The post that follows was originally posted in the June edition of Keystone Edge. It is the second in a continuing series about what we at Ben Franklin Technology Partners and I personally have learned from over 150 incubator/accelerator clients.
In the first installment of this series of lessons we’ve learned from 30 years of incubating innovation we ironically described how there aren’t any universal entrepreneurial lessons to be learned. Instead of rote lessons that, if learned and memorized, will systematically lead entrepreneurs to success, we’ve instead accumulated a body of gut-informing experiences that we share with each new founder we meet. These experiences aren’t ‘the answer’ but rather are gentle nudges that help each entrepreneur find their own solutions. Promising founders can become successful entrepreneurs only if they are able to accurately translate that advice from us and others into their own uniquely personal situation. This is why so many investors invest in the person rather than the product. Not surprisingly, it’s the people and not the lessons that matter most. This emphasis on people is the core of the second lesson that entrepreneurship is about people not things.
The most important founder skill that cannot be taught is how to interpret the needs and wants of people in world. There are many who think that successful companies start with an invention. This, in my experience, is simply not true. New products start with an invention, but great companies start with innovation. Most people don’t think about the distinction of such things as invention vs. innovation, but we do and it’s an enormous distinction. We think of it this way: invention happens to products, but innovation happens to people. The general rule for us at Ben Franklin is that we believe entrepreneurs are people who identify market opportunities and then seek to create products to solve those problems. Inventors are not the best entrepreneurs because they tend to identify products…protein interactions for instance, or some magic algorithm…that demonstrate breakthrough science but then look for market opportunities where they can be applied. Usually, the market opportunities the founder later identifies are virtually everywhere. “This new product can help every consumer and every business everywhere,” is not likely to be an effective marketing and sales strategy. We have learned that it is generally better to start with an innovation for a limited market (aka, a group of people with a problem) and then work backwards to invent products to execute on the needs of those people.
My kids must certainly be tired of hearing me advise, as I have many times, that in life there are only two things that you will ever work on. You will only ever work on things or work on people. Most of our founders arrive at our door with incredible technical talents. They have studied and worked with electrons, molecules, algorithms and polymers. They elaborate on professional and academic experiences in which they developed and invented and hacked their way to breakthrough technologies. But all of these are things…things that can be examined and manipulated in environments controlled for all sorts of factors like temperature and moisture and vibration and load testing.
But things are not people. People do not behave like things. You can set a chemical reaction into motion, generally control the environment and time and time again, get the same results. However, selling and hiring and negotiating and purchasing do not occur in a controlled environment. And entrepreneurship is ALL about the uncontrolled environment of people. Co-founders, key first employees, suppliers, investors, customers…all people. Often in the case of customers and investors, you’re actually dealing with groups of collaborating people which adds another layer of complexity.
My ultimate point is to know your strengths and weaknesses before you launch a company. Building a great tech company absolutely needs a great product and, therefore, needs a team that knows how to invent things. But to significantly increase your chances of entrepreneurial success, you or your co-founding team needs to know how to innovate for people.