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How to Finance the Scale Up of Your Company

Posted on Aug 19, 2014 in Articles, 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...

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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 get this right, because the emergence of entrepreneurship as a policy priority has paralleled (and is at least partly in response to) disappointment with dictated industrial policy, barren “cluster” strategies, and the failure of a limited focus on a set of macroeconomic framework conditions (the so-called “Washington Consensus”). If we’re to prevent the enthusiasm for entrepreneurial ecosystems from also fizzling out,...

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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 than creating it. Extreme (and painful) example to make the point: On September 11th, 2001, a group of 19 men disrupted life as many of us knew it, killing thousands, shaking our feelings of safety, and disrupting the normal course of events in the world’s most powerful cultural and commercial center while negatively impacting the lives of many millions. The...

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Entrepreneurship Always Leads to Inequality

Posted on Mar 10, 2014 in Authored, Harvard Business Review

Originally published in Harvard Business Review on March 10, 2014 “Inequality is bad.” “Inequality is dangerous.” “Our system is at risk due to increasing inequality.” Wealth inequality is on everyone’s minds these days: citizens, political leaders, economists, policymakers and yes, business leaders. Unfortunately, simpleminded thinking and insensitivity are often clouding the conversation. Deservedly vaunted venture capitalist Tom Perkins’ callous, arrogant and elitist recent comments should not serve as an expedient excuse to overlook an important “dirty little secret” about entrepreneurship, the acknowledged engine of economic growth:successful entrepreneurship always exacerbates local inequality, at least in the short run. The $19 billion sale of WhatsApp’s to Facebook made Koum and Acton, overnight, vastly wealthier than their next door neighbors. The Boston Innovation District’s meteoric real estate prices are pushing the very entrepreneurs who made the district sexy towards neighboring districts where rents have not tripled since 2010. Tel...

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Not so Tech; Not so Startup.

Posted on Jan 23, 2014 in Authored, The Economist

Originally posted in The Economist on January 23, 2014 Daniel Isenberg, who created the entrepreneurship ecosystem project at Babson Executive Education, thinks that our special report on tech startups, “A Cambrian moment”, promulgates the misimpression that entrepreneurship is exclusively, or even largely, about small, accelerated, lean social media startups. We invited him to write a reply. THE distinction between tech and non-tech entrepreneurship is false. Today, every business venture, entrepreneurial or otherwise, requires technology to be competitive, whether it is diamond trading, transportation, construction, or energy. There is nothing intrinsically more technological about Twitter and Facebook, say, than about Harley-Davidson or American Express. In fact, medical devices and alternative energy are arguably more technology-intensive, generically, than any of the report’s wide-eyed examples. Furthermore, for any business, anywhere, ignoring the opportunities and necessities presented by technology is backing light speed into...

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4 Big Myths About Starting Your Own Company

Posted on Jan 21, 2014 in Authored, Bloomberg Businessweek

Originally printed in Businessweek on January 21, 2014 Entrepreneurship has become faddish of late, and business school students are not immune to the fervor. I have devoted more than 30 years to the study and practice of, and investment in, entrepreneurship, and here’s my advice: take a gimlet-eyed look at what the entrepreneurial life entails before you take the leap. Entrepreneurship is almost never about working in flip-flops in an incubator; it is tough work that requires extraordinary effort. It is super full-time and super risky. In today’s tough job market, “doing a startup” may sound better than “unemployed,” “getting my third master’s degree,” or “staying with my folks awhile.” But entrepreneurship is for those who are laser-focused on building a company that will scale; it is a marathon, not a sprint, usually requiring a decade or longer of commitment. Students, like the...

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