Wednesday, October 26, 2011

Bad Ideas or Bad Entrepreneurs

There is a lot of chatter about how small businesses and entrepreneurs are the backbone of the economy, and many have commented on how both are the best chance we have at regaining economic strength as a country and throughout the world. Most universities now offer, through their business schools, areas of emphasis in entrepreneurship. The up-and-coming generation is bombarded with the message of working for yourself, thanks to books like the 4-hour work week and so many others.

When you sort through the hype and get down to what's really going on, it seems like all of this focus is not creating any more commercially viable businesses than before. A lot of research suggests that start-up failure rates have not improved. So are there no more good ideas that can be turned into successful businesses, or do we generally lack enough qualified entrepreneurs, or "A" performers, to create successful ventures?

In my opinion, the world generally does suffer from a lack of good ideas. In fact, more of the people around you than you might think have good ideas rattling around in their heads that would solve problems for customers in such a valuable way that the customers would be willing to pay for the solutions. What the world lacks are "A" entrepreneurs and "A" teams that can really make the most of good ideas, turning them into successful businesses.

Where is my proof? Just look at all of the incubators, mentor-driven startup groups, and other similar initiatives that have become so popular in the last few years. If each of these organizations were honest, they would tell you that all of the startups they have sponsored are founded on great ideas, but most of them lack the entrepreneurial leadership required to make them successful. These entrepreneurs can only be mentored and "incubated" for so long. If they fail to take and implement the advice they get, and if they lack the battle-tested experience needed to run a non-theoretical business (meaning it's no longer a business plan worked on in a class or a bunch of concepts read in a text), the great ideas they are trying to commercialize will never materialize.

So the need is clear--we need "A" entrepreneurs and teams. The solution is not as clear. As universities, angel groups, incubators, and start-up generators struggle, they'll find the best results if they focus on creating "A" entrepreneurs with the right blend of experience, education, humility, desire, work ethic, and so much more.