The Evolution of the Professional Entrepreneur

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When asked, people running the best companies will tell you about their boards, advisers, and mentors. Entrepreneurs are people who need people, too.

Pro-phobe > > > > Pro-phile
Pro-phobe: "A consultant is someone who borrows your watch to tell you the time."
"A banker is someone who will lend you money only when you don't need it."
Pro-phile: "When should a founder bring professional management into a new business? Immediately."
--Phil Romano, founder, Fuddruckers

Start-up > > > > Start-up or whatever
Start-up: "Real" entrepreneurs start companies from scratch.
Start-up or whatever: Real entrepreneurs take on start-ups, spin-offs, buyouts, or purchases; it's how you grow the company, not how you get it, that matters.

Organizationally orthodox > > > > Organizationally innovative
Organizationally orthodox: "It used to be that our companies' organization charts looked like trees. Now our organization charts are beginning to look like webs, the quintessential biological structure."
--Paul Saffo, a director of Institute for the Future
Organizationally innovative: Here are a few examples:

• Trammell Crow Co.: has local equity partners in every development project
• Re/Max: 100% of commission goes to brokers
• W.L. Gore: matrix organization
• Springfield Remanufacturing: open-book management

Trade association member > > > > Web surfer

Self-sufficient > > > > Virtual
Self-sufficient: Entrepreneurs who wanted something done did it themselves --or added someone to the payroll.
Virtual: Paul Farrow calculated that it would cost $1 million in capital to design, manufacture, and market a molded plastic kayak. He didn't have $1 million. But within a year, Walden Paddlers did all that for less than one-tenth of the estimate--and with only one employee: Farrow. He'd contracted everything. "The access to sources is fantastic," says Farrow. "We have more design and manufacturing horsepower than any of our competitors do. There are a lot of creative people out there."

Think small > > > > Think big
Think small: Carterphone's inventor just wanted to plug his little device into AT&T's network.
Think big: MCI founder Bill McGowan wanted to replace AT&T's network.

Small-business founder > > > > Entrepreneur: "It's totally inappropriate to equate small-business founders and entrepreneurs," says Bill Wetzel, of the University of New Hampshire. "One's looking for an income. The other has the intention of building a significant company that can create wealth for the entrepreneur and investors."

Seat-of-the-pants > > > > Business plan

Boss > > > > Leader
Boss: "My way or the highway."
--Sign on CEO's desk
Leader: Jack Stack owns less than 20% of Springfield Remanufacturing's stock. Employees own the rest. Stack could have owned more of the engine-remanufacturing company's stock. "But that was plenty for me. Not wanting to be accused of being greedy probably had something to do with it, but more important, I didn't want to be alone. I was going to be leading the charge up the hill. I wanted to make sure that when I got to the top and turned around, there were people coming with me."

Male > > > > Mixed: In 1980, women owned a quarter of all sole proprietorships; in 1993, they owned one-third.

Supportive spouse at home > > > > Spouse runs own business

Automation > > > > Innovation
Automation: Big companies used expensive technology to automate the work people had always done. Often, the high price of that technology was a barrier that kept small businesses out of certain markets.
Innovation: Professional entrepreneurs use today's cheap information technology to let people do things never done before.

"A filing cabinet is just a box of papers," says Ben Narasin, CEO of Boston Preparatory, a clothing designer and manufacturer. "The same information set up on a computer network can give you a dynamic sense of your customers. You can pull up their history--the way they pay their bills, what they're talking about--and get a feeling for them. You get $10 worth of value for every $1 of information. When technology breaks down, you realize how effective it is when it's working."

Intuition > > > > Education
Intuition: Trip Hawkins's first company, founded when he was 19 years old, flopped. "I loved being an entrepreneur," he says, "but before I'd do it again, I'd figure out how to do it right."
Education: Hawkins studied for an M.B.A. at Stanford University and worked at Apple Computer before making his next entrepreneurial moves: launching Electronic Arts in 1982 and 3DO in 1991.

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