

Myths about entrepreneurs - ilamont
http://www.washingtonpost.com/opinions/five-myths-about-entrepreneurs/2011/06/29/gIQALtCBhI_story.html?hpid=z3

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ramanujan
Unfortunately, Vivek Wadhwa is being highly misleading here. He publishes a
variant of this same article over and over and over again in every forum
available to him (see his old TechCrunch posts, for example).

The key is really the misleading definitions at the beginning. He includes
what we'd call lifestyle businesses as startups. Is a new carpet cleaner a
startup?

Publish the raw data, Vivek, with the actual names of the businesses, their
founders, their market caps, their sectors, and their revenue growths in a
single publicly accessible, read-only Google Spreadsheet.

Because my feeling is that the actual businesses selected will differ strongly
from the kinds of operations peoe on Hacker News are concerned with: Google,
Facebook, Adobe, LinkedIn, Apple, Twitter etcetera, and the kinds of companies
they acquire.

\---

Edit: here's the original study

<http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1431263>

Note that this is a survey of 549 respondents across twelve industries. First,
that is a relatively small sample to slice and dice on multiple axes
simultaneously, though you can compare each attribute to the population at
large.

More importantly though it is not a _rank ordered survey_ within those
industries. For example, identify the top N most profitable companies started
in the last T years in the hardware sector, for different values of N and T.
Who are their founders? What are their characteristics? They are going to look
more like Jen Hsung Huang of Nvidia, another Stanford grad school product,
than the demographic profile Wadhwa presents.

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nhebb
I want to agree with you because I find Vivek's writings repetitive, highly
subjective, and often misleading. But to be fair, without seeing the study I
can't be sure whether he's talking about startups or entrepreneurs in general.
The title of the article is _Five myths about entrepreneurs_ , but the content
seems geared toward the tech sector. Unfortunately, the excerpt doesn't say
which 12 "high-growth" sectors the study focused on.

> 4\. Women can’t cut it in the tech world.

Vivek throws out this straw man (straw woman?), but other than a rare sexist I
don't hear anyone saying that. There may be observations that the number of
women in tech is low - and a lot of speculation as to why - but no one's
saying women can't cut it.

~~~
jpdoctor
> but other than a rare sexist I don't hear anyone saying that.

The thing about rare sexists is that they are not all that rare.

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jpdoctor
Most important one imho = #5:

 _Our analysis of more than 500 companies in high-growth industries revealed
that not even 11 percent of these companies took venture capital at any stage
of their existence. The Kauffman Foundation ran a similar analysis of
companies on the Inc. magazine 500 list and found that only 16 percent of them
raised venture capital._

The results speak for themselves.

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ForrestN
I'm not sure that when people say "you're born with it," they mean literally
that it's genetic. I think they mean that it's innate, in whatever makes up a
person's personality by the time they might be starting a business. Thinking
that business acumen can't be taught isn't disproven by analyzing family
history.

That said, I think most of what matters can be taught!

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dm_mongodb
I've been an entrepreneur a long time and my take is:

1\. Not a myth! Apple, Microsoft, Yahoo, Google, Facebook, Foursquare, ...
There are counterexamples but certainly plenty of young ones. I'm 40+ now so
no bias. :-) 2\. Correct, myth. I could teach you to be an entrepreneur if you
wanted to be one. 3\. Myth 4\. Myth. Gilt Groupe a good example. 5\. Myth

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Maro
The value in the Silicon Valley startup model this article seems to miss (and
bash) is that it's there. With programs like YC, VC firms and plenty of prior
startup examples (data), potential entrepreneurs (and also investors) can get
a good sense what they need to do to succeed. Success of course is still
statistical, but it's there.

For example I started a company in E.Europe, and here it's not clear at all
what process you have to follow to succeed.

You may think that an entrepreneur has to figure that out, but that's not a
good way to look at it. A good entrepreneur, since he's already involved in a
venture with high overall risks, will minimize individual risks whenever
possible. By following a model such as the YC/SV model, where he is advised,
maximizes the inflow of information about his idea/BP etc, he can achieve
that.

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Shenglong
There's a way to skew the representation of data in just about any way
imaginable. You can change sample sizes, adjust test criteria, and even
replace tests when they don't generate the desired result.

I think it's _obvious_ that you don't need to be an ivy league drop out to run
a successful start up. However, representing data this way portrays the image
that this stereotype actually hurts the start up model - which I doubt is
true. I'm not speaking quantitatively - just from my sense of logic.

If the goal of the article is to promote non ivy league drop outs to found
companies, then I'm all for it. If it's trying to convince us that ivy league
drop outs perform worse, then I don't buy it. People tend to drop out to start
a company for a reason - and that reason is usually boredom.

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awaz
I read few weeks back in Y Combinator FAQ page that the average age of Y
Combinator funded entrepreneurs is 26. Vivek's survey found the average age of
founders to be 40. It would be interesting to know the average age of Y
Combinator applicants.

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tonyedgecombe
Y Combinator is supplying relatively small amounts of capital, that is only
likely to be useful if you haven't been working long enough to accumulate some
savings. This is going to push their average down from the industry average.

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dmor
I think another myth is that the majority of companies are started in the Bay
Area. That might be true for tech, but for entrepreneurship overall in the
U.S. I bet the Bay accounts for 10-15% tops.... does anyone have numbers? (I'm
searching, but if you read regularly and have found some numbers please let me
know)

~~~
nhebb
I think that's only a myth to those that gravitate toward the Bay Area. Former
Magellan fund manager Peter Lynch wrote that he liked companies based around
Cleveland because half the US population fell within a 500 mile radius of it.
The key point being that general entrepreneurship occurs in highly populated
areas, which facilitates growth and expansion.

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patricel
#2 is interesting: both the thesis and the antitheses are wrong! There can
hardly be an "entrepreneur gene", but at the same time, what makes an
entrepreneur is its ability to break rules, and breaking rules can't be
taught.

I followed a couple of courses about entrepreneurship in a top B-school - not
too many, though - and I am quite sure none of them turned corporate exec,
engineers, consultants or lawyers into entrepreneurs if they were not ready
for it in the first place.

~~~
jeffdavis
"breaking rules can't be taught"

Really?

~~~
wisty
Yeah, it looks like a bit of a cop-out.

You don't need to teach people to break _all_ the rules. That's not what you
want. You want people to take calculated risks, and break the rules that need
breaking.

You could teach the history of rule-breaking, and explain how why those rules
needed to be broken. Teachers could do _that_ pretty well.

~~~
patricel
Entrepreneuship is not a really "calculated risk", its a deeply uncalculated
one on the contrary: leave your job (or your normal career track), get no
revenues for an undefined while, bet most of your credibility on idea that may
change or become irrelevant, etc...

Teachers can tell stories about all of those, but they won't really "teach"
them, since there are too personnal to be replicated.

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michaelpinto
As someone in his 40s who finished college and is located in silicon valley
may I say THANK YOU!

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niknir
Another major flaw in the presentation of this data has to do with the base
rate fallacy. For example,

"founders of tech companies tend to be highly educated."

Observing that the majority of successful founders have college degrees tells
you nothing about the effect of not having a college degree. If 1% of students
drop out, 99% do not drop out, and of the founders from the 1%, 80% are
successful and from the 99%, 20% are successful, we would still see the vast
majority of successful companies coming from non-dropouts.

A very poor analysis published by a man with a pro-education agenda.

~~~
ristretto
The "dropout" meme is interesting, because, even though it implies that the
subjects did not finish college / postgrad / phd , they _did_ enroll in it and
in many cases found inspiration / colleages / ideas while doing it. This seems
to be more common than people choosing not to go to college at all.

P.s. are there anti-education agendas; i would be curious to read about it

~~~
temphn
20under20 is a fairly well thought out "anti education agenda". It's not
against the idea of learning, just the outdated concept of going $300k into
debt for content you could have learned by yourself online. Predictably,
Wadhwa is very much against the idea of doing anything that doesn't involve
paying him and his colleagues for four years.

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georgieporgie
_America’s typical tech entrepreneurs are in their 20s._

It seems to me that media is absolutely in love with this notion. The scrappy,
brilliant kid who's going to change your world (e.g. Diaspora). Why is that?

~~~
craigmc
Everyone loves the story of the overnight success. No one wants to read about
a 10-15 year struggle, with liberal doses of failure and setback. They'd
rather read about someone who had a 'light bulb' moment and cashed out six
months later. The reason is perhaps that everyone likes to think they too can
do it - if amazing success is available almost overnight to other people, why
not to them. Not as cool to dream about years and years of toil...

~~~
jeffdavis
"Everyone loves the story of the overnight success... the reason is perhaps
that everyone likes to think they too can do it..."

Perhaps it's the opposite. If they turn founders into mythical characters,
then it's much easier to disregard the idea of ever starting a business. They
don't have to take responsibility for their own lives or accomplishments.

~~~
ChristianMarks
And you can keep the employees in line. They're supposed to be disposable and,
ideally, outsource-able. Business journalism makes money reminding employees
how powerless they are, and that they are too old and too genetically
disadvantaged to emulate the mythical irreplaceable entrepreneurs.

