All People Are Born Entrepreneurs, Then Society Takes This Away

Interview originally published in Ta Nea (Greek newspaper) on March 29, 2022

Q. In Europe universities and entrepreneurship have a “complicated, love/hate relationship”. What is the way to “make it work”?

A. First of all, Europe does not have a monopoly on this complicated relationship. It exists around the world. Entrepreneurship has not been taken seriously as a field of research and as such the body of knowledge is insufficient for the demand now put on the universities for teaching it. One of the key factors is that research likes clean data sets and it is very hard to get such data sets for new entrepreneurial ventures. Just ask any entrepreneur.

Secondly, the study of business commenced about 150 years ago with the industrial revolution. It focused on how we manage and produce predictable, optimized, and de-risked results. This is the essence of management with things like planning, budgeting, human resource management, financial leverage, supply chain optimization, six sigma quality assurance, and the like. What is common in these things is the assumption of an existing organization. Entrepreneurship is about creation not optimization and derisking. The game is changing.

Academic institutions with tenure, i.e. job for life, or tenure-like arrangements for faculty are, as a result, systems with a lot of inertia. That inertia makes them slow to change and that is what you see right now with the need for the change described above.

Q. A 2015 report about the Entrepreneurial Impact of MIT said that the Alumni-founded companies had created 4.6 million jobs, generating nearly $2 trillion in annual revenues. That would make them the 9th largest economy in the world. What makes MIT-trained entrepreneurs so successful?

A. It is right there in MIT’s motto, “mens et manus,” which translates to “mind and hands.” While others pursue knowledge for knowledge’s sake, a legacy of universities being set up to train clergy and philosophers, MIT’s mission is much different. It is to create a body of knowledge that can be applied to the world’s greatest challenges. As such, this has created a culture of problem-solving. Knowledge by itself is insufficient. It must be applied.

So it starts with the motto and mission and then it builds from there. This has created some initial successes which then creates a virtuous positive reinforcing feedback loop that others see as possible and attempt to do the same. With more success, more people with entrepreneurial tendencies tend to apply and choose to come to MIT which further enhances the entrepreneurial results and so forth. But if you had to point to one thing, it all starts with the DNA from the birth of the institution codified in the motto and mission.

That being said, we have gotten great support to develop a rigorous and relevant innovation-driven entrepreneurship curriculum and associated co-curricular and extra-curricular set of programs to amplify this tendency. MIT has recruited and supports a world-leading set of faculty at the MIT Sloan School of Management who do research on innovation and entrepreneurship. These academic faculty work to make sure we have an evidence-based approach to teaching this important subject. We complement this with highly skilled practicing entrepreneurs to work in tandem with the academic to produce that rigor and relevance we believe is critical to a successful entrepreneurship education program.

Q. Is it that the MIT students and alumni are very entrepreneurial, or do they take cues from their professors? 

A. Much less than one would think from the outside. Yes, there are iconic professors like Bob Langer, Dmitri Bertsimas, and Greg Stephanopoulos to name a few who have started multiple companies, but there are also many others who have started none. Professors starting companies is certainly accepted (up to 20% of any professor’s time can be spent on outside activities which may or may not be related to starting a company) but it is not universal. I would argue that MIT has been and will always be a “bottoms up-driven” university rather than a “top-down-driven” organization. That means that the leadership of MIT does not dictate or carefully set directions but rather depends on the drive and creativity coming from the students and faculty. In this case, the students drive entrepreneurship at MIT more than the faculty.

Q. What is needed to help the alumni of Greek universities follow the same steps?

A. I think, first of all, Greek universities need to be supported in increasing their entrepreneurship offerings. The demand for this far exceeds the current capacity. The role of the universities is not to create companies but rather to focus on creating entrepreneurs. There need to be more entrepreneurs and they need to be of a higher quality, what we call innovation-driven entrepreneurs. I would encourage all universities to get, read and take to heart a new book called “From the Basement to the Dome: How MIT’s Unique Culture Created a Thriving Entrepreneurial Community” by Jean-Jacques Degroof. It explains the lessons learned on how to do this but of course, it will need to be adopted to the specific content of each Greek university but it gives a detailed road map as a place to start.

Q. How vital is technology transfer for society?

A. A vibrant technology transfer is a vital part of any university that wants to have an impact. It is the structure and vehicle to move research from the lab to the marketplace. It is important but not the only vehicle. In fact, it is less important than most people imagine. For example, each year at MIT, we have approximately 20-30 companies that are started directly through licenses from the MIT Technology Transfer office. These are very important companies and the office provides a clear path for professors to move their breakthrough ideas to the market for impact. However, each year, MIT and MIT alumni start approximately 1,000 new companies. You can see that the vast majority (97% or more) are not started through the licensing office. This is in no way a bad reflection on the technology transfer but rather indicates if we train students to understand technology, give them a problem-solving mentality and effectively educate them on the entrepreneurial process while instilling them with the proper mindset and way of operating (with a community), the results are less technology-specific than one would imaging.

Q. Is there a formula for a successful entrepreneur? Can you teach someone to be a successful entrepreneur? 

A. Interestingly, I would reframe this question. All people are born entrepreneurs and it is then society that slowly dilutes this and even threatens to take it away. From the beginning of time, people survived by making things, trading things, or providing services to people in order to survive.

So an entrepreneurship educator’s job is to bring this back out and then sharpen those skills. There is a lot of empirical evidence that shows entrepreneurship can be learned. The more a person tries entrepreneurship, the more likely they are to be successful.  When entrepreneurship is effectively taught, the results are even more compelling. In our full program, ending with the delta v fully immersive educational accelerator, the success rate of our students who start from scratch at the beginning of the process (as measured by whether they are in business five years later) is well over 70%. We also have other data that shows very compellingly that entrepreneurship can be taught.

While there is no algorithmic formula to guarantee the creation of a successful entrepreneur and there never will be since success is the achievement of something that is novel and never seen before, there are first principles that dramatically improve the odds of success. Those first principles create the characteristics that we refer to as the 4H’s.

It all starts with the heart and creating the mindset or spirit of being an entrepreneur. This is the joy and drive of being different to make the world a better place. Entrepreneurs not only have the drive to improve over the current status quo, they delight in doing this. Secondly, the successful entrepreneur must understand the first principles of the skills required to achieve their goals. This is the second H, the head. This is the tested body of knowledge that we know improved the odds of success when embarking on an entrepreneurial initiative. This is not from a single source but it is from multiple sources. My just-released book in Greece “Disciplined Entrepreneurship” (check the title here as I believe it has been translated to something more like “Principled Entrepreneurship”) is an excellent example of the first principles. Knowledge alone is not sufficient however to be a successful entrepreneur, it must be conveyed into real-world capabilities. This is the third H, the hand. Since entrepreneurship is a craft, not a science or art, it should be taught in an apprenticeship model. To create entrepreneurs, we must offer co-curricular and extra-curricular programs to supplement the theory we teach in the classroom. Lastly, successful entrepreneurs need to learn how to effectively, efficiently, and quickly access resources beyond their control. This is where the last H comes in, home. For entrepreneurs to increase their odds of success, they need to have a community-based way of operating that is different from the command, control, and conquer approach that is traditionally taught in schools of management.

These are the pillars of our educational program to create high-quality entrepreneurs and it is working as we noted above.

Q. What is the value of organizations like MITEF Greece in cross-pollinating the local communities with the entrepreneurial DNA of the MIT alumni?

A. MIT Enterprise Forum of Greece and similar high-quality organizations play a vital role in creating entrepreneurs and ultimately the companies they create that change the region and world. As noted, entrepreneurship is a craft, and learning it can’t not be done just in a classroom. MIT EF Greece provides the structure and mentors for an apprenticeship model. They also provide invaluable contacts to help the entrepreneurs jump-start their community. In addition, each entrepreneurial journey is unique and the MIT EF Greece can provide the context to apply the first principles. Lastly, the emotional support for something as challenging as entrepreneurship, it is important to have the emotional support of a community like MIT EF Greece to sustain the journey and for the entrepreneur to maintain their mental health. In sum, for these reasons and more, organizations like this are invaluable.

Q. Is innovation-driven entrepreneurship important only for startups? How can large corporations benefit from cultivating the entrepreneurial spirit of their employees?

A. Absolutely not. The Entrepreneurial mindset, skillset, and way of operating should not be confined to startups. Large organizations need entrepreneurs more than ever. Corporations, government, academic institutions, non-profits, and more, need to continue to innovate or they will die out or at a minimum perform suboptimally. As a society, if we are to solve the intractable problems we have in areas like climate change, health care, education, financial inclusion, and much more, we need entrepreneurs everywhere. Startups will only get us the low-hanging fruit. To get the bigger fruit higher up on the trees for areas as I have described above, we will need entrepreneurs in platforms with bigger assets and that means entrepreneurs in large organizations.

Q. What is your advice to Greek universities? Should they be managed by academics or professionals (from the market) in order to succeed in the very competitive global environment?

A. The universities need to be managed by both. As my colleague at MIT, Dean Nelson Repenning, says “My classroom works best when we privilege neither theory nor practice, but instead make sure both are front and center, highlighting where they align and debating the relative merits when they don’t.” It is similar to running a university. We need both academics and practitioners working in harmony to solve the challenge of creating and teaching this new important craft of innovation-driven entrepreneurship.

More specifically, my advice would be to read Dr. Degroof’s book and take it to heart.

Lastly, I would encourage a nationwide effort to make entrepreneurship education something that goes beyond the traditional barriers of a universities’ walls. They should partner with the government and organizations like MIT EF Greece to create an annual Grand Entrepreneurship Prize with extensive programming to support it. The programming that is now possible through online classes presents exciting opportunities to make their content, which has been historically only available to a select few, more broadly available to everyone in Greece. MIT EF Greece could help with the outside the university programming, in collaboration. The government could play a powerful role in marketing, financial support, and brokering across different stakeholder groups. I encourage the universities, and others, to think more ambitiously. If we are to survive and thrive, and I would argue if democracy is to survive and thrive, we need to create not thousands more entrepreneurs but millions. Then we will give all Greeks the opportunity for hope and pride in their lives and true incentives for rigor. It is not only possible but Greece would be the ideal place to implement such a plan.

Q. How much did the pandemic affect universities? Do you see in your students a difference in their behavior or their performance?

A. The pandemic just accelerated the need for entrepreneurship education and reinforced the notion that is relevant beyond just startups. The disruption to our lives and the creative thinking required to survive, solve and come out stronger on the other side, clearly illustrated the value of having people with an entrepreneurial mindset, skill-set, and way of operation. We will never go back to our old ways. Looking at the long arc of history, we know that the rate of change will continue to accelerate. In such a world, entrepreneurs are needed more than ever – throughout all of society. That became crystal clear more than it ever had before. We cannot go back to the old ways. Students feel this and want entrepreneurship more than ever. Faculty and administrators know it. We welcome the challenge but it will not be easy. We need to work more collaboratively than we ever have before and embrace the uncertainty. In other words, act like entrepreneurs ourselves.