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?