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Don’t Judge the Economy by the Number of Start-Ups

Posted on Oct 2, 2014 in Authored, Harvard Business Review

Originally published in Harvard Business Review on October 1, 2014. Co-authored with Fernando Fabre. More new businesses are better for society, right? That’s a common assumption. For instance, take this recent Washington Post piece, headlined, “More businesses are closing than starting. Can Congress help turn that around?” Sounds ominous at first. But wait a minute – is starting more new businesses always a good thing? Isn’t it a basic economic tenet that well-functioning markets will have many entrancesand exits, that weak businesses (including thousands of one-person enterprises) will get recycled quickly (fast failure) and that over time, vigorous, well-regulated markets will support strong and growing companies, which in turn provide dignified jobs and prosperity? This conflation of startups with entrepreneurship, and more broadly with “business dynamism,” has become so widespread it can muddle even the most serious research. For example, the admired Brookings Institution recently purported to explain an apparent decades-long decline in American entrepreneurship. The supporting evidence? More and more American companies are surviving and growing beyond 16 years. The implicit axiom here is that robust companies that have sustained and grown over the longer term are somehow less innovative. The authors of this study, as well as othercommentators, imply or even proclaim explicitly that these dead weight dinosaurs are dampening American society’s entrepreneurial spirit. (It should be noted that amongst this group of apparently innovation-barren 16-somethings are: eBay [19], Google [16], Starbucks [43], Netflix...

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How to Finance the Scale Up of Your Company

Posted on Aug 19, 2014 in Authored, Harvard Business Review

Originally published in Harvard Business Review on August 18, 2014. Co-authored with Daniel Lawton. Tom Szaky knows well the meaning of the saying “Beware your dreams, for they may come true.” With the 2004 Christmas retail season rapidly approaching, he was trying everything he could to scale up TerraCycle, a two year old venture selling liquid worm poop as fertilizer in used PET bottles. So far, he had been successful distributing through lots of smaller retailers, but had encountered a flood of rejections from the big box stores. Undaunted, Szaky finally landed a 15 minute meeting with Walmart Canada’s buyer. Instead of telling Szaky to “drop off the face of the earth” (he had been warned this was likely) Walmart Canada placed a huge order — for every one of its stores. But as he recounts in his engaging book, achieving his dream quickly turned into a nightmare when he was confronted with a stark reality: they had sold to Walmart without having the necessary infrastructure in place to handle the huge volume increase. Fortunately for Szaky, he hadalready laid the groundwork of financing from suppliers, equity investors and others to allow them to double sales in two months. Contrary to conventional wisdom, the most dangerous period for entrepreneurs is not when they start up from scratch but when they scale up for...

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Fostering Entrepreneurship in Bahrain

Posted on Aug 18, 2014 in Articles, Authored, Print

Printed in Tamkeen Annual Report...

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What an Entrepreneurship Ecosystem Actually Is

Posted on May 12, 2014 in Authored, Harvard Business Review

Fostering entrepreneurship has become a core component of economic development in cities and countries around the world. The predominant metaphor for fostering entrepreneurship as an economic development strategy is the “entrepreneurship ecosystem.” It should come as no surprise, however, that as any innovative idea spreads, so do the misconceptions and mythology. Here is a quick true-false test that will serve as a reality check on entrepreneurship ecosystems, and on the connection between entrepreneurship and development more generally. It’s important to...

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Entrepreneurs don’t disrupt, they create value

Posted on May 9, 2014 in Authored, Miscellaneous blogs

“We have dangerous confusions about what entrepreneurs do and how they do it.” In this guest blog, Dan Isenberg argues that Entrepreneurship is the creation and capture of extraordinary value; it is not disruptive innovation per se, and innovation is neither necessary nor sufficient for entrepreneurship. Have we forgotten that disruption is connotatively and denotatively negative? Creation and disruption are virtual opposites. This distinction is both practical and important, because people can create a lot of disruptive innovation while destroying value rather...

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