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Entrepreneurs Share a Universal Hunger to Build Things

February 2005

STANFORD GRADUATE SCHOOL OF BUSINESS—For successful entrepreneurs, it's an inveterate passion for innovation that fuels their extraordinary energy, focus, excellence, and resilience, speakers told the Business School's Conference on Entrepreneurship. "Successful entrepreneurs need to be entrepreneurs," said Pat House, co-founder and vice chairman of Siebel Systems. "This type of need can grow from anything—insecurity, a grudge, a need to prove yourself. But regardless of where it comes from, there has to be a hunger there. It's the adrenaline that comes from that type of hunger that sustains you when things get tough."

Though setbacks and criticism are an inevitable part of the entrepreneurial experience, speakers agreed that a willingness to resist—and to challenge—conventional wisdom plays an important role in an entrepreneur's success or failure. "You can't get distracted when people tell you that your idea is stupid and isn't going to work," advised Amazon founder and CEO Jeff Bezos, one of two keynote speakers at the Feb. 12 conference. "Invention always leads you down a path that people are going to think is weird." According to Bezos, successful entrepreneurs confront criticism and failure with "a unique combination of stubbornness and flexibility."

For Amazon, an unrelenting focus on the customer—rather than competitors—provides the stability necessary not only to endure setbacks but to thrive in a competitive landscape that is constantly changing. "The key is not to be distracted by external influences. You can't let Wall Street or your competition or the media set your strategy. You have to stay 'heads-down' and focused exclusively on your customers," Bezos advised.

In 2000, when countless media reports seemed to predict Amazon's imminent demise, Bezos met with his 125 employees. "I told them they shouldn't concern themselves with the media reports and they shouldn't worry about our competitors, but they absolutely should be worried about our customers," he recalled. "Your competitors are going to do what they're going to do, but your customers are the only ones that are going to give you money," he added with a laugh.

Bezos also emphasized the importance of effective team-building to the success of Amazon—and to any new enterprise. "We try to select people correctly on the way in," he said, explaining that the company's recruiting philosophy-hiring people with an inherent aptitude for innovation and problem solving-helps the firm maintain a culture that rewards experimentation. "You need people who like to solve problems and invent at all levels of granularity—not just people who can contribute grand, whiteboard-level ideas, but people who can really sweat the details and get things done."

Donna Dubinsky, the conference's second keynote speaker and the former CEO of Handspring (a venture that she co-founded in 1998), also emphasized the importance of both effective team-building and implementation to the success of a new venture. "Everyone tells you that it's all about the team, but it really is true," she said, describing the complementary mix of skills that the early Handspring team possessed. "We started out with 28 people, but it was the right 28 people."

Like Bezos, Dubinsky stressed the importance of hiring both big-picture visionaries and detail-oriented functional leaders who can put strategy into action. "You can have the greatest strategy in the world, but if you fail at the implementation of it, then you can't succeed. You have to get the details right," said Dubinsky, who learned the importance of implementation firsthand when Handspring's inaugural website couldn't accommodate early demand for its products. "We were sending products to people that we thought might have ordered them," said Dubinsky. "It was a humiliating experience, but one that we learned a great deal from."

To avoid such costly mistakes, Robin Bellas, MBA '73, a general partner at Morganthaler Ventures, which invests in information technology and health care companies, advised entrepreneurs to entrust day-to-day management of a new enterprise to functional experts. "Hire people who are better than you in different disciplines to head up the various functional areas within your company," suggested Bellas, who participated in the conference's life sciences panel discussion.

Speakers also stressed the importance of setting ambitious objectives and holding themselves—and their teams—to extraordinarily high standards of excellence. Pat House, for example, said that she continuously aspires to an extraordinary standard of work thanks to her colleague Tom Siebel. "Nothing short of perfection is ever good enough for Tom," House said. "But having partners and colleagues who continually push you to raise your own standards of excellence is one of the best things you can do for your career."

Similarly, Bezos advised the many MBA candidates in attendance—whether entrepreneurs or not—to actively seek organizations that maintain extraordinarily high performance standards. "Work early in your career at a best-practices company," Bezos suggested when an audience member asked him to share the most valuable career lessons he had learned over the course of his own career. "People who are exposed to high standards are often surprised that standards can be set so high," said Bezos, who cited his own early experiences at Bankers Trust and D.E. Shaw as providing the foundation for his successful entrepreneurial career.

Bruce Cozadd, MBA '91, co-founder and executive chairman of Jazz Pharmaceuticals, cautioned entrepreneurs not only to set high standards but to consistently meet them as well. "Set incredibly ambitious objectives," he advised. "Shoot high. Don't be afraid of not being able to do things, but be careful not to make promises that you can't keep. Your integrity and your ability to honor commitments will be important to your investors."

For every successful entrepreneur, persistence and resilience plays a role, too. Frank Fischer, CEO of NeuroPace, a medical device startup, said that the persistence necessary to succeed often involves a lengthy process of re-evaluating and refining goals and objectives. "Sometimes, what you started out hoping to do isn't actually achievable. But it can turn into something that is. Be flexible and continuously re-evaluate and adjust your goals." Joshua Makower, consulting associate professor at the Stanford University School of Medicine, concurred: "If you believe in it, don't give up," Makower said. "Iterate. Evolve. But never give up."

—Lisa Vollmer

Related Links

Report on the 2004 Entrepreneurship Conference
Report on the 2003 Entrepreneurship Conference
Report on the 2002 Entrepreneurship Conference
Report on the 2001 Entrepreneurship Conference
Report on the 2000 Entrepreneurship Conference

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Center for Entrepreneurial Studies

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