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Overtraining and Entrepreneurship

Vipul and I have had a long-running discussion on why certain people have the mentality to build a startup and others do not, and how this seems to be completely uncorrelated with raw intelligence. I argued for a long time that my academic training leads me to abstract new ideas into old frameworks for analysis, as well as leads me to discount the impact of certain new ideas. In some ways, it is a decidedly Hegelistic view of knowledge, but one that has worked for me for some time. Vipul, on the other hand, has argued to me that all the potential impacts of a technology can never be seen at the onset of the company, and that belief in yourself and faith in your concepts and your team will carry you through. I had a great deal of difficulty seeing his point of view until I read Crossing the Chasm and The Innovator's Dilemma, both of which speak to and provide numerous proof points for Vipul's world view.

An article popped up on this weekend's BoingBoing that addressed the very idea that young (under 30), untrained people make better entrepreneurs than older, highly experienced people. The author makes several excellent points about the almost beautiful arrogance of a young engineer to believe they can change the world with a simple idea.

However, amongst other issues, the author doesn't speak much to the extremely high failure rate of new concepts, or the expectation (probability definition) that a given idea will pay off. ("Expectation of career success" is not a new idea, also; there is a good section in Fooled by Randomness on this topic.) Additionally, several of the technologies listed weren't really viable for making money using the business models successfully applied by their usurpers. Yahoo, for example, relied upon human categorization of content and a relatively unsophisticated search algorithm compared to Google, whose PageRank algorithm made the monetization of search, through AdSense, far easier. It isn't that people who have been around the business longer don't see these new opportunities, and it is far more often the case that the organizational structure prevents them from implementing some whizbang new technology that would assist their core business and open up new markets rather than pure ignorance of the changing space.

Anyways, in short, the article is very much worth the read for anyone who asked themselves why did person X start a company while person Y did not.

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This page contains a single entry from the blog posted on May 21, 2007 9:36 AM.

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