Babson Entrepreneur Experience Lab

Elements of the Entrepreneur Experience

Learning

Learning Is Largely Informal

To be an entrepreneur is to navigate a never-ending series of questions where the learning curve is steep and long. In fact, nearly the entire entrepreneur experience can be understood by looking deeply at what and how entrepreneurs learn. What’s most striking here is that despite the availability of formal entrepreneurship education programs — especially at the undergraduate and post-graduate levels — the majority of learning occurs informally. It comes from talking with peers and mentors, studying precedents and following existing models, listening to stories, and practicing.

The importance of informal learning is due in part to the messy and complex nature of entrepreneurship; individual experiences are often unique enough that formalized knowledge feels overly generalized. But it’s also due to the fact that much entrepreneurial knowledge is tacit and experiential in nature—it’s “know how” rather than “know what;” it’s learning that’s inseparable from doing. 

*”Living in the Question” is a phrase we first heard from entrepreneur/philosopher Bijoy Goswami of Bootstrap Austin. For more on Bijoy’s use this concept to teach entrepreneurship see: www.bijoygoswami.com.

Opportunities

  1. How can we create new educational models that recognize and support the three types of knowledge building?

  2. How can we help people practice in a variety of contexts or roles before launching their venture?

     

  3. How can we enhance  education practices that incorporate the type of experiential learning that is so critical to the entrepreneur experience?

     

  4. How can we teach reflection as a critical practice within the entrepreneurship method?

Three types of knowledge building

Three types of knowledge building

Mike and Seth

Mike and Seth talking about all the mistakes they made regarding technology; they had serious business chops but nearly crashed the company because they didn't know the tech side of their business.

http://blip.tv/play/h7YEgsrsRwA.html

Meg

Meg was an expert in international development and maternal health, but really struggled to understand the basics of business.

http://blip.tv/play/h7YEgsrsVAA.html

Jacob and Susan

Jacob and Susan talk about gaps in their knowledge of running a business, and that seeking help through their community is more valuable than formal education.

http://blip.tv/play/h7YEgsr0LgA.html

Bennett

Bennett decided to go to business school to prepare himself to start his business.

http://blip.tv/play/h7YEgsvBFgA.html

Broadly speaking, entrepreneurs need to continually assess and build knowledge across three different areas: core knowledge, business knowledge, and experiential knowledge. Core knowledge is the basic knowledge around an entrepreneur’s product, service, or field. For instance, this might be knowledge about eye-tracking software, green building technology, or pizza making. For many entrepreneurs, this is knowledge they bring from prior experience and is often the impetus for entrepreneurship in the first place.

Business knowledge includes all the codified knowledge around launching and managing business; it’s what people learn in business school. This includes such things as balance sheets, valuations, capital structures, basic legal information, business models and business plans, management practices, and a host of other things. It’s the basic things one needs to know when navigating the discipline of entrepreneurship independent of core knowledge. It’s also the place where most entrepreneurs have the biggest gaps in their knowledge. Many entrepreneurs come into entrepreneurship with a lot of core knowledge but but don’t actually know how the components of business are integrated into a functioning organization designed to generate value.

Experiential knowledge is the knowledge that actually underlies most of what entrepreneurs do. This might include knowing how to best pitch a venture to different audiences, hiring the first addition to the core team, or learning how to distinguish good advice from bad. This knowledge undoubtedly overlaps with core and business knowledge, but it is the knowledge best learned through demonstration and practice. Certainly entrepreneurs can read all sorts of books about pitching ventures to potential investors, but an entrepreneur will undoubtedly know how to do this better after watching others and having practiced pitching some 100 times themselves.

Assessing and building knowledge across all three areas is a critical component of the experience. As one entrepreneur put it, “the most important thing to being a successful entrepreneur is to be able to reach and respond to new information.”

Knowledge in other peoples heads

Knowledge in other peoples heads

Michael

Michael on the decision to hire Mohan as the business development person.

http://blip.tv/play/h7YEgsrsDwA.html

Laura

Laura talks about people having to think and dream bigger.

http://blip.tv/play/h7YEgsv5DgA.html

Janis

Janis on the role of mentors to make up gaps in experience.

http://blip.tv/play/h7YEgs2pcwA.html

Meg

Meg needed someone to actually work with her to do the business plan, but it was hard finding someone else with similar interests.

http://blip.tv/play/h7YEgs6zUQA.html

Entrepreneurs build knowledge by pulling someone in who holds the knowledge they need.  These “experts” are used as knowledge proxies. This is another way in which mentors and peer-mentors are important. But it is also one of the primary reasons for adding more members to a team. As ventures grow and pick up momentum, there is less need for generality and more need for specificity. The entrepreneur can’t herself learn or master (let alone implement) all aspects of the venture, so she includes people on the team who do have that knowledge.

After building out and testing his venture’s basic educational software package, Michael faced the question of how to really grow and expand their business and offerings. From multiple meetings with mentors, friends, and potential investors, Michael realized that what they were missing from the team was someone with knowledge and experience with business development and growth. Rather than take on this additional challenge and responsibility himself, the obvious decision was to hire a full-time business development person with close ties to the company. Through this proxy, Michael cleared the hurdle of not knowing enough about business development.

Knowing what came before

Knowing what came before

Bennett

Bennett can't believe he took the gamble to become an entrepreneur.

http://blip.tv/play/h7YEgsrzdwA.html

Rachel

Rachel asks, "What company is out there now that was where I am and is now quadruple in sales. You're four steps ahead of me, how did you get there?"

http://blip.tv/play/h7YEgsrsMQA.html

Doug

Doug believes finding someone to help guide him through a problem is important.

http://blip.tv/play/h7YEgsveawA.html

Startup Chicks

Learning through mentors and from others’ experience is immensely valuable.

http://blip.tv/play/h7YEgs3LVAA.html

Another key method for learning is looking to precedent. Entrepreneurs find others using similar models or those who have gone through similar experiences and ask: “How did you do this?” Learning this way occurs at many scales from analyzing an existing business model to asking another entrepreneur in their co-working space where she got t-shirts printed. Mentors are critical sources in this learning process as are the stories that other entrepreneurs tell about their challenges and experiences. Through precedents, entrepreneurs learn how others dealt with similar problems.

An example of this is Rachel, an Atlanta entrepreneur who founded an online team/project management tool. Her primary process is seeking out advice from mentors at every stage of the process. When she first began and was looking for funding, she actively sought out the single female entrepreneur who had successfully raised capital for a tech business in her city. Further down the road, when she was confronting the question of how to increase sales she used the same process—seeking out companies that had previously been in her place and were now quadruple in sales—and reached out directly to the founders for advice.

Get out there and try it

Get out there and try it

Alex

Alex talks about the struggles of having to do things without having any prior experience or learning in those areas.

http://blip.tv/play/h7YEgsuPBgA.html

Doug

Doug feels that you can't teach entrepreneurship, that you have to learn a lot of it by the seat of your pants.

http://blip.tv/play/h7YEgsvedAA.html

Mark

Although Mark believes formal education is important, there is a lot to learn being on the ground and actually living entrepreneurship.

http://blip.tv/play/h7YEgszHDQA.html

Kamal

Kamal was an expert baker, but when it came the running a business he learned everything on the job.

http://blip.tv/play/h7YEgs2pPwA.html

Sabrina

As part of an incubator, Sabrina finds lots of learning on the job.

http://blip.tv/play/h7YEgs3LZAA.html

Eileen

Eileen on the importance of prior experience and opportunities to “practice” entrepreneurship.

http://blip.tv/play/h7YEgs6dRgA.html

Eileen

Eileen began by throwing herself into a process of learning everything about the core question driving her venture.

http://blip.tv/play/h7YEgs6dVgA.html

In the end, it all comes down to practice. Practice is by far the most cited and most significant means of building knowledge. This is, in part, because of the experiential nature of entrepreneurship, but also because of its complexity; it’s hard to anticipate all that one might need to know. So many entrepreneurs act and learn and then repeat the cycle again. This is the obvious reason why serial entrepreneurs tend to be successful—they’ve literally had the chance to practice entrepreneurship in different contexts.

Mike from Atlanta has a successful track record as an entrepreneur and has advised innumerable other companies along the way. Mike is confident enough in his experience and skill as an entrepreneur that he’s currently launching an electric car venture—an area that’s largely outside his core expertise. But he has practice convening and managing large teams of people, raising funds for different types of ventures, and working with novel technologies in unknown industries. From his perspective, his experience working in a variety of contexts gives him the ability to build this new company.

Mimicry, the art of imitation, can also be a fundamental tool for learning and advancement. Many entrepreneurs regularly attempt to mimic more experienced entrepreneurs and borrow existing practices. In some sense, mentors are a tool for mimicry. It’s quite common for aspiring artists and designers to learn by copying famous works. It’s no different for entrepreneurs. This is a major appeal of franchising; it provides a model to follow where one can immediately practice what others have already done. It can be seen in the recent wave of new accelerators—programs that help first-time tech startup founders further develop their pre-seed stage companies—cropping up in cities across the US.

When Dave, a founder of a web content management system, saw an opportunity to help tech startups in Atlanta, he didn’t think twice about emulating the YCombinator model—a highly acclaimed Silicon Valley accelerator program—and created a local accelerator that mimics its Bay Area counterpart. Mimicry can also turn into a cloning activity where entrepreneurs chase trending industries and replicate a wildly successful startup. The vast number of Groupon clones is testament to this. 

It is all about forward motion

It is all about forward motion

Entrepreneurship is fast-paced and all consuming. Many will tell you they rarely have time to reflect on what they’re actually learning and experiencing out there in the trenches; that forward motion almost always trumps reflection. Mryna, a commercial photographer in New York states it this way, “Well I tend to analyze in the moment and move forward. I don’t really sit down and reflect per se. I am also quite good at cutting loses and re-evaluating when I see something is not working. Reading about other past experiences, yes, its great to gain insight. For myself, I try to be more a ‘learner’ and ‘doer’ than reflecting.”

A number of entrepreneurs are turning to formal mentors and personal coaches to provide a mechanism for reflection. Steve, an Austin entrepreneur developing new LED lighting technologies and products, has weekly check-ins with an executive coach. In these sessions, Steve is held accountable to reflect on the past week, assess progress towards identified priorities, and plan for the upcoming week. The coach provides Steve the opportunity to actively reflect on his experiences in a productive manner. For Steve, these sessions are immensely valuable.

Importance of prior experience

Importance of prior experience

Bennett

Bennett talks about gaining experience in other fields, and going to business school before starting his business.

http://blip.tv/play/h7YEgsrzWwA.html

Mike

Prior to founding his company, Mike studied physics and history of science, built a small development company, worked at Microsoft. He built up a real diversity of experiences that helped him to be a successful entrepreneur.

http://blip.tv/play/h7YEgsrsXQA.html

Doug

It was easy to start another business for Doug after falling into the serial entrepreneur "trap."

http://blip.tv/play/h7YEgsveXwA.html

The majority of entrepreneurs in the study had built up a diverse set of experiences prior to becoming entrepreneurs. Not surprising. Entrepreneurs are the ultimate generalists, able to jump from business strategy to product development to fundraising to talent development to customer service. So it’s no wonder that individuals who have worked in a variety of different contexts and assumed a variety of different roles make strong entrepreneurs.

Take Seattle entrepreneur Mike, for example, who prior to founding a venture for developing civic software, studied science and history, built a small web development company, was a software developer, and worked at Microsoft in organizational and software strategy. By the time Mike was ready to hop on the entrepreneurship path he had already built up the experience and literally practiced in all the core areas of his venture.