"Entrepreneurs aren't born, they're made"

As a first-generation serial entrepreneur who has since morphed into an academic researcher on globalisation, innovation and education, Vivek Wadhwa can speak on the subject with passion born of first-hand experience. In an interview to DNA, the senior research associate with the Labour and Worklife Program at Harvard Law School and executive in residence/adjunct professor at the Pratt School of Engineering at Duke University argues that ‘nurture’ counts for more than ‘nature’ in shaping a successful entrepreneur, and that Indians in Silicon Valley have shattered the stereotypes about entrepreneurs.

What are the defining characteristics of an entrepreneur?

An entrepreneur is anyone who takes risks and starts a venture. I always say that an entrepreneur is someone who jumps out of a plane without a parachute in the hope that he or she will figure it out on the way down. The question then arises: is a dry cleaner or a dhabawallah an entrepreneur? Yes, but there’s a difference between a dry cleaner and a tech executive. So the definition needs refinement. A replicative entrepreneur simply duplicates business processes. If you’re selling samosas in a stall in Bombay, you’re not innovating, you’re replicating.

Can a person be taught to jump out of an airplane ‘without a parachute’?

There’s something innate in that. Some people will take risk, others won’t. But the skills necessary to start a business — how you put together a financial plan, incorporate a business, accounting, marketing and management —can be taught.

Even a person who is afraid of taking a risk may become an entrepreneur. Let’s say a person has been working all his life for the Indian government, and has suddenly been laid off for whatever reason. He decides to start a grocery store. Now, he has become an entrepreneur out of necessity. Even people who are not inclined to become entrepreneurs can become entrepreneurs if they are taught the right skills.

Based on a study that fuses entrepreneurship with genetics, Scott A Shane at Case Western University says that entrepreneurship is in one’s DNA.

I don’t buy that. This is the same bias I’ve been seeing in people who think there’s something in the ‘white’ gene that gives them superiority, or that there’s something magical in the Aryan gene or whatever.

But doesn’t growing up in an entrepreneurial culture give one an advantage?

It does. In our research we found that people who come from entrepreneurial families tend to become entrepreneurs. In India, you have families who are into business. You have a business class, or a caste, or a culture — whatever you call it. You tend to see long hereditary lines — the banias or the Marwaris.

Your study came up with a ‘profile’ of a successful entrepreneur. What does s/he look like?

One of the myths in Silicon Valley, in particular, is that entrepreneurs are young, brash college drop-outs. But the data revealed that the average age of an entrepreneur was 40 years; they tended to have extensive experience in industry before they started their companies. They started companies because they’d reached a point in their lives when they were tired of working for other people, they wanted to build wealth before they retired, and they had ideas based on their experience in business.

What about the prevailing notion that entrepreneurs are extroverts?

Indians have defied all the myths of Silicon Valley. Consider this: 15.5% of Silicon Valley companies are founded by Indians. Considering that in 2000, Indians accounted for only 6% of the working population in the US, they were disproportionately successful. Indian entrepreneurs in Silicon Valley are IIT-ians and professionals. They’re not banias or Marwaris. Yet they’re now standing head-to-head with the most entrepreneurial people in the most entrepreneurial culture in the world — Silicon Valley. In fact, they now dominate. Indians are the No 1 founding group among all nationalities in Silicon Valley. You’ll find that many of them are introverts: quiet, shy people. It means the stereotype is being shattered. Indians have disproved the myth about young, brash, arrogant white guys being the typical entrepreneurs in America.

How important is business education in making a successful entrepreneur?

It helps a lot; it makes you more likely to succeed. But it doesn’t matter that you don’t have Ivy League education; just having an education helps. But timing is critical. The best time to get an education is when you’re ready to start a venture. That’s a teachable moment.

Venture capitalists say they’re not guilty of stereotyping, they’re only looking for a recognisable pattern of entrepreneurs. What’s wrong with that?

Their patterns are typically white, young college drop-outs. Most of the companies that get funded in Silicon Valley fit that stereotype, which means that women get left out, as do blacks. Venture capitalists turn a blind eye to anyone who doesn’t fit the stereotypes. Indians had to work harder to rise above the stereotypes.

Have you heard anything that’s persuaded you that some inborn entrepreneurial qualities cannot be inculcated?

No. If you have some super-skills, sure, you can be more successful than others. But even if you don’t have those characteristics, you can be successful because you can get other people to help you: you can surround yourself with competent people.

What are the implications of your study for big family-run businesses in India?

They should look for competent people who have potential in their ranks. They shouldn’t just look within the family.

About Vivek Wadhwa:

Vivek Wadhwa is a fellow with the Labor and Worklife Program at Harvard Law School and executive in residence/adjunct professor at the Pratt School of Engineering at Duke University. He helps students better prepare for the real world, lectures in classes and leads groundbreaking research into globalization and the U.S. competitive advantage. He is also an advisor to several start-up companies and a regular columnist for BusinessWeek.com.

Wadhwa has long been a pioneer of change and innovation in the technology industry, and has founded 2 software companies. He started his career as a software developer and gained a deep understanding of the challenges in building computer systems.

His quest to help solve some of IT's most daunting problems began at New York based investment banking powerhouse CS First Boston, where he was Vice President of Information Services. There he spearheaded the development of technology for creating computer systems which was so successful that CSFB decided to spin off this business unit into its own company, Seer Technologies. As Executive Vice President and Chief Technology Officer, Wadhwa helped grow the nascent startup into a $118 million publicly traded company.

With the explosion of the Internet, Wadhwa saw an even greater opportunity to help businesses adapt to new and fast changing technologies, and started Relativity Technologies. As a result of his vision, Wadhwa was named a "Leader of Tomorrow" by Forbes.com. Relativity was named as one of the 25 "coolest" companies in the world by Fortune Magazine.

Wadhwa’s research at Duke University has focused on the impact of globalization on the engineering profession, the competitive threat from India and China, and one of America’s greatest advantages – its skilled immigrants. This research has received worldwide attention and acclaim.

Mr. Wadhwa holds an MBA from New York University and a B.A. in Computing Studies from the Canberra University in Australia. He is founding president of the Carolinas chapter of The IndUS Entrepreneurs (TIE), a non-profit global network intended to foster entrepreneurship. He has been featured in thousands of articles in worldwide publications including The Wall Street Journal, Forbes Magazine, Washington Post, New York Times, U.S. News and World Report and Science Magazine. He has also made many appearances on U.S. and international TV stations including CNN, ABC, NBC, CNBC and the BBC.