Wall Street players. Imagine if they could receive six and seven figure bonuses for uncovering fraud and corruption. Ask any one of Bernie Madoff’s victims if they would have minded paying a government employee a million dollar bonus for discovering his deceit several years ago.

We need to start incentivizing good behavior over bad. We have to be smarter in rooting out systems that still reward rampant self interest at the cost of unsuspecting others. We need to get back to understanding that wealth creation comes from starting and building great companies that employ people and advance new innovation and productivity. This had been the backbone of our economy and our global advantage … until we lost our way. And the surest way of getting back on track is to pay people to do the right thing.

Interview with an Iconic Entrepreneur

One of the greatest gifts of my job is the opportunity to meet entrepreneurs. Born around the globe and bred from all walks of life, it never matters the entrepreneur’s background, nor does it matter the outcome of their venture—be it success or failure. From each entrepreneur I come to know, I glean a new sense of appreciation for this path they’ve chosen and learn even more about what makes these individuals so unique. 

A couple weeks ago, I was fortunate enough to talk entrepreneurship with Barnett Helzberg, Jr., former CEO of—you guessed it—Helzberg Diamonds. An iconic entrepreneur in Kansas City, Barnett is the only one I’ve come to know personally who’s sold a company to Warren Buffet and to me, that says a little something about his ability to grow and run a business. 

I have known Barnett for a while, prior to taping the latest Top of Mind episode with him. He’s also the founder of the Helzberg Entrepreneurial Mentoring Program (HEMP), a program right here in Kansas City, MO that matches seasoned, successful entrepreneur mentors with less-experienced entrepreneurs. When he established the program, Barnett drew inspiration from his own 23-year mentoring relationship with Kauffman Foundation founder, Ewing Kauffman. 

Needless to say, I have come to know Barnett well through his work with HEMP. But it wasn’t until our recent discussion that I learned even more about his and his family’s inspiring entrepreneurial journey—including the times when he thinks the now nationwide chain of more than 200 stores was close to going out of business. Watch the interview with Barnett…he has a few things to teach us all.

Community Is the New Currency

In her book, It Takes a Village: And Other Lessons Children Teach Us, Hillary Clinton famously (or infamously, based upon your politics) advocated for a society that assumes shared responsibility for raising children. The book became a New York Times Bestseller and a conservative lightening rod to denounce what the right deemed as a nanny-state intrusion on family.

For me, the value proposition of the book boiled down to the societal benefit of raising socially balanced children with the requisite cognitive and academic skills to contribute to society—an aspiration that is not the sole providence of the right or left.

I have concluded that there is some value to "the Village," but in an emerging way that may be redefining what we expect from the communities in which we engage. As it relates to entrepreneurs considering where to start a company or how to engage the assistance of others, I see increasing value in a variety of forms of communities such that I believe communities are emerging as a form of currency in our economy. Namely, some communities are providing direct economic benefit to entrepreneurs capable of identifying, engaging and leveraging these communities.

Let me offer some evidence. In March, I attended the fifth annual gathering of the Global Entrepreneurship Congress in Rio de Janeiro. More than 2,000 people representing 130 countries attended the Congress and shared ideas, best practices and assistance promoting an assortment of programs, resources and networks. There for all to witness was activity that had genuine economic value -- either as gifts of resources, time and access or other linkages.

Whereas the research purists reading this would (rightly) suggest that one couldn't simply assert that economic benefit is directly caused by this global network, one could certainly observe a correlation. By virtue of many individuals coming together in a community of common interest and purpose, they can extract value in obvious and less obvious ways.

Back in the U.S., we launched a new experiential-based learning program for aspiring entrepreneurs starting new firms called 1 Million Cups. The premise behind 1MC was built from the notion that if we could have more conversations (presumably over a cup of coffee), we could encourage and assist more individuals to start firms by sharing the knowledge and experiences of others. The program ostensibly has become a platform for community-based experiential learning for the aspiring entrepreneurs who present every Wednesday morning.

Founders of two startups get six minutes to present a company overview followed by roughly 20 minutes of Q&A from the audience, which now boasts more than 200 weekly in Kansas City, Mo. Invariably, each company gets the question, how can the community help? For the entrepreneurs who have done their homework, namely participate as a community member in several 1MCs prior, they will anticipate this question and get a rare opportunity to ask a sizeable crowd to: sample my product, register for our newsletter, help with warehouse space, sign our petition, help us find programmers or other employees, etc.

At the recent one-year anniversary of the program, alumni got on stage and shared an update on their progress post-1MC. Participant after participant could point to tangible benefits from the program, by virtue of the 1MC community that engaged with them.

A more recent book espousing the virtue of community (ecosystem) is Brad Feld's Startup Communities: Building an Entrepreneurial Ecosystem in Your City. In the book, Feld identifies roles for people in the community: Leaders and Feeders. In his view of successful ecosystems, Leaders are bona fide entrepreneurs and Feeders are everyone else who has an interest in supporting and growing such communities.

The existence of these communities, however, isn't always obvious. That's why we recently deployed a new channel on our website, entrepreneurship.org, named ID8 Nation. ID8 is a multimedia online journal focusing on entrepreneurial ecosystems of cities around the country. The channel debuted with a look at the iron city better known as Pittsburgh. Stories, videos and photos attempt to stitch together a tapestry of the vibrant community in Pittsburgh, partly to help its residents see what's happening among them, and partly to showcase great ideas that can be shared with other communities looking to promote similar activity.

In an increasingly mobile world with lessening geographic constraints to starting and growing companies, we need to help entrepreneurs identify the communities that may best serve their needs. In so doing, communities will realize the economic benefit of supporting the activities and needs of founders who are working hard to plant the seeds of economic growth in their "community gardens."