Why entrepreneurs need to understand the route from A to B
Professor John Mullins has examined the entrepreneurial world from a myriad of different angles. His latest book, Getting to Plan B, provides yet another unique slant on entrepreneurial endeavour.
In the downturn, starting your own business can seem even riskier than normal. But, spending time in a class run by London Business School's entrepreneurship expert Professor John Mullins provides persuasive hope. "In their talented hands London Business School MBA students hold a considerable portion of the economic development potential of the 120 plus countries from which they come. Our evidence indicates that as many as half of them will have started or bought a fast-growing business by the time they are 5-10 years out of their MBA programmes. Helping to equip them for the inevitable challenges every entrepreneur encounters is one of the most important and enjoyable things I do," says Professor Mullins.
Mullins makes a passionate case for his subject. "People always ask us whether we can teach entrepreneurship. Is this something you can learn like accounting or finance?" he says, immediately tackling the elephant in the entrepreneurial room.
"I think the evidence is quite clear that going to a business school is a useful stepping-stone for an entrepreneur. It's not a stepping-stone for everybody; many just go out and do it and that is fine. But, it gives you a set of tools with which to develop approaches to solving the kind of problems you are going to face as an entrepreneur and every day is going to bring another problem. Being an entrepreneur is very difficult. You need a toolkit and you need inspiration from people who have gone before. In most business schools you find a lot of that around - there are alumni who have done things, there are peers who have done things - all that really helps you get through the tough times. So, I don't think everyone can learn it but everyone can choose to follow the entrepreneurial path so long as they learn lessons from people who've been down that path before."
Professor Mullins has been down the path. He spent 20 years working in the retail industry in the United States and was involved in the early development of the retail chain, Gap, as well as a number of start-ups - "You really learn by doing in this kind of thing and experience is a good teacher". Now, he sits on a number of boards and leads the entrepreneurship summer school at London Business School every year which has generated 80 start-ups.
Mullins is the author of one of the most helpful books on assessing new venture opportunities, The New Business Road Test, and his latest book is Getting to Plan B (co-authored with Randy Komisar). Mullins argues that successful entrepreneurs are often those who are willing to ditch their original business plan. Witness an unprofitable site for illegal file sharing that evolved into Skype, which was eventually sold to eBay for $2.6 billion after almost no initial investment; PayPal which reached Plan G; or Silverglide Surgical Technologies, which found profit only after making tools for neurosurgeons instead of plastic surgeons.
Letting go is the hard part. If you have spent days, weeks, perhaps years, honing a business plan, putting it to one side is quite a challenge. "You know when to ditch Plan A when you discover that some of the assumptions on which Plan A is based actually don't hold any water. The most common outcome for a new venture is failure, and so the challenge for entrepreneurs is to systematically try and test the often unstated assumptions that underlie what you want to do, and figure out which of those make sense and actually are true, and which ones aren't. Once you find out they aren't true then that's the time to move on," says Mullins.
All of this means that entrepreneurs need extraordinarily large amount of patience, but patience leavened by clinical decision making. "One of the myths about entrepreneurship is that it's about tenacity, persistence and drive and if you just beat the wall hard enough, sooner or later it will fall. Actually, that's not true. The most successful entrepreneurs are those who figure out when the wall is not going to fall and where the route is around that wall. For those who like the challenge of dealing with the unknown and getting up tomorrow morning and saying, I don't know what the day will bring but I know it's going to test me and make me a better person, it's a wonderful career path."
John W. Mullins (jmullins@london.edu) is Associate Professor of Management Practice and Chair of the Entrepreneurship group at London Business School.
Getting to Plan B by John Mullins and Randy Komisar is published by Harvard Press.