When people study successful entrepreneurs—those who have started two of more companies—that always do the same thing. They look at their behavior.
And that’s a problem.
If you only examine what Howard Schultz or Michael Dell do, you would conclude—correctly—that their behavior is idiosyncratic, No two entrepreneurs do things exactly the same way. And so you would conclude that every single entrepreneur is unique, and so there is little to be learned from studying them; you would have to be Howard Schultz to start Starbucks and Michael Dell to start Dell.
Enter our friend Saras D. Sarasvathy, professor of business administration at the University of Virginia’s Darden School of Business. Early in her work, she made a fascinating discovery, one that ran counter to the conventional wisdom. Saras studied serial entrepreneurs, people who have started two or more companies successfully. But instead of looking at their behavior of entrepreneurs—which is indeed unique—Saras focused on how they think. And there she found amazing similarities in how they reasoned, approached obstacles, and took advantage of opportunities.
Yes, of course, there were variations. But the basic approach, as she understood it, was always the same.
In the face of an unknown future, they act. More specifically they:
1. Take a small smart step forward. (What’s a smart step? It is the action you take based on the resources you have at hand, and it never involves more than you can afford to lose.)
2. Pause to see what they learned by doing so; and
3. Build that learning into what they do next.
This process of: Act; Learn; Build, as we came to think about it, repeats until they are happy with the result, or they decide that they don’t want to (or can’t afford to) continue.
About this same time, the faculty at Babson started going down this path as well and came to many of the same conclusions.