Interview: Lou Ellman on Entrepreneurship

Lou Ellman, founder, and CEO, of RoyaltyZone.com and I explore the challenges of bootstrapping a business, the challenges of product development and the importance of product roadmap, and what it’s like to build and sell a software company on my Everyday Entrepreneurs podcast.

 

You can listen below on Soundcloud or subscribe to the podcast on iTunesGoogle PlayStitcher, or wherever you get your podcasts.

You can learn more about Lou and connect with him on LinkedIn. You can also find him on Twitter @louellman

David Harkins is a business strategist, speaker, and teacher.

He is the founder and executive consultant at David Harkins Company. In his spare time, he writes hikes, explores, and creates art. Although, not necessarily in that order.

Connect with him on social media below:

Thoughts on Entrepreneurial Education

In December, I will complete the required coursework and earn a master’s degree from Western Carolina University’s Master of Innovation Leadership and Entrepreneurship program. Over the course my graduate work I have been asked many times if a master’s degree is worth the money if I really needed a master’s degree to be an entrepreneur, what prompted me to continue my education, and why I chose a Master of Entrepreneurship degree over an MBA.

As I wind down the program, I wanted to share my perspectives on these questions and offer other thoughts on entrepreneurial education.

My motivation for pursuing a graduate degree.

When I started the program in January 2017, my primary purpose was to earn the credentials to teach courses as an adjunct in higher education. My goal was to teach the basics of licensing and intellectual property protection to those students, like my summer interns from Savannah College of Art and Design (SCAD), who were on a path to creative careers but seemed to have little knowledge and understanding of licensing options for generating revenue and the importance of aggressively protecting their creations.

It was apparent to me that those with aspirations for careers in the creative arts are missing education in the fundamentals of business necessary to support themselves in those careers. I saw this not only in my student interns but also in my interactions with working artists and creators some of whom have been out of school for many years. I wanted to teach students how to establish a better business foundation for extracting long-term value from their future creative careers.

Two years later, my desire remains fundamentally the same; however, my vision is different. The coursework for the master’s program led me to think more broadly. We live in a world where corporate loyalty to employees is virtually nonexistent, and many individuals are pursuing entrepreneurial endeavors—some out of desire, others out of necessity. Moreover, the Internet enables everyone who wants to start a business, a way to find an audience, sell a product or service, and facilitate the delivery of the creation—whether its artwork, a book of ideas, a piece of furniture, or a service.

Most of us, though, are educated and trained to work for others. Very few of us understand how to be self-employed, or have the basic understanding of how to build a business that employs others. This lack entrepreneurial education and training must change, or the long-term impact is potentially devastating to the economy and the culture.

At the end of my program, I still see the significance of helping students extract long-term value from their future creative careers, but I now understand the necessity and importance of embedding entrepreneurial thinking and approaches in our post-industrial culture. I want to be a part of preparing future generations to think differently, to help them develop skills to identify opportunities and to teach them the building blocks that create products and services on which viable businesses can be built and thrive.

Why Master of Entrepreneurship (ME) instead of an MBA?

I chose the Master of Entrepreneurship program because I liked the idea of exploring the foundational theories for business management within the context of innovation leadership and entrepreneurial action.  Plus, I already hold a Bachelor of Business Administration, and I have significant hands-on experience in running and managing businesses, which is a core component of an MBA program. I found little additional value for earning a master’s degree in the same discipline.

While I suspect the curriculum may differ from university to university, I believe, based on my research and experience, the MBA curriculum primarily prepares students to run and manage the businesses of others, whereas graduate curriculum in entrepreneurship teaches students to identify and develop opportunities that can grow into businesses. While there may be some similarities in the ME and MBA programs, the business focus is often different. The curriculum differences would also seem to suggest some variances in the level of risk tolerance between graduates of the two programs, with the MBA leaning more toward risk avoidance and the ME leaning more toward risk acceptance.

A high level of risk tolerance is essential for innovation and is the cornerstone of most entrepreneurial education. Let me be clear: I am not saying MBAs cannot innovate—many do—although the curriculum for MBA programs and my experience with many MBA-trained executives in my career would suggest the educational foundation stresses an over-reliance on existing data and information in decision-making. Innovation stems from chasing the unknown, which is hard to do when there’s no hard data to support the chosen direction. Entrepreneurs know this, and a graduate level education in entrepreneurship soundly reinforces the concept of decision-making under uncertainty. For me, such a curriculum provided greater support and balance for my tendencies toward research and data.

Contrary to what some might think, a Master of Entrepreneurship degree doesn’t just teach you to start your own business—you don’t need a graduate degree, or any degree, to be an entrepreneur, but some entrepreneurial education does help your long-term success rate. Many, including the degree program in which I participated, teach entrepreneurial concepts applicable to existing organizations as well as startups. By focusing on those skills necessary to identify and drive innovation, a Master of Entrepreneurship degree provides a foundation that students can deploy for the benefit of any organization—from their own startup, to small businesses, to large corporations, third-sector organizations, nonprofit organizations, and everything in between.

As with many decisions of this nature, there’s no right or wrong answer. The choice depends on personality, background, experience, personal goals, and aspirations. There are indeed many individuals with an MBA who are successful entrepreneurs. The MBA-path was not the path for me.

Is a master’s degree worth it?

For me, this Master of Entrepreneurship degree is worth the time and expense because it helps to put in motion my future goals. My payback period should be short, I have learned a few new things, met some great people and earned a necessary credential for the next step in my career path.

Lifelong learning is important to me and the Master of Entrepreneurship degree demonstrates my commitment to that concept. I didn’t pursue a graduate degree at this stage in my life with hopes of increasing my earning potential significantly. I chose the degree to update my foundational knowledge and to learn new techniques and approaches to business and entrepreneurship upon which I can form new insights and, hopefully, contribute knowledge to future generations.

Of course, everyone must weigh the pros and cons of a graduate degree themselves. In some fields I would imagine it’s worth the time and expense; in others, perhaps not as much. I do think many hiring managers consider a master’s degree to signify a certain level of knowledge and commitment that a bachelor’s degree once suggested.

My commitment.

There are too many entrepreneurs who, whether by choice or necessity, are flying by the seat of their pants, throwing things against the wall and hoping it will stick. I know, because I've been one of them and I have worked with many others. What I have learned through experience and formal entrepreneurial education is there is not a magic formula that will breed successful ventures, but there is a framework for innovation leadership that will improve the chances of entrepreneurial success. And it's time to give back.

I value the power and impact of entrepreneurial activity on the broader economy, yet my greater interest is in entrepreneurship as a solution for unemployment and economic growth in distressed communities. More specifically, I have interest in those communities where changing demographics, cultural and societal shifts, corporate closures, and access to education create barriers to employment and economic growth, and how to spur innovation and entrepreneurial activity to break down these barriers.

To this end, I rebooted my strategy consulting practice earlier this year, and I have incorporated a coaching component for startup founders and entrepreneurs as my first step in giving back. I am also looking for opportunities within academia as well as select organizations where I believe I can leverage my education, experience, skills, and abilities for the next generation.

Finally, I am exploring doctoral programs so that I might continue researching, working, and teaching how innovation leadership and successful entrepreneurial activity can be a positive force in cultural change.

If I can be of any assistance to you in your pursuit of entrepreneurial activity, please don’t hesitate to reach out.

 

David Harkins is a business strategist, speaker, and teacher.

He is the founder and executive consultant at David Harkins Company. In his spare time, he writes hikes, explores, and creates art. Although, not necessarily in that order.

Connect with him on social media below:

The Founder’s Identity Crisis

There are just a few things you need to launch a business.

You need a vision (the ability to spot an opportunity or solve a previously unsolved problem), confidence, desire or passion, and a high tolerance for the probability of losing everything.

Fundamentally, this is all you need. These four things will get your business off the ground and, probably, help you land your first few customers. You don’t need much money to make this happen, and when it does, you’ll become a startup founder.

Growth, however, will bring new challenges.

Growth means you’ll probably need more employees, maybe a partner or two, a board of directors, and likely investors. You’ll need to learn new skills—what I call “adding tools to the toolbox”—so your business can scale and so you can become more effective as a founder. You’ll need to learn how to become flexible, how to be accountable to others, and become comfortable leading rather than dictating. You’ll need to improve your communications skills. You’ll need to define, develop, and maintain a culture, and figure out how you’ll deal with internal, and external conflicts (Eisenmann, Howe, & Altringer, 2017). These basic skills will carry you far, particularly if you are self-aware and introspective, and understand your shortcomings. With these “tools in your toolbox” you’re on your way to “Chief Executive Officer (CEO)-material,” but you’re not a CEO.

This point in your growth is where you get yourself into trouble as a founder. You want that CEO title because it gives some prestige and respect. While you may be the highest ranking individual in the company, overseeing the corporate decisions and managing operations, it’s disingenuous to claim the CEO title when you have only a few employees, and you’re flying by the seat of your pants, which is usually the case in a startup. You’re not fooling anyone with the title, let alone an investor.

When you take on investors, you must become a CEO; not just call yourself the CEO. The desire to have the CEO title without accumulating the skills necessary to be the CEO is the fastest way for you to lose your company as it grows. Many founders choose a voluntary succession approach when they see their investment or wealth tanking because it forces a founder to come face-to-face with the limits of their skillset (Wasserman, 2012). This decision to let go can help a founder preserve wealth and maintain involvement in the company.

Conversely, some founders are so ego-centric they never bother to learn the skills necessary to become an effective CEO and they are surprised when they’re forced out by their board (Wasserman, 2012). Steve Jobs is but one example. Although Jobs was not the CEO at the time he was fired, he was a founder who never bothered to learn those management and leadership skills necessary to serve in senior roles as the company became much larger (Siegel, 2011). The driving and demanding personality that served Jobs well as a founder did not serve the company well as it grew, and played a part in his firing. When he returned to Apple later, he had acquired the necessary skills to lead (Siegel). Unfortunately, it’s rare that a founder gets a chance to return to his or her company once fired.

The individual who can get a company off the ground is usually quite different than the individual who can run it well as it grows. The skills and abilities required of each are very different. A founder must take the time to learn new skills to transform from the role as a founder to the role true CEO if this is indeed the goal. Sometimes, though, it is not the goal. The key for entrepreneurs is to consider and develop an exit strategy from the very beginning to have a clear path toward the end goal, whatever it may be.

Remember this, though: It’s certainly fine to be the founder, but not the CEO. However, don’t claim to be the CEO until you have acquired the skills to lead and manage, and have a track record that supports your claim. Investors already know where you are on the founder-to-CEO spectrum, so all you’re doing by claiming a title without the requisite skills and experience is creating an identity crisis for yourself.

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References

Eisenmann, T., Howe, R., & Altringer, B. (2017, June 21). What Does an Aspiring Founder Need to Know? Retrieved from hbr.org: https://hbr.org/2017/06/what-does-an-aspiring-founder-need-to-know

Siegel, J. (2011, October 6). When Steve Jobs Got Fired By Apple. Retrieved October 1, 2018, from abcnews.com: https://abcnews.go.com/Technology/steve-jobs-fire-company/story?id=14683754

Wasserman, N. (2012). The Founders Dilemma. Princeton: Princeton University Press.

Photo by Ian Schneider on Unsplash

David Harkins is a business strategist, speaker, and teacher.

He is the founder and executive consultant at David Harkins Company. In his spare time, he writes hikes, explores, and creates art. Although, not necessarily in that order.

Connect with him on social media below: