The Enemy Isn’t Stanford, Harvard, or Berkeley. The Enemy Is People Who Don’t Do Entrepreneurship.

Bill Aulet was interviewed on August 23, 2019 by Philip Bouchard, Executive Director of TrustedPeer Entrepreneurship Advisory. This interview was condensed and edited for clarity.

Interview questions and highlights

• What are your three primary roles as an entrepreneurship center director?
• Are the approaches to entrepreneurship and innovation maturing to the extent that standards are being set?
• Are ecosystems the next phase of university entrepreneurship?
• What programs would you encourage directors of emerging ecenters to implement?
• What decisions have you made that you would advise other universities to avoid?
• How can universities enable bigger corporations to become more entrepreneurial?
• How can universities collaborate with big companies?
• What is an “innovation hotbed” and how can a large corporation develop one?

Philip Bouchard: As the Managing Director of the Martin Trust Center for MIT Entrepreneurship, what are your three primary roles?

Bill Aulet: First of all, we are educators. We teach students how to fish, not how to catch a fish. We’re not an economic development agency nor are we an investor. We are focused totally on the student and that’s the number one thing that we need to understand. There are other people who are investors. There are economic development agencies, but our job is to teach skills, to teach people how to fish, and that’s how we should get measured.

The second thing is that entrepreneurship is not a science nor is it an art; it’s a craft. As such, we need to teach students how to do something that creates a unique product that no one’s ever created before. Students can be taught their first principles to do that, but they don’t guarantee success. Entrepreneurship must also be taught in an apprenticeship model.

It’s important that we understand our mission, to understand the nature of the task in front of us and to approach it with both a serious element of being evidence-based, looking for data and being rigorous about it. We need to approach entrepreneurship with a sense of humor so that we don’t take ourselves too seriously because this is an area that’s fraught with failures as you’re running your experiments.

In summary:

• First, we’re educators.
• Second, we have to understand what is the nature of entrepreneurship education. It’s a craft. It’s not a science. It’s not an art.
• Third, we need to do that with rigor, but we also need to do it in an environment that allows people to experiment, fail and learn from that.

PB: The languages of Disciplined Entrepreneurship, Lean Startup and Business Model Canvas are broadly accepted. Are the approaches to entrepreneurship and innovation maturing to the extent that standards are being set?

BA: Not as not as much as they should be. I’m concerned that entrepreneurship is not seen as a serious body of knowledge, as a serious field. Currently, what we are seeing is often the term of the month? Is it Lean or is it Crossing the Chasm? Is it this? Is it that? These things are propagated by people who write popular books. They’re not done by serious academics. I don’t mean that in any negative way towards the people who do those things. I just mean it in a sense that, for example, medicine is not going to be taught and practiced off some popular book that comes out. Entrepreneurship has to be driven by an academic, be evidence based, and with rigor that’s reviewed by other people who do that.

While things have improved, we’re a long ways from entrepreneurship being a respected field of study by academics, by practitioners and by the students themselves.

PB: You have said, “The one necessary and sufficient condition for an ecosystem is entrepreneurs. The essence of a healthy ecosystem is better trained entrepreneurs who are more connected.” Are ecosystems the next phase of university entrepreneurship?

BA: That’s a really good question. When we’re teaching entrepreneurship at MIT, when I first started 10 years ago, the persona that we were expected to focus on was the ready-to-go entrepreneur. An example of that persona was Chris Nolte who was going to start a company. That was our target market and that’s what we built our product towards, that is, our classes, our extracurricular and co-curricular programs and our competitions. We’ve done a good job but that does not represent the interests of all the people that we get in our classroom. That represents 10 to 15%.

The biggest portion of people who are curious entrepreneurs, exploratory entrepreneurs who make up 50% of our class. We need to attract those people, to say to them, “This is what entrepreneurship is. Not to become an extra in Silicon Valley the TV show”. Entrepreneurship is a much broader field than that.

We’ve got ready-to-go entrepreneurs and we’ve got curious entrepreneurs. Curious exploratory entrepreneurs are not a steady state category; they’re going to become ready-to-go entrepreneurs or they’re going to become the persona that we call joiners. Joiners want to be entrepreneurs but they’re not ready to be the first person in a company. They don’t want to be a founder. They want to join a company. Someday they may become the founder. That is a legitimate group of people who we consider entrepreneurs. Also, there are corporate entrepreneurs.

But there’s another category that we didn’t expect. We call these people entrepreneurship amplifiers. Amplifiers are people who are not starting companies, but are enabling environments where people can thrive. An example of this persona was Esteban Lipinski. He was not going to start a company; he was going to take over the family business, but he wanted to be able to get people who are going to be corporate entrepreneurs into his organization. He wanted to be able to work externally under the concept of open innovation with entrepreneurs who were out there doing their startup thing. Esteban Lipinski was such an ecosystem person.

We found that a lot of those people moved on to help develop entrepreneurial ecosystems in government, in the private sector, in corporations and elsewhere. “Ecosystems” has now become an incredibly big buzzword. Ecosystem has a lot to do with policy and what corporations do with their risk capital.

All those things are important but sometimes people lose focus. The single necessary and sufficient condition for business is a paying customer. You should always have your customer at the center of your thought process, of what you’re doing and of your programs.

For an ecosystem, it’s all about getting entrepreneurs, getting more of them of higher quality and having them more connected because that’s how you will create a vibrant entrepreneurial environment or ecosystem.

It is a complicated system with all these parts and stakeholders contributing to it. It’s important that we put entrepreneurs at the center and understand that, not only do we need entrepreneurs, but we need to “up level” them, we need to connect them together and we need to create more of them. Then you’ll be able to have a successful entrepreneurial ecosystem.

PB: For directors of emerging entrepreneurship centers, what programs would you encourage them to implement?

BA: If you’re going to start a hospital in a rural area, you don’t try to recreate the entire field of medicine. You should take all the things that already work, bring them in, use those and customize them to your environment.

Figure out what makes you unique in your school, in our region, in your mission as a school entrepreneurship center. Once you have done that, look at all of the material that’s available. As you may know, MIT makes all of our materials open sourced, available to anyone. MIT provides all of the slides, quizzes, syllabus and videos; whatever you’d like. Take those materials and customize them. Then connect back to this educational community to get feedback on what you’re doing.

As we always say to a start-up, “Stealthy is unhealthy.” If you have an idea you should socialize it with other people. Likewise, if you are an educator, if I have something that’s good, I will gain by sharing it with other people, by getting their feedback and by getting their updates. As educators we’re in the field of producing knowledge that will positively impact the world. We’re in the business of helping to create the next generation of entrepreneurs. We shouldn’t let proprietary egos get in the way of this. We’re not in this for the money. We’re in this to help make the world a better place.

Use what’s out there already. But, before you do that, figure out what is it that is unique about your environment. Take what’s already out there and then have the group give you feedback about how they’re using it. The strength of the pack is in the wolf. Each wolf should be strong in the pack, but the strength of the wolf is in the pack. Meaning that the wolf is much stronger if it’s part of a pack.

We, as entrepreneurship educators, should all work together and we will all benefit from that dramatically. We should have our own “entrepreneurship pack” where we all make contributions and we all give back.

PB: Can you share any decisions that the Martin Trust Center has made that you would advise other universities to avoid.

BA: We have made so many mistakes but those mistakes are not something that we dwell on. We have a development program where we constantly rotate our entrepreneurs-in-residence. I’ve been at the Martin Trust Center for 10 years; I’m the backplane but we’re constantly rotating people because we want to stay current. It is not productive for me to speak with young entrepreneurs about what it was like to work with mainframes and enterprise software. We need to have a dynamic crew of people coming through to keep up with what’s going on.

We also have what we call our “honest broker policy”. That is, we should not be an investor. Let investors invest. Educators make poor investors; investors make poor educators. Play your position. If I’m a goalie in soccer then I should be the best goalie in the world. I shouldn’t be trying to score goals at the other end of the field. If you are Lionel Messi and you are a great goal scorer, don’t try to act like you’re a goalie; play your position. Michael Jordan was a great basketball player. When he tried to play baseball, it didn’t work out so well.

Let’s just be the best educators we can; let’s not get into investing at an organizational level or at a personal level. Even though we can make money, it’s not the right thing. So many benefits that accrue to taking that position because a student never has the perception that you’re out for something other than their own self-interest. They understand that you’re worrying about the “fish that they catch” because you have a financial incentive; that you’re not trying to get yourself a job or a job for some friend of yours. Leave that to the students to make all those decisions; don’t leave any ambiguity.

I wrote a piece called The Brilliance at 100%. When you are a 100% educator, there’s no ambiguity as to whether you are 5% of the time as an investor. Let’s be 100% educators. Let’s keep it simple.

PB: You have said, “Many of our problems in society like healthcare, energy and environment are longer-term problems. We as a society need big companies to become more entrepreneurial. The solution is a concerted effort to foster entrepreneurial thinking. It is important for society that we develop this field of corporate entrepreneurship so that bigger corporations can become more entrepreneurial.” How can universities enable bigger corporations to become more entrepreneurial?

BA: This is one of the big challenges. I enjoy startup entrepreneurship more than I enjoy corporate entrepreneurship. I worked at IBM for 11 years. I know what it’s like. There’s a movie called Silicon Cowboys about this and I’m in it. Corporate entrepreneurship is a lot harder than startup entrepreneurship. It’s not as much fun as startup entrepreneurship. When you are a startup entrepreneur, you got this beautiful clean slate and you can do whatever you want with it. When you’re in a corporation, the canvas is already there and you only get to do some small part. It’s just a lot harder and is more of a grind at a political and at a personal level.

It’s essential that we understand that startup entrepreneurship is just going to get the low hanging fruit. To do some of those bigger things like healthcare and energy, we need organizations that have assets and balance sheets. We need to get them to be more innovative. Entrepreneurial behavior and innovation has been much more prevalent in startups than at big companies. We can’t just accept that; we have to get that to change.

To that end, we are teaching people how to have an entrepreneurial mindset to be different. In a big corporation you are taught to optimize, to de-risk, to make things predictable. That’s what management is. What we’re doing is creating new things which requires a different mindset. But it’s not just the mindset, it’s a skill set. We’re teaching them with, for example, the Disciplined Entrepreneurship approach, teaching them finance, teaching them the basics. You’ve got to have the heart to be an entrepreneur, you have to have the head to know what to do with these principles, and you have the hands to be able to do it.

The last “H” should we talk about is the is the home. How do you create these communities where you can work in a much more efficient way than you’re taught in a big corporation? When I worked at IBM, they said, “Bill, here are your resources to work on this PC project. And Phil over there is the best embedded coder of them all. When Phil doesn’t want to work on the project, he doesn’t exist to us anymore.” We learned that we must own all the resources, control them and then execute in an efficient way. That approach doesn’t work anymore today.

Today, what entrepreneurs have learned is how to work with resources beyond their control. Professor Howard Stevenson defined entrepreneurship as a pursuit of opportunities with resources beyond your control. We teach our students how to be different, how to do it from the fundamentals of market segmentation, total addressable market, building a persona, cost of customer acquisition, all those basic fundamental things. Then we have to teach them how to operate in communities with this efficient distributed operational model.

If you teach the four H’s – Heart, Head, Hands and Home – those people can go into big corporations and they can produce what we call “antibodies”. They are people who, in the face of chaos, in the face of change, in the face of adversity, don’t just survive; they see it as an opportunity and they get stronger. That’s what we’re focused on.

I have an article coming out on the goal of entrepreneurship is to produce anti-fragile human beings.

PB: You’ve also said, “Don’t look at big companies as the enemy; look at them as someone you can collaborate with.” How can universities collaborate with big companies?

BA: Corporations want their problems to be at the focus of student projects. There’s a balance here because I could spend all our time working with corporations, but that is only part of the portfolio of things I should do. I should be working on the startup individual. I should be working on the joiner. I should be working in the corporate entrepreneur. I should also be working on the new entrepreneurship amplifier persona that we’ve talked about.

We have a corporate members program where we don’t take an enormous amount of money from them to be members, but we take enough to get them engaged for an ongoing dialogue. That dialogue is around getting exposure to talent, getting exposure to ideas, taking challenges that they might have and putting them in front of students to see how they might work. This is done in classroom projects called action learning and in extra-curricular programs.

Corporate members also like to – it’s very beneficial for them – sponsor competitions because they get a view into students and get to see what a different culture is like than the culture inside their four walls with mahogany and cubicles and an environment built on efficiency and optimization.

PB: In an MIT blog post, you stated that, “While entrepreneurship can be taught, what is more important is the “innovation hotbed” where entrepreneurs and intrapreneurs, those who are entrepreneurs within established large corporations, develop their skills.” What is an “innovation hotbed” and how can a large corporation develop one?

BA: The word “ecosystem” has become one of these cliche words like “disruptive” and “innovation”. I don’t really know what it means.

What I mean by hotbeds is community. When you walk into the Martin Trust Center for MIT Entrepreneurship, it feels different. People are doing all these different things. There are signs up that say, “It’s more fun to be a pirate than to join the Navy.”

A hotbed is a community of things that are happening. Think of it as Greenwich Village in the in the 1960s; think of it as Williamsburg in Brooklyn today. It’s a place where you go, with lots of ideas and people being different and exploring different things. Not only is it acceptable to be different and innovative and trying new things but it’s cherished. That’s what you’re pushed to do. In his book Influence: The Psychology of Persuasion, Robert Chaldini states that people are more motivated, not by the economic side of it, but by peer influences. Having communities allows people to open up.

For example, no one in my family was entrepreneurial. We didn’t even know what the word “entrepreneur” was. I went to college and I didn’t know what it was. It wasn’t till I got an exposure to it in a community. Mitch Kapor was at Lotus Development Corporation when I worked at IBM. All of a sudden a world of possibilities opened up.

The data is clear. Entrepreneurship is not nature; it’s nurture. And nurture is about being put in an environment to see what’s possible. If other people are doing it, then you keep up with them.

The analogy I would use in sports is look at the Dominican Republic which is amazing for baseball players. Lithuania is amazing for basketball players. Is there something genetically in those countries? No, because you can see places like Romania when Nadia Comaneci became a fantastic gymnast, the fact that there was a role model and people talking about gymnastics and doing it with their friends that all of a sudden Romanian gymnasts stormed the world. Was there some special muscle that they had? No! It was about role models.

This idea of the power of influence and the communities – hotbeds – is important for people to understand. That’s what we do at the Martin Trust Center. We provide that home. I talked earlier about the heart, the head, the hand and this home. It is hard to measure but it’s really, really important.

I would encourage all the entrepreneurship instructors out there to understand that you’ve got to create these communities. That’s the part about networking people together. That’s the magic that happens in places like Cambridge, Massachusetts or Silicon Valley or Boulder Colorado right now or Israel. They are talking to other people and then the whole group moves forward

PB: thank you so very much. This is an incredible interview and I look forward to publishing it.

BA: Thank you very much for having me, Philip, and good luck with what you’re doing. It’s a noble cause; we need to connect the entrepreneurship educators together. We all need to be pushing to help each other. As I always say to my good friend Tom Byers, “The enemy isn’t Stanford. The enemy isn’t Harvard. The enemy isn’t Berkeley. The enemy is people who don’t do entrepreneurship.” We’re all part of the same fraternity. We should all help each other. That’s why I love what you’re doing.