A friend introduced me to a noteworthy line of thinking recently. It went something like this: “There are two types of entrepreneurs in this world: alpha entrepreneurs and beta entrepreneurs. Alpha entrepreneurs are the guys that are naturally risk tolerant, even irrational dreamers; they’re charismatic and marshal folks around them to develop a company that’s viable. Alphas take the first step. Beta entrepreneurs, on the other hand, are very execution focused, basically rational when it comes to risk, and bring to bear a learned skill set. They take problems and set about methodically solving them. Betas make entrepreneurship work.”
So, my friend says, “We need to stop encouraging alpha entrepreneurship. You can’t teach someone to be an alpha. What we can do is teach folks to be betas. A community doesn’t need a ton of alphas, but it needs lots of betas.”
For me, this classification and accompanying recommendation resonate in certain ways. Execution builds businesses. And loads of multi-million dollar businesses are built without a real visionary or need only a creative kick-start.
I do have a couple counterpoints, though: (1) lots of individuals have had their natural alpha suppressed by risk-averse upbringings and a little encouragement can go a long way; (2) a startup’s potential may turn on creative, risky adaptation (in other words it’s not just about a visionary getting the ball rolling; consider Facebook’s application API ingenuity).
Incidentally, the market tends to place a higher value on end-user execution than ingenuity. Consider invention licensing contracts (pretty favorable to the licensee) or content creation vs aggregation/distribution value allocations (pretty favorable to the aggregator/distributor). These examples are driven by monetization control but the point holds, I think.
I suspect that my friend has a strong argument from an economic development standpoint. To “teach betas,” I’d add, “attract alphas.” Creative juice and leaps of faith are integral aspects of the game, and I’d hate to lose sight of that. Irrational risk compasses are a precious commodity.
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Photo credit: Pink Neon sign, originally uploaded by Browserd
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