The Evolution of the Professional Entrepreneur

Characteristics of some company builders from days past and how they differ from those building businesses today.

Creators, Part Two

Characteristics of the prototypical company builder, then and now

Local > > > > Global
Local: Export was for big companies or for small companies that had become established in their domestic niches.
Global: Name a "domestic" business--just one--where foreign competition isn't (or couldn't be) a factor. Local is global.

Snap decisions > > > > Consensus

Heart > > > > Market
Heart: Rick Duhé believed in Cajun Cola. Never mind that distributors weren't moving it and consumers weren't buying it--and that he was hundreds of thousands of dollars in debt with nothing to show for it. "You can get so connected with a dream that you lose touch with where you are. We had gotten so much acceptance in such a short time. What else was I going to think but that I'd pulled off a pretty incredible thing." The dream ended in bankruptcy court in 1989.
Market: Although Steve Gottlieb had always wanted to break into the music business, he waited until his graduation from Harvard Business School, in 1984, to choose his approach. He started TVT Records because, of the 12 distinctly different business plans he had shopped around, TVT had gotten the best response.

Lone Ranger > > > > Networker

Knockoffs: > > > > Innovations:
Knockoffs: Burger King: it's like McDonald's, only different.
Innovations: Fuddruckers offers premium burgers at thrice the price (with service and venue to match).

Idea > > > > Execution:
Idea: In 1982, 80% of Inc. 500 CEOs credited their companies' success to novel, unique, or proprietary ideas.
Execution: In 1992, 80% of Inc. 500 CEOs described the ideas for their companies as ordinary or mundane. It was superior execution, they said, that brought them success.

The only thing a good idea guarantees today is that it will be quickly copied. Tom Stemberg may have invented Staples, the office superstore. But Staples rose to the top of what quickly became a crowded field because Stemberg didn't roll out the business until he had the capital and the management he needed for growth.

With information-based companies, it's not scale that matters--the incremental cost of distributing one more page of data is zero or close to it--but speed. "Speed," says Idealab founder Bill Gross, "is the ability to execute without making mistakes."

Knows the trade > > > > Knows the business
Knows the trade: Eddie Rickenbacker, a pilot, headed one of the country's first airlines: Eastern.
Knows the business: Fred Smith, an M.B.A., created Federal Express from a business plan he wrote as a classroom assignment. (Smith earned a C on his paper. "The concept is interesting and well formed," the professor noted, "but in order to earn better than a C, the idea must be feasible.")

Secretive > > > > Open
Secretive: My books are my business.
Open: Our books are our business.

Novice > > > > Veteran
Novice: As long as entrepreneurs stayed with the companies they started, not much learning took place. Onetime entrepreneurs had little information to pass on, and the pool of knowledge about entrepreneurship stayed shallow.
Veteran: More entrepreneurs are like Ruth Owades, founder of Gardener's Eden, a catalog retailer. She sold the business to Williams-Sonoma before launching Calyx & Corolla, which sells mail-order flowers. "Gardener's Eden gave me credibility," she says. Not to mention experience. With more people like Owades launching multiple start-ups, the pool of experience--and knowledge--grows deeper. Entrepreneurism, in other words, breeds entrepreneurs.

Self-reliant > > > > Inquisitive
Self-reliant: I'll figure it out for myself, thanks.
Inquisitive: Professional entrepreneurs thrive on the experiences of others.

Steve Leveen, founder of Levenger Co., a reading-accessories catalog, filled many three-ring binders with advice sent to him by Ric Leichtung, a three-time Inc. 500 winner with his own successful catalog company. "I felt like the Karate Kid, or like Luke Skywalker getting the Force," Leveen recalls.

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