Entrepreneurship is not only for the MBA-tested 27-year-old whose business plan survived two years of scrutiny at Wharton, or the idealistic, energetic 19-year-old building a business or two in their dorm. About 58 percent of the alumni attending Management Assistant Professor Laura Huang’s master class, “Switching Into Entrepreneurship,” during 2013 MBA Reunion had never been entrepreneurs before. They—and the 42 percent who had entrepreneurial experience —may have ranged in ages and demographics, but all were interested in going into business for themselves.
Their interest makes sense. According to Huang, research has shown that entrepreneurs are more satisfied in their careers, as compared with other professionals. And Whartonites apparently make good entrepreneurs; From Huang’s estimates, about one in five Wharton alumni enter entrepreneurship at some stage in their careers.
“Twenty percent is a huge number,” she told the class.
And those 20 percenters enjoy an amazing success rate. Typically, one in every 3,000 raw ideas becomes an economically profitable startup, Huang said. Comparatively, about 56 percent of Wharton founders achieve profitability at some point.
“Ideas are cheap,” Huang said. “It’s all about being nimble and quick.”
What happens when you aren’t? The proportion of firms that fail because of their senior management team is roughly two out of three of all startups that don’t make it.
So, let’s assume all Wharton alumni are nimble and quick, as well as determined, savvy and a few other attributes needed to be great startup managers and leaders and to overcome the odds in such dramatic fashion. That doesn’t mean newbies to entrepreneurship—even Wharton newbies—can’t use some help.
That is where Wharton Lifelong Learning and master classes such as Huang’s come in. The professor offered five tips for startup survival during times of rapid growth. They are:
1. Hire slow, fire fast. It might be counterintuitive to a fast-growing firm, but take the time to get the right people—but little time to correct hiring mistakes.
2. Transparency is the key. Over communicate, especially when it comes to pricing.
3. All money is not good money. Huang shared the story of a student whose startup’s business plan was getting derailed by money from one big client.
4. Don’t wait to delegate. Many startups fail because they are “one-pony shows.”
5. Get out of your own way.