Wednesday, December 20, 2006


The recent 2006 Wharton Entrepreneurship Conference, organized by the school's Entrepreneurship Club, the issue of what makes a successful entrepreneur, inviting a group of entrepreneurs to discuss their backgrounds and business philosophies and offer advice to those interested in taking the plunge.

Raffi Amit, academic director of Wharton's Goergen Entrepreneurial Management Programs, set the tone for the discussion by noting that academic research has debunked much of the conventional wisdom about entrepreneurs.

"There's a myth that entrepreneurs have special traits that distinguish them from other people," he said. "But research shows no unique characteristics. There's a myth that entrepreneurs are risk takers. But research has shown that they try to manage risk. They outsource it where they can. And there's a myth that entrepreneurs have some sort of secret method that they can apply to venture after venture. But many second-time entrepreneurs fail."


***When you graduate is as good a time as you'll see to start a business. The negative is you're broke. But the positive is you're broke, so you've got nothing to lose.

***"The more wealth and prestige you accumulate, the more risk averse you become.

***"There's too much emphasis today on venture capital as a funding source. Historically, most businesses are funded using friends and family, credit cards, Small Business Administration loans and second mortgages. Very few companies are venture backed. One entrepreneur shared he started his business with $25,000 in credit card debt.

***Venture capital makes sense for very few companies. When you're in something that requires a lot of money to start or where time-to-market is critical, then maybe it makes sense.

***Did anyone ever notice how rich VCs are? That money comes at your expense if you're an entrepreneur who is financed by VCs.

*** Before turning to venture capital try to tap personal savings, debt, angel investments, government loans and grants and even financing from potential vendors and customers. One entrepreneur increased her student loans to start her business.

***Another pitfall for aspiring entrepreneurs is spending too much time thinking about all the gee-whiz features they might add to their products. Instead, they should bang out prototypes and put them in consumers' hands as quickly as possible. Remember the KISS rule: 'Keep It Simple, Stupid. Give your product to your mom. Can she use it without any problems? Then you're ready to go.

***"Fail early and learn. Once a company starts attracting customers, many of the other obstacles facing new ventures, like finding investors, will begin to work themselves out.

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