Being a part of a startup can be described by many as building an airplane in midair at night while navigating through thunderstorms with no radar. When I hear that anecdote, I think of being in a room full of people asking for volunteers to sign up. For most people, they will hear that anecdote and say ‘I’m good’ here on the ground, others will say ‘Sound interesting. Do I get a parachute?’ But there is a small group that jump to the front and say, ‘when do we start and give me some tools?’
This last group is defined as the entrepreneurs. They are willing to take the risk to find a solution to a problem that they see in the world that can be solved. Entrepreneurs are the life blood of the world’s economy. Industries that did not exists 30 years ago can be traced to these people who risked all to chase after their new vision at great personal and financial risk. We all know their names, Ford, Edison, Gates, Jobs, Bezos, Musk, Zuckerberg. There are books, videos and seminars that documents these leaders of industry that have crated economic empires that change economies globally.
As we look to see these people, it does beg the question? Can you create an entrepreneur? Or are these people born with innate skills that will blossom once they find an opportunity that they can bring to market. So, let us look at one the great management thinkers to see what he thought.
Peter Drucker, who Business Week called “the man who invented management.” Authored 39 books including the first book about running a corporation, The Practice of Management in 1954. Drucker was also prescient in his novel observations about the future. In the Age of Discontinuity, published in 1968, Drucker stated “the impact of cheap, reliable, fast and universally available information will easily be as great as was the impact of electricity.” If he postulated on a world of fast data transmission, he probably would have written about other topics that are relevant today. And he did in 1985 with the book, Innovation and Entrepreneurship.
Some years ago, I picked up the book and I keep it on my bookshelf. As I was thinking about writing on Innovation, I decided to re-read the book and write up some posts on my views on the book.
In the Introduction, Drucker lays out his view of Entrepreneurship. “Entrepreneurship is neither a science nor an art. It is a practice. It has a knowledge base, of course, which this book attempts to present in an organized fashion. But in all practices, medicine, for instance, or engineering, knowledge in entrepreneurship is a means to an end. Indeed, what constitutes knowledge in a practice is largely defined by the end, that is by the practice. Hence a book like this should be backed by long years of practice.”
The phrase that I take away from this paragraph is “years of practice.” In Drucker’s view, entrepreneurship should not be undertaken unless the entrepreneur has taken many years of study of the key ideas so that the enterprise that is started can be successful. As we move through the book, we can see his view that the process combined with an entrepreneur is what creates a successful enterprise.
One point to remember, Drucker has a consulting business starting in the 1950s that worked with major companies in the United States and around world. So, he was an entrepreneur with his own consulting practice as well as being a professor. He was able to test his theories and refine them over many years in his own firm.
As we start chapter 1, Drucker defines an entrepreneurial business. To be an entrepreneurial business, it must create something new and different; it must change business practices. Starting a new business that just creates new demand is not entrepreneurship. That is a harsh statement, and I would not call someone who puts his or her capital and energy into a business to be irrelevant to entrepreneurship. A new business that creates jobs and demand for a good or service it a net plus and should be treated as a welcome addition to a community. So, as we go through this and subsequent posts, I propose that we use a broad definition that any business that is started is started to create efficiency in a market or economic area and is looking to improve economic access or opportunity in an area either through the ability to a customer to find efficiency in the use of limited resources, whether it be time or money.
Drucker’s next point is that the entrepreneur always searches for change, responds to it, and exploits it as an opportunity. We can all agree on that point. Anyone that starts a business sees an opportunity and sets up a business that will provide value to an area. Whether the innovation is a new widget, a service, or a social structure, the entrepreneur must change the wealth-producing potential of already existing resources to create innovation (Drucker p.31).
The last point to bring out of the introduction to this book, it that Drucker discussed the idea of the entrepreneur having a “flash of genius” working away in solo isolation, removed from the all worldly contact until emerging with the new innovation. Drucker posits that entrepreneurs practice systematic innovation, defined as the purposeful and organized search for changes and in the systematic analysis of the opportunities such changes might offer for economic or social innovation (p. 35). Whether the entrepreneur is aware of it or not, there is a process that successful ones follow. Drucker states that entrepreneurs who start out with big ideas and who must get there in a hurry are headed down a path to failure as they will make multiple mistakes, leading to failure of the business.
Looking at our process at Secured2 since its founding, we can see that we follow a systematic process. Our plan was to create a new way secure data. As we go through the book, we did not intentionally follow a systematic process, but we did. We were trying to create a new way to secure data and by doing so, we could see the path to where we could build a substantial business. As we have moved forward, we have stayed with that main goal of securing data, even as new technologies have come forward. For example, quantum computing was a far off idea when we started Secured2, but as we built our algorithms, we made sure that we would be able to be quantum resilient when the market would demand a solution that could protect data when encryption was compromised. We are there now!
Thanks for reading and let us know what you think.