Babson Entrepreneur Experience Lab

Elements of the Entrepreneur Experience

Uncertainty

You're Probably Wrong

We heard countless stories that describe the central role failure plays in the entrepreneur experience. To be innovative entrepreneurs are told they must not only celebrate success, but also expect and embrace failure. To fail early and often. There’s an important value lesson in this, but one that gets lost in translation. Businesses will fail, and accepting this, and learning from others about the experience of ‘crashing’ a company or steps to prevent it is a central component of being an entrepreneur. But, the predominant use of the term ‘failure’ is really framing another important aspect of entrepreneurship that’s little understood and discussed in entrepreneurial circles.

The entrepreneur experience is rarely smooth or predictable. It requires iteration and experimentation. Yet, the language given to describe this aspect of the experience is centered around the concept of failure: setbacks, false starts, wrong turns, and mistakes. Many entrepreneurs are not wired for iteration. Past educational or corporate experiences do not help them prepare for, learn from or respond to taking a venture creation step. At its core, iteration is a cyclic process of prototyping, testing, analyzing, and refinement. It’s a way of building knowledge through experimentation: try something, see what happens, learn from it, and then adapt or pivot. Framed as failure, entrepreneurs develop fear for this part of the experience. Reframing it as intentional iteration allows entrepreneurs to develop the skills needed to respond to the uncertainty they face.

Opportunities

  1. What would happen if we just stopped using the word failure?

  2. How can we teach entrepreneurs a method of iteration and experimentation—how to prepare for it, manage it and learn from it?

  3. How can we teach entrepreneurs to systematically manage a portfolio of opportunities as a form of experimentation and iteration?

  4. How can we help large organizations to adapt their own training to embrace entrepreneurial behavior?
     

De-education

De-education

Laura

Laura talks about getting hung up on setbacks.

http://blip.tv/play/h7YEgsziEgA.html

Recognizing that ingrained behaviors may not be of help to an entrepreneur is the first step towards adopting the right mindset. Un-learning habits from prior educational or corporate experiences is necessary, especially where these previous habits conflict with the fast, iterative nature of the entrepreneur experience. For instance, Michael, an entrepreneur working in San Francisco, has spent most of his professional life working in corporate software development. With his new venture, a mobile application development platform, he’s realizing that tendencies and habits from his prior experience may be preventing him from launching with anything but the “perfect product.” Sitting next to a younger entrepreneur who went from initial idea to first, and admittedly imperfect, product launch within three months, Michael realizes he’s struggling to un-learn these habits and to manage the tension of wanting to do it right and launching early to get feedback.

Planning to Pivot

Planning to Pivot

Rajiv

Rajiv talks about setbacks and pivots that happened as a result of testing things with clients.

http://blip.tv/play/h7YEgsvZCAA.html

Rajiv

Rajiv talks about not having a real plan and letting the idea pull you along.

http://blip.tv/play/h7YEgsvZFgA.html

Mike

Mike believes a business has to adapt and change relative with the market.

http://blip.tv/play/h7YEgsvhKQA.html

Rich

Rich and his team actively experimented with different business models early on.

http://blip.tv/play/h7YEgsyhDwA.html

Diane

Diane talks about having the ability to adjust and adapt business models and ideas as you go.

http://blip.tv/play/h7YEgszgYgA.html

Startup Chicks

Pivoting is an inevitable part of entrepreneurship and you need to be ready for it.

http://blip.tv/play/h7YEgs3LSgA.html

Every venture starts off with an idea that will change and develop over time. A major pitfall is the temptation to overly commit or stick with a particular idea even in the face of certain setbacks. Entrepreneurs often talk about the importance of identifying a mission that is likely to stay consistent even while the scope changes as the venture grows, as customers engage with it, and as it is influenced by the ecosystem. Developing a mission and guiding vision that is malleable enough to accommodate and even anticipate inevitable pivots is critical for success. All ideas change, and entrepreneurs need to keep an open mind towards their capacity to pivot.

Rajiv’s Rhode Island venture went from being a local nonprofit focused on raising awareness around health and wellness to a for-profit venture that offers social employee wellness platforms to Fortune 500 companies across the country. From his perspective, they’ve always had a commitment to a basic vision, yet how they execute and achieve that vision is still an open and ongoing question. “You go out there and start something. You know you’re in the right space. We wanted to be in health and wellness, we wanted to be in community development, bringing people together. Along the way you find you start to move down a pathway and identify opportunities.”

De-risking

De-risking

Laura

Laura talks about her strategy of de-risking.

http://blip.tv/play/h7YEgsziFAA.html

Laura, founder of an online marketplace for Twitter tools described a primary business failure strategy as that of de-risking. By identifying all the ways her venture might fail, recognizing which of these she had some control over, and then incrementally working to address those issues, she was able to reduce her risk and learn about her product and market iteratively.

“An entrepreneur’s job is to dive headfirst into a really, really risky undertaking and systematically deā€‘risk it. Identify what are the six main ways this could fail, and what can I do about... OK, three of them I can’t control, but these three I can. Let me make progress towards that.... And so, I just kept working all the angles of, well, I can’t do anything about this risk, but I can do something about this.”

The Bootstrap Model

The Bootstrap Model

Bijoy

Bijoy compares bootstrapping versus traditional funding models.

http://blip.tv/play/h7YEgsv0SgA.html

Bijoy

Bijoy talks about bootstrapping enabling the ability to "go at your own pace."

http://blip.tv/play/h7YEgsv0ZwA.html

Matt

Matt used one of his ventures to support the other.

http://blip.tv/play/h7YEgsyNIwA.html

Matt

Matt constantly adapted his business model.

http://blip.tv/play/h7YEgsyNLQA.html

Jimmy

Jimmy believes it is important to get a product out to market quickly, and test in iterations.

http://blip.tv/play/h7YEgsykWwA.html

Although commonly used as shorthand for simply not seeking outside funding, bootstrapping is a distinct methodology that centers on constant iteration and leveraging constraint to fuel innovation. As opposed to the VC model of writing a business plan, raising capital from investors, growing quickly, and then aiming for a relatively fast exit, bootstrapping focuses on shorter cycles of iteration that enables business models to emerge from the process itself. It’s a slower, more organic approach that fully embraces experimentation and its associated lessons as the core of the entrepreneur experience. As a methodology, it reframes failure as an essential and productive activity. While the Bootstrapping movement is often seen as an alternative to the VC model, the truth is that most entrepreneurs, both historically and at present, are in fact bootstrappers. Most entrepreneurs don’t take outside money, are constantly working with significant resource constraints, and are always iterating and experimenting with their business model.

Leo, a serial entrepreneur based in Austin, works a full-time job while he steadily iterates his new venture, a donation site that allows people to round up purchase costs and donate money to selected social organizations, towards launch. Leo understands that change in his product and business is invevitable and plans for it. “A very large percentage of what I start with changes. We refined the strategy. Interviewed donors. Got educated. Got [the] idea out there. Got feedback. Incorporated the feedback we think is important. Circle back to make sure new ideas are the right ones. We know what we launch will need to change again... You adapt. You grow. You listen.”

Portfolio of Opportunities

Portfolio of Opportunities

Doug

While trying to get his first company moving, Doug started another completely unrelated venture.

http://blip.tv/play/h7YEgsveUAA.html

Mike

Mike sees his business as a lab to explore a portfolio of opportunities.

http://blip.tv/play/h7YEgsvhJAA.html

Mike

Mike uses his business as a way to incubate and develop their own new ideas.

http://blip.tv/play/h7YEgsvhMQA.html

Another form of iteration was seen in entrepreneurs who are developing a portfolio of ideas. Instead of focusing solely on one idea, there are individuals actively advancing multiple ventures simultaneously. In other cases, entrepreneurs are designing ventures that create the working conditions and infrastructure for developing a portfolio of ideas centered on a particular space or industry.

For instance, Mike, the founder of a civic software development company in Seattle, describes his venture as a laboratory that is opportunity driven. He intentionally cultivates a culture of experimentation, so that while they’re focused on civic software they’re free to identify and respond to a host of different social problems within that space. “If we find the opportunity   there’s some gap in the market that we can get a strong ROI on our particular development skills, consumer Internet skills, then we’ll go jump at that and scale it.... The difference between a product and a company is that a company is a machine that you’re building that can listen to the market and adapt and change from the original ideas.”