00:00:00
So, what are the keys to success for an entrepreneur these days? A new book by Wharton's Lori Rosenov delves deeper
00:00:07
into this. The book is titled Unstoppable Entrepreneurs: Seven Paths for Unleashing Successful Startups and
00:00:15
Getting Value Through Innovation. And she joins us right now. Lori, great to talk to you again. How are you doing?
00:00:21
Fine, Dan. It's great to be here. Thanks for having me. Thank you very much. Uh,
00:00:25
what had you researching this idea in the first place? Well, I just believed that role models matter for
00:00:33
entrepreneurship. And there's a media stereotype that's so pervasive. That's
00:00:38
one way of being an entrepreneur. Drop out of college, get venture funding, build a unicorn. But I was seeing so
00:00:45
many different pathways that our students as well as our alumni were following and wanted to provide some new
00:00:52
role models and new ideas and show that there's no one-sizefits-all path. So
00:00:56
with all that's going on right now, how do you define entrepreneurship at this
00:01:00
moment? Take a very broad definition. I define entrepreneurship as value creation
00:01:08
through innovation. There are so many ways to create value. And of course, financial value is very prominent, but
00:01:16
there's also social value. Are you impacting society in a healthy way? Emotional value. How does it make you
00:01:21
feel to do this sort of innovation and the like. So entrepreneurs are creating value and they're doing it by
00:01:28
innovating. That innovation might be product, process, business models, service. Uh but it might also be
00:01:34
something as simple as figuring out a new routine in your home life or family life. All of those things create value
00:01:40
for us. And that starts to make us realize that everyone can be innovative and entrepreneurial. And I hope it'll
00:01:46
inspire people to be all the more entrepreneurial. What's interesting is that uh obviously
00:01:52
a lot of the attention goes to the bigname well-known and probably in many cases well-funded entrepreneurs who have
00:01:59
had you know incredible levels of success but as you kind of alluded to and you can expand on a little bit more
00:02:04
there are so many other avenues for people to create success through entrepreneurship social being one so
00:02:11
many other things going on in one's community I mean it is just not narrow uh narrowed down to just the successful
00:02:19
these days. Absolutely. Do you know there are 31 million enterprises in the US? 29
00:02:28
million are sole proprietorship. So this might be the person who mows your lawn or who does your nails. But there are
00:02:35
many many people who are doing small business entrepreneurship. We tend to focus on high growth entrepreneurship
00:02:41
which is in many cases funded by venture or uh by any sort of debt. Um but those
00:02:48
are less than 20% of all of the entrepreneurial activity. Most activity is actually bootstrapped. So each of
00:02:57
these the disruptor, the bootstrapper, the social entrepreneur, these are all pathways in the book. For the longest
00:03:03
time in doing the shows that I have talking about entrepreneurship, the one thing that obviously still comes up is,
00:03:10
you know, it's a challenge. There is a level of of failure uh that is in there.
00:03:16
It might not be the first idea that you are end up being successful with. It might be the second or third. Is there
00:03:22
enough recognition of that right now that that is kind of part of the process? Well, that's why my book is
00:03:29
called unstoppable entrepreneurs. I talk about an entrepreneurial mindset which has six Rs and one of them is
00:03:36
resilience. Each of the entrepreneurs that are profiled in my book had many many obstacles and challenges. And part
00:03:45
of their ability to succeed was having some people call it growth mindset, some people call it grit, but an a mindset
00:03:52
that allows you to say, "I'm going to need to try a lot of things in order to
00:03:57
get to the finish line. I'm going to hear negative feedback and I'm going to
00:04:01
treat that as a learning experience and then uh adapt my efforts in order to do better with that. I'm going to deal with
00:04:09
crises like COVID or the current economic conditions and there are many many ways to solve these sorts of
00:04:16
problems. And so each of my entrepreneurs are incredibly resilient and that's something that everybody can
00:04:22
work on understanding that feedback is always a gift. How many of the group are the so-called disruptor? And in in
00:04:30
general, is there a ratio of disruptors that you expect to see uh coming from the role of of being an entrepreneur? I
00:04:38
love that question because disruptors are of course the the people who we we see all the time in the media, these
00:04:44
celebrity entrepreneurs in many cases. It turns out that disruptors are typically venturebacked because they're
00:04:52
trying to overturn an entire market. venture-backed entrepreneurship is far less than 1% of all of that enterprise
00:05:00
that's out there. So it's actually very very uncommon but when done well the
00:05:06
returns are enormous. So they are getting most of the attention but most efforts toward disruption fail. There
00:05:13
were many many car sharing services that were attempted. We we had one that students were working on at Wharton way
00:05:21
back when and now of course Uber dominates that market. Lyft is a a very serious second and now of course Whimo
00:05:28
is automating it completely. But there were hundreds of attempts at car sharing. So most disruptors are not
00:05:34
successful but all the attention goes to the small percentage that are. So you mentioned social a little while ago and
00:05:41
obviously we're in a time where social issues have become very very important
00:05:45
kind of across the board of of of how we live our lives right now. So then are are we seeing a sharp rise in social
00:05:54
entrepreneur entrepreneurism as well? Well, I've been at Wharton for over 30
00:05:59
years and certainly 30 years ago we weren't seeing a lot of students saying I want to be social entrepreneurs. These
00:06:06
days in our efforts at Venture Lab, we see about one in seven of our students who are doing something entrepreneurial
00:06:15
will raise their hand and say, "I'm a social entrepreneur." Now, that doesn't
00:06:20
sound like a ton, but if you ask the students a different question, and this is so fascinating to me, if you ask
00:06:26
them, do you have impact goals in your company? So, meaning do you have other goals beyond your financial ones? then
00:06:33
70% of them will say, "Well, of course I have impact goals." So more and more
00:06:38
with the emphasis on of course the the UN sustainable development goals and goals and all the interest in in climate
00:06:45
um and and other sorts of of uh community issues. We're seeing more and more students and more and more alumni
00:06:53
build those sorts of aims into their ventures, but they're a little bit reluctant to claim the label. And I
00:06:59
think that's because some people hear that label and say, "Oh, it's a
00:07:03
nonprofit or it's not really uh intending to be as big." But the social
00:07:07
entrepreneur I profile in my book is doing incredibly well. One, I mean, we talk so much about entrepreneurs, but
00:07:14
you also bring up the component of the entrepreneur, which maybe doesn't get as
00:07:19
much conversation, but the component of somebody working at a company who comes up with a great idea and maybe works
00:07:25
with their company to develop this new idea. How how frequent how common is that these days? I'm so glad you asked,
00:07:34
Dan. 70% of all innovations that are developed are developed in established companies. So there are tons of
00:07:43
opportunities for people to be entrepreneurial in their companies on their employers resources and devoting
00:07:52
their time to the development of new businesses. How does the company then react to that? Because I think it's a
00:08:00
uni unique dynamic where a company probably has their normal process in so many areas, but has an an employee maybe
00:08:08
come up with something that could be transformative. Well, some companies try to embrace that
00:08:13
in their culture and will devise all sorts of structures and processes to encourage that. the the example that
00:08:21
gets thrown around these days, Google gives 20% time to employees to work on something of their own choosing. That of
00:08:27
course is an outgrowth of 3M's 15% time that's been around for decades. Many
00:08:34
companies that have enough resources will create a separate part of the organization where people can experiment
00:08:42
in ways that might conflict with what's going on in the core business. And that
00:08:47
separation is incredibly important until something new happens. Other companies use hackathons and the like to get
00:08:54
people exploring ideas. But there are quite a few people who come up with a new idea in an organization and find
00:09:01
that they can't get enough support and wind up leaving and developing it somewhere else. Is the I is the
00:09:08
entrepreneurial mindset is it organic or is it something that can be developed? It can definitely be developed. I while
00:09:17
there are some people who will tell you the story and this is about half the entrepreneurs in my book will say I
00:09:22
always knew I wanted to be an entrepreneur. I was selling candy in middle school and the principal
00:09:26
suspended me and tell those kinds of stories. The other half are people who were doing the more standard path and
00:09:33
started to see over time opportunities to create value and then went on their own uh to do it. And these these people
00:09:44
can can be trained to do that. Uh among the Rs in my entrepreneurial mindset is recombination. And what I mean by that
00:09:52
is taking your knowledge and experience from different places. You've worked in
00:09:57
different companies. You've taken different courses in school and certifications. You've lived in
00:10:02
different places. Everyone has a unique set of experiences. and mixing and matching all of that knowledge is what
00:10:09
gives you the opportunity to identify a unique uh opportunity. And when you can do that, that's the root of innovation.
00:10:18
And all of us have the capacity to look back at what we've accomplished and try
00:10:22
to think about those combinations. And then as I'm advising people to look forward, I always say, what can you do
00:10:27
that will allow you to think differently? If you're a college student, can you take a minor in
00:10:32
something different? or if you're you're further grown, should you take a
00:10:35
certification or could you take some sort of a trip or could you take an art class, whatever it might be? That's what
00:10:41
starts to give people the chance to see those unique opportunities. One of the other Rs that you bring up is
00:10:48
relationships. And look, that's so important in business in general, but especially for somebody who's starting
00:10:54
out trying a new idea. to be able to have the relationships that are going to help you build to success has to be
00:11:01
vital especially today. Absolutely. Relationships are are giving you an opportunity to access knowledge and
00:11:10
resources and talents. You need people to help you assess whether your um idea is addressing a big enough pain point,
00:11:20
help you understand the bigger market. So you're not just solving your own problem and hoping people will come to
00:11:25
you, but that the market is desperate for it. You need those relationships uh to to get funding in many cases once you
00:11:32
get to that point and that gives you access and you need the talent that people can provide to you. You want to
00:11:39
be working in the space that gives you the most joy, where your your genius zone, some people call it. You want to
00:11:46
be able to attract talent that's going to complement your skill set as your organization grows. You you talk with a
00:11:52
lot of great entrepreneurs in here and if I can highlight one who is somebody that I know and I've t and I've talked
00:11:58
with her a few times over the years at Wharton doing interviews is Caitlyn Graasso with Jen Jen heration and the
00:12:06
idea of networking but networking thinking about it through the process of what women are experiencing right now
00:12:13
and and I I told Caitlyn that when my daughters get old enough they're going
00:12:18
to go with her on a tour. talk a little bit about what she has done and what she
00:12:23
has brought to the table. I'm so glad you asked me to do that rather than asking me to pick my
00:12:29
favorite subject of all of them because I love them all equally. But but Caitlyn
00:12:34
is a great example of so many of the things we've been talking about since a
00:12:38
young age. She always wanted to do things for young girls and was doing it all throughout her Wharton career here.
00:12:46
She graduated in 2015. She was one of the first people I met when I became vice dean of undergrad in 2013 because
00:12:52
she came bounding into my very first office hours because she is a fabulous the best networker that I know. But she
00:12:59
built out with the support of some pen awards after she graduated. She built out generation to take girls as you
00:13:07
mentioned on bus tours to learn about uh opportunities that uh would help to further their careers. And this was
00:13:13
chugging along nicely and then co happened. Talk about resilience. You can't take a bus tour. And she had to
00:13:20
convert everything to virtual. This wound up being the seed that's led her business to explode because once she was
00:13:26
virtual, she realized she was an edtech. And now she's building curriculum that
00:13:31
she can sell to educational institutions. She can sell to corporations. Uh she has lots of girls
00:13:38
that are subscribing. And the company is it's incredibly profitable. Also, she's
00:13:43
calls herself a social entrepreneur, but she has a a very strong profit motive uh
00:13:48
as well. She has 10 employees. She's doing fabulously. Having written this book now, what are you most excited for
00:13:56
potentially for the future of being an entrepreneur? Well, I I think we're going to see all the more
00:14:02
entrepreneurship right now. We're obviously in a period where there's a fair amount of job dislocation. So
00:14:08
people are saying how can I apply my talents in a way where I have a little bit more control and and can uh take
00:14:15
care of my my needs for for income and security and the like. So I think we're
00:14:19
going to see a lot more people looking for ways to participate. I also think at this moment with all that's going on
00:14:25
with AI, this is an important moment for everybody to be training themselves on the tools because they you want to
00:14:31
operate as efficiently as possible, but there's also a lot of opportunity for
00:14:36
those high growthoriented entrepreneurs to start building in this new AI ecosystem. So, I think it's it's a big
00:14:43
moment for entrepreneurship. Lori, thanks very much for your time. All the best with the book. Thanks very much.
00:14:49
Thanks, Dan. You got it. Lori Rosenoff of the Wharton School. The book is titled Unstoppable Entrepreneurs: Seven
00:14:55
Paths for Unleashing Successful Startups and Creating Value Through Innovation.