If you run a start-up--whether it’s for profit or a social enterprise--one of the big questions that you face every day is whether to spend more time thinking about your venture’s problems or just make a decision and take action.
If you’re anything like me, you’ve been through an educational process that puts a tremendous emphasis on getting you to think hard before acting and record your thinking in exhaustive detail.
Many of America’s greatest entrepreneurs, from Bill Gates to Jeff Bezos, have been through that kind of cerebrally-intensive education at Harvard and Princeton, respectively. To be sure, both institutions have evolved more to encourage their students to get real-world experience than they did when Gates and Bezos were attending them.
But over-thinking a problem can be disastrous for a start-up. In technology-based start-ups, engineers left to their own devices will keep refining their product to impress other engineers and never think it is ready to be put in front of a customer. That’s why such start-ups usually burn through their investors’ money before getting any revenues.
As a teacher of strategy and entrepreneurship at Babson College--U.S. News & World Report has ranked its undergraduate entrepreneurship program tops in the U.S. every year for the last 20--I have concluded that aspiring entrepreneurs must know when to stop thinking and start acting.
How to teach them this became a real problem for me this spring when Babson asked me to create a new course to be called Foundations of Entrepreneurial Management (FEM).
FEM is based on one of Babson’s best ideas: that aspiring business leaders should both think and act entrepreneurially. And in my mind, Babson’s approach, dubbed Entrepreneurial Thought & Action (ET&A), emphasizes the importance of both thinking and doing, as described in 2011’s The New Entrepreneurial Leader co-authored by Danna Greenberg, Kate McKone-Sweet and H. James Wilson.
In a sense, ET&A springs from the motto of MIT, the alma mater of the college founder, Roger Babson. MIT’s seal includes the Latin words--mens et manus--which translates as Mind and Hand. I interpret MIT’s philosophy to be that students should analyze a problem, think of a solution, build and test a prototype, see how well it solves the problem, learn from the experiment, and apply that learning to the next iteration of the prototype.
What does this mean for you as an entrepreneur?
You should build your company by pairing up two logics -- creative -- where you come up with a business idea, try it, and see what happens; and predictive -- set a long-term goal and develop a clear progression of steps to achieve the goal.
For example, if you were engaged in resource planning for your venture, the predictive mindset would make you ask yourself: “How much capital do we need? Who do we know? and How do we pitch to get them interested?” whereas the creative one would lead you to say “Let’s start with the means at hand, what do we have? who do we know? and how can we make something happen with what we’ve got?”
An important ET&A theme is that these two ways of thinking about entrepreneurship co-exist. If your goal is to create economic and social value, you can apply ET&A to a variety of business situations you might encounter during your career, including:
· Starting and leading a new for-profit, non-profit or social venture;
· Joining the team of a growing enterprise; or
· Infusing an established organization or family business with entrepreneurial vigor.
What does this mean for you? Thinking is important--but don’t overdo it. On the other hand, acting without thinking clearly can create too-high tuition payments that yield little learning.
You must figure out where your thinking should leave off and action should take over. And your ultimate goal as an entrepreneur should be to learn faster and better than your competition. That learning should help you win new customers and turning them into repeat buyers; hire the best people and make them act as an effective team; and attract the most helpful investors and learn from their insights.