What is an entrepreneur?
Ask that question and you’ll get the usual responses. People will say they spot trends and start businesses. Often, they’ll cite Steve Jobs or Walt Disney or click off qualities like tenacity, passion, and perseverance. But they’re just barely scratching the surface. What if entrepreneurship was more like a way of thinking than a set of traits? What if the process was as important as the result? And what if reshuffling was on par with creating?
Those are some of the underlying philosophies in the W.R. Berkley Innovation Lab at New York University’s Stern School of Business. Taking its cue from the school’s tagline, “An education in possible,” the Innovation Lab has broadened entrepreneurship beyond the rigid boundaries of writing business plans and honing pitches. Instead, the program has embraced innovative entrepreneurship, a process designed to help students master a new way of thinking.
DISRUPTIVE INNOVATION IS THE FOUNDATION OF THE PROGRAM
What does this type of thinking entail? For one, according to Luke Williams, executive director of entrepreneurship and founder of the Berkley Innovation Lab, it requires a taste for disruption. “Too many business schools send a directive to their students that incremental change is safe and that disruptive change is fraught with danger, when in fact the opposite is true,” Williams argues. “When students start believing that their fundamental purpose is to alter the status quo, rather than preserve it, their motivation and mindset starts to change. They begin to see opportunities beyond what others have defined as limits.”
However, this can be a painful process. For example, in the Lab’s Entrepreneurs Challenge, Williams introduces what he calls “deliberate discontinuity” into the early stages of the competition. For example, teams will be asked off-the-wall “what if” questions that directly challenge the assumptions that ventures are based upon. “People are great at forging ahead and setting up paths and following them, Williams observes. “But most people are terrible at actually going back and challenging or provoking the original assumptions or decisions that gave rise to that path or trajectory in the first place. So that’s a big part of what we’re doing. At end of the day, we just need better ideas.”
In fact, Williams sees entrepreneurial and conceptual thinking as a skill, one that is honed by deliberate practice no different than tennis or piano. However, it is not just the province of entrepreneurs. The real value of Stern’s approach is that it can also be applied in any industry to give students a leg up over their peers. “A lot of students come in and they believe that to be an entrepreneur and be innovative that they must invent something new. Innovation entrepreneurship is not necessarily about invention,” Williams emphasizes. “It is about taking resources that you have available to you (and everyone else) has available and seeking a new arrangement of those resources to make them more valuable.”
DOES INNOVATION CAPITAL TRUMP SEED MONEY?
While recent Stern grads have launched top startups like Linio ($175.5 million in funding) and Spring, Inc. ($32.5 million), the school’s Innovation Lab measures success by an entirely different rubric. “A lot of entrepreneurial centers will put the emphasis on how many businesses have they spun out,” explains Williams. “While that’s important…it is a dangerous mindset for the educators to get into.” Instead of rewarding results, Williams posits an alternative: Rewarding effort and experimentation.
“Think of ideas as currency,” Williams submits. “Every idea that you have as a student enables you to purchase another idea. Even if your new idea, whether it is a product or service or a new business model, fails, it hardly means it is worthless. It’s going to lead to another idea. It’s going to take you down another path. You’ll combine that with something else. You learn something from every idea. That’s what we call innovation capital.”
In a fast-changing environment like business, Williams adds that innovation capital may be what differentiates successful companies from also-rans. “There is so much uncertainty in the world. It’s getting exponentially harder to get a read and know what the future is even going to look like. So where there is uncertainty, you need to increase your options. So you can think of ideas and these experiments for students as options on their future.”
FIGHTING AGAINST A 20TH CENTURY MANAGEMENT PROCESS AND A 19TH CENTURY EDUCATIONAL MODEL
You might assume that many investors and self-proclaimed change agents would embrace entrepreneurial innovation. However, in Williams’ experience, they are often the real barriers to sustainable and meaningful change. While all pay lip service to ideas and innovation, Williams claims they are “biased towards evolution rather than revolution.” What’s more, they are more interested in execution and successful results, which trickles down to have a chilling effect.
“They’re willing to reap the benefits of those successful ideas. But anything that falls short of that is more bother than it’s worth,” Williams explains. “Basically, what this encourages in organizations, and a lot of VCs do this as well, is they’re basically enforcing conformity and continuity.”
And the educational landscape further hinders true entrepreneurial thinking. “If you look at the way entrepreneurship is taught in most schools,” Williams posits, “you’ve got 21st century business ideas that students are coming up with being evaluated by 20th century management process – all built on top of a 19th century education model.”
A NEW MODEL FOR THE 21ST CENTURY
And that’s what Stern’s Innovation Lab seeks to change – with Williams leading the charge. Once the creative director at Frog, Williams has designed over 100 products, holds 30 patents, and has authored an international bestseller on disruptive thinking. And he believes Stern has found a unique niche among business schools.
“Our point of view is hardly any school in America really knows how to teach innovation entrepreneurship. We believe this is the Holy Grail for innovation and entrepreneurship. So we have put a stake in ground saying, ‘We’re not just about replicative entrepreneurship. We’re going to figure out how to basically create more innovative entrepreneurs.”
And it has certainly emerged as an enticing proposition for Stern students. According to the school, between 10-15% of MBA students are specializing in entrepreneurship and innovation. In addition, Stern’s Entrepreneurs’ Exchange (EEX), the MBA student club has increased year-after-year since 2004, currently topping out at 992 members (including full-time MBA, part-time MBA, EMBA, and other NYU students).
Recently, Poets&Quants sat down with Williams to learn more about Stern’s groundbreaking program, along with gaining insights on the state of entrepreneurship and the keys to launching a successful startup. Here are his thoughts.