I am beginning to wonder if mainstream education and conventional wisdom is treating entrepreneurship all wrong.  Last week, I had a conversation with my boss-in-start-up, who introduced the term the “iterative process” into my business vocabulary.  Today, I came across this eye-opener.

The article, and the paper discussed, questions if there is any fundamental difference between the way MBAs and your average boot-strapping entrepreneur bring product ideas to market.  And the answer is a resounding yes.

1. Change the question.

During the research, it was found from the get-go, the two groups appear to attack two potentially different sets of problems.  Entrepreneurs prefer to be in an unpredictable market, since the market can “be shaped through their decisions” as well as their select group of stakeholders and customer-partners.  Reasoning that someone smarter and with deeper pockets can always come in and do it better than they do, many entrepreneurs stay off the beaten track and experiment with new markets themselves.

The researcher attribute this behaviour to to the logic: To the extent that we can control the future, we do not need to predict it. Whereas most MBAs are taught to act based on the assumption and logic that: To the extent that we can predict the future, we can control it.

2. Conqueror vs. explorers.

Alas, the paper is full of analogies like these.  Actions of MBAs are compared to Genghis Khan, whom given a pre-determined goals and set of means, seek to identify the optimal route and result.  An entrepreneur, on the other hand, is compared to Columbus, whom does not begin with a specific goal, but a given set of means.  They allow “goals to emerge contingently over time from the varied imagination and diverse aspirations of the founders and the people they interact with.”

3. Dealing with setbacks.

During business school, we used to write a lot of business, or marketing, or strategic plans, from every stage of the product life cycle to those dreaded case studies.  Usually towards the end of such plans, we stick in a section that deals with contingencies – what happens if one of the key variables or assumptions don’t work out?  In reality, of course, the whole piece on hand was based on nothing but assumptions.  But we still had to scratch our heads and attempt to answer to our self-selected obstacles.

It turned out that most successful entrepreneurs don’t work that way.  Although in fairness, I’m not sure product development within a corporate environment can be compared to one that takes place in the anarchic environment that entrepreneurs inhabit.

Based on the research, most of those self-starters initiate the process with little elaborate planning, and instead, executes plans that are constantly revised and recast through “action ad interaction with others on a daily basis.”  The end goal also changes at the beginning stage, because surprises that come along sway it so.  And instead of treating at those contingencies as unwanted elements in an otherwise deterministic path, the most successful entrepreneurs actually see it as the norm, “the flora and fauna of the landscape, from which one learns to forge a path through the jungle.”

I’m reminded of the article here that discussed the role side projects (many results of accidental discoveries) played in the entrepreneurial success of America.  We can probably add Twitter to that list in 2009.

4. The role people play.

Entrepreneurs are also highly dependent on a good team of people.  The network of enduring relationships outlive failures and create successes over time.  Essentially, MBAs will work with the idea that “a particular effect has already been chosen such as a target segment within an existing market, the people we hire an partner with will depend on the effect we want to create or the market we want to penetrate.”

On the other hand, the converse idea will dictate the actions of a self-starter. Markets do not pre-exist, they are only built with the people that are brought together to create it.  Thus, the ultimate creation is not a static entity, but one that is dynamic and ever-changing.

So given the current economic environment, the consensus it that entrepreneurs may fare better. Your thoughts?

picture source: Deinha1974

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With the collapse of Wall Street and Detroit, self-promotion is the only industry America has left. Owen Thomas [Gawker]

There are no more passionate or enterprising individuals in the world than Americans. No other people in the world have embraced the idea of self-promotion and self-aggrandizement with same level of enthusiasm, shamelessness, and let’s face it, success that even closely rivals the Americans. Over the centuries, a distinctly love/loathe relationship has formed between the public and its tireless marketers.

Ultimately, marketing is a push activity. Unless you make extraordinary products like iPod, or Maserati, or limited edition Nike shoes. In that case, you push in indiscernible ways to create demand, and then sit back and manage the pull. Or you could just make a kickass product and sell it. That’s how it used to be a couple of hundred years ago. Then marketers realized there’s money to be made by hype and mass-production. Then soon enough, everyone was doing it, because not doing it was like surrendering before the battle even starts. Advertising became the bugle that signaled the legitimacy of a product, and we accepted it as so.

After decades of marketing, spearheaded by the Madison Avenue machine and sponsored by its corporate clients, the symbiotic engine began to sputter. Consumers got tired of having products pushed to them by conglomerates. The previous marketing mix management and product line expansion gimmicks started to see cracks.

Then the information revolution descended upon us. Soon enough, everyone had a voice, and everyone started talking to everyone else. Corporations realized that they were no longer in charge of their brand image, and it became increasingly difficult to hide behind PR campaigns. Many disastrous marketing campaigns and ineffective “customer outreach” programs later, businesses looked to young, hip, and mostly self-educated and self-branded social media gurus for help. Soon enough, those guys sprang up everywhere, advising dinosaurous businesses on the proper management of their “social media presence”.

When the now deified Web 2.0 first caught everyone’s imagination, it was touted as the tool that would revolutionize the way we communicate. It was supposed to be democratic, horizontal, transparent, and authentic. In other words: everything that the corporate-advertising-complex wasn’t. Gradually, businesses caught on this myth, and started blogging, facebooking and twittering – a domain of activities reserved mainly for greasy college students only a few years back.

Most businesses do not understand social media networking. Actually, most of us don’t. But we do it anyway, because that’s the way to stay current. Remember when Facebook first surfaced and sparked debates as to whether someone that pulled your hair at summer camp twenty years ago really counted as a “friend”? Well, that argument is hardly relevant anymore. Now we don’t blink twice before adding our mothers to our profiles, because that still makes way more sense than “following” hundreds or thousands of strangers on Twitter.

I shouldn’t complain: I got a job off of Twitter. But from time to time, I’m still befuddled as to how, or if I’m even close to uncovering its supposedly boundless potential. Most of the time, I feel like I’m twittering into a vacuum: a vacuum full of people with blogs, businesses, skills, and agendas to promote. I’m guilty as charged.

Twittering may make a lot of sense for business such as Zappos, Dell, and Comcast as an extension of their existing customer service platform, and businesses such as Amazon has nurtured and leveraged its community for years. But for every American Express success story, we see many more awkward deployment of hipness by old men in suits. We are embarrassed for them, not unlike the way we cover our eyes at the atrocious sights of rhythm-challenged middle-aged white guys getting jiggy with it at Christmas parties.

But is there really anything stopping those businesses from get their acts together to bring in young consultants, and buy their ways into some street cred? I think it is inevitable. Just as the advertising industry has transformed itself by shifting its expertise from print to TV advertising, and from TV advertising into more insidious product placement and guerilla marketing, they will find a way to leverage and benefit from the power of the crowd too.

It is hard not to be cynical and resigned to the ultimate triumph of marketers, when so much reverence is reserved for marketing gurus. Because even as they preach authenticity or tribes or innovation or communication, they are preaching marketing, and the kind of marketing and branding that stays two steps ahead of consumers, and ultimate make them do what the marketers would want them to do. And knowing these are the very message that businesses pay dearly for, is there really any doubt that the social media platform will become another well-fed, well-massaged, and well-deployed tentacle in the overall marketing plan?

Ultimately, putting the right products into the right hands with minimum pushy interference and annoyance is a sign of good customer service, and is something to be applauded. But the process of doing so is little different than the prevailing marketing paradigm, as long as the goal is to push, as most businesses are doing, versus building communication channels and transparency. More businesses are catching on, and this is a good sign. But too many are still at once confused and mesmerized by the possibilities of hyped-up social media marketing.

On a smaller scale, this is no more apparent than the expansion of the blogosphere, where branding is one of the most popular topics. As blogging crossed over (that tipping point already passed long ago) from part-time hobbies to legitimate careers, we see a consolidation and commoditization of media personalities as plausible brands, even those that exist solely through online niche. Managing your online persona/brand is now dealt as seriously with as any other business concerns.

In the past, many that became disillusioned with the corporate machine and machinations leave to pursue their own passion or work, hoping to get away from the excessive salesmanship of having to toot your horns at all times. Now they find little respite. What new media has effectively done is to make branding and marketing tools readily available to individuals and small businesses. Just like when advertising first started, non-participation in this brave new world of new media is not an option. Unwittingly, the fervent marketers in us steered “social” tools away from their originally conceived purposes. Instead, their primary purpose nowadays is to amplify our already unhealthy obsession with marketing and branding.

Where do you see social media networking and marketing headed in the near future? As both consumers and marketers, how do you think we can successfully utilize existing tools to improve transparency and authenticity?

picture source: ~SpringlighT