Dr. Jeff Cornwall is the inaugural Jack C. Massey Chair in Entrepreneurship at Belmont University in Nashville, Tenn. Dr. Cornwall's current research and teaching interests include entrepreneurial finance and entrepreneurial ethics.

Dr. Jeff Cornwall is the inaugural Jack C. Massey Chair in Entrepreneurship at Belmont University in Nashville, Tenn. Dr. Cornwall's current research and teaching interests include entrepreneurial finance and entrepreneurial ethics.

What Makes an Entrepreneur — Daddy’s Money?

Marginal Revolution has a post on a paper that suggests that Brazilian entrepreneurs. The authors of this paper report the following:

We find that family characteristics have the strongest influence on becoming an entrepreneur. In contrast, success as an entrepreneur is primarily determined by the individual’s smartness and higher education in the family. Entrepreneurs are not more self-confident than non-entrepreneurs; and overconfidence is bad for business success.

The paper also reports that social networks help determine who becomes an entrepreneur, but not how much success they will enjoy once they start their ventures.
These findings are certainly consistent with findings in other places around the globe. Culture and family background point you toward a career as an entrepreneur, but your wits and education are what lead to success.
Culture plays a major role in fostering entrepreneurship. Culture begins with the family and then extends to the community. This study suggests that family and social relationships are the strongest predictor for entrepreneurial activity. Note the lack of any findings on the importance comprehensive government planning in this paper!
Of course, there are those out there who seem to interpret these findings as evidence that entrepreneurship is only an avenue for the economic elites. The blog Stumbling and Mumbling sees it this way).:

In other words, what makes an entrepreneur is access to capital – the sort of access that comes from having a wealthy background.

We all know where this type of perspective often takes us.
It is a long stretch to conclude that since entrepreneurs often come from successful parents, it must be the capital they give to them that makes their children more likely to become entrepreneurs.
Access to capital does not correlate very highly with entrepreneurial outcomes. That is, more money at start-up does not predict more entrepreneurial success. If that were true I would suspect that venture captialists and angels would have much higher than the typcial 10% success rates that they often see in their rather sizable investments.
It is more likely that these economically successful parents have instilled ethics and values in their children that reinforce the importance of success, self-reliance, and education.
(Thanks to Nathan Ratcliff for pointing me toward this discussion).

Adding to the Team

The thought of adding executives can be overwhelming to entrepreneurs who own fast growing companies. In fact, even the thought that they need “executives” can be mind bending. Which position should I add first? How do I know what type of talent I need?
What can help with this is to create a Team Development Plan.
– Start with a self-assessment of your strengths, weaknesses, and skills. Keep doing what you are good at, and add folks who can pick up your weak areas. If you strength is marketing, build a team that complements this strength.
– Develop a plan that allows you to work on your business and not just in your business. This means you not only add people to your team, but you must work toward creating a whole new “job description” for your role.
– Before you run out and hire outsiders, assess the potential of current team/staff to take on more responsibility. It is almost always cheaper to grow your own talent. However, most of us overestimate the abilities of our employees to grow into these new roles quickly enough. And some just really won’t want the added responsibilities.
– Based on an inventory of all of your management needs over the next few years, create a plan to train current staff and bring on new talent with clear priorities and milestones. Timing is everything. Bring people in too soon, and it creates an overhead drain that can badly impact cash flow. Bring them on too late, and the company may not be able to handle the challenges of growth.
– A word of caution. Don’t just look for people with the right skills and experience. Make sure each new team member will fit with your culture. The right fit with your culture can be just as important as their technical abilities.

Belmont has Two Social Ventures in Running at ideablob.com

Belmont students have two ideas in this month’s ideablob.com competition. Both are ventures based on social entrepreneurship business model. As of this morning they hold the top two spots in the voting.
Noah Curran’s idea is called Turning Actions into Good, which is a web-based non-profit charity which revolves around the kindness of strangers. The concept allows anyone who feels compelled to participate in a charity, regardless of their financial status, a way in which to contribute. If people want to get involved, they can do it in a variety of ways. Whether it is through actions or through generosity, anyone can do an act of kindness. What makes all of this possible is the facilitation of the official TAG website.
Jancie Dotti summarizes her ideablob entry as follows:
“I want to create a completely fair trade, completely organic coffeehouse that sponsors social justice causes while taking care with the environment. In addition to serving fair trade coffee, we will also only use fair trade sugar, tea, and cocoa as we educate our consumers on how their buying habits affect the working poor in developing countries. Every month, this coffeehouse would sponsor a social justice cause–promoting awareness to customers about worldwide issues of injustice. This coffeehouse will also have free wifi, live music, local art–all with a community emphasis.”
Join in this month’s ideablob. And while you are there, vote for one of Belmont student ideas!

Creating Balance Every Morning

Sam Davidson of CoolPeopleCare sent me a link to a blog post that offers “10 Morning Rituals For The Healthy Entrepreneur“. While these can feel a bit hokey at first, it is important to engage in this type of routine. It can be a key element for creating temperance in our lives. Work can so easily become all consuming, especially for the entrepreneur.
Reading this reminds me of the routines that I value that I have let slip a bit lately….
– Quiet reflection or prayer sitting on my back porch early in the morning with my first cup of hot coffee.
– Taking my daily walk with my wife (and our dogs, of course).
– Attending morning mass on the way to work.
Lent is right around the corner. I think I will commit to bringing these things back into my daily routine rather than try to find something to “give up” for Lent.

Calling All “Edisons”

Everyday Edisons, a PBS reality series chronicling modern inventors and the development of their inventions, announces its 2008 casting call schedule to be held in major cities throughout the nation in search of Season Three participants. The show considers all categories of invention, ranging from sketched ideas and simple concepts to detailed, patented designs and factory prototypes.
The Everyday Edisons panel of judges, including product development and patent law experts, will provide a forum for participants to present and demonstrate original ideas. The judges will select 10 to 12 inventors to be featured in the third season of Everyday Edisons, which chronicles the inventors as their concept is refined, produced, marketed and sold.
The remaining Everyday Edisons 2008 casting call schedule includes:
– SAN JOSE – February 16
– DALLAS – March 15
– CHICAGO – April 19
– NORTHEAST LOCATION TBA – May 17
Participants with factory prototypes or finished products will be reviewed by the judging panel, as well as representatives from major retailers, including Bed Bath & Beyond, Home Depot, QVC, PetSmart, Staples, The Sharper Image and buybuyBABY. Previous inventions featured on Everyday Edisons range from a convertible baby bag and kitchenware product to a family board game and construction tool.
Interested? Go to their web site here for more details.

Viral Marketing

ideablob.jpg
The ideablob.com team talked to one of our classes about viral marketing.
Just like “word of mouth”, viral marketing doesn’t just “happen.” It is an intentional strategy. Viral marketing campaigns work, according to Ami Kassar from ideablob.com, because of two things.
First, you need a hook. People need a reason to spread the word about your business. With ideablob.com the main hook was the prize that people could win for the best idea. It is also a cool site to play with.
Second, you need to tap into the need that people have to connect with one another. For ideablob they found a way to help entrepreneurs connect with each other. Entrepreneurship can be quite a lonely pursuit.
Viral marketing never just happens — it must be intentional and must resonate with your customers.

The Wisdom of Counsel

ideablob.jpg
In the discussions between our Belmont entrepreneurs and the ideablob.com team last evening, the topic centered on the value of getting multiple perspectives when facing a decision — of seeking wise counsel from people with experience and expertise. Seeking counsel is one of the practices that Mike Naughton and I talk about in relation to the virtue of prudence in our book about being a good entrepreneur titled Bringing Your Business to Life (due out later this spring). Prudent entrepreneurs are good stewards of the resources available to them for their businesses, including investment and other start-up capital, employees’ labor, customer trust, and so forth.
Seeking counsel is never more is never more important than when considering whether to launch a new business and how to best position it for market entry. Aspiring entrepreneurs should not seek out only those who act as cheerleaders to their dreams. Find people with expertise and experience who are willing to bluntly tell you the flaws and weaknesses in your plans. My students call this being “Cornwalled” when I offer my honest assessment of their ideas and plans. I always encourage them to seek more perspectives than mine. More than once I have failed to see the wisdom of a new business idea!
One of the things I like about ideablob.com is that it is creating a forum that dramatically widens your circle of people who can offer counsel on new ideas. Many of the people who frequent the site are passionate about entrepreneurship.
Seek wise counsel on your ideas from several people with different backgrounds. Listen to their counsel — never argue. Reflect on all of what you here and look for common threads that you can use to make your idea stronger. It will improve the odds that your idea is really a good business opportunity, that you will position it properly when you launch, and that you will realize the success that you dream of.