Seyed Masoud Hosseini · Overview · Study log · Weekly summaries · Ideas · Search · Transcript · RSS feed

New Enterprises · Lecture 5 of 12 · 7:59

Lecture 5: Six Myths of Entrepreneurship

Study guide

What this lecture covers

This lecture directly challenges popular assumptions about who entrepreneurs are and how they operate. Aulet goes through six widely believed myths and explains, with research and examples, why each one is false and why believing them can actively discourage people from starting companies.

After watching, you should be able to name the six myths, explain why each is misleading, and understand why the course is titled "disciplined entrepreneurship."

Key ideas

Myth 1 - smartest in the room: entrepreneurs are not typically valedictorians; they tend to focus intensely on what excites them and neglect the rest, which is why some drop out of school.
Myth 2 - lone individuals: research from Ed Roberts shows teams consistently outperform solo founders, up to a point, making entrepreneurship a team sport.
Myth 3 - born not made: there is no statistical link between having entrepreneur parents, or any specific gene, and becoming an entrepreneur; it is a learnable skill.
Myth 4 - love risk: successful entrepreneurs avoid gambling and instead take calculated risk in areas where they hold an asymmetric advantage, while "de-risking" everything else, as illustrated by the MIT Blackjack Team.
Myth 5 - charisma drives success: MIT leadership research links success in change-making to vision, sense-making, relationships, and execution ("innovation engineering") rather than charisma.
Myth 6 - undisciplined: real entrepreneurs need extreme discipline to compete as the resource-poor "attacker" against better-resourced incumbents, which is why Aulet calls his framework disciplined entrepreneurship.

Before you watch

Watch the earlier lectures in this course, since this one assumes familiarity with the course's framing of entrepreneurship as a teachable discipline.

Check your understanding

What does the research on entrepreneurs and academic achievement actually show?
Why does team size correlate with a higher chance of success, according to Ed Roberts's research?
How does Aulet distinguish "calculated risk" from the kind of risk-seeking often attributed to entrepreneurs?
What five qualities does Aulet substitute for charisma as drivers of successful change?
Why does Aulet argue that discipline, not looseness, defines successful entrepreneurs?

Vocabulary

myth (noun): A widely believed idea that is actually false.
The lecture debunks six common myths about entrepreneurs.
valedictorian (noun): The top-ranked student in a graduating class.
Entrepreneurs are often not the valedictorian of their class.
solo founder (noun): A single person starting a company alone, without co-founders.
Research shows teams outperform a solo founder on average.
statistical link (noun): A pattern in data showing two things are related.
There is no statistical link between having entrepreneur parents and success.
calculated risk (noun): A risk taken after carefully weighing the chances of success and failure.
Successful entrepreneurs take calculated risk rather than blind gambles.
asymmetric advantage (noun): A benefit one side has that the other side lacks, giving them an edge.
The blackjack team relied on an asymmetric advantage in card counting.
de-risk (verb): To reduce or remove danger from a situation before taking action.
Skilled entrepreneurs de-risk everything they can before betting big.
charisma (noun): A charming and persuasive personal quality that attracts others.
Charisma is not what actually drives most successful founders.
vision (noun): A clear, forward-looking idea of what you want to achieve.
A strong vision helps guide a company's direction.
execution (noun): The act of carrying out a plan effectively.
Good execution turns a vision into a working company.
discipline (noun): The ability to control your behavior and follow a plan consistently.
Discipline is essential for a founder competing against bigger rivals.
attacker (noun): A smaller, newer competitor challenging an established player.
A startup often plays the role of the attacker against incumbents.
debunk (verb): To prove that a widely held belief is false.
The lecture debunks common myths about entrepreneurs.
research (noun): Careful study done to discover facts or test an idea.
Research shows teams do better than solo founders.
resource-poor (adjective): Having very limited money, people, or tools available.
Startups are typically resource-poor compared to big companies.
gambling (noun): Risking money on an uncertain outcome for possible gain.
Successful entrepreneurs avoid pure gambling in their decisions.
sense-making (noun): The ability to understand and explain a confusing or complex situation.
Sense-making helps leaders guide others through uncertainty.
relationships (noun): Connections and trust built between people.
Strong relationships help a leader drive real change.
compete (verb): To try to win against others in a contest or market.
Startups compete against much larger, better-funded companies.
card counting (noun): A technique used in card games to track which cards remain, improving the odds of winning.
The MIT Blackjack Team used card counting to gain an edge.

From the YouTube description

MIT 15.390 New Enterprises, Fall 2013
View the complete course: http://ocw.mit.edu/15-390F13
Instructor: Bill Aulet

Discussion of the six key myths around entrepreneurship, such as "Entrepreneurs are undisciplined," "Entrepreneurs are all about charisma," and more. Uncover key myths about entrepreneurship that after often not just untrue, but also unproductive.

License: Creative Commons BY-NC-SA
More information at http://ocw.mit.edu/terms
More courses at http://ocw.mit.edu

← Lecture 4: Three Ways to Start a Company · Lecture 6: How to Do Market Segmentation →