Derek Lidow’s book, Building on Bedrock: What Sam Walton, Walt Disney, and Other Great Self-Made Entrepreneurs Can Teach Us About Building Valuable Companies, is a welcome corrective to the overhyped promotion these days of high capitalization, high-technology, and high-risk businesses. Bedazzled by the wild hype surrounding gazelles and unicorns, entrepreneurship researchers have continued to focus on the black swans, even though the total IPOs in any given year would fit comfortably into a large lecture hall, as on average just over 100 U.S. firms went public annually between 2001 and 2016. The number of new ventures receiving venture capital funding annually in the United States has not changed appreciably in the last 20 years, hovering around 1400 per year. Nonetheless, business books and prominent entrepreneurs continue whipping up enthusiasm, encouraging entrepreneurs to take big risks in anticipation of big gains.
Meeting at the Centre, by Robert Davidson
In contrast, Derek Lidow points to “bedrock entrepreneurs” as the true foundation of economic prosperity in the United States. Every year, hundreds of thousands of ordinary businesses are started in the United States, many by people who have no idea what they are doing and who are not prepared for the challenges they will face. Martin Ruef and I wrote about these “mundane entrepreneurs” in our book, Organizations Evolving, and Paul Reynolds has diligently documented their existence through large scale representative samples of business starts. Lidow offers sage advice to would-be entrepreneurs, suggesting that many of them would be better off taking wage and salary jobs. But, for those who are willing to prepare themselves for the challenges, he recommends going for it.
But, “going for it” does not mean in the reckless way encouraged by entrepreneurial self-help books, but rather in a mindful, reflexive, and experimental way. He shows that successful entrepreneurs are not differentiated from the rest of us by any inherent talents, but rather by their willingness to learn from their experiences. He recommends that entrepreneurs continue experimenting until they either get it right or realize that the venture they’ve planned will not work.
This is a delightful book, written by somebody who has had a productive career running a family business, starting his own business, being CEO of a listed company, and then transitioning to a university position. He has the life experiences and educational training, including a PhD in applied physics from Stanford, to offer valuable advice. He readily admits his mistakes and is humble about his successes.
I highly recommend this book to anyone who’s contemplating entrepreneurship and to anyone who is consulting, teaching, or otherwise involved in the entrepreneurial community.