How do entrepreneurs create value? By finding a market space that is ripe for disruption, and then applying “leverage” to that space.
What is the key to a successful start-up? “Market Selection:” figuring out what you are selling, to whom you are selling it, and when.
Serial entrepreneur Andy Ory, who sold Acme Packet to Oracle for a couple of billion dollars in 2013, expounded on the essence of entrepreneurship at the April 30th Boston breakfast meeting of the Association for Corporate Growth. Ory is now working at his new company, with twenty-five employees (mostly engineers), financing and, so far, “no product.”
Why do entrepreneurs do this, and why do they act independently and why cannot entrepreneurship flourish within larger, well financed companies (the kinds of companies that often purchase the successful entrepreneurship projects)? According to Ory, “entrepreneurs don’t make good employees.” Many large companies have tried internal innovation, and almost all have failed (he noted Google as a possible exception that proves the rule).
What sort of resources do budding entrepreneurs need? Since successful market selection, Ory’s key to value creation, requires experience and context and a robust network to tap into, he thinks that budding entrepreneurs should be provided with meaningful internships. Perhaps universities can set up internships which will facilitate creation of a dynamic network, thus informing the market selection process.