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The Path to Entrepreneurship

Posted on Friday, Mar 9th 2007

I went to Stanford on Wednesday to give a lecture to a class of 60 students at the Department of Management Science and Engineering. The course was “Creativity and Innovation”, taught by Professor. Riitta Katila, who invited me to speak about Entrepreneurship.

It was interesting for me to observe what’s top-of-mind for a cross-section of engineering students at one of the world’s top universities. Here are some nuggets:

* I asked for a show of hands on how many of the students already have aspirations of becoming an entrepreneur. About 60% of the class.

* Many of the students are final year undergraduates, and already have job offers. The job offers seem to weigh heavily in the direction of Investment Banking and Consulting. They asked me, which is a better path? My answer: If the interest in entrepreneurship is serious, then neither is a good step as a first job.

* What about working for a big company, they asked. My answer: Working for a big company early on in life develops in you a very narrow skill-set, at a very slow pace, whereas, the range of skills required to become an entrepreneur is frighteningly wide. The resource constraint in starting a company is acute, and hence an entrepreneur needs to wear so many hats, that narrow skill sets tend to produce ineffective / mediocre entrepreneurs. Working for a startup may be a much better preparatory step, instead. Even if the startup fails, you would still pick up the skills necessary to become a strong entrepreneur yourself.

* But Google? Especially not Google. Free lunches, dinners, massages, dry cleaning, laundry and the rest will spoil your habits so badly, that you’d never be able to master the most important virtue in an entrepreneur: frugality.

* Both of the above (big company, Google) are okay for a short period of time, sometime in your career (if you have the patience for it), just as Consulting is also very good as a learning device. However, if all you have ever done is Consulting, then you don’t really learn to build anything, let alone a company.

I thought some of these points may be useful for others, beyond my class of 60 from this week. If you have other questions, please feel free to ask in the comments section.

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[…] if you want to be an entrepreneur. This is what Sramana Mitra advises. The paths are different. And the big companies can spoil you in more than one ways – by […]

Do Not Work For A Big Company on iface thoughts Thursday, March 15, 2007 at 6:36 AM PT

[…] Lees het hele artikel hier. […]

werk nooit voor een groot bedrijf... « as exciting as watching grass grow Friday, March 16, 2007 at 3:49 AM PT

Ask me Sir, 4 years back I left those biggy offers for a smaller company, I was the first employee, from tech to marketing, marketing to HR I have gained all, small/startup companies need different people who can see solution not problems as it is full of problems.

Startup companies are like clay, you can mould it, big companies are beautiful vessels you can enjoy it. Now its your choice, are you an artist or an art lover.

AjiNIMC Friday, March 16, 2007 at 4:52 AM PT

I don’t think big companies can spoil you. If you wnat to start your careers for entrepreneur from a big company you can because you will get cream person there and they will always guide you to run in the correct path.

Only a good artist can give value to art. If you are not a good artist then you can’t give value to art. Obviously from a startup company you can learn many things yourself. But in a biggy company you can learn addon cream things what you get only from cream people.

Subikar Saturday, March 17, 2007 at 6:28 AM PT

The assumption that you would get “cream” mentors at a big company is not only false, but ridiculous. Very few companies have “cream” people up and down their ranks. Google, Pixar, Salesforce.com, Apple are a few that do. Most big company middle management is chock full of mediocre people, trying to protect their turf. Chances are, these are the people you would be working with. Wastage of invaluable time, in my opinion, time, that is better spent elsewhere.

Sramana Mitra Saturday, March 17, 2007 at 12:37 PM PT

[…] Sramana Mitra’s blog forms an interesting and informative read every time. I highly recommend it to my readers here. He always posts excellent articles on Enterprise 3.0 and other Management Science topics. Here is one interesting post on “The Path to Entrepreneurship“. […]

Many Ways to be an excellent Entrepreneur at Vinod Live! Monday, March 19, 2007 at 7:41 AM PT

“Most big company middle management is chock full of mediocre people, trying to protect their turf.”

To some extent people can manage to reach some upper level with less talent but I don’t think in a high profile high profile company the upper management people are “mediocre”.

Subikar Monday, March 19, 2007 at 8:57 AM PT

That’s right, you get good people in the upper management, but when you start your career at a large company, you don’t work for them. You work for middle management.

Sramana Mitra Monday, March 19, 2007 at 11:04 AM PT

Thats right Sramana, in large companies people work for middle management but the ultimate result is that the upper management always keeps track of those persons who work for the middle management.

Subikar Wednesday, March 21, 2007 at 4:32 AM PT

Yeah, right! What exactly are you smoking Subikar?

Sramana Mitra Wednesday, March 21, 2007 at 2:33 PM PT

[…] Readers may recall one of my prior posts, The Path to Entrepreneurship, where I suggested that young people interested in entrepreneurship ought to go work for startups, […]

Sramana Mitra on Strategy » Blog Archive » Story of an Entrepreneur-in-Residence, Raj Vaswani (Part 4) Sunday, May 27, 2007 at 3:03 AM PT

Very interesting thoughts. I was in consulting now I am interested in entrepreneurship. Stanford did its job 🙂

Rokas Tuesday, July 3, 2007 at 7:47 AM PT

Completely agree with you Sramana. Middle management is usually nothing but “chockful of ancients protecting their turf!” I am so tired of the beaucracy of it all. The crazy thing is, usually, unless you make some moves, there is no straight up ladder. You have to jump from one spot to another to get past the turf-protectors

Harsh Friday, July 6, 2007 at 1:29 PM PT

I’ve heard both points of view before. That working in a big company first is better, because it gives you access to lots of resources to learn on, and that smaller is better because it lets you wear many hats, and actually practice “being” and entrepreneur.

In my own limited experience, I’ve found that the best way to learn something is to do it. I managed my own retail store for almost 2 years, and I gained most of my management experience, and developed my management philosophy from actually “doing” the job.

I would say that working for a startup is ideal, because you actually learn how the inner workings of a startup function. I’ve heard too many people pitch me ideas like “oh, well, we’ll just throw a couple million into this”. A couple million?!?!? What the hell? Where do you plan on getting this money from?

There is one advantage to working for a big company. And that is getting a job working in your business of choice. Industry experience is key in understanding the workings of your business, and it also gives you a chance to make contacts and get cash for your startup. So think and strategize people!! There is no one right answer!!

David

David Rajzman Wednesday, July 11, 2007 at 1:53 PM PT

I would argue there are several different types of entrepreneurs.

Many folks are serial entrepreneurs that just float from start-up to start-up looking to grow it to a reasonable size so they can flip-it and get rich. This crowd may also really enjoy the process of growing a business from infancy, but don’t really care that much what they’re growing. I’d best most of your MBA crowd falls into this category – and most of them will have gone through 4-6 companies by the time they are 30. These guys definitely should start with start-ups and stay there because that’s the experience they need. (And this experience is critical for start-ups – just don’t expect much loyalty or commitment to the ‘vision’ if someone whips out a checkbook).

Visionaries represent another group who see startups as a way to foster new ideas that can change the world. These guys have the passion and commitment to really make their dreams come true. These guys can start anywhere – often they are disillusioned big business types who have enough expertise in a field to know what needs to be done. They can also be professors or consultants that have built up enough expertise and knowledge. As a side note, I think far too few people starting businesses fall into this category.

Many others are just really interested in a technical (or business) area, enjoy the excitement of a start-up, and latch onto a visionary (for excitement) or a serial entrepreneur (for money). These guys come from anywhere – big business, college, start-ups – whatever. Just smart people with a critical skill set to make the dream come true.

Karl Garrison Wednesday, July 11, 2007 at 2:51 PM PT

Overall, I agree with you.

I work for a large company and most of my colleagues are risk avoiders. They dream of getting out of the big company, but the security it affords eventually leads to laziness.

I use the security as a launchpad for my own entrepreneurial pursuits. I’m currently on the path to my third venture in four years.

Sean

Sean Wednesday, July 11, 2007 at 5:06 PM PT

I agree to Sramana’s central thesis of frugality , however I would suspect that there are many other parameters which are critical to entrepreunership . Many of my ex-Infy colleagues who are running successful businesses were not necessarily apt at frugality . This applies for others who have managed start-ups. So essentially frugality is a virtue ,but there are many others which are critical as well -like passion , energy ,…..etc etc

Niladri Roy Friday, July 13, 2007 at 2:08 AM PT

Speaking of Google, perhaps it’s time to admit that the emperor is buck naked? Google is no longer an asset to small business. It’s digressed into a black box designed to extract as much money as possible from small business while giving back as little value as possible. This piece explains why Adwords is something to be skeptical about: “Why Google Adwords is Not Helpful to Small Business” https://smartstartup.typepad.com/my_weblog/2007/07/a-fable-doing-b.html

FYI Tuesday, July 17, 2007 at 12:51 AM PT

Sounds like you are recommending that aspiring entrepreneurs start their careers at small companies. Personally, I think there is no formula. If you are an entrepreneur at heart chances are you’ll find your way to entrepreneurship no matter where you start off! As someone commented large companies breed laziness. At the same time, if a startup that you join fails (badly), the bad experience might lead people away from startups t the more secure large company environment.

Pran Kurup Monday, September 10, 2007 at 8:56 PM PT

True entrepreneurs never get led away to secure large company environments.

Sramana Mitra Monday, September 10, 2007 at 9:23 PM PT

Am an entreprenuer myself after having worked for over 15 years with big companies.
Sramana mitra nailed the most needed character for an entreprenuer – frugality. I am going through the experience of cutting out most luxuries I enjoyed as an employee – but not regretting any bit of it. I realize that there are many things in life that are actually not needed (like Dilbert said in one of his strips).

Venky Wednesday, September 26, 2007 at 6:55 AM PT

The things mentioned here are what exactly I think.
Have a few ideas and want to bring them to reality as an entrepreneur.
Have been looking for a Masters program designed for Entrepreneurs.
I am thinking of enrolling for a Professional Entrepreneurship Training.
Came across this offering by University of Waterloo in Canada:
https://cbet.uwaterloo.ca

Has anybody heard about this,do let me know your feedbacks.
Mr.Klacar has been counselling on it and can be reached on
rklacar@uwaterloo.ca

shambho Wednesday, January 16, 2008 at 7:50 AM PT

Many people do believe that Entrepreneurship in India is a death wish. If this would have had been the case then I don’t think so much of development would have been possible if entrepreneurship wasn’t there. I agree an entrepreneur faces many problems while establishing a new venture however, without facing the hardships nothing can be achieved. But due to upsurge of various VC, firms providing seed funding angel investment etc have swollen up, entrepreneurial activities has proved to be a boon for many. To site an example that is helping to achieve the above goal is PITCHINDIA (www.pitchindia.com)
Many more firms, which are working from various nook and corners of the country, are trying to boost the investment in entrepreneurial activities and thus supporting to grow the Indian Economy.

Suraj Thursday, January 31, 2008 at 11:08 PM PT

Very good article, Sramana – thanks for thinking of sharing it. Though its written a while ago, that makes no difference – the points made in it are timeless. I’ve personally seen some of what you observe, in some parts of some big companies where I earlier worked.

Vasudev Ram
http://www.dancingbison.com

Vasudev Ram Friday, February 1, 2008 at 8:26 AM PT

Interstesting soul shaking videos on entrepreneurship.Here is a link.
https://www.facebook.com/pages/ENTREPRENEUR-DADDY/9126717803

Syed mahmood Thursday, March 27, 2008 at 4:08 AM PT

Sramana’s
article helping number of new and even old entpnrs too much.Its impossible to make progress without innovations…

Pravin D. Friday, May 30, 2008 at 11:59 PM PT

Thanks sramana for valuable thoughts.It is realy pathmaking for new entrepreneur.

sandip Malekar Wednesday, June 25, 2008 at 9:16 AM PT

good perspective… from my experience I would say its partly true and not true..
1. Frugality: must.. critical for first 30 months, i believe..
2. Big company: some big companies can give you quick skill building opportunity within your domain, which you can sell as independent service provider (as i did). (its bit easy to lean to tolerate middle management incompetence when sole purpose is building professional skills)
3. Consultancy & investment banking campus offers: i still wonder how person with no real business/managerial experience has expertise to advice other CEOs or make valuations for ventures… and how other CEOs end up buying services of these guys… may be i value hands-on experience more valuable than GMAT scores…

Nandan Friday, September 5, 2008 at 8:14 AM PT

Sramana,

I can see where you are coming from and how working for a big company early on in life could help instill a very narrow skill-set. There are also other factors that can help or hinder the development of entrepreneurial abilities.

For instance, David and Karl bring up some excellent points.

I agree with David that “the best way to learn something is to do it.” To develop the skills of an entrepreneur you would have to be one and learn by experience.

Karl brings up an excellent point about “visionaries” being the entrepreneurs who really thrive because they have a passion for their work and for entrepreneurship. There are very few visionaries compared to those who believe in “get rich quick,” and visionaries tend to be successful entrepreneurs.

Pran also shares a great point that “if you are an entrepreneur at heart chances are you’ll find your way to entrepreneurship no matter where you start off!”

Thanks for starting this great conversation on entrepreneurship.

Dali Burgado

Dali Burgado Saturday, March 14, 2009 at 9:35 PM PT

[…] https://sramanamitra.com/2007/03/09/the-path-to-entrepreneurship/ […]

Comparing Life Paths - The Corporate Life vs. The Entrepreneurial & Startup Life « Entrepreneurial Activism Wednesday, May 6, 2009 at 12:54 AM PT

great point about working for a small company vs. a large company. I hadn't thought about it much before but you ae absolutely right, if you decide to go the path of an entrepreneur and don't really understand the mechanics of how the pieces of a business fit together it will be a liability if you decide to go out on your own.

Scott Schreiber Thursday, October 20, 2011 at 8:42 AM PT