Newton Campos, a good friend who lives in São Paulo, Brazil, is one of those rare people who is at home in both the business world and academe. He’s executive vice-director of the Private Equity and Venture Capital Research Center at FGV-SP — and he’s a professor at both Fundação Getulio Vargas (Brazil) and IE Business School here in Madrid, Spain.
Newton (@phdnew) has more than 20 years of experience in business development for technology and educational services. During those two decades, he has lived on four different continents and visited more than 50 countries for professional and academic purposes. A true master of the subject on entrepreneurship, he has developed a special expertise on the role of obstacles and social networks for entrepreneurial ventures in emerging and underdeveloped economies.
With the publication of his new book, The Myth of the Idea and the Upsidedown Startup: How Assumption-based Entrepreneurship has lost ground to Resource-based Entrepreneurship, I asked him if he could write a short post for The Nextsensing Project. He has a lot of wisdom to share. Here’s a quick sample.
“Passionate, creative, disruptive, persistent, admirable, authentic, inspired…
The list at times feels infinite. In the beginning of the 21st century, it seems there are too many words in the vocabulary to describe an “entrepreneur”. Ever since I first started observing entrepreneurship in the 1980s, I have seen the entrepreneurship ‘movement’ emerge, spread and become globally indispensable.
With hundreds, if not thousands of non-governmental organisations (NGOs), governments and business firms currently promoting entrepreneurial activities and initiatives as something not only necessary but also “vital to human progress”, entrepreneurship has become something almost religious.
However, the word entrepreneurship only became popular after the 1990s. As a global phenomenon, then, it is still something relatively new. As it happens with most not totally comprehended phenomena, unanswered issues end up spreading in the form of myths — and, with entrepreneurship, the situation is not different. For example, there is a myth that entrepreneurs create jobs. That’s not necessarily true. Sometimes they do create jobs, but sometimes they also destroy a lot of jobs. Think about what Netflix did to Blockbuster, the movie rental store.
Another myth says that entrepreneurs are good for society. That’s not necessarily true either. Only responsible entrepreneurs are good for society. Imagine entrepreneurs who pollute the environment or corrupt government authorities.
One of the main myths I like to address in my classes is the “Myth of the Idea”. Most people think that entrepreneurs are very creative people who start their ventures based on amazing ideas. This can happen, but it’s very uncommon. Many studies in the field, including my own, show that most entrepreneurs don’t start with a great idea but with key networked resources. Good ideas emerge afterwards and aren’t as important as people imagine.
Instead of following the traditional start-up development formula in which the idea assumes a central role in the entire entrepreneurial process, research has shown that we should replace this initial point of view with a new appreciation for the proper use of resources that are already available to potential entrepreneurs. That’s because access to resources invariably leads to better execution; and, from good execution, all sort of ideas can be properly tested.
The implications of this re-reading of the entrepreneurial process are significant. At this exact moment, there are literally thousands of start-up competitions running within companies, trade fairs, schools, universities and governments around the world. And all of these seem to have a focus on the myth that entrepreneurship is triggered by some “great idea” that will inspire a winning venture. This view of how entrepreneurs really work is far too limited in its reach.
Allow me to propose a new way of defining the entrepreneurial process. By putting coordinated or networked resources in the epicentre of the process, the idea moves to a more humble subaltern and supportive role within the entrepreneurial framework.
Do you want to start a venture?
If so, you no longer have to wait for some unique and amazing idea to suddenly spring to mind. There is no need for countless ideation sessions, intense brainstorming, design thinking or other conceptual tools of innovation that confuse or decelerate the beginning of the entrepreneurial process. Nor should you feel that you have to bring great ideas to an existing entrepreneurial project that is lacking conceptual thrust. Instead, I recommend a reverse or upsidedown way to start and grow a venture. As I argue in my book, execution is emerging as the main source of entrepreneurial achievement around the world.
People are still allotting far more weight to the importance of the great idea as the key to entrepreneurship. The entrepreneurs I’ve met and studied show that there are many other, better ways to move forward. The vast majority of people can explore their entrepreneurial potential even without having a perfected sustainable idea in mind for a venture. In fact, those who stand the best chance to sustain a new venture will invert the entire order of the traditional entrepreneurial process by simultaneously diminishing risks while augmenting the chances of a favorable outcome. And best of all, this is not just a theoretical proposal but a practical method for success.”