A Thought Leader Guest Post from Dr. Fred Haney, Author of The Fundable Startup:
Entrepreneurship vs. Executive Management
“All our dreams can come true, if we have the courage to pursue them.”— Walt Disney
If you have read “The Fundable Startup: How Disruptive Companies Attract Capital,” you know that I have struggled to understand the difference between “entrepreneurship” and being a successful CEO. I know that entrepreneurial studies programs try to teach students how to build businesses, but I have always felt that there is a disconnect between the essence of entrepreneurship and the essence of the processes involved in building a successful business. Let’s look at the definitions.
An "entrepreneur" is a person who organizes and operates a business or businesses, taking on greater than normal financial risks in order to do so.
A “CEO” is a chief executive officer, the highest-ranking person in a company or other institution, ultimately responsible for making managerial decisions.
To “manage” is to be in charge of (a company, establishment, or undertaking)
“Startup” is the action or process of setting something in motion.
We know these words, but in day-to-day usage they have connotations that reach beyond their dictionary definitions. Venture capitalists like to invest in founders who are entrepreneurs with great vision and passion. But they also want their companies to be managed by CEOs who have proven their ability to get the job done. And looking back at successful startups, it is clear that some mix of the two was involved.
So, what’s the difference? Where does entrepreneurship stop and management start? What is the difference between being a successful entrepreneur and creating a successful startup? Or being a successful CEO?
After making a keynote speech about The Fundable Startup, I received some questions that prompted me to pursue a novel thought process. I decided to research online articles about entrepreneurs, CEOs and startups to find out what words, or connotations, are most frequently associated with each concept.
What Makes a Successful Entrepreneur or CEO?
I performed an experiment that, while not highly scientific and controlled, offers some interesting insights. I searched on-line for the following phrases:
- “What it takes to make a successful entrepreneur”
- “What it takes to make a successful CEO”
- “What it takes to make a successful startup”
I captured approximately 12,000 words on each topic. This was not the total available, but it represented approximately the first 12,000 words for each topic and generally the first two pages of search engine results. Then I counted the number of occurrences of some important words in each category and I identified the words more frequently associated with each category—as well as different combinations.
This analysis focused on 61 words that are used to describe “successful entrepreneurs,” “successful CEOs” and “successful startups.” They appear a total of 1,816 times in the three sets of articles. Forty one percent of the words appear in the “successful startup” articles. Thirty five percent of the references appear in the “successful entrepreneur” articles. But only 23% of the references appear in the “successful CEO” articles. I believe this variance is a result of different styles in writing about the three subjects. Articles about entrepreneurs and startups are packed with jargon specific to those topics. The articles about CEOs are written in much more general, process-oriented language.
Summary of Results
The table below summarizes the number of references to each of four key words in the three article categories:
In a highly distilled way, these articles tell us that:
- Successful entrepreneurship is largely about passion (20 references vs, 2 for CEOs)
- Successful CEOs are about “management” and “process” (48 references to “manage” and 14 to “spreadsheet”)
- Successful startups are about “markets (93 references)
The entrepreneurial focus on “passion” is not surprising. But successful CEOs do not talk about “passion.” They are more focused on dispassionate management. The CEO articles mention “manage” 48 times and the entrepreneur articles only mention it 6 times. This seems to suggest that concepts of “management” are de-emphasized in the entrepreneurial world. Finally, the word “markets” is mentioned 93 times in the articles about “successful startups” and only 10 times in the “successful entrepreneur” articles and 9 times in the “successful CEO” articles.
The results, summarized in this manner, not only confirm my suspicions about the differences in the way the words “entrepreneurship” and “management” are used; they highlight the differences between ...
About the Author
Thanks for this Guest Post to Dr. Fred Haney, the Founder and President of the Venture Management Company, a firm that provides assistance to high tech companies. He is the author of The Fundable Startup: How Disruptive Companies Attract Capital, published by Select Books of New York.
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