COMMENTARY ON SCORING THE ENTREPRENEURIAL QUIZ

 

 

1

The independent way of life is not so much genetic as it is learned, and the first school for any entrepreneur is the home. So, it's only natural that a child who has grown up in a home where at least one parent is self-employed is more likely to try his hand at his own business than a child whose parents were in, say, the civil service. Our own research has shown this to be the case more than two-thirds of the time. Some good examples of this are Howard Hughes and New York real estate tycoon Donald Trump, both of whom parlayed modest family businesses into major fortunes.

 

 

2

This question is tricky because the independent-thinking entrepreneur will very often quit a job instead of waiting around to get fired. However, the dynamics of the situation are the same; the impasse results from the entrepreneur's brashness and his almost compulsive need to be right. Steven Jobs and Steven Wozniak went ahead with Apple computer when their project was rejected by their respective employers, Atari and Hewlett-Packard. And when Thomas Watson was fired by National Cash Register in 1913, he joined up with the Computer-Tabulating-Recording Company and ran it until a month before his death in 1956. He also changed the company's name to IBM. The need to be right very often turns rejection into courage and courage into authority.

 

 

3

America is still the land of opportunity and a hotbed for entrepreneurship. The displaced people who arrive on our shores (and at our airports) every day, be they Cuban, Korean, or Vietnamese, can still turn hard work and enthusiasm into successful business enterprises. Fifteen years ago, Korean born entrepreneur K. Philip Hwang worked his way through college by sweeping the floors of a Lake Tahoe casino. Last March, Hwang took his company, Televideo, public, and his personal stock holdings are now valued at over $750 Million. Though it is far from a necessary ingredient for entrepreneurship, the need to succeed is often greater among those whose backgrounds contain an extra struggle to fit into society.

 

 

4

I've heard it said that "inside every corporate body, there's an entrepreneur struggling to escape." However, small business management is more than just a scaled down version of big business management. The skills needed to run a big business are altogether different from those needed to orchestrate an entrepreneurial venture. While the professional manager is skilled at protecting resources, the entrepreneurial manager is skilled at creating them. An entrepreneur is at his best when he can still control all aspect of his company. That's why so many successful entrepreneurs have been kicked out of the top spot when their companies outgrew their talents. Of course, that isn't always a tragedy. For many, it offers the opportunity (and the capital) to start all over again.

 

 

5

The enterprising adult first appears as the enterprising child. Coin and stamp collecting, mowing lawns, shoveling snow, promoting dances and rock concerts are all common examples of early business ventures. The paper route of today could be the Federal Express of tomorrow.

 

 

6

The average age of entrepreneurs has been steadily shifting downward since the late 50s and early 60s when it was found to be between 40 and 45. Our most recent research puts the highest concentration of entrepreneurs in their thirties, but people like Jobs and Wozniak of Apple Computer, Ed DeCastro and Herb Richman of Data General, and Fred Smith of Federal Express all got their businesses off the ground while still in their twenties. Although we look for this data to stabilize right around 30, there are always exceptions which leave us wondering. Computer whiz Jonathon Rotenberg is just such an exception. He currently presides over the 8,500 member Boston Computer Society, is the publisher of the slick magazine Computer Update, and earns up to $1,500 a day as a consultant. In 1978, Rotenberg's advice was solicited by the promoter of an upcoming public computer show. After conferring several times on the phone, the promoter suggested they meet for a drink to continue their discussions. "I can't," Rotenberg replied. When asked, "Why not?" Jonathan answered, "Because I'm only 15." An established entrepreneur, Rotenberg is now all of 20 years old.

 

 

7

The answer to this question is always the same. Entrepreneurs are most commonly the oldest children in a family. With an average of 2.5 children per American family, the chances of being the first child are only 40%. However, entrepreneurs tend to be the oldest children more than 60% of the time. In an interesting aside (and we're not quite sure what it means), a Mormon Church official has revealed that in cases of polygamous marriages, the first sons of the second or third marriage are generally more entrepreneurial than the first child of the first marriage.

 

 

8

Our research concluded that the vast majority of entrepreneurs are married. But then, most men in their 30s are married, so this alone is not a significant finding. However, follow-up studies have shown that most successful entrepreneurs have exceptionally supportive wives. (While our results did not provide conclusive results on female entrepreneurs, we suspect that their husbands would have to be doubly supportive.) A supportive mate provides the love and stability necessary to balance the insecurity and stress of the job. A strained marriage, the pressures of a divorce, or a strained love life will simply add too much pressure to an already strained business life. It's also interesting to note that bankers and venture capitalists look a lot more favorably on entrepreneurs who are married than on entrepreneurs living with their mates without the benefit of clergy. And this is more of a pragmatic attitude than it is a moralistic one. A venture capitalist remarked to us the other day that "if an entrepreneur isn't willing to make a commitment to the woman he loves, then I'll be damned if I'm going to make any financial commitment to him."

 

 

9

The question of formal education among entrepreneurs has always been controversial. Studies in the 50s and 60s showed that many entrepreneurs, like W. Clement Stone, had failed to finish high school, not to mention college. And Polaroid's founder, Edwin Land has long been held up as an example of an "entrepreneur in a hurry" because he dropped out of Harvard in his freshman year to get his business off the ground. However, our data concludes that the most common educational level achieved by entrepreneurs is the bachelorís degree, and the trend seems headed toward the MBA. Just the same, few entrepreneurs have the time or the patience to earn a doctorate. Notable exceptions include An Wang of Wang Laboratories, Robert Noyce and Gordon Moore of Intel, and Robert Collings of Data Terminal Systems.

 

 

10

Entrepreneurs don't like working for anyone but themselves. While money is always a consideration, there are easier ways to make money than by going it alone. More often than not, money is a byproduct (albeit a welcome one) of an entrepreneur's motivation rather than the motivation itself.

 

 

11

These results really surprised us because past studies, including our own, have always emphasized the strained or competitive relationship between the entrepreneur and the income-producing parent (usually the father). The entrepreneur has traditionally been out to "pick up the pieces" for the family or to "show the old man," while at the same time, always seeking his grudging praise. However, our latest study showed that a surprising percentage of the entrepreneurs we questioned had what they considered to be comfortable relationships with their income-producing parents. How do we explain this? To a large extent, we think it's directly related to the changing ages and educational backgrounds of the new entrepreneurs. The new entrepreneurs are children of the fifties and sixties, not the children of the Depression. In most cases they've been afforded the luxury of a college education, not forced to drop out of high school to help support the family. We think that the entrepreneur's innate independence has not come into such dramatic conflict with the father as it might have in the past. We still feel that a strained or competitive relationship best fits the entrepreneurial profile, though the nature of this relationship is no longer so black and white.

 

 

12

The difference between the hard worker and the smart worker is the difference between the hired hand and the boss. What's more, the entrepreneur usually enjoys what he's doing so much that he rarely notices how hard he's really working. I've always believed that a decision is an action taken by an executive when the information he has is so incomplete that the answer doesn't suggest itself. The entrepreneur's job is to make sure the answers always suggest themselves.

 

 

13

Entrepreneurs seldom rely on internal people for major policy decisions because employees very often have pet projects to protect or personal axes to grind. What's more, internal management people will seldom offer conflicting opinions on big decisions, and in the end the entrepreneur makes the decision on his own. Outside financial sources are also infrequent sounding boards when it comes to big decisions because they simply lack the imagination that characterizes most entrepreneurs. The most noble ambition of most bankers and accountants is to maintain the status quo. When it comes to critical decisions, entrepreneurs most often rely on outside management consultants and other entrepreneurs. In fact, our follow-up work has shown that outside management professionals have played a role in every successful business we've studied, which wasn't the case when it came to unsuccessful ventures.

 

 

14

Contrary to popular belief, entrepreneurs are not high risk takers. They tend to set realistic and achievable goals, and when they do take risks, they're usually calculated risks. They are very confident in their own skills and are much more willing to bet on their tennis or golf games than they are to buy lottery tickets or to bet on spectator sports. If an entrepreneur found himself in Atlantic City with just ten dollars in his pocket, chances are he'd spend it on telephone calls and not in slot machines.

 

 

15

All businesses begin with orders, and orders can only come from customers. You might think you're in business when you've developed a prototype or after you've raised capital, but bankers and venture capitalists only buy potential. It takes customers to buy products.

 

 

16

Like billionaire Daniel Ludwig, many entrepreneurs will adamantly state that they have no hobbies. But that doesn't mean that they have no social life. In fact, the entrepreneur is a very social person and, more often than not, a very charming person. (Remember, an entrepreneur is someone who gets things done, and getting things done often involves charming the right banker or supplier.) And while he will often only talk about things concerning himself or his business, his enthusiasm is such that anything he talks about sounds interesting.

 

 

17

One of the biggest weaknesses that entrepreneurs face is their tendency to "fall in love" too easily. They go wild over new employees, products, suppliers, machines, methods, and financial plans. Anything new excites them. But these "love affairs" usually don't last long; many of them are over almost as suddenly as they begin. The problem is that during these affairs, entrepreneurs can quite easily alienate their staffs, become stubborn about listening to opposing views, and lose their objectivity.

 

 

18

The answer to this question is easy: "bright and energetic," right; Wrong. The natural inclination is to choose "bright and energetic" because that describes a personality like your own. But stop and think a minute. You're the boss. Would you be happy or, for that matter, efficient as someone else's right-hand man? Probably not. And you don't want to hire an entrepreneur to do a hired hand's job. That's why the "bright and lazy" personality makes the best assistant. He's not out to prove himself so he won't be butting heads with the entrepreneur at every turn. And while he's relieved at not having to make critical decisions, he's a whiz when it comes to implementing them. Why? Because, unlike the entrepreneur, he's good at delegating responsibilities. Getting other people to do the work for him is his speciality!

 

 

19

Organization is the key to an entrepreneur's success. This is the fundamental principle on which all entrepreneurial ventures are based. Without it, no other principles matter. Organizational systems may differ, but you'll never find an entrepreneur who's without one. Some keep lists on their desks, always crossing things off from the top and adding to the bottom. Others use note cards, keeping a file in their jacket pockets. And still others will keep notes on scraps of paper, shuffling them from pocket to pocket in an elaborate filing and priority system. But it doesn't matter how you do it, just as long as it works.

 

 

20

The only thing an entrepreneur likes less than discussing employee problems is discussing petty cash slips and expense accounts. Solving problems is what an entrepreneur does best, but problems involving employees seldom require his intervention so discussing them is just an irritating distraction. Expense accounts are even worse. What an entrepreneur wants to know is how much his sales people are selling, not how much they're padding their expense accounts.

 

 

21

Entrepreneurs are participants, not observers; players, not fans. And to be an entrepreneur is to be an optimist, to believe that with the right amount of time and the right amount of money, you can do anything. Of course, chance plays a part in anyone's career-being in the right place at the right time; but entrepreneurs have a tendency to make their own chances. I'm reminded of the story about the shoe manufacturer who sent his two sons to the Mediterranean to scout out new markets. One wired back: "No point in staying on. No one here wears shoes." The other son wired back: "Terrific opportunities. Thousands still without shoes." Who do you think eventually took over the business?

 

 

22

Sales gives instant feedback on your performance; it's the easiest job of all for measuring success. How does a personnel counselor or a teacher ever know if he's winning or losing? Entrepreneurs need immediate feedback and are always capable of adjusting their strategies in order to win. Some entrepreneurs brag that they play by the rules when they're winning and change the rules when they're losing. Although we don't endorse it (look what happened to John DeLorean), when it works it's known as the win/win strategy.

 

 

23

While friends are important, solving problems is clearly more important. Oftentimes, the best thing an entrepreneur can do for a friendship is to spare it the extra strain of a working relationship. By carefully dividing his work life and his social life, the entrepreneur insures that business decisions will always be in the best interest of his business.

 

 

24

Everyone knows that a camel is a horse that was designed by a committee, and unless it's clear that one person is in charge, decisions are bound to suffer from a committee mentality.

 

 

25

Vince Lombardi is famous for saying, "Winning isn't everything, it's the only thing," but a lesser known quote of his is closer to the entrepreneur's philosophy. Looking back at a season, Lombardi was heard to remark, "We didn't lose any games last season, we just ran out of time twice."

 

 

Entrepreneuring is a competitive game and an entrepreneur has to be prepared to run out of time, occasionally. Walt Disney, Henry Ford, and Milton Hershey all experienced bankruptcy before experiencing success. The right answer to this question is C. but the best answer is the game itself.