Category Archives: Entrepreneurship

Derek Lidow’s Terrific New Book on Entrepreneurship

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.

Robert Davidson sculpture

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.


Family Businesses as Boundary Objects

Boundary objects are arrangements that permit people to work together without needing to achieve consensus, as Susan Leigh Star explained. The figure below displays a collection of small dots that represent different manifestations of some phenomenon of interest, with three of them labeled with capital letters. Object A is clearly at the center – it is probably the central tendency in this group. In contrast, Objects B and C are at the edges of the cluster. People could say, “I’m studying this phenomenon by examining C.” Somebody else could say, “I’m studying this phenomenon as well; I’m examining B.”


objects to cagtegorize

Cluster of objects that might be classified into the same category

Objects A, B, and C are in different parts of the overall domain, but a key feature of a boundary object it is that scholars don’t actually have to agree on what specific characteristics put something inside or outside of the definition. They just have to have some degree of overlap in their conceptions. Boundary objects are not about sharp edges; boundary objects are about overlap and working together even in the absence of consensus. I think that’s a very good characterization of the family business field.

Considering the diverse scholarly community that makes up the field, it is apparent that the field of family business studies includes people from many disciplines. Each discipline, and sometimes each person within a discipline, offers a different definition of a “family business.” Distilling a single definition is highly unlikely. Nonetheless, it’s possible to have a conference with “family business” in the title at which scholars work together, as long as they recognize that the goal is not consensus. Instead, the objective is to talk to one another rather than worrying about the things that might divide them.

Observers could still ask, why do so many different definitions exist? Why does field of family business exhibit such diversity? What is it about the phenomenon that has led people to come up with such different conceptualizations? I believe that the fuzzy set comprising the multiple definitions stems from scholars attempting to take account of the historical changes that have transformed the phenomenon generically labeled “family business.” Even in periods as short as a few decades, they could well be talking about very different phenomena.

Holly Straut Eppsteiner and I am currently working on a paper that uses findings from research on the history of family forms in the United States over the past several centuries. Much of this research is based on life course and family demography models. The paper focuses on the formation and composition of families from around 1800 until 2015, using long-term trends derived from US Census data and other sources. Steven Ruggles’ 2015 Population Association of America address was particularly helpful to us. We urge family business scholars to bring into their work what we have learned about the economic and social transformations in the US that have produced fundamental changes in the ways in which family units form and are sustained.  Studies of “family business” in the 21st century need to take account of the new reality.