Burn the Business Plan: What Great Entrepreneurs Really Do

Burn the Business Plan: What Great Entrepreneurs Really Do

by Carl J. Schramm

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Overview

“The evangelist of entrepreneurship” (The Economist) reveals the true stories about how a range of entrepreneurs created their successful start-ups: hint, many of them never began with a business plan.

Business schools teach that the most important prerequisite for starting a business is a business plan. Nonsense, says Carl Schramm in Burn the Business Plan, who for a decade headed the most important foundation devoted to entrepreneurship in this country. Microsoft, Apple, Facebook, and Google are just a few of the companies that began without one.

Schramm explains that the importance of a business plan is only one of the many misconceptions about starting a company. Another is the myth of the kid genius—that all entrepreneurs are young software prodigies. In fact, the average entrepreneur is thirty-nine years old and has worked in corporate America for at least a decade. Schramm discusses why people with work experience in corporate America have an advantage as entrepreneurs. For one thing, they often have important contacts in the business world who may be customers for their new service or product. For another, they often have the opportunity to strategize with knowledgeable people and get valuable advice.

Burn the Business Plan tells stories of successful entrepreneurs in a variety of fields. It shows how knowledge, passion, determination, and a willingness to experiment and innovate are vastly more important than financial skill. This is an important, motivating look at true success that dispels the myths and offers invaluable real-world advice on how to achieve your dreams.

Product Details

ISBN-13: 9781476794372
Publisher: Simon & Schuster
Publication date: 01/08/2019
Edition description: Reprint
Pages: 288
Sales rank: 472,708
Product dimensions: 5.40(w) x 8.30(h) x 0.90(d)

About the Author

Carl J. Schramm is an American economist, entrepreneur, and former President and CEO of the Ewing Marion Kauffman Foundation, a private philanthropic foundation. The Economist has named Schramm the "evangelist of entrepreneurship"

Read an Excerpt

Burn the Business Plan

How can real, practical information help potential entrepreneurs? I have started companies, managed small and large entities, been a venture investor, consulted with big firms and governments on innovation, and spent time as a professor. For ten years, I was privileged to run the Kauffman Foundation, the “Foundation of Entrepreneurship” in Kansas City. Along the way, I was lucky enough to spend time with many successful entrepreneurs, aspiring entrepreneurs, investors, and business visionaries.

These experiences made me realize that many of the popularly held ideas about how, when, and why people start companies probably are wrong. As an economist, I began to look skeptically at the powerful underlying memes—the largely unexamined but widely accepted ideas that shape our view of the world—especially those applicable to new business success. The entrepreneurship memes seemed to be little more than an assortment of stories and case histories that had crystallized into a rubric.

So, in 2002, I embraced the opportunity to direct the Kauffman Foundation. The Foundation was a nearly $2 billion endowment established by Ewing Marion Kauffman, an innovative Kansas City pharmaceutical company founder, and was the world’s largest philanthropy dedicated to promoting entrepreneurship. This was an irresistible challenge: I knew that a continuing stream of new businesses was critical to society’s growth and advancement, and that what entrepreneurs really do is too important to be described by glittering narratives that are not based on evidence. After all, innovative businesses bring us unimagined products and services, create most of the new jobs in our economy, and are the most important force driving growth and creating expanding welfare. Entrepreneurs are too valuable a national resource to be subjected to a potpourri of unsubstantiated aphorisms dressed up as good business advice.

The Kauffman Foundation provided the platform to recruit a small army of brilliant economists to initiate serious research on how new businesses really get started and grow. The team extended the work of Joseph Schumpeter1 and William Baumol,2 two influential economists who had examined entrepreneurship well before almost anyone knew how to spell it, much less what it meant. Research inside Kauffman and scholarship supported by the Foundation produced a torrent of empirical research on entrepreneurs, which resulted in insights that people now seem to think that we’ve always known. For example, it was not previously well understood that young firms create more than eighty percent of all new jobs in our economy, or that new business formation plays such a significant role in economic expansion. Now, happily, entrepreneurship is embedded in every discussion about economic growth. The Kauffman team was the first to inject intellectual, empirical rigor into research about how new firms are created. Because of this work, we know much more about how businesses are formed and how they grow and what is likely to improve your chances for success.

This book seeks to translate many of these findings, and the experiences of some of the thousands of entrepreneurs whom I’ve met, into practical guidance and lessons. It is intended to illustrate how businesses really start, grow, and prosper. The first four chapters speak to the “what” of business startups, the following four to lessons learned by those who have gone before you, and the last section is devoted to data-derived facts, not myths, and realistic guidance from successful entrepreneurs.

Table of Contents

Preface xi

Chapter 1 Burn the Business Plan 1

Chapter 2 Twelve Things Every Aspiring Entrepreneur Should Know 29

Chapter 3 Why Start a Company? 51

Chapter 4 What Motivates Entrepreneurs? 73

Chapter 5 Can You Survive the Entrepreneur's Curse? 99

Chapter 6 Big Companies Can Be Schools for Startups 117

Chapter 7 Copycat Entrepreneurs 137

Chapter 8 Preventing Failure Before It Happens 159

Chapter 9 Don't Waste Time Doing Things That Don't Work 187

Chapter 10 Planning for Success 207

Chapter 11 Becoming a Successful Entrepreneur 227

Acknowledgments 247

Notes 249

Index 257

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