Don’t build a start-up, become a systems entrepreneur

560px-Morne_Seychellois_NP_footpath“Make sure you start the year on the right foot…”

…my grandmother always used to remind me. Given that I work at what is externally referred to as one of Canada’s main entrepreneurship centres (though I much prefer describing MaRS as an innovation hub), starting the year by writing a piece on why you should NOT build a startup probably wouldn’t meet her standard. But you have to put your job on the line at least once a year to make the ride worthwhile, right?

Whenever I am trying to solve a problem, whether it’s in my personal life, at work (first in management consulting and now in innovation) or in my relationships (where I get a lot of slack for treating problems like projects), I generally go through a three-stage process:

The why

How is success defined? How should it be defined? What is the North Star or goal post we’re going after?

The how

What are the options? What pathways can we imagine to get us there? Which one(s) should be chosen?

The what

Where do we start? What’s the first step? How do we track progress and learn?

There is also a big “who” question that runs through all three stages, but we will leave that for another time. For now, let’s consider the challenge proposed in the title of this article through these questions.

(Re)defining success: Why people build startups

When I consider the wide range of underlying motivations for why people decide to build startups, they generally fall into one of the following (non-comprehensive) categories:

  • Necessity: “This is my best chance at providing the basics of life for me and/or my family.”

If this is the case for you, you should absolutely take what you believe to be the best path forward. Nobody else understands your specific context better than you do. Just make sure that you understand the realities of the startup life and the risks associated with it, and also be sure to get access to the fast-growing range of public resources that can help support you along the way.

  • Achievement: “I am going to do this so that I can have more money/power/freedom/excitement/etc.”

While I have my own opinions about why these are the wrong settings on a personal compass, fortunately I can just defer to Phil Libin, CEO of Evernote, who explains why you shouldn’t build a startup if these are your goals.

  • Impact: “I want to change or create a positive impact in the world!”

I’m lucky enough to meet a lot of people for whom impact is a primary motivation. Listening to them express their motivations makes my heart both melt and ache every time. It makes my heart melt because these are absolutely the kind of people we need much more of—those who seek meaning, are driven by purpose, and have a vision for the future. On the other hand, it makes my heart ache because I see so much of their amazing potential go to waste (or, at best, not go very far). This is due in part to their choosing the wrong “how,” even though they have the right “why” as their starting point.

Mission Big Change: Why building a startup isn’t the best path

Of those in that final category, almost everyone I speak to genuinely wants to create real, meaningful, positive, long-lasting, sustainable change—what we will call ‘big change.’

The next question is whether building a startup is the best way to get there (most people default to this option and only ask how to build the best startup.)

To answer that question, we can compare the most significant conditions necessary for big change with the most common pieces of advice given to the founders of new startups. As we can see in the chart below, for every one of the five key conditions, the common advice for startups is the exact opposite:

Screen Shot 2015-01-21 at 4.43.19 PM

A whole article could be written analyzing each condition and piece of advice, their respective underlying logic and their stark contrast, but we will leave that to another time. For now, I will just share a quote from Nicholas Negroponte of MIT Media Lab and One Laptop Per Child fame (who has, with freakish accuracy, predicted the future over the last several decades), from his interview with Stewart Brand of The Long Now Foundation:

“Startup businesses are sucking people out of big thinking. So many minds that used to think big are now thinking small because their VCs tell them to ‘focus’…they’re doing these startups and their venture funding tells them focus, focus and become cash-flow positive—which is a really stupid idea in a startup…keep the risk high, don’t become cash-flow positive.”

To be abundantly clear, no part of this is a criticism of entrepreneurial thinking or entrepreneurial spirit—both of which I love, with the former featuring prominently in our curriculum (led by our amazing faculty member Assaf Weisz) and the latter being a big part of our culture at Studio Y. Both are necessary ingredients to becoming a truly successful systems entrepreneur. The issue is that these really powerful, bold ideas and concepts have been corrupted in the way in which we’ve built our dominant startup ecosystems.

“But what about Elon Musk?” is an unavoidable counter to the arguments outlined above. Elon Musk, in this case, is exactly the exception that proves the rule. He thinks big, he gives away his intellectual property and he takes on big societal challenges that matter to our future. In fact, the fact that Elon Musk is celebrated for being such an outlier in how he goes about working on his ventures is what should concern us most.

Another great (and Toronto-based) example is Aled Edwards, director and CEO of the Structural Genomics Consortium, who has championed the view that drug discovery advances would be made more rapidly within an open access research environment in which no patents are filed, and materials and ideas are exchanged without restriction on use.

C/O NASA

C/O NASA

So if not ‘launch a start-up!’ then what?

The road less traveled: The rise of systems entrepreneurs

To make the case for an alternative path, it is important to also consider how big change happens. Two distinguishing factors include adoption and success definition:

Let there be light.  

The fundamental transformations in our world come from large-scale adoption, not from the act of invention. For a number of reasons, including very innate human tendencies, we reward invention significantly more than we do adoption, despite adoption being an absolutely necessary condition for big change. In my research for this piece, I came across Dr. Marc Ventresca, an economic sociologist in strategy and innovation at Saïd Business School, who makes this point in a TEDx talk using a great example. He argues that it is large-scale power-grid systems (each unique to its particular context) that have changed the world, not simply the invention of electricity.

We need to grow.

This is the shared mantra of almost every organization across industries. Even in those organizations focused on growing impact (rather than profits), the problem is that the “we” is the organization; our dominant, if not exclusive, approach to success definition is at the organizational level. Just think about the mind-blowing amount of resources that go into setting up, growing and promoting individual organizations, or about how highly we regard leaders (again, across all sectors) who grow an organization’s budget, size, reach or, in the best case scenario, actual impact.

Yet, what we know to be unequivocally true is that our biggest issues are so complex and interdependent that no single organization or solution can alone achieve the level of fundamental systems change required. One of the biggest issues with the startup model is that it fundamentally defines success as organizational success (and how fast, big and far you can grow it) with zero accountability for system success.

So who, then, are systems entrepreneurs? The concept of systems entrepreneurs is not widely recognized, as can be seen by performing a Google search for  “systems entrepreneur” or “system entrepreneur,” which return 25,000 and 5,000 results respectively, almost all of which are related to information, communication and power systems.

Both Engineers Without Borders and our team at Studio Y have used the term “systems change leaders” as a frame over the past couple of years, in developing the people we work with.

In her paper, “How Actors Change Institutions: Towards a Theory of Institutional Entrepreneurship” (2009),  Julie Battilana, an associate professor at Harvard Business School, suggests that while all systems entrepreneurs are change agents, to be considered a systems entrepreneur, two criteria must be met:

  • First, you must initiate divergent change (something that breaks with the status quo rather than simply improving or enhancing it).
  • Second, you must actively participate in the implementation of these changes, demonstrating an ability to marshal the resources required to implement change (speaking to the adoption point made earlier).

She and her colleagues then describe three sets of activities that systems entrepreneurs undertake:

  • Developing a vision — encompasses activities undertaken to make the case for change, including sharing the vision of the need for change with followers.
  • Mobilizing people — includes activities undertaken to gain others’ support for and acceptance of new routines.
  • Motivating others to achieve and sustain the vision — consists of activities undertaken to institutionalize change.

Note how none of these criteria and activities require building a startup. In fact, the dominant startup model limits one’s ability to truly focus on some of the most important elements of systems entrepreneurship.

More recently, Peter Senge, the author of The Fifth Discipline and a guru in systems thinking and organizational learning, co-authored a piece in the Stanford Social Innovation Review titled: The Dawn of Systems Leadership. In it, the authors offer the following advice for those interested in getting started on a journey of becoming a systems leader/entrepreneur.

  • Learn on the job.
  • Engage people across boundaries.
  • Let go of control.
  • Build your own toolkit.
  • Work with others on a similar journey.

A plea and a pledge

I may not have listened to that piece of advice from my grandmother about how to start a new year, but one thing I learned through her actions (rather than her words) was never to shy away from a healthy debate about the future.

So whatever your vision or passion for the future, consider this a plea to make the pledge to take the road less travelled by way of systems entrepreneurship because, as Robert Frost said, we will look back years from now and know “that has made all the difference.”

For more on systems change roles, thinking, mindsets and initiatives, explore Ecosystems for Systems Change.

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Hamoon Ekhtiari About Hamoon Ekhtiari

A lover of all things blueberry and/or avocado, Hamoon Ekhtiari is the director of Studio Y at MaRS, a program that supports exceptional young people in driving positive change in their own lives, in our communities and in the systems we live in. He is also the co-founder of CatalystsX, a social enterprise that has raised over $900,000 to date, and a fellow of the School for Social Entrepreneurs-Ontario. Hamoon joined MaRS from Deloitte, where he most recently helped build the company’s consulting business in the Caribbean. He has also served as an adjunct faculty member at the University of Waterloo and previously worked at Family Services Toronto. Hamoon completed both his undergraduate and graduate degrees at the University of Waterloo, and was recently recognized with an Alumni Achievement Award from the school. Twitter: @HamoonPraxis.

Comments

  1. Great theory, Hamoon. Check out Peter Diamandis’ upcoming book ‘Bold’, about entrepreneurship that veers more to the big change side of your chart, and challenges people to work on things that will impact the history of our species. Even still, entrepreneurship is one of several ways to make lasting impact.

  2. Thanks for the comment, Dan!

    I was actually listening to this talk by Peter over the weekend: http://wbf.wobi.com/Peter-Diamandis – you make a very good point and I’ll be sure to check the book out as well.

    Excited to be joining you in Windsor soon!

    -H.

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