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To Be A World-Class Entrepreneur, Should You Be A Sprinter or Marathoner?

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Watching Usain Bolt run the 100-meter dash is shared joy. Watching Stephen Kiprotich win the marathon is shared (and joyful) agony. But what it takes to win in each sport is as different as night and day.

The 100 meters is a joyful burst of speed. The marathon is a painful bout of endurance. To be a world-class entrepreneur in Silicon Valley, you need to be a world-class sprinter and run like a lightning bolt. To be a world-class entrepreneur outside Silicon Valley, you need to be a world-class marathoner and endure (and perhaps relish) long-distance pain.

Silicon Valley Model

The Silicon Valley model is best exemplified by entrepreneurs such as Steve Jobs, Mark Zuckerberg, and even outsiders such as Bill Gates and Jeff Bezos. It involves the following requirements:

  • Get in an emerging industry: 88% of the world-class entrepreneurs from Silicon Valley were in emerging industries. The Valley is built to dominate emerging industries. It stinks when there is no emerging industry or they try to create one.
  • Get in at the right time: Once the lead horses have taken off, it is very difficult to catch up. You need to get in before they have established a huge lead that cannot be overcome.
  • Don’t worry about what you know or don't know because you are competing with others who are equally in the dark: At 20-something, you are not counting on experience, you are counting on chutzpah and swagger. If you don’t have this, get it before you move to the Valley.
  • Gamble with VC to boost your rocket ship: 80% of all VC-funded ventures fail, and only 1% become a home run where you become insanely rich. So do you feel lucky?
  • Get VC later if you want to stay in control of the rocket ship: World-class entrepreneurs who delayed getting VC till Aha kept control of the business and of the wealth they created. If not, the VCs controlled the business and hired “professional” CEOs. This means that you are relying on the expertise of others -- and they may turn out like the CEOs of Apple between Jobs I and Jobs II.

Rest-of-the-World Model

The Rest-of-the-World Model is best exemplified by entrepreneurs such as Steve Ells (Chipotle), Kevin Plank (Under Armour), Harry Stine (Stine Seed), Richard Burke (UnitedHealth), Michael Dell (Dell), Michael Bloomberg (Bloomberg), and Amancio Ortega (Zara). It involves the following requirements:

  • Get into an emerging industry or a fragmented industry or an industry where you have some experience: World-class entrepreneurs outside Silicon Valley grew in a variety of businesses, including emerging (Dell), fragmented (Chipotle), or oligopolistic (Stine, Burke and Bloomberg).
  • Get in at the right time and/or you have the right experience: They got in when the industry was taking off or when they knew they were ready.
  • Worry about what you know since you may be competing with better-funded and bigger competitors: Their race was a marathon. They needed to know all facets of the business and they learned it. Then they learned how to excel.
  • Become capital efficient to grow without capital: They did not want, or could not get, VC. They stayed capital efficient and built billion-dollar companies. It can be done. You don't have to get VC, except perhaps in the Valley. But even there, become capital efficient and delay.
  • Stay in control: The world-class entrepreneurs in the Rest-of-the-World did not cede control. They stayed in charge of the business and of the wealth they created -- and they kept more of it. This was the same strategy used by those who delayed VC, such as Gates and Zuckerberg.

MY TAKE: The secret to success is to know yourself and then pick the right strategy for you. If you are in an emerging industry and you are a gambler and a sprinter, move to Silicon Valley. But if you want to keep control of your venture in Silicon Valley (or elsewhere), get to Aha before seeking VC. If you are not in Silicon Valley, and you still want to succeed, become a marathoner. Learn capital efficiency.