Battling it Out During Tough Times: MBAs vs. Entrepreneurs

I am beginning to wonder if mainstream education and conventional wisdom is treating entrepreneurship all wrong.  Last week, I had a conversation with my boss-in-start-up, who introduced the term the “iterative process” into my business vocabulary.  Today, I came across this eye-opener.

The article, and the paper discussed, questions if there is any fundamental difference between the way MBAs and your average boot-strapping entrepreneur bring product ideas to market.  And the answer is a resounding yes.

1. Change the question.

During the research, it was found from the get-go, the two groups appear to attack two potentially different sets of problems.  Entrepreneurs prefer to be in an unpredictable market, since the market can “be shaped through their decisions” as well as their select group of stakeholders and customer-partners.  Reasoning that someone smarter and with deeper pockets can always come in and do it better than they do, many entrepreneurs stay off the beaten track and experiment with new markets themselves.

The researcher attribute this behaviour to to the logic: To the extent that we can control the future, we do not need to predict it. Whereas most MBAs are taught to act based on the assumption and logic that: To the extent that we can predict the future, we can control it.

2. Conqueror vs. explorers.

Alas, the paper is full of analogies like these.  Actions of MBAs are compared to Genghis Khan, whom given a pre-determined goals and set of means, seek to identify the optimal route and result.  An entrepreneur, on the other hand, is compared to Columbus, whom does not begin with a specific goal, but a given set of means.  They allow “goals to emerge contingently over time from the varied imagination and diverse aspirations of the founders and the people they interact with.”

3. Dealing with setbacks.

During business school, we used to write a lot of business, or marketing, or strategic plans, from every stage of the product life cycle to those dreaded case studies.  Usually towards the end of such plans, we stick in a section that deals with contingencies – what happens if one of the key variables or assumptions don’t work out?  In reality, of course, the whole piece on hand was based on nothing but assumptions.  But we still had to scratch our heads and attempt to answer to our self-selected obstacles.

It turned out that most successful entrepreneurs don’t work that way.  Although in fairness, I’m not sure product development within a corporate environment can be compared to one that takes place in the anarchic environment that entrepreneurs inhabit.

Based on the research, most of those self-starters initiate the process with little elaborate planning, and instead, executes plans that are constantly revised and recast through “action ad interaction with others on a daily basis.”  The end goal also changes at the beginning stage, because surprises that come along sway it so.  And instead of treating at those contingencies as unwanted elements in an otherwise deterministic path, the most successful entrepreneurs actually see it as the norm, “the flora and fauna of the landscape, from which one learns to forge a path through the jungle.”

I’m reminded of the article here that discussed the role side projects (many results of accidental discoveries) played in the entrepreneurial success of America.  We can probably add Twitter to that list in 2009.

4. The role people play.

Entrepreneurs are also highly dependent on a good team of people.  The network of enduring relationships outlive failures and create successes over time.  Essentially, MBAs will work with the idea that “a particular effect has already been chosen such as a target segment within an existing market, the people we hire an partner with will depend on the effect we want to create or the market we want to penetrate.”

On the other hand, the converse idea will dictate the actions of a self-starter. Markets do not pre-exist, they are only built with the people that are brought together to create it.  Thus, the ultimate creation is not a static entity, but one that is dynamic and ever-changing.

So given the current economic environment, the consensus it that entrepreneurs may fare better. Your thoughts?

The Social Construction of Gen Y

A couple of days ago, a fellow blogger commented on this rather unfortunate Fortune article on his blog.  It is interesting for several reasons.

First, the ideas are cookie-cutter and stale.  Us Gen Yers had been told (to a certain extent) that we were on the cusp of a great demographic shift, where baby boomers’ impending departure would wreak havoc on corporate health.  True, some of us were led to believe that our contribution would be valued at a premium, which would in turn translate into lots of choices and result in us hopping through the corporate environment at break-neck speed.  In reality? Highly unlikely.  The smart ones among us always knew that good jobs are competitive, and supply almost always outstrip demand, especially at the bottom rung. But the media kept up the propaganda – to what end, I don’t know.  Every once in a while, articles like this appear.

Second, the timing is totally off.  Because of economic realities, many boomers simply can’t afford to retire.  More and more Gen Yers find themselves in a much more competitive environment than they were led to believe.  Now everybody is learning to make do with less and to compromise.  Exactly who is out pandering to those misunderstood geniuses, I’m not sure.

The somewhat hilarious prescriptions thrown around by the Fortune writer, and the kick my blogger friend got out of it, reminds me of a book I heard about recently.  In this book, the authors address the various social and consumerist constructions of the Gen Y generation.  I took some notes, here’s a broad overview of the ideas.

School: the obsession with feeling good at all cost

According to the book, the ME culture evolved over several decades, but found its decisive start within the school system.  The baby boomer generation struck out, rejected authority and tried to find its own path.  In their children, they instituted and obsessed over instilling self-esteem.  Subsequently, various forms of formal, or informal self-esteem programs were introduced in school.  They generally aim to make children feel good about themselves at all times and at all cost, with messages like: you are special, you are unique, you are fine just the way you are.

This relentless focus on the self led to some friction as children of those baby-boomers moved through the school system.  In one instance, red pen were deemed too harsh a colour to mark mistakes, so lavender was used instead.  Participation trophies in sports were introduced.

Over time, various institutions have had to deal with this cohort and adjust to its various demands.  In universities, some professors are now faced with complaints when handing out marks: some children and their parents simply would not accept bad ones. In this case, education is viewed as a business transaction, and entitlement rears its ugly head: students are customers of a product, and universities are there to provide it.  Therefore, they feel entitled to walk away with a degree, and a degree with hounours at that.

The road to hell is often paved with good intentions.  Child psychologists now recognize that instead of instilling self-confidence and self-esteem in children, this generational focus on feeling good has created quite the problematic outcome.  The languages and tools used throughout the school system has created an environment where competition is eliminated or downplayed, criticisms are removed when deemed too harsh, children are protected from failures, and as a rule, any kind of output – meaningful or not, is lavished with praise.  In hindsight, this created us: a generation hooked on constant validation and affirmation, perhaps with an unrealistic sense of our own strengths and shortcomings.

The extent to whether the above analysis is in fact accurate, is questionable.  The teachers and lecturers I encountered during my school years were for the most part, fair, constructive, and honest.  But I have noticed the emergence in a brand of bland, neutral and non-critical teachers into the classroom. With various changes taking place in the education system, and more teachers seeing themselves not as teachers but facilitators, what can we expect from the next generation?

The market feeds the beast: unique, customized, and controlled by you

Marketing shifted its focus when it comes to psychological selling.  In the past, the advertising world used to sell based on aspirations.   The marketing message then was: you are not good enough unless you buy our products.  Since nobody will ever be “good enough”, one is left to buy in perpetuity.

That message lost its lustre a while ago.  The message that sells now is something quite different.  Marketers tap into our sense of entailment , our vanity, our need to feel good, and our need for “self-expression” and self-validation through the idea of: you are important, you are unique, you are great the way you are. Now all you need is a product that we have to express your uniqueness.

If we think of some of the most successful products and services to emerge in the past decade, what comes to mind? Facebook, Youtube, IPod, Starbucks.  What do they have in common?  They all capture our need to exert and broadcast our presence, our importance, and our uniqueness to the world.

The trend that pander to the idea of self-expression and self-importance developed when the current Gen Yers were still in their tweens – the term has only been in existence for under two decades.  It was back then marketers first tasted the success of marketing to kids that had their own brand of shampoo.  Since then, that market had been segmented and targeted as one that has the power to make or break products.  I know a little about that.  I still remember the Tomagochi craze and the hand I had played in that hype with my baby alien.

Since then, our generation had not been without this constant bombardment of “uniqueness” marketing.  Marketers are also astute to introduce a sense of “control” back to the consumers: you know better than us, so tell us how and what you want.  Starbucks sells to that – customized coffee experience; burger and sandwich places want to sell you “your” burger or sandwich; cultish spiritual books sell on that – The Secret is to conform the world to your divine force; new condos targeting young urban yuppies – customize your living space by checking a few boxes.

Of course, the true irony of the situation is: the more we buy into the message of customization, the more we are essentially the same.  No matter what colour of IPod we choose, how obscure our coffee order is, or what kind of boxes we tick off when it comes to picking our condo tile or flooring colours, we are buying into the same message of uniqueness.

Arguably one of the most consistently powerful and seductive marketing pitch of our time is one that centres around the idea of: you deserve it.  The L’Oreal commercial and Oprah alike appeal to their audiences this way.  There’s nothing wrong with leading the best life that we can have.  But after years of the same self-congratulatory refrain, we have internalized the idea that luxury is for the masses and not only the rich.  In doing so, we have become accustomed to living the life we want, or “deserve”, rather than the life we can afford.  That sense of entitlement has us hooked on swiping those credit cards.  In one way or another, those self-affirmation and feel-good principles seeded during our school years, carefully nurtured by teachers, parents and marketers alike, came to fruition.

Now, the workplace

The problem gets a little more interesting when my generation enters the workforce.  The old guards are not used to tell us how valuable we are, or hold our hands for constant validation or feedback, or have the patience to listen to our unidirectional broadcast.

All the arguments given above is predicated on the idea that we are indeed a cohort, and this kind of attitude is prevalent in our generation.  In many cases, family influences can trump socialization.  Even so, I have to say that whether I like it or not, my generation probably embodies more Me-ness than generations past.  Whether these are attributable to our age and brashness, or some wider social forces, I cannot be certain.

But the ego-massaging activities the marketing community readily offers is beginning to seem more cynical than clever to me.  If they are indeed fostering a generation that is both insecure and vain, unable to cope with failure and assess ourselves critically and realistically, then perhaps we are better off without them.