Culling from their own experience launching new companies and interviews with 55 entrepreneurs around the world, Christopher Gergen and Gregg Vanourek, co-founders of New Mountain Ventures, a Colorado leadership development company, recently published Life Entrepreneurs: Ordinary People Creating Extraordinary Lives (Jossey-Bass; March, 2008). In it they explain the growing "life entrepreneurship" movement and make the case for integrating work and life.
BusinessWeek's Stacy Perman spoke with Vanourek about practical strategies and why an economic downturn can be a good time to start a business. Edited excerpts of their conversation follow:
You make the point that a growing number of people are rejecting traditional careers and becoming entrepreneurs. Why is that?
I think there is a change in values in society. There is a generation of people looking at the older generation who worked for extended periods for Corporate America or had a single career [and rejecting that way of life]. They [feel] those kinds of careers don't allow them to be innovative and creative.
In your book, you talk about entrepreneurs building lives around purpose, connection, and impact. Is that not possible within a traditional career structure?
It's definitely possible. It's just that lots of people are choosing a new path—self-direction is an increasing phenomenon. The key to this mindset and approach is to create a fulfilling, productive life.
In large corporations we talk about intrapreneurship—being an entrepreneur within a big enterprise. There are lots of examples of this where there is a bottom line, room for innovation, and a war for talent. [Corporations] want to attract the most talented people and retain those who have the entrepreneurial instinct, and make sure they don't bail because the company is too staid or bureaucratic.
You make the point that a recession may be one of the best times to be an entrepreneur—how so?
There are a few reasons. First, the landscape is different, and going through a downturn presents new opportunities. And finding new opportunities is what allows an entrepreneur to be successful. Entrepreneurs look at home prices, foreclosures, and companies retrenching, and in each one of those changes is an opportunity for an entrepreneur to do interesting things. A smart entrepreneur can spot those trends and take action to improve his own conditions.
Second, an entrepreneur can be nimble and respond more quickly to market shifts than a big corporation. It goes back to the entrepreneurial approach: they take ownership and are comfortable with risk. They are used to managing cash and can flourish when times are tough, when others are struggling or pulling back.
While most entrepreneurs are comfortable with risk, most other people are not, so wouldn't switching from a traditional job to start your own business in a downturn seem more daunting?
The common perception of entrepreneurs is that they are more risk-seeking compared to others in the population. We interviewed 55 people around the world and it turned out that wasn't necessarily the case. Their risk profiles ran the gamut. But in all cases they were adept at managing risk, and understood that risk is part of today's global economy. A lot of people who aren't entrepreneurs find they have the skills to take on and mitigate risk. It doesn't require a magical, risk-seeking personality to be a successful entrepreneur.
One of the things you talk about in the book is "adaptive persistence" that allows people in existing organizations to anticipate disruptions to the market and to recognize opportunity—what is a good example of this?
Howard Schultz of Starbucks (SBUX) had adaptive persistence. Starbucks was an existing company and he traveled to Italy and saw the power of the barista and wanted to bring that experience to America. He presented the idea to Starbucks and they rejected him multiple times. At one point he got approval to try it out on a limited basis and he went to raise equity and was working without a salary for a while. His wife was pregnant and he was ready to give up but didn't. He was able to leverage his network to stave off threats of his vision going under and stuck with it. And now Starbucks is what it is today.