Professor Steven Rogers is the Gordon and Llura Gund Family Distinguished Professor of Entrepreneurship at Northwestern University’s Kellogg School of Management and the author of Entrepreneurial Finance: Finance and Business Strategies for the Serious Entrepreneur.
Here, Professor Rogers shares his advice for today’s entrepreneurs.
How do you define entrepreneurship?
The definition is a person who pursues an opportunity by putting capital at risk and then ideally employing people; that’s the definition that I give my class. Opportunity, risk capital, employment. In a much broader sense, entrepreneurship means freedom and independence.
What is the importance of a business plan?
When you think about [the fact that] 8 out of 10 entrepreneurs will fail, research will show that the entrepreneurs who succeed, they will have failed 2.3 times before succeeding. So what we know is that failure is almost a rite of passage, it’s just definitely going to happen. We also know that people fail because of lack of preparation, and lack of training. A business plan is a form of training, a form of preparation that increases your chances for entrepreneurship.
… If you’re trying to raise money, that plan, in essence, is a substitute for you. If you’re standing in front of a person telling them what you’re going to do, that plan does it for you in a cohesive, cogent succinct matter.
What is the best business book that you’ve read recently?
The Outliers by Malcolm Gladwell is the most profound book I have read that applies to business, [although] it’s not strictly a business book. Gladwell has done research to determine what creates an outlier. What is an outlier? A person who has had great success; what is it that differentiate people like that from the run of-the-mill? He gives anecdotes and use empirical data to come up with an algorithm for success, and it is an absolutely fascinating read, everybody should read it.
Is an advanced education important for today’s entrepreneurs?
The more education one has, the better your chances for entrepreneurial success.
I teach entrepreneurs, I have a class of 30 of them, and they will literally say, “I wish I had taken this stuff before I was an entrepreneur, so that I could learn to do it the right way.”
Graduate school teaches us how to do things the right way. Why you’re training yourself, you’re doing things haphazardly, and you’re prone to making mistakes. In entrepreneurship, when you’re making mistakes … one has to realize that’s taking up a lot of time and a lot of money. Why not go to graduate school and learn how to do it the right way so that you don’t waste that time and that money?