The path to untold riches

The past several years have a created a resurgance in entrepreneurship. Our generation holds innovators in the highest regard; Bill Gates and Larry Ellison have become celebrity icons. The talented future careerist has shifted away from wanting to climb the Fortune 500, and now focuses on emulating the individual entrepreneur. And while the principles of entrepreneurship may seem intuitive, recent years have demonstrated that even really intelligent people can be ignorant of them. We have become obsessed with certain qualities such as innovation and technology at the expense of proven values like experience and temperence. People have also forgotten that entrepreneurship existed before the 1990s. We have strayed from proven successful role models, becoming deaf to the lessons that they learned and the keys to their successes. Before storming forwards, we would be smart to look to our entrepreneurial forebearers for advice. For my book on entrepreneurship, I have been speaking with numerous successful entrepreneurs about their experiences, including Mort Zuckerman -- the founder of the Boston Properties -- and Jerome Fisher -- the founder of Nine West -- about their entrepreneurial experiences. Their insights, some that I share in this column, directly challenge current assumptions and approaches. Zuckerman and Fisher exemplify the importance of industry expertise. Fisher truly understood his product; he understood every facet of the design and production process; he loved his tanneries as much as the store window. His business depended on his ability to efficiently manage merchandisers and develop relationships with the retail end. Both men had mastered the core competencies of their businessses before striking out on their own. They could run any element of their business. Zuckerman understood real estate financing and development in the same way that Jerome Fisher understood the principle elements that went into producing and selling shoes. Financing has always been a central tenet of real estate business. And Zuckerman knows the financial underpinnings of his business perfectly. When he began Boston Properties in 1970, he had absolute faith in his ability to structure deals flawlessly. As he said to me, "I understood the banking thing." Zuckerman and Fisher confirm the value of learning a business before trying to conquer it. They exemplify the importance of industry experience. Neither man began his own business directly out of school; instead they both worked for other people, and garnered operational experience before striking out on their own. As a result, building their businesses had felt like a natural extension of what they had already done. For Mort, starting Boston Properties wasn't a far leap from his experience, unlike when people jump industries or transition from student to CEO. Individuals who start successful companies directly out of college represent entrepreneurial anomalies. While their path to success may be inspiring, they do not necessarily make for the best models to follow. Zuckerman and Fisher, by gaining experience, implicitly understood the value of patience. Neither of these men waited until they had over matured in someone else's organization, but they respected the potential pitfalls of immaturity -- the young person's mistake of charging out too early. Undoubtedly true, entrepreneurship requires a high tolerance for risk. Both men embraced risk, but their tolerance was calculated. And while high levels of risk tolerance remain a crucial ingredient, it pays to be prudent and not overanxious. They had a logic, a knowledge base, a first-hand understanding of the market and its opportunities. There still remained a great deal of risk in founding their companies. But they could also calculate the downside. Their risk was a determinant and not an assumption, and it was directly correlated with the potential return. Towards the end of my interview with Zuckerman, he shared a favorite story that he'd first heard at Harvard Business School: "Before becoming a playwright, George Bernard Shaw had been a clerk in a dry goods store. Why he'd decided to go to London to try writing plays was that, "If it never worked I can always go back to being a clerk in a dry goods store.'" In a hushed voice, Mort confided that he'd felt the same way.

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