choosing a business partner: a framework for the entrepreneur
DESCRIPTION
This presentation explores a format for choosing a business partner by looking at a management model, successful traits of entrepreneurs and personality type.TRANSCRIPT
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Choosing a business partnera framework for the entrepreneur
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A new venture with a team is more likely to succeed
• The lone entrepreneur is a popular myth• A team approach is proven more likely to
succeed1
1. Timmons, J & Spinelli, S 2007, New Venture Creation: Entrepreneurship for the 21st Century 7th ed., McGraw Hill Irwin, New York; Schutjens, V & Wever, E 1999, “Determinants of new firm success.” Papers in Regional Science, vol. 79, no. 2, pp. 135-153.; Baron, R & Markman, G 2000, “Beyond social capital: How social skills can enhance entrepreneurs' success.” Academy of Managment Executive, vol. 14, no. 1, pp. 106-116.
2. Baron, R & Markman, G 2000, “Beyond social capital: How social skills can enhance entrepreneurs' success.” Academy of Managment Executive, vol. 14, no. 1, pp. 106-116.
“What there is in our business is plenty of plans, plenty of entrepreneurs, and plenty of money. What there’s a shortage of is great teams.”2
John Doerr, partner in a Silicon Valley venture capital firm
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So what makes a good entrepreneur?
• Developed an approach that looks at the qualities of a good leader and a successful entrepreneur
• Leadership and management models• Studies on successful entrepreneurs• Personality type
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Good leadership vital – and it’s a tricky balancing act
Positive framingConnecting
EngagingManaging
energy
Meaning
Impact: PresenceResilienceBelonging
Centered leadership: how talented women thrive1
1. Barsh, J, Cranston, S & Craske, R 2008, “Centered leadership: How talented women thrive.” The McKinsey Quarterly, vol. 4, pp. 35-48.
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A good social network gives your start-up a competitive advantage
• People will help you out, proving the economic theories wrong1
• A good network can get you opportunities not available on the market, or resources cheaply.2
• Have to obey the laws of reciprocity3
1. Witt, P 2004, “Entrepreneurs' networks and the success of start-ups.” Entrepreneurship and Regional Development, vol. 16, pp. 391-412. 2. Baron, R & Markman, G 2000, “Beyond social capital: How social skills can enhance entrepreneurs' success.” Academy of Managment Executive, vol. 14, no. 1, pp. 106-
116. 3. Witt, P 2004, “Entrepreneurs' networks and the success of start-ups.” Entrepreneurship and Regional Development, vol. 16, pp. 391-412.
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Social networks are only built through excellent social skills
• Vital for success once you are ‘through the door’
• Venture capitalists place great weight on social skills1
• Critical skills2:– Social perception– Impression management– Persuasion and influence– Social adaptability
1 & 2: Baron, R & Markman, G 2000, “Beyond social capital: How social skills can enhance entrepreneurs' success.” Academy of Managment Executive, vol. 14, no. 1, pp. 106-116.
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Make sure you are compatible – the Myers-Briggs Type Indicator1
Extraversion Introversion
IntuitionSensing
Thinking Feeling
Judging Perceiving
1: Krebs Hirsh, S & Kummerow, J 1998, Introduction to Type in Organizations 3rd ed., CPP, Inc., Mountain View.
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Soft skills are not enough, there’s an entrepreneurial skill-set too
• Management or entrepreneurial experience is a predictor of success1
• Need a generic set of hard skills in the venture2
MarketingOperations and productionsFinanceEntrepreneurial managementLaw and taxesInformation technology
1 . Schutjens, V & Wever, E 1999, “Determinants of new firm success.” Papers in Regional Science, vol. 79, no. 2, pp. 135-153.2. Timmons, J & Spinelli, S 2007, New Venture Creation: Entrepreneurship for the 21st Century 7th ed., McGraw Hill Irwin, New York.
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Who’s in charge? Choose the right ownership structure
• Democratic models mostly don’t work1
• Whoever has ownership has the power2
• Rewards need to be:– Differentiated– Performance based– Flexible3
1. Timmons, J & Spinelli, S 2007, New Venture Creation: Entrepreneurship for the 21st Century 7th ed., McGraw Hill Irwin, New York. 2. Lansberg, I 2009, Succeeding generations: realizing the dream of families in business, Harvard Business Press, Boston. 3. Timmons, J & Spinelli, S 2007, New Venture Creation: Entrepreneurship for the 21st Century 7th ed., McGraw Hill Irwin, New York.
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Choosing a business partner
Start your venture with a team, you’re more likely to succeed
Does your potential partner have the skills to lead?
Do they have a useful social network?
Is it backed with excellent social skills?
Are your personality types complementary?
Do they have the right entrepreneurial skills?
Can you agree on who’s in charge?