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Pinpointing That Critical Entrepreneurial Spark

By Joe Hadzima, Partner and Co-director of High Tech/New Venture Group, Sullivan & Worcester, jgh@alum.mit.edu

Those weighing if they are entrepreneur material, should consider the following:

Is there the requisite passion to succeed? John Preston, the entrepreneurial head of technology transfer at MIT, talks about "passion."

Entrepreneurs are driven to succeed. They will figure out ways to go over, under, around or through obstacles to reach their goal.

Entrepreneurs leave the impression that they are going to succeed, that their train is leaving the station and they will be on it, one way or another.

Prospective entrepreneurs should ask whether they are leaving their current positions because of something there, or because they have the passion to do something innovative.

Can they focus on success and set clear goals and accomplish them?

Because nothing succeeds like success, can the prospective entrepreneur sacrifice the perfect situation in order to generate some near-term successes that he or she can leverage? Entrepreneurs usually are not distracted by details that are not important to achieving the task at hand. That is usually the opposite of what it takes to succeed in a larger, more rigid organization.

Warning: Those who have this trait should make sure they get someone working with them who will worry about the details without dragging the effort down.

Entrepreneurs, however, probably will have more control over their situation than they did in a larger company.

But they shouldn't look to control for control's sake. They should inquire: "Am I a control maniac?"

If so, prospective entrepreneurs should ask if they would like to work with--and for--somebody like themselves.

Start-ups can be very stressful.

One of my start-up clients is a company founded by a former Digital employee and a former Data General employee, both in their 40s.

Each held very responsible positions with their prior employers and both worked long hours. They admit that they did not really understand stress until they started up their own company.

"At DEC I never woke up in the middle of the night in a sweat, unable to get back to sleep," says the entrepreneur-client.

Not all founders face that level of stress. The point is: Is the founder ready for stress and, perhaps more importantly, are the spouse and children ready?

A roller coaster metaphor is appropriate for several reasons.

A roller coaster provides highs and lows. Is the prospective business owner capable of managing such extremes? The highs and lows of a roller coaster usually come in rapid succession. Startups can also face rapid changes, and one should be ready for them.

Are roller coasters risky? Thrilling, perhaps; but not commonly thought of as being risky. Jumping out of an airplane without a parachute--now that is risky!

Although people often say that entrepreneurs are risk-takers, one will find that most of them don't jump out of airplanes.

On the contrary, while they're not afraid to undertake projects that might fail, they also work to minimize risk.

Are they innovators?

Entrepreneurs look at problems and craft new ways of doing things. Jonathan Harber was a co-founder of Digital Video Applications Corp. or DiVA, a company that developed and marketed digital video-editing software for the Macintosh. At the seminar series organized for entrepreneurs at MIT in January, Harber told how he set a "zero budget" marketing policy for DiVA. "If it cost money, we just wouldn't do it," he said, proudly.

The result? DiVA managed to attend tradeshows by appearing at other companies' booths. DiVA also got Ben & Jerry's to beta test DiVA's product and to donate its ice cream bars as a promotion for DiVA's product at tradeshows.

A larger corporation using traditional approaches to marketing would probably have spent $100,000--without achieving the same impact.

Can they build a team?

Entrepreneurs often think and act differently, but the most successful ones are not loners.

MIT Sloan Professor Ed Roberts in his book "Entrepreneurs in High Technology" (Oxford Press), reports on research that shows that entrepreneurial teams of three or more persons have a higher probability of success.

Are they capable of identifying their strengths and weaknesses? Are they capable of finding and motivating persons with complementary skills?

Are the founders control freaks?

Many people leave larger companies because they want to be their own boss. The simple fact is that no one is really their own boss. An entrepreneur must answer to many people, including customers, investors and employees.

For those who have answered these questions to their satisfaction and not dissuaded from starting a new venture, here are some homework assignments:

Hang out with people interested in entrepreneurial ventures. For example, attend the MIT Enterprise Forum, the WPI Forum at Worcester Polytech and the 128 Venture Forum.

Read extensively about entrepreneurial efforts in newspapers.

Join the entrepreneurial network. Talk to people. Get on Mailing Lists from the Big Six accounting firms, law firms, etc.

Read biographies--not only of today's entrepreneurs, but of those who have innovated in the past.

Ask what traits the person had that enable him or her to succeed. How did the person handle failure?

Above all, constantly plumb the soul and consider motivations.

Joseph G. Hadzima, Jr. is a partner at the Boston-based corporate law firm Sullivan & Worcester, where he heads the High Technology/New Ventures Group. He is also a Visiting Faculty member at the MIT Sloan School of Management. Telephone: 617-338-2866, Fax: 617-338-2880, Internet: jgh@alum.mit.edu.