Top Entrepreneurs Wired to Innovate, Challenge Status Quo

Published in UT San Diego, September 23, 2013

What’s the difference between founder Jeff Bezos and former General Electric CEO Jack Welch? Why do entrepreneurs recognize opportunities that successful corporate executives do not? Are their brains wired differently?

These are questions we often ask, so we were intrigued by the research results of a study conducted by three well-known business school professors — Clayton Christensen of Harvard, Jeffrey Dyer of Brigham Young, and Hal Gregersen of INSEAD business school. Since these are academics, the study has a long name — Entrepreneur Behaviors, Opportunity Recognition, and the Origins of Innovative Ventures.

Not everyone who starts or owns a business is an innovative entrepreneur — a differentiation we believe is important. The study defines innovative entrepreneur as “the founder of a new venture that offered a unique value proposition relative to incumbents” and “the person who came up with the original idea to start the venture.” Thus opening a dry cleaners or a restaurant does not qualify.

The researchers interviewed 25 impressive innovative entrepreneurs, including Marc Benioff, founder of; Jeff Bezos, founder of; and Pierre Omidyar, founder of eBay. They do not list the executives. We wonder why.

The differences that they found are striking. Innovative entrepreneurs:

• Are more likely to ask questions that challenge status quo.

• More frequently engage in active observation primarily of consumers and end users.

• More frequently experiment with a hypothesis in mind.

• Spend more time talking with a network of individuals who are diverse in both background and perspective.

• More frequently engage in pattern recognition, which is triggered from their questioning, observing, experimenting and idea networking.

• Are less susceptible to the status quo and more likely to be motivated to change the world.

Interestingly, the researchers found that these innovative entrepreneurs rarely invented something new. Rather they combined existing ideas and technology in new ways that allowed them to offer something new to the market.

It is very difficult to be an “innovative entrepreneur” in an existing company that has a culture, a product, a management team, a predictable cash flow and politics. We see this most frequently in our interactions with strategic partners, with large corporations who have the word “billions” somewhere in their financial statements. In order to make a deal with big companies, the entrepreneur must find a champion inside the corporation. Then he has to navigate the corporate world of budgets. If your product is not in the annual allocation, go back to square one and resubmit it in 12 months.

Neil comes from the movie business, and here is a statistic from him. If a movie executive said “no” to 100 percent of the movie ideas offered to him, he would be right 80 percent of the time. There is no job security in saying “yes.”

The entrepreneur wants to build “the first one” — that is the one that is impossible to finance, that is the one that every corporate executive says, “If it works, we are there for you baby on units 2 through infinity.” Great. When there is almost no risk, every armchair business development corporate genius can see the future. The trick is to see it before the clouds clear. Pattern recognition rules.

Network chitchat is imperative. The innovator goes to every event and works the room and talks and presents and pitches and tests his hypothesis with the network, with the crowd.

And finally, Neil says, “My dear Barbara, it is wiring. If I could get a job in corporate America, I would be fired before I parked the car on the first day. It is why you have to love Bezos and Jobs and Zuckerberg. They are wired to innovate.”

Rule No. 304:  If corporate America didn’t already exist, it would take an entrepreneur to invent it.

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