The Myth of the Entrepreneur and the Garage

From the Winter issue of California Management Review:

A Garage and an Idea: What More Does an Entrepreneur Need
Pino G. Audia and Christopher I. Rider

There exists a common belief that entrepreneurs commonly start businesses in garages (or basements or dorm rooms or kitchens). The garage entrepreneur is a highly popular contemporary legend, but not quite accurate. An emergent notion in academic research is that entrepreneurs are often organizational products. They typically acquire confidence, business knowledge, and social connections via prior experience at existing organizations. These psychological and social resources aid entrepreneurs in forming companies.

Although the belief of the garage entrepreneur contributes to the preservation of the American ideals of opportunity and upward social mobility, it offers misleading insights to would-be entrepreneurs because it suggests an undersocialized view of the entrepreneurial process. Individuals, companies, policy makers, and business schools will benefit from recasting the garage as a contemporary legend and focusing instead on
the lessons that can be derived from an understanding of entrepreneurs as organizational products.

Granted, this is about three time as many words as required to say it, but the point is a good one: Entrepreneurship doesn’t happen in a vacuum. Too much of the mythology around the subject implies otherwise.

Related posts:

  1. The Myth of the Serial Entrepreneur
  2. Parsing the Word Entrepreneur
  3. Do You Have to be Rich to be an Entrepreneur?
  4. The Myth of the Serial Entrepreneur — Part II
  5. MBA Entrepreneur: An Oxymoron

Comments

  1. brian says:

    And yet, some of the most celebrated entrepreneurs (from Bill Gates to Michael Dell to the Yahoo and Google Guys) while not naifs were not when they began prominent, respect members of their field/business. They weren’t professors, seasoned business executives or noted personalities at the time of the founding of their firms or development of their technologies.

  2. Absolutely true, but two answers. First, that’s ad hoc empiricism — a few high-profile examples that are notable _precisely_ because they are so rare, not because they are the rule.
    Second, no-one’s sugegsting you need to be “professors, seasoned business executives or noted personalities” when you found a company. Far from it. But that said, and we’re seeing a lot of this in friends (at Google/Yahoo/Microsoft) buying Web 2.0 companies from friends: It sure helps to have a network around.

  3. Andrew Fife says:

    Brian/Paul:
    I think what this article is really getting at is that it is very rare for anyone to be able to build a successful product with out either A) have serious domain expertise B) interacting with prospective customers and incorporating their feedback into the product before releasing or C) ideally both A & B. The myth is that genius & stubbornness are what drives great entrepreneurial success, when the reality is that being a great listener is infinitely more important.
    I have written a more detailed post on this subject here:
    http://andrewbfife.blogspot.com/2006/01/are-great-entrepreneurs-stubborn.html
    Paul:
    I would suggest that your last point about friends buying companies from friends is also ad hoc empiricism. There is no question that a historically positive relationship will help in an acquisition, but friends buying friends is the exception rather than the rule.
    -Andrew

  4. Franklin Stubbs says:

    Entrepreneurs as organizational products? That is some of the worst writing I’ve ever seen. A constipated robot could turn a better phrase.
    ‘Tis further ironic that John Batelle’s pean to Google shows a picture of Larry and Sergey in, where else, their garage.
    Seems to me the unintended “emergent notion” is that the sanitized and homogenized world of academia can be a toxic environment for creative mavericks. If I had to read zombie prose like that on a daily basis, or even a weekly basis, my head would explode. Maybe entrepreneurs load up on technical skills, build up their rolodexes, and then run to the garages as fast as they can to get the hell away from the spirit-sapping likes of Audia and Rider.