I’ve written and talked about the cultural differences between entrepreneurs and career researchers. Lately I’ve discovered a new one:
Scientists: Are afraid of making bad decisions. As a result, they are slow to make difficult decisions.
Entrepreneurs: Optimize around fast, not perfect, decision making with constant iteration.
Loyal readers know that I work with professors and career scientists and help them commercialize their work, often through the formation of a startup company. The professor’s role is as a founder of the startup, usually with an experienced entrepreneur or business person as a co-founder. Professor-founders should ensure there is a good alignment of incentives between themselves and the business people running the company and cede the business decisions to the business people. When professors insert themselves into operational decisions, they often find themselves completely out of their element.
The reason is that business is an art, not a science. You never have perfect information, you never have all the resources you need, and you never have enough time. But experienced business people understand that business these days is all about making quick decisions and iterating and adjusting. When things don’t work out, as they frequently don’t, you learn from the decision, fix what you can, and move on. This paradigm throws career scientists way outside their comfort zones. They respond to this discomfort by slowing everything down which often becomes a leading indicator for failure.
I know one professor well who admits that, “I’m a scientist. I want to see data before making a decision.” Whenever I’ve given him advice, his reaction is usually to look for at least two more people, often VCs, plus one attorney who will validate the decision. And he won’t make a decision unless he first gets everyone to agree with him. If there’s no consensus, we go around and around until there is harmony. My counsel to him is to focus on research, which he does really well, and let business people make the business decisions. Because he owns the majority of his startup, and controls the board of directors, everything except the most trivial decisions requires his consent. As a result, things are not progressing as quickly as they could be.
A friend of mine says that professors are no different than other newbie entrepreneurs. They’re accomplished in one field and business, from a distance, seems like it must be easy. But there is something to be said for business experience. Venture capitalists like to call this “pattern matching”.
With startup experience under your belt, you are able to make faster hiring and firing decisions. With experience, you’ve got a library (literally and metaphorically) of negotiations, deals and agreements that you can reference. You’ve called on hundreds of customers and have made every sales mistake possible. You know when to compromise to get a deal closed. If you’ve raised money from investors in the past, you have a much better sense for how to do it than you did the first time, and you know how to tell a story and when the story is fundable…and when it is not.
All their lives scientists, especially those that have risen in their field to become chaired professors at leading universities, have been told how smart they are. Their reputations and professional advancement are based on having insight and being right. But in business they are on a different field altogether. The problem isn’t that they aren’t capable or aren’t smart (hardly), or couldn’t eventually adapt, it is that they are learning on the job. And without the benefit of a career spent in business, they aren’t able to see around corners and anticipate the consequences of decisions. In business you don’t need to be right all the time. You just need to be close most of the time, and you need to be nimble. In today’s economy speed often trumps perfection, and sometimes the right decision in the long run is not the best decision at the time.
In my earlier post I noted that scientists earn their reputations as individuals whereas entrepreneurs know that building the right team is what brings ultimate success. My recommendation for getting past this mismatch of decision making styles is to recognize that building a successful business is a team effort. Find a structure of accountability that lets each team member do what they do best.