Wednesday, November 18, 2009

The fox, the hedgehog, and the entrepreneur

"Generalists Succeed as Entrepreneurs," proclaims a 2005 press release from the Stanford School of Business. It is robustly true that entrepreneurs tend to be generalist "foxes" rather than "hedgehogs" who specialize. However, among inventor-entrepreneurs, it turns out that the more varied their experience, the lower their household income. The current likelihood is that Stanford got the arrow of causation wrong: variety-seekers tend to gravitate toward both generalism and entrepreneurship, but a lack of specialist skills is more likely to make a startup fail rather than succeed. While foxes may be better at predicting the future, they may be worse at succeeding in a startup.

Many people have read the earlier studies showing the tendencies of entrepreneurs as a whole, but fewer have read the later study characterizing successful entrepreneurs. It would be nice if there were a service that keeps track of what claims you've read and then alerts you if later evidence comes up that invalidates those claims! In any case, press releases are generally set in stone, so it's unlikely the press release will ever be updated to "Generalists Try to be Successful Entrepreneurs, but Usually Fail."