Six Myths of Entrepreneurship

I want to talk about the six myths that people have about entrepreneurs which are not only not true but not helpful and as we think about this and think in looking through as the how we're going to educate you to be an entrepreneur it's important to understand these six myths are not true first of all entrepreneurs are the smartest most high achieving people in the room this is a myth that you the perpetuated by entrepreneurs themselves I think sometimes and they're rewriting history most of the entrepreneurs I know are not the Val victorians of their class in fact it's very rare they are entrepreneurs are not looking to please other people they are in fact trying to figure out what they really think they're they have passionate about and then they kind of reject everything else so they're more likely to get A+ in one class and not go to the other classes in fact they often even that that's one of the reasons why they often drop out of school they don't see the relevance of it now I am not encouraging you to drop out of school but I am saying that you can see this pattern where people get very excited about one thing focus on that and then don't do some of the other things that they should do so the first myth is smartest and high achieve High achieving people in the room okay so um so that's that's just not true and data shows that the second thing is entrepreneurs are individuals this the Mercurial individuals who make things happen by themselves the kind of Horatio Alger story that's not true either Ed Robert's research shows that in fact teams are much more likely to succeed than individuals if you have two people on your team you're more likely to succeed statistically than one person three more than two four more than three up to to a certain point so it is not an individual sport it's a team sport so entrepreneurs as individuals not true you need to be looking um you need to be looking to find people to join your team all the time the third thing is entrepreneurs are born not made again a Convent you know a story that's often told the research shows again that entrepreneur URS don't come from parents who are entrepreneurs there's no statistical correlation between that nor is there a gene to that makes you an entrepreneur it's basically a skill that can be acquired and that's what we're going to be working with you on um at MIT every says well it's all because people are smart at MIT well there's a lot of other places where people are very smart and they don't start companies at the rate they do with MIT so uh entrepreneurs being born not made not true you can become an entrepreneur this is possible that's what happens the fourth one is is entrepreneurs love risk you know I hear this all the time they love risk they love risk no let me tell you what entrepreneurs you won't I don't like to go to a a casino entrepreneurs I know don't like to go to casinos because that's kind of stupid you're not in control of your own destiny what we like to do is take calculated risk um where we know we have an unfair advantage and let me explain that we actually drisk risk so we say we have an advantage in this one area and then we take the risk out of everything else but I'll take risk in an area where I have an advantage I have asymmetric information I have a particular asset will give me competitive advantage over everybody else I will then bet on that and think of the long term and then I'll drisk everything else great example of this the MIT blackjack team very interesting the movie 21 or the book Bringing Down the House these people became entrepreneurs you think well they did all this algorithms and things like that they become hedge fund managers and it was very interesting on the panel when I I work with them is um I I I I was able to moderate with them and asking the questions and you understand why they become entrepreneurs they know how to take risk and use it to their advantage and then patient in the long term the next thing is um for risk misunderstanding of risk the fifth one is is successful entrepreneurs are charismatic that's what makes them successful in fact entrepreneurship is about affecting change and affecting change is about leadership and the MIT leadership uh Center here led by deban cona actually has shown that Charisma is not a correlated with success and change ing the world what it is it's made up of basically five other things it's do you have a vision do you have a sense making capability to understand what's going on in the world fourthly do you have the relationships to make that happen and then sry thirdly and then fourthly it's called this thing you know which I will call Innovation engineering how do you take where we are today the Asis State and get to a future state that hasn't existed before and then have a personal signature on that that which is a fifth point so you have to have a vision it's a possible State the Sens making state is the Asis state where we can go who are the people the relationship and then how do we move into a world that's never been done before and then do that with our own personal signature so it does not have to do with Charisma The Fifth Fifth uh the fifth myth the sixth myth I would say is that entrepreneurs are undisciplined and this in fact is why I name called my book disciplined entrepreneurship because as I said that some people would say disciplined entrepreneur no entrepreneurs are undisciplined that's an oxymoron nothing could be further from the truth it is essential to be disciplined when you're an entrepreneur because you are as my colleague Howard Anderson say you are the attacker going up against The Defender as the attacker you don't have a lot of resources you don't have a lot of time you don't have cash flow all that belongs to the defender you just have this small small thing called passion and how do you execute against this bigger foe requires an extraordinary amount of discipline so we at the center say you know to be a great entrepreneur you have to have the spirit of a pirate which means we're trying to do something new we're creatively irreverent we're thinking of new ideas how do we innovate but you also while you have the spirit of a pirate you have to have the execution skills of a Navy sealed Team Six so all the entrepreneurs you see if you think they're uh not disciplined um look closely and you'll see they actually are very very self-disciplined so these six Smiths that you you have you have to be the smart smartest High achieving person in the room not you have not true you have to be passionate they're individuals not true you're a team and you have to get people to work with you three born not made not true either you can become an entrepreneur we teach it we see it happening all the day it's not just in the classroom it's outside of it risk how do you drisk risk and how do you think about that in the long term and use it to your advantage fifth charismatic not true there's a whole kind of skill set that you can learn to affect change and six discipline these are myths that have to go if we're going to be effective entrepreneurs