Entrepreneurs driven by vision

The Windows 95 hoopla included a lot of media attention on Microsoft founders Bill Gates (net worth $13.5 billion) and Paul Allen ($6 billion) and how the software products of their 20-year-old, $53.6 billion company are changing the way we live and work. Tucked away in these stories are keen and instructive insights about the nature of entrepreneurship, the driving force behind America’s new economy.

There are many definitions of entrepreneur. My Webster’s says an entrepreneur is a person who “organizes, manages and assumes the risks of a business or enterprise.” My dictionary of business terms says it is one “who initiates business activity (and) takes business risks.”

Victor Kiam, the Remington razor man, says, “Entrepreneurs are risk-takers, willing to roll the dice with their money or reputations on the line in support of an idea or enterprise. They willingly assume responsibility for the success or failure of a venture and are answerable for all its facts. The buck not only stops at their desk, it starts there, too.”

Common to all these definitions are the ideas of “starting an enterprise” and “risk-taking,” And, even though Victor Kiam adds the important element of “personal responsibility,” I have never liked these widely used definitions because they didn’t fit the entrepreneurs I’ve known. Entrepreneurs I’ve known are people who were vision-driven, who spotted a need in the marketplace and who rushed to meet it. They were not planners. They made things up as they went along, and often the bucks they risked were not primarily their own but those of friends and relatives — who believed in them and their vision.

That’s why I’ve always preferred the description of an entrepreneur as a person “who pursues opportunities without regard for resource constraints and take personal responsibility for his actions.” I can’t remember who said that, but those words capture the behavior and outlook of the entrepreneurs I’ve known.

That definition is also useful because it applies equally to entrepreneurial activity no matter where it is found — in business, a not-for-profit hospital, a university or think tank or a civic association. In fact, the entrepreneurial mentality is spread widely in America’s can-do society.

This definition of entrepreneur also shows why entrepreneurs don’t like big institutions — big business, big labor, big government, whatever. Reason: Big institutions require plans, and plans are a way of delaying action and “proving” that you don’t have enough resources to do something. Entrepreneurs practice “ready, fire, aim” with great frequency.

All of these qualities of the entrepreneur surface in the stories about the lives of Microsoft founders Gates and Allen. Last week’s Fortune cover story shows that Gates and Allen were driven by a vision of new markets (for PC operating systems) not by making money and not by the glitz of new technology. They also ignored resource constraints as they pursued opportunities. Example: Gates offered, in 1980, to license the DOS operating systems to IBM at least 48 hours before Allen had actually closed the deal to purchase the system from DOS developer, Seattle Computer. Microsoft eventually purchased DOS (for $50,000) and the rest is history.

There are many lessons for all Americans in the Bill Gates-Paul Allen story — including the story of Windows 95, which makes the PC almost, but not quite, as good as a Macintosh.