The Kinetic Entrepreneur

17 November 2016 | Tracking Entrepreneurs

In architecture, the most overused word today seems to be “iconic”. In business, the word is “entrepreneur”. That’s not simply because a Google search of the word yields 217 million results. The word is used much too loosely. I have heard the word simultaneously applied to people such as Steve Jobs and Elon Musk, people who invest dollars in a pre-packaged “startup” (such as a new sandwich shop) and people engaged in a lean startup inside General Electric or some other major, established corporation.

There is no reason to demean the person who seeks a brighter future in a well-devised programme of how to make and sell sandwiches, nor the enterprising team members trying to devise a new business model for its parent corporation. However, neither is quite on the same level as someone who, with little if any resources, creates something that is simultaneously unique, daunting, rule-changing (if not game-changing), and bursting with financial and marketplace promise.

Perhaps it’s time to go back in history. In the 1970s, Professor Howard Stevenson defined entrepreneurship as “the pursuit of opportunity beyond resources controlled”. [link] His succinctness stands today, and I would not change a word of his definition. However, I have come to believe that the truest form of entrepreneur is one who is kinetic, as opposed to those who should more aptly be called doers, dreamers, or daredevils.

An entrepreneurial scale

Doers  If someone imports a model business and makes it their own (the sandwich shop, for example), they may be extending what was an originally entrepreneurial idea. But they are actually merely performing an act of business that is driven by habit, routine, and rules. Are they taking a risk? Absolutely: they may be opening that sandwich shop only a few doors from a wildly successful hamburger chain or super-popular low-cost cafeteria. Yet, what entrepreneurial doers do (from the very start) is already laid out in a prescription they did not devise personally. More than that, the steps they take every day mimic the steps that were taken by all others who have invested in that same business model. If the enterprise proves successful, they can be proud of their industry, but the success of the business is rooted in a model that was conceived by someone else. In this sense, one might even call doers “unconscious entrepreneurs”.

Dreamers  We will never know how many more entrepreneurs there would be in the world if some of those with some great ideas actually acted on them. I’ve talked with countless people who have laid out many visionary ideas for products or services that could prove useful and popular to society. The problem is that dreaming entrepreneurs are satisfied with mental gymnastics mainly, and so the electric car company they conceived never gets venture funding, never gets a prototype vehicle, or never gets into production — and, if it does, it’s marketed poorly (if at all). One website recently listed “10 reasons why entrepreneurs fail”. It includes not having a written business plan, not generating revenue sufficient to sustain the business, not thinking more widely, and not having intellectual property. Of the list, the one that echoed loudest for me with people I have met is that they were not able to execute the idea — not able to make decisions and take risks. [link]

[pullquote]We will never know how many more entrepreneurs there would be in the world if some of those with some great ideas actually acted on them.[/pullquote]

Daredevils  Some, of course, are the complete opposite of dreamers; they are all action and imprudent risk. Based on what worked for them in the past (or their study of other entrepreneurs), they believe that their knowledge, experience or raw confidence, alone, will propel their new business forward. When Netflix first started its model of mailing DVDs to customers, it was reported that “a cavalcade of other companies” started doing the same thing. [link] They weren’t entrepreneurs, really; they were imitators. A recent post on profiles businesses that tried to mimic the social media success of others and failed accordingly. One example: Vera Bradley tried to translate its line of women’s handbags via “Why It’s Good To Be A Girl”, but the younger Facebook generation did not buy it. [link] Daredevils basically recall and integrate either what they did before (which may be relevant to a new market) or what someone else has done (which seldom eclipses the original). Importing someone else’s dreams, decisions, processes and systems into your own business is of dubious value.

The kinetic entrepreneur

The truest entrepreneurs are those driven by curiosity, discovery, and sense-making. They may have devised a dream whole-cloth with nothing to support it, but that is unlikely. More probable is that they looked at how things were being done in the present and used their ingenuity to find a better way to do the same thing. Or they sensed a need in the marketplace and used their desire to be responsive to propel a new enterprise to life. Ingenuity and responsiveness are the triggers to bring Stevenson’s ideal entrepreneur into reality. The idea seizes their minds. Life from that point on focuses on “the pursuit of opportunity” even though they lack the immediate capability to transform the idea into something tangible. For the moment, it is “beyond resources controlled.” So they push on.

Kinetic entrepreneurs realize that they must be emergent, they must grow a new business by imagining novel possibilities and then generating not only funding but also cultivating people, teams, operating procedures, and all the rest of any business equation, from marketing to shipping-servicing. They become active and effective at the job of entrepreneuring. As A. P. Julian and J. S. Brown expressed it in Pragmatic Imagination: “Efficacy in the world today required a productive entanglement of imagination and action.” [link]

What, then, is special about kinetic entrepreneurs? In my own experience, the real differentiator is not so much in the action but in the imagination. What separates for me the true entrepreneur from the also-rans is the willingness to think diligently about:

What’s happening in the world  They stretch their sensibilities by including as many others as they can in their emergent view of a new opportunity. It’s not enough to know what’s happening with their competitors and their industry, they crave knowledge about what’s happening in the world of business and organisations everywhere. Thus, they form a leadership circle and ask everyone to suggest what is happening “out there, in the big world” that affects what’s happening inside the scope of their current situation.

Taking a definite stand  When they sense an opportunity to pursue, they decide to decide! Boeing decided to stop making propeller aircraft; Apple decided to sell and service only digitized music; Starbucks decided it was not going to compete with common cups of coffee; Netflix was not going to open video rental stores.

Shaping a new order  But before charging ahead and ordering equipment or hiring new employees, they form an expansive image in their heads about how the new business will operate. This does not mean that they start inventing forms to be filled out or measuring the size of cublicles; it does mean that they decide how people will interact with fellow employees, with customers, and with the world. It’s not about a new business card; it’s about a new business convention.

Leading with foresense  After all this intense thinking, they move from their mental platform to the “real” work stage. Here is where they demand that everyone involved act with a clear vision of how the new business should operate, resisting any temptations to incorporate past norms or current competitor behaviours.  Or, in Peter Drucker’s words: “Leadership is lifting a person’s vision to high sights, the raising of a person’s performance to a higher standard, the building of a personality beyond its normal limitations.” Kinetic entrepreneurs are truly about building new worlds, infusing them with vigour and life, and enthusiastically living in them while attracting many others to join them.

Joseph PistruiJoseph Pistrui (@nextsensing) is Professor of Entrepreneurial Management at IE Business School in Madrid. He also leads the global Nextsensing Project, which he founded in 2012.