"The Lean Startup" Author Eric Ries On Entrepreneur Being A Job Title

1) What's the biggest lesson you learned in 2012?

"That entrepreneurship is a new corporate function. I have been saying for a few years now that entrepreneurship is a management discipline. But I had not really understood until this year that this means companies need to have a functional department dedicated to it. If companies are looking to have teams build new disruptive innovations, each team should have a leader whose business card says 'entrepreneur.' And when you start to think that through, you realize that person is going to need to report to someone who understands how to hold entrepreneurs accountable, which is a very different problem from holding general managers accountable. Entrepreneurs can't forecast accurately, because they are trying something fundamentally new. So they will often be laughably behind plan--and on the brink of success."

2) How do you think you'll apply it in the year ahead?

"I used to think that only big companies and students had to study entrepreneurship. 'Real entrepreneurs just do it.' A lot of entrepreneurs hate big companies. But if you hate them so much, why are you trying to build a new one? The truth is, as soon as a startup has any kind of success whatsoever, it will face big company problems. How do we balance serving new customers with the needs of existing customers? How do we build new teams to go explore new opportunities and build new products? So one of my goals for the year ahead is to help entrepreneurs meet these challenges head-on by learning to systematize things that they do naturally. It's one thing to have the personal agility to make a bold pivot. But how do you teach that skill to your employees? How do you help them become the entrepreneurs your company will need to succeed for the long term?"

More Lessons for 2013 from some of today's most innovative business thought leaders here.

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3 Comments

  • EdRodPOV

    I've done this before, i.e., intrapreneuring. There is a lot more to it, but top of mind there are a number of hazards to keep in mind. There is a continual struggle for resources, and defending their allocation, versus a company's core business. The "Innovator's Dilemma" as described by C Christensen increases in proportion to the novelty of the offering or market. The NIH syndrome often appears. Champions and senior management commitment can wane if milestone achievement expectations are not met, and these are often derived from the core business experience and not the particular milieu of the innovation. Unlike the entrepreneur who keeps trying when one avenue does not pan out, intrepreneurs often get only one chance. In short, the spirit of the comment is correct on the need for corporate entrepreneurs, but whether an organization is likely to follow through in practice, when it might be less risky to buy or license an offering or smaller company, is something that should be studied very clinically. CEO's often think they can do anything, but the cultures, practices, pre-established organizational fiefdoms, and resource competition with core business among other factors make navigating the corporate intrapraneuring waters a hazardous undertaking that should be led by someone who has been there before.

  • Guest

    In economic terms, entrepreneurs serve a 'coordination' function in the market.  In other words, they bring together capabilities and resources to produce something new.  Since they are in competition, this must be done 'first' or 'quickly' in order to not fail (waste effort or resources, like time).  

    Any manager has the option of finding synergy between resources and capabilities, to coordinate, to produce value of some sort.  But I can see the point of labeling some managers as 'entrepreneurs' - because the measurement of these people's success should be different than how we normally measure managers. 

    This is another reason I believe Agile methodology for management is useful.  Entrepreneurship implies 'unknown' as they are going to make 'something out of nothing'.  So, using a system to manage complexity is going to make more sense than a system to manage a complicated, yet certain process.  

  • Hugo Castro

    If I understand it correctly Eric is saying startup teams should have a management guy, who will be responsible for keep things on tracks while the rest of the team is building the product?