I met Burton Lee at Stanford University last year during a “Poland Day” conference organised each year by the US-Polish Trade Council. I was impressed by his vivid interest of the European entrepreneurship ecosystem and his acute mind the kind of feeling one is usually experiencing when meeting smarter people than yourself. I have recently asked Burton one simple question: “What is entrepreneurship?” and see below for yourself his view on that matter.
Dr. Burton Lee, Lecturer, European Entrepreneurship and Innovation, Stanford School of Engineering.
In most countries around the world, ‘entrepreneurship’ means building a family-owned company, venture or enterprise, that exists for and in support of the family across one or more generations, to be kept in the family for as long as possible. The family owns the vast majority of the equity, shares are passed from generation to generation, and employees receive no part of the equity, only salaries. Such firms are typically slow-growth, conservative, bank-backed, scale poorly, receive low valuations, are rarely sold on the public markets or to outside parties, lack transparency, do little M&A, and have a culture and management approach that are dominated by family personalities and dynamics. Such family-entrepreneur-based ‘Build-To-Keep’ companies form the backbone of most national economies around the world, including in Europe, Latin America, Africa, Asia and Israel.
Here in Silicon Valley, in contrast, ‘entrepreneurship’ refers almost exclusively to the practice of building fast-growth technology-based companies which are then sold to outside parties
Here in Silicon Valley, in contrast, ‘entrepreneurship’ refers almost exclusively to the practice of building fast-growth technology-based companies which are then sold to outside parties (to the general public, or to a major corporation). These ‘Build-To-Sell’ companies, typically called ‘startups’ in the early stages, are highly scalable, disruptive, venture-backed, receive high valuations, share broad ownership with employees, and function fully independently of founder family dynamics. At the heart of their commercial success lies their dynamic internal innovation culture which can typically move faster and outthink most traditional legacy companies that currently operate in the marketplace. This new class of entrepreneurial ‘startup’ firm, led by a very different kind of founder, together with mature new enterprises that have gone ‘public’ via IPOs, or that have been acquired by publicly-held companies, today form the backbone of only one economy in the world, that of the United States of America, where the technology sector is increasingly dominant in new job creation and corporate valuations. The only other economy that comes somewhat close in this regard is Israel, but even today, traditional family-owned companies and banks continue to dominate much of the Israeli economy.
we are beginning to see this new class of entrepreneur and ‘scalable sellable startup’ company emerge in economies as well, including in Eastern Europe
In the USA, it is thus more appropriate to refer instead to ‘serial entrepreneurship’ vs the one-off family-based entrepreneurship’ that we see in most other countries historically to date. As digital technology permeates societies around the world, however, we are beginning to see this new class of entrepreneur and ‘scalable sellable startup’ company emerge in economies as well, including in Eastern Europe, which has been historically dominated by state-owned enterprises during the Soviet period.
Twitter contacts: @burtonlee, @europreneurs.
Linkedin profile under this link
Burton Lee is a technology venture finance, innovation, entrepreneurship and design industry professional with 15+ years entrepreneurship, senior management and technical leadership experience in seed-stage investment; venture-backed startups; major global technology corporations (GE, HP, Daimler); govt executive service; STI & economic development agencies (NSF, NIH, NASA, European Commission); & top research universities.
Burton Lee lectures on ‘European Innovation and Entrepreneurship’ in Stanford’s School of Engineering. He is also a frequent public speaker in Europe, Latin America, Washington DC & Silicon Valley.
As Managing Director of Innovarium Ventures, Dr. Lee provides senior strategic, financial & technical leadership and advisory services to the global innovation sector, including hitech startups; private equity | VC investment funds and seed- & early-stage investors; technology & manufacturing corporations | MNCs; universities; S&T parks; accelerators & incubators; and regional & national govt STI agencies.
[Copyright 2016 Burton H. Lee, All Rights Reserved]