Fortunately, we thought ahead to quantify our findings.  For each company we visited, we had one to three students score the company on a variety of metrics related to MBA hiring.  Diving into the data sheds new light on the complex relationship between MBAs and startups.

We asked the burning question: How Receptive are Silicon Valley Companies to Hiring MBAs

Overall, Silicon Valley startups were not as hostile to MBAs as we were led to believe.  Over 75% of startups visited were interested in hiring an MBA.  Only a small minority of companies were outright hostile, although perhaps such anti-MBA startups wouldn’t have received us in the first place.

Experienced Entrepreneurs More Likely to Value MBAs

The companies we visited had a good blend of first time entrepreneurs (39% of companies) and very seasoned entrepreneurs (18% of companies).  As entrepreneurial experience increased, we observed an increased willingness to hire MBAs.  We optimistically interpret this to mean serial entrepreneurs recognize MBAs are the key to startup success.

 Company Size Strongly Correlates with Interest in Hiring MBAs

The stage of a company is a good predictor of how likely they are to hire MBAs.  Very small companies (<15 employees), which accounted for 17% of our visits, were the least likely to hire an MBA.  As they scale, they become more receptive to hire MBAs.  Anecdotally, we note small companies are most eager to hire technology talent.  As they scale, they start to staff out business development, marketing, strategy, and other MBA functions.

Startups in Accelerators Overall Less Likely to Hire MBAs

14% of the companies we visited had been through accelerator programs, and these companies were among the least interested in hiring MBAs.  Although these companies were disproportionately still small, we note this effect remained consistent for companies at all levels of employees.  We suggest that robust accelerator programs, which provide access to mentorship, networking, and business development opportunities, may supplant the value of some MBAs.

Interest in MBA Hiring Varies Sharply by Industry

For each company, visiting students assigned it into as many industries as applied.  We note that medical, gaming, and consumer internet startups were less likely than average to hire business school students.  MBAs were most highly sought after in marketing/advertising, big data, or energy startups.

Silicon Valley: Open For Business School Students

In conclusion, the MBA provides a measurable value add for Silicon Valley startups.  An MBA is less valuable to an early stage startup or one that has gone through an accelerator program.  Serial entrepreneurs are more likely to value an MBA, perhaps indicating the degree may become more valuable if the current wave of startups propagates into future generations.

If you are a small startup looking to bring aboard an MBA, you should weigh a few pros and cons.  A startup necessarily carries a lot of risk, yet MBAs are often hard-wired to minimize risk or avoid it altogether.  Make sure the MBA you are talking with is on board because they share your passion for the idea, and are willing to accept a lower paid position than many of their peers.

A major benefit of hiring an MBA (as opposed to an undergraduate business student) is that they often bring quality work experience from before their MBA program.  Pay attention for MBAs with industry domain expertise, especially if you are in the B2B space.  A strong personal and professional network from a person nearly a decade into their career generates accelerating returns.

Finally, look for an MBA who can juggle the work of several later stage hires too costly for early stage startups, ideally one demonstrating real-world experience with skill sets like finance, accounting, HR, strategy or market analysis.  A dedicated expert in any of these arenas are useful but often too costly for a small company.  The right MBA can juggle several of these tasks for you.

In closing, around the Bay Area, there’s never been a better time to suit up!

On one side stand those who believe that entrepreneurs have stopped chasing and solving Big Problems – capital B, capital P: clean energy, poverty, famine, climate change, you name it.  I needn’t replay their song here; they’ve argued their cases far more eloquently elsewhere.  In short, they contend that too many brains and dollars have been shoveled into resolving what I call ‘anti-problems’ –  interests usually centered about food or fashion or ‘social’or gaming.  Something an anti-problem company  might develop is an app  that provides  restaurant recommendations based on your blood type, a picture of your childhood pet, the music preferences of your 3 best friends, and the barometric pressure of the nearest city beginning with the letter Q.  (That such an app does not yet exist is reminder still of how impoverished a state American scientific education has descended.  Weep not! We redouble our calls for more STEM funding.)

On  the other side stand those who believe that entrepreneurs have stopped chasing and solving Big Problems – capital B, capital P – that there are too many folks resolving anti-problems… BUT  just to be on the safe side, the venture capitalists should keep pumping tons of  money  into  those anti-problem entrepreneurs because you never know when some corporate leviathan – Google, Facebook, Yahoo! – will come along and buy what yesterday looked like a nonsense app and today is still a nonsense app, but a nonsense app that can walk a bit taller, held aloft by the insanities of American exceptionalism.  For not only is our sucker birthrate still high in this country (one every minute, baby!), but our suckers are capitalists bearing fat checks.

On the other other side, a side that receives scant attention, scanter investment, is where big problems – little b, little p – reside.  Here, you’ll find a group I’ll refer to as the unexotic underclass.  It’s rather quiet in these parts, except during campaign season when the politicians stop by to scrape anecdotes off the skin of someone else’s suffering.  Let’s see who’s here.

To your left are single mothers, 80% of whom, according to the US Census,  are poor or hovering on the nasty edges of working poverty.  They are struggling to raise their kids in a country that seems to conspire against  any semblance of proper rearing: a lack of flexibility in the workplace; a lack of free or affordable after-school programs;  an abysmal public education system where a testing-mad, criminally-deficient curriculum is taught during a too-short school day; an inescapable lurid wallpaper of sex and violence that covers every surface of  society;  a cultural disregard for intelligence, empathy and respect;  a cultural imperative to look hot, spend money and own the latest “it”-device (or should I say i-device) no matter what it costs, no matter how little money Mum may have.

Slightly to the right, are your veterans of two ongoing wars in the Middle East. Wait, we’re at war?   Some of these veterans, having served multiple tours, are returning from combat with all manner of monstrosities ravaging their heads and bodies.  If that weren’t enough, welcome back, dear vets, to a flaccid economy, where your military training makes you invisible to an invisible hand that rewards only those of us who are young and  expensively educated.

Welcome back to a 9-month wait for medical benefits.  According to investigative reporter Aaron Glantz, who was embedded in Iraq, and has now authored The War Comes Home: Washington’s Battle against America’s Veterans, 9 months is the average amount of time  a veteran waits for his or her disability claim to be processed after having filed their paperwork.  And by ‘filed their paperwork,’ I mean it literally: veterans are sending bundles of papers to some bureaucratic Dantean capharnaum run by the Department of Veterans’ Affairs,  where, by its own admission, it processes 97%  of its claims by hand, stacking them in heaps on tables and in cabinets.

In the past 5 years, the number of vets who’ve died before their claim has even been processed has tripled. This is America in 2013: 40 years ago we put a man on the moon; today a young lady in New York can use anti-problem technology if she wishes  to line up a date this Friday choosing only from men who are taller than 6 feet, graduated from an Ivy, live within 10 blocks of Gramercy, and play tennis left-handed…

…And yet, veterans who’ve returned from Afghanistan and Iraq have to wait roughly 270 days (up to 600 in New York and California) to receive the help — medical, moral, financial – which they urgently need, to which they are honorably entitled, after having fought our battles overseas.

Technology, indeed, is solving the right problems.

Let’s keep walking.  Meet the people who have the indignity of being over 50 and finding themselves suddenly jobless.  These are the Untouchables of the new American workforce: 3+ decades of employment and experience have disqualified them from ever seeing a regular salary again.   Once upon a time, some modicum of employer noblesse oblige would have ensured that loyal older workers be retained or at the very least retrained, MBA advice be damned.  But, “A bas les vieux!” the fancy consultants cried, and out went those who were  ‘no longer fresh.’  As Taylor Swift would put it, corporate America and the Boomer worker  “are never ever getting back together.”  Instead bring in the young, the childless, the tech-savvy here in America, and the underpaid and quasi-indentured abroad willing to work for slightly north of nothing in the kinds of conditions we abolished in the 19^th century.

For, in the 21^st century, a prosperous American business is a soaring 2-storied cake: 1 management layer at top thick with perks, golden parachutes, stock options, and a total disregard for those beneath them; 1 layer below of increasingly foreign workers (If you’re lucky, you trained these people before you were laid off!), who can’t even depend on their jobs because as we speak, those sameself consultants – but no one that we know of course — are scouring the globe for the cheapest labor opportunities, fulfilling their promise that no CEO be left behind.

Above all of this, the frosting on the cake,  the nec plus ultra of evolutionary corporate accomplishment: the Director of Social Media.  This is the 20-year old whose role it is to “leverage social media to deliver a seamless authentic experience across multiple digital streams to strategic partners and communities.”  In other words, this person gets paid six figures to send out tweets. But again, no one that we know.

Time and space and my own sheltered upbringing  defend me from giving you the whole tour of the unexotic underclass, but trust that it is big, and only getting bigger.

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Now, why the heck should any one care? Especially a young entrepreneur-to-be.  Especially a young entrepreneur-to-be whose trajectory of nonstop success has placed him or her leagues above the unexotic underclass.  You should care because the unexotic underclass can help address one of the biggest inefficiencies plaguing  the startup scene right now: the flood of  (ostensibly) smart, ambitious young people desperate to be entrepreneurs; and the embarrassingly idea-starved landscape where too many smart people are chasing too many dumb ideas, because they have none of their own (or, because  they suspect no one will invest in what they really want to do).  The unexotic underclass has big problems, maybe not the Big Problems – capital B, capital P – that get ‘discussed’ at Davos.  But they have problems nonetheless, and where there are problems, there are markets.

The space  that caters to my demographic – the cushy 20 and 30-something urbanites – is oversaturated. It’s not rocket science: people build what they know.  Cosmopolitan, well-educated young men and women in America’s big cities are rushing into startups and building for other cosmopolitan well-educated young men and women in big cities.  If you need to plan a trip, book a last minute hotel room , get your nails done, find a date, get laid, get an expert shave, hail a cab, buy clothing, borrow clothing, customize clothing, and share the photos instantly, you have Hipmunk, HotelTonight, Manicube, OKCupid, Grindr, Harry’s, Uber, StyleSeek, Rent the Runway, eshakti/Proper Cloth and Instagram respectively to help you. These companies are good, with solid brains behind them, good teams and good funding.

But there are only so many suit customisation, makeup sampling, music streaming, social eating, discount shopping, experience  curating companies that the market can bear.  If you’re itching to start something  new, why chase the n^th  iteration of a company already serving the young, privileged, liberal jetsetter? If you’re an investor, why revisit the same space as everyone else?  There is life, believe me, outside of NY, Cambridge, Chicago, Atlanta, Austin, L.A. and San Fran.

It’s where the unexotic underclass lives.  It’s called America.  This underclass is not some obscure niche market.  Take the single mothers. Per the US Census Bureau, there are 10 million of them  today; and an additional 2 million single fathers.  Of the single mothers, the majority is White, 1 in 4 is Hispanic, and 1 in 3 is Black.  So this is a fairly large and diverse group.

Take the veterans. (I will beat the veteran drum to death.) According to the VA’s latest figures, there are roughly 23 million vets in the United States.  That number sounds disturbingly high; that’s almost 1 in 10 Americans.  Entrepreneurs and investors like big numbers.  Other groups you could include in the underclass: ex-convicts, many imprisoned for petty drug offenses, many released for crimes they never even committed.  How does an ex-convict get back into society?  And navigate not just freedom, but a transformed technological landscape?  Another group, and this one seems to sprout in pockets of affluence: people with food allergies.  Some parents today resort to putting shirts and armbands on their kids indicating what foods they can or can’t eat.  Surely there’s a better fix for that?

Maybe you could fix that.

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Why do I call this underclass unexotic?  Because, those of us, lucky enough to be raised in comfortable environs – well-schooled, well-loved, well-fed – are aware of only 2 groups: those at the very bottom and those at the very top.

We have clear notions of what the ruling class resembles – its wealth,  its connections, its interests.  Some of you reading this will probably be part of the ruling class before you know it.  Some of you probably already are.  For the 1% aspirants (and there’s no harm in having such aspirations), hopefully by the time you get there, you will have found meaningful problems to solve – be they big, or Big.

We have clear ideas of what the exotic underclass looks like because everyone is clamoring to help them.  The exotic underclass are people who live in the emerging and third world countries that happen to be in fashion now -– Kenya, Bangladesh, Brazil, South Africa. The  exotic underclass are poor Black and Hispanic children (are there any other kind?) living in America’s urban ghettos.  The exotic underclass suffer from diseases that have stricken the rich and famous, and therefore benefit from significant attention and charity.

On the other hand, the unexotic underclass, has the misfortune of being insufficiently interesting.  These are the huddles of Whites – poor, rural working class – living in the American South, in the Midwest, in Appalachia.  In oh-so-progressive Northeast, we  refer to them as ‘hicks’ and ‘hillbillies’ and ‘trailer trash,’ because apparently, this is the one demographic that American manners have forgotten.

The unexotic underclass are the poor in Eastern Europe, and Central Asia, who just don’t look foreign enough for our taste.  Anyone who’s lived in a major European city can attest to the ubiquity of desperate Roma families, arriving from Bulgaria and Romania, panhandling in the streets and on the subways. This past April, the employees of the Louvre Museum in Paris went on strike because they were tired of being pickpocketed by hungry Roma children.   But if you were to go to Bulgaria to volunteer or to start a social enterprise, how would the folks back on Facebook know you were helping ‘the poor?’  if the poor in your pictures kind of looked like you?

And of course, the biggest block of the unexotic underclass are the ones I alluded to earlier: that vast, suffocating mass right here in in America. We don’t notice them because they don’t get by on $1 a day. We don’t talk about them because they don’t make $1 billion a year.  The only place where they’re popular is in Washington, D.C. where President Obama and  his colleagues in Congress can can use members of the underclass to spice up their stump speeches: “Yesterday, I met a struggling family out in yadda yadda yadda…” But there’s only so much Washington can do to help out, what with government penniless and gridlocked, and its elected officials occupying a caste of selfishness, cowardice and spite, heretofore unseen in American politics.

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If you’re an entrepreneur looking for ideas, consider looking beyond the city-centric, navel-gazing, youth-obsessed mainstream.  That doesn’t mean you need to fly to the end of the world.  Chances are there are more people addressing the Big Problems of slum dwellers in Calcutta, Kibera or Rio, than are tackling the big problems of hardpressed folks in say, West Virginia, Mississippi or Louisiana.

To be clear, I’m not painting the American South as the primary residence of all the wretched of the earth. You will meet people down there who are just as intelligent and cultured and affluent as we pretend everyone up North is.

Second, I’m not pitting the unexotic against the exotic.  There is nothing easy or trendy about the work being done by the brave innovators on the ground in Asia, Africa, and Latin America.  Some examples of that work: One Earth Designs which helps deliver clean energy and heating solutions to communities in rural China; Sanergy, which is bringing low-cost sanitation to Kenya’s poorest slums;  Samasource, which provides contract work to youth and women in Haiti, Ghana, Kenya, Uganda and India.  These are young startups with young entrepreneurs who attended the same fancy schools we all know and love (MIT, Harvard, Yale, etc.), who lived in the same big cities where we all congregate, and worked in the same fancy jobs we all flocked to post-graduation.  Yet, they decided they would go out and  tackle Big Problems – capital B, capital P. We need to encourage them, even if we could never imitate them.

If we can’t imitate them ,and we’re not ready for the challenges of the emerging market, and we have no new ideas to offer, then maybe there are problems, right here in America for us to solve…The problems of the unexotic underclass.

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Now, I can already hear the screeching of meritocratic,  Horatio Algerian Silicon Valley,

“What do we have to do with any of this? The unexotic underclass has to pull itself up by its own bootstraps!  Let them learn to code and build their own startups!  What we need are more ex-convicts turned entrepreneurs, single mothers turned programmers, veterans turned venture capitalists!

The road out of welfare is paved with computer science!!!”

Yes, of course.

There’s nothing wrong with the entrepreneurship-as-salvation gospel. Nothing wrong with teaching more people to code.  But it’s impractical in the short term, and misses the greater point in the long term:   We shouldn’t live in a universe of solipsistic startups…  where I start a company and produce things only for myself and for people who resemble me.  Let’s be honest.  Very few of us are members of this unexotic underclass.  Very few of us even know anyone who’s  in it.   There’s no shame in that.  That we have  sailed on a yacht of good fortune most of our lives — supportive generous families, a stable peaceful democracy, excellent schooling, prestigious careers and companies, relatively good health – is nothing to be ashamed of. Consider yourselves remarkably blessed.

What is shameful though, is that in a country with so many problems, with such a heaving underclass, we find the so-called ‘best and brightest,’ the 20-and 30-somethings who emerge from the top American graduate and undergraduate programs, abandoning their former hangout,Wall Street, to pile into anti-problem entrepreneurship.

Look, I worked for Goldman Sachs immediately after graduating from Wellesley. After graduating from MIT, I worked at a hedge fund. I am not throwing stones.   Here in hell, the stones wouldn’t reach you anyhow… If you’re under 30 and in finance, you’ve definitely noticed the radical migration of your peers from Wall Street to Silicon Valley and Silicon Alley.   This should have been a good exchange.  When I first entered banking, leftist hippie that I was (and still am), my biggest issue was what struck me as a kind of gross intellectual malpractice:  how could so many bright historians and economists, athletes and engineers, writers and biogeneticists, from every great school you could think of – Princeton, Berkeley, Oxford, Harvard, Imperial, Caltech, Amherst, Wharton, Yale, Swarthmore, Cambridge, and so on — be concentrated into a single sector, working obscene hours at a sweatshop to manufacture money?

When I look at the bulk of startups today – while  there are notable exceptions (Code for America for example, which invites local governments to request technology help from teams of coders) – it doesn’t seem like we’ve aspired to something nobler: it just looks like we’ve shifted the malpractice from feeding the money machine to making inane, self-centric apps. Worse,  is that the power players, institutional and individual — the highflying VCs, the entrepreneurship incubators, the top-ranked MBA programs, the accelerators, the universities,  the business plan competitions have been complicit in this nonsense. 

Those who are entrepreneurially-minded but young and idea-poor need serious direction from those who are rich in capital and connections.  We see what ideas are getting funded, we see money flowing like the river Ganges towards insipid me-too products, so is it crazy that we’ve been thinking small?  building smaller? that our “blood and judgment” to quote Hamlet, have not been  “so well commingled?”

We need someone bold (and older than us) to stand up for Big Problems which are tough and dirty.  But what we especially need is someone to stand up for big problems – little b, little p –which are tough and dirty and too easy to overlook.

We need:

A Ron Conway, a Fred Wilson-type at the venture level to say, ‘Kiddies, basta with this bull*%!..  This year we’re only investing in companies targeting the unexotic underclass.”

A Paul Graham and his Y Combinator at the incubator level, to devote one season to the underclass, be it veterans, single moms or overworked young doctors, Native Americans, the list is long:  “Help these entrepreneurs build something that will help you.”

The head of an MIT or an HBS or a Stanford Law at the academic level, to tell the entire incoming class: “You are lucky to be some of the best engineering and business and law students, not just in the country, but in the world.  And as an end-of-year project, you are going to use that talent to develop products, policy and programs to help lift the underclass.”

Of the political class, I ask nothing.  With a vigor one would have thought inaccessible to people at such an age, our leaders in Washington have found ever innovative ways to avoid solving the problems that have been brought before them.  Playing brinkmanship games with filibusters and fiscal cliffs;  taking money to avoid taking votes.  They are entrepreneurs of the highest order: presented with 1 problem, they manage to create 5 more. They have demonstrated that government is not only not the answer, it is the anti-answer…

The dysfunction in D.C. is a big problem.

Entrepreneurs: it looks like there’s work for you there too…

A paradigm of success, Jasmina Aganovic, Founder of Bona Clara, embodies this person. One could argue the wealth of her past work engagements provided her with a unique perspective with which to ideate her skincare company. The ability to turn that initial concept into a successful startup, however, was entirely a derivative of her and her team at the now very successful Bona Clara.

As a chemical and biological engineer, MIT ’09, Aganovic decided to forgo the path common to graduates of her major. After her research stint at GSK, she chose to turn to the VC business instead, craving a smaller company culture and direct interaction with the end customer. Exploring her underlying interests in business, she worked with new technologies at the seed-level stage while also dealing with major Japanese cosmetics and hair care producer, Shiseido.

This dynamic switch from research to finance, led to the awareness of existent opportunities in the beauty industry wherein science could play a game-changing role. According to Aganovic, the beauty industry was undergoing a shift in incorporated ingredients as retailers such as Sephora were blacklisting traditional elements.

Taking full advantage of all opportunities available to her, Aganovic traveled to Spain on a fellowship from the Barcelona Chamber of Commerce to work in a dynamic space bridging science with beauty. Her work consisted of applying gold nanoparticle technology to skincare at a Spanish startup, Endor Nanotech.

Continuing her interest in the beauty industry, she then gained further valuable experience at Fresh and interfaced with QVC and Sephora via her spokesperson position at Living Proof.

Aganovic’s varied experience in both the beauty and research domains placed her in the prime position to take advantage of the next opportunity to come her way, HFM, now known at NutraClick. It was at this Cambridge based startup that Aganovic pitched the innovative concept of Bona Clara in the form of a skincare line, Stages of Beauty. She had always wanted to define a brand from concept to market and HFM’s unique positing as brand incubator and digital advertising servicer allowed her to do so. The concept for Stages stemmed from the research Aganovic had worked on as an undergraduate. While testing antibiotic eardrops made for babies, she found a significantly lower variance when segmenting results by the age of human skin samples. Without her valuable stint in the beauty industry, she might never have found she could leverage these findings towards  developing age defined skincare products.

Before Stages of Beauty, skincare was largely problem based, but Aganovic formulated a disruptive line that redefines skincare by age. However, Stages is not just another skincare line, it is an educational experience for the consumer as well. It troubled Aganovic that the general public lacked a deep understanding of the products formulated by the beauty industry. To combat the ignorant perception that this industry was superficial and in essence, only “skin-deep,” she crafted a story speaking to the customer’s experience while educating the masses of the smart engineering critical in everyday beauty products.

After testing the social selling model with Stages, what came next was a rapid launch of Bona Clara. The social selling domain was ripe for transformation and the infusion of digital and modern effectiveness into the old-fashioned Avon model met with immediate success. In Jan 2012, members of the Stages team branched off to dedicate their undivided energy to the Bona Clara brand.

What makes the selling model so appealing is its ability to engage customers and employees as one. Employees initially start off as customers, and quickly evolve into brand ambassadors. Employees and customers are both a reflection of the brand and help grow the business quickly by marketing the product skillfully. Yet, social selling is a complicated space and vastly underestimated. In spite of this, Aganovic’s startup managed to achieve success with a very difficult business model by leveraging their proprietary software, in particular. Bona Clara built an innovative digital platform to streamline the process of managing brand ambassadors all over the country.

This platform also has the capability to accommodate varying learning curves with an adaptive algorithm. In this way, personalized and tailored training tools provide a “level” playing field for employees. The digital platform allows Bona Clara to recruit diverse representatives so there is no “typical” ambassador. All are welcome for the chance at a flexible, commission-based job. Relying on ambassadors, who form an extension of the brand, is risky for some companies. However, Bona Clara’s shared value creation proves to be beneficial thus far. Representatives are commendably motivated to distribute the brand’s revolutionary beauty products. All brand ambassadors receive a welcome kit and the excitement of the brand continually grows as digital resources such as training calls, newsletters, and videos are provided to their ambassadors. Regional field development directors such as Deborah Coleman, previously at Avon, provide additional in person support in certain geographical areas to encourage and inspire ambassadors to host Bona Clara parties and educate their friends.

As successful as Bona Clara is now, the beginning, ramp-up stage was laden with hitches, typical to most startups. , Shipping products to ambassadors was a messy and expensive process and there were problems when transitioning brand representatives from Stages to Bona Clara. According to Aganovic, time or lack thereof was probably the biggest factor working against them. However, metrics for success were reformulated to emphasize impact as opposed to simply the number of products sold on Sephora shelves and optimism was instilled as a practice.

For Aganovic, the entire experience has been greatly inspirational. The big picture of her brand’s impact on its employees and customers motivates her to overcome the difficulties of managing a startup. Hearing of representatives finally be able to go on a honeymoon with the commission they earned is just one of many stories that fuel Aganovic’s passion to continue with this line of work. She hopes to continue the journey by expanding Bona Clara’s aged based skincare line to additional verticals such as body and hair care in the near future.

The future of MIT’s own entrepreneur Jasmina Aganovic may not reflect a predetermined path, but at the very least is incredibly promising. In following her lead, the opportunity to pioneer a novel contribution to society could present itself if we broaden our experiences and dare to associate with disparate fields. Hackathon’s are intellectually stimulating events that unite individuals of differing experiences. People of varied backgrounds mix to form inter-disciplinary groups that ideate fresh approaches to the most complex problems. Why can’t the same model be leveraged and encouraged at an individual level? Famous inventor and innovator Thomas Edison once said, “Opportunity is missed by most people because it is dressed in overalls and looks like work.” The same could be true for missed chances concealed from us because we choose not to uncover them, perfectly oblivious to the great opportunity that may arise if we boldly venture outside our comfort zones.

Here are 10 reasons why doctors have the potential to be terrific entrepreneurs:

1. The know how to build clinical judgment. The process is the same for business. Learning from mistakes is called experience. Learning from experience is called clinical judgment. It’s the same with entrepreneurship. Very few entrepreneurs have not had their share of mistakes of failed startups. The successful ones learn from those mistakes and have judgment about pursuing the next opportunity.

2. Entrepreneurship is about research and experimenting, something doctors do well. Doctors do this every day, day in and day out, with their patients.

3. Doctors are used to dealing with uncertainty. Like businesspeople, doctors make decisions with incomplete information. Sometimes they have to do things based on their gut. In fact, they do so more than they would like to admit. Only about 25-35% of medical decisions are based on scientific evidence.

4. Doctors have a bias to action. While obtaining a patient’s history, doing physical exams and tests are a routine part of care, they are all a means toward an end of solving or relieving the patient’s problem. Doctors are trained, admittedly sometimes unsuccessfully, to not do things that won’t make a difference in how they treat patients.

5. Doctors are excellent at pattern recognition. Doctors basically do three things: They make decisions, communicate/educate, and do procedures. Decision-making, whether in dermatology, pathology or multiple other specialties, relies on pattern recognition skills.

6. Doctors know how to question, observe, connect and associate: core entrepreneurial skills. In The Innovators DNA, Christensen et al. noted the core skills of innovators are: questioning, associating, connecting, experimenting and observing. Doctors have them all.

7. Doctors know how to assess risk and make on the spot cost-benefit decisions. Every medical decision is based on the risks versus the benefits.

8. Doctors can fulfill core entrepreneurial roles. They can be technopreneurs, market perceivers, managers, and/or investors.

9. Doctors have access to patients and understand the clinical issues more than anyone else. They live in a world of market opportunity.

10. Doctors have the courage to know when something won’t work or should be ended.  Doctors deal with such circumstance on a routine basis when dealing with patient’s treatment.

So, the next time someone raises their eyebrows when you tell them you are a physician entrepreneur, hand them a card with this list on the back of it. Maybe they’ll offer to invest in your idea.

Arlen Meyers originally published a version of this article on his blog for the Society of Physician Entrepreneurs at www.sopenet.org. 

MITER: What is the Fooducate story?  How did you decide to pursue the venture?

Hemi: Fooducate is my second venture.  I started a company ten years ago with two friends that ultimately led to a successful exit after three years.  I really enjoyed that experience, despite the fact that we were bootstrapped and really had a hard time.  We started the company during the nuclear winter of “dot bomb,” but I really enjoyed the independence and endless opportunities that being an entrepreneur provided compared to being in a large organization.  We were ultimately acquired, and I spent several years in a cushy corporate job.

As background, I’ve been a foodie most of my adult life.  I’ve always enjoyed cooking and the first place I go when I travel overseas is the food markets, and Whole Foods for me is like a holy shrine!  But I didn’t really care about the nutrition of food; rather, the quality.  I wouldn’t eat at McDonald’s because it tasted like crap, not because it’s not healthy.

But then I became a dad and started thinking differently about things.  That’s when I started looking into what’s really in the food I make for my kids. One day I read through the ingredients in a “glow-in-the-dark” yogurt that my wife had bought for the kids. Needless to say, I was shocked.

Around that time I was also trying to think about my next career steps and I realized I didn’t want to stay in a big company.  I made a list of five ideas I wanted to explore, and Fooducate wasn’t one of them!  But one night, out of the blue, I was having trouble sleeping and the idea for Fooducate, a mobile app for scanning barcodes, just popped into my head.  It was 2 AM and I ran to my computer to see if there was something like it and didn’t find anything too similar.  And that’s when it started rolling.

M: What were your priorities over the first year and how did you go about building the team and funding the venture?

H: It took a few months to find a cofounder. I was looking for a technical person and found my partner, who actually seemed like an unlikely partner at first.  He didn’t care much about health or nutrition, had a beer belly, and smoked. He liked the concept of a mobile phone advisor, though it wasn’t the food part that attracted him.  At that point I had developed an algorithm based on some scientific papers, but I needed to test it on a database.  That night he sent me an email at 4:00 AM where he scraped a website that had 10,000 products on it, and we started working off of that to test the algorithm.

We incorporated with just two people and started shopping around with angels.  We raised a small angel round, and hired another two people, realizing that what we needed to do was to get a product out as quickly as possible to test the hypothesis that people were actually interested in scanning barcodes in the supermarket.  It took about four months to develop the product, of which we spent a month on design. […] We also did a lot of work on the algorithm and database and did a quiet launch in mid-November 2011 with the idea that we’d have 6 weeks to do a bigger launch in January, which is when most people are interested in nutrition.

That’s what we did and in January 2011 we started to get some press.  I hired a PR professional for two months on low budget to get some initial press, which was very effective.  Another thing that helped us was Fooducate’s daily blog.  The blog has been around for much longer than the app – since Aug 2008, but the app launched two years later.  By the time we launched our app, the blog had reached over 100,000 monthly users, had been quoted in the NY Times and LA Times, and dietitians knew about it, so it was a good marketing platform for the app.

A few months after launch we got a very surprising email from Apple’s Developer Relations team.  They said they were impressed with the app. I drove down to meet them within a few days.  It was an awesome session and they told us they would promote Fooducate, but they couldn’t tell us how (Apple is sooooo secretive).  A few months later we started seeing ads for iPhone 4 that included Fooducate as a featured app.  There were full-page ads in People Magazine, Wall Street Journal, and others.  That gave us a lot of visibility and helped with downloads.  We launched on Android that summer.  So that’s pretty much the first year, and we’ve been at it ever since!

M: How did you demonstrate credibility and attract early adopters?

H: There was a nutrition professor that had been on my target list from day one; his name is Adam Drewnowski at the University of Washington in Seattle.  He invented the science of nutrition profiling and has a famous algorithm called NRF9.3, Nutrient Rich Foods; 9 nutrients to encourage and 3 nutrients to limit, which he developed, that looks at daily value of good nutrients, sums them up, then subtracts the three bad ones which are saturated fat, sugar, and sodium.  We took this algorithm, which was very naïve, and added an analysis of the ingredient lists. This is because food manufacturers can easily “cheat”: they take candy bars, fortify them, and say that they’re healthy.  So our algorithm discounts all that.  We then worked with several dietitians to tweak the algorithm and ran it in multiple iterations until we could compare two products and get the same feedback from the app as from a dietitian (a Turing test, if you will).  A dietitian knows by reading the nutrient list which is better for you and we wanted to see that our algorithm said the same thing.  We still do some tweaking, but are in a good place now.  We have professional dietitians that help us with decisions like this.

M: Did you get any push-back from the larger food and beverage companies along the way?  If so, how did you respond?

H: “First they ignore you” – and for the most part, we are probably still there.  We have been generating revenue through ads with the healthier brands and I can tell you we’ve walked away from very nice financial opportunities that told us “well, if our grades were better… (hint hint).”  Obviously that didn’t happen.  We haven’t had any company sue us, though there may be a PR silver lining if that were to happen.

We’ve also had medium-sized companies ask why their products don’t rate well and we’ve explained how our algorithm works.  The general components of it are published at bit.ly/fdctABCD.  They’ve said they don’t agree with us and that, for example, organic should get a much better consideration or the amount of sodium is fine because  the product is served in large portions.  Every company thinks their product is healthy; we get that.

M: How has Fooducate been commercialized?

H: We are generating revenue from several sources, but are not yet profitable, though last year was pretty close.  When you’re a VC-funded startup there’s expectation for that one winning business model.  We are still at a stage where we can be flexible and explore our options. I can tell you that our goal is not to stay as an app.  Our goal is for Fooducate to be the trusted brand and resource when people have to make food decisions, so it can even be as a seal of approval on food and in restaurant venues.  That’s our long term vision.

Right now we are generating revenue through premium versions of the app (e.g., allergies, diabetes), advertising, and partnerships in health care.  I’m very excited about the latter, because finally insurance companies understand that a dollar invested in disease prevention through healthy food might be worth $100 down the road.  We have a very large product database that other companies are interested in licensing, so we have a couple of partnerships there, as well.  These things add up and we will ultimately become profitable; otherwise, there is no justification for Fooducate to exist.  I don’t believe that Fooducate should be non-profit – I’m enjoying building a real business.

M: How do you see technology supporting health and nutrition going forward?  Are there any interesting trends you see emerging?

H: I think tech is wonderful and the “quantified self” movement is very exciting.  I think in the next few years we’ll see a lot of sensors.  Ideally we could put something on our tongue and, no matter what we eat, it will record it and it’ll be the best food journal ever.

However, I don’t believe technology is going to solve our health problems.  I think health starts with the Farm Bill and the legal/government system we have that can’t get free of the stranglehold of lobbies. I think the food and agricultural lobbies are wreaking havoc on our health at levels and proportions that are orders of magnitude larger than the benefits of a Fooducate app or any other app out there.  Until we realize that, we won’t see real improvements in the food system and in our health.

M: What’s next for Fooducate?

H: As I said, we don’t want to limit ourselves to being just an app, and I’ll leave it at that…

About Fooducate

Fooducate (fooducate.com) is a mobile application that helps individuals make informed food purchase choices.  It uses barcode scanning to identify food items, scores them based on a proprietary algorithm, and suggests healthier alternatives in the same food category.  Most recently, Fooducate introduced a health tracker that allows users to scan food that they’ve consumed to track their daily intake and the quality of food they are consuming.

For the early startup making their first hires, the process feels less like a badge of honor and more like a throbbing headache.  Hiring is a difficult process and many startups are forced to learn the ropes by trial and error.  Unfortunately, mistakes can be discouraging, expensive, and potentially fatal to the company.

We wanted to learn more about how startups navigate the thorny hiring process.  To do so, we got on the phone with startups who had posted job listings on http://startlabs.org/ and asked them a series of questions about their hiring habits.  We profile here three startups in very different stages of their growth:

• Small: An early stage mobile app, with fewer than 5 full time employees.
• Medium: A financial data company with about 15 employees.
• Large: A big data analytics company with about 30 employees.

Who are they hiring?

Technology talent is foremost in demand among all companies.  Over half of all open roles at all three companies were for technology positions, and such hires took a disproportionate amount of the hirer’s focus.  Small startups were looking to fill five positions: three strictly technology, one designer, and a single non-technical hire.  As the startups got larger, the need to bring in technology talent remained, but they were more diversified towards hiring marketing, ops, or other business roles.

Who is doing the hiring?

We found that the smaller the startup, the more senior the person who was handling the hiring.  At the small startup, the responsibility fell in the lap of the CEO/co-founder.  At the medium startup, hiring was still the responsibility of one of the company’s co-founders, although the CEO did not directly do it.  At the large startup, the responsibility fell to a senior VP.

Where do they look?

Contrary to crazy claims bandied about by some digital hipsterati, startups traffic in resumes just like large companies.  The resume serves as the starting point in the funnel.  About 20-25% of resumes merit an initial interview, and maybe a quarter to a third of people will move on to an in-person interview.  The funnel varies widely depending on the position, of course.  A typical technical position would receive about 50 resumes, while a business position may see up to 150 resumes.

The positions almost always end up posted to job boards around the internet, especially the free ones.  Startup sites like Startuply or technology focused sites like Stack Overflow received high reviews.  Most also looked to post at university career boards.  Craigslist in particular was singled out for its low quality resumes.  Despite all the time spent on job boards, respondents felt the best hires would come from personal networks or career fairs not job boards. These startups seldom used recruiters and often had bad experiences in their contacts with recruiters.

How do they evaluate hires?

The first screen for technology resumes is to see if they think the potential employee possesses the technically ability to do the job.  This doesn’t always require a direct match of technical skills to job requirements – a potential hire can get a pass if they demonstrate a proficiency in the most current technologies (more details on what these are in a future article).

Beyond this, additional factors come into play.  Through the resume and subsequent interviews, the hirers would look for other positive factors, including a good education, communication skills, and a fit with the company’s culture.

Conclusion

Although most of the people interviewed did not have a background in hiring, they all displayed a high level of sophistication in their hiring techniques.  Most of the knowledge was picked up over the course of several hires, and especially from the pain of making bad hires.  Some took an impressive analytical approach, and others were quite resourceful at sourcing talent.  While startup companies often lacked the resources or manpower of larger companies, they compensated with greater ingenuity.

Could smartphones have taken off if Steve Jobs had asked people what they wanted? All the user preference data in the world in 1998 would have shown him he should have made flip phones, because that was what the next trend would be. Similarly, if Henry Ford asked people what they wanted in 1900, they would have said faster horses. Cars would not have been invented, because people were not truly aware of all the possibilities. No doubt, Netflix will be amazing at predicting trends, but not more than that. Trends are just ripples of an existing wave. They should not be mistaken for a new creation. Did the average person know that 3D film technology existed well before it was “forced” on us? Did the average person know that touch-screens existed for years before Jobs “forced” them on us? Did the average person know that digital cameras were patented ages before they were “forced” on us? No. People didn’t know they wanted all this. All they know is that they want Kevin Spacey and David Fincher together in a political drama; so Netflix made them House of Cards.

Bottom line: Netflix is in the business of maximizing the monetization of existing trends, not the business of true creative innovation (technological innovation – yes, content innovation – no). Therefore, there will always be a place for risk taking content-innovative production companies and studios. It may sound arrogant – but true innovators either know better than the masses what the masses want, or are very lucky at guessing. Fake innovators play it safe with datasets. Real trendsetters don’t ask people what they want; they force it on them with the confidence of a parent that knows what’s best for the kids. It’s not nice to say, but it’s true of every genuine innovator, from Da Vinci to Anna Wintour.

Netflix will be the first to notice a new trend, but they will always need someone else to set it: someone has to invent vampires before someone else can realize that vampires are popular. Netflix will win this game of losers. They may make a ton of money beating the other losers, but at the end of the day they will always be the ones asking David Fincher and Kevin Spacey to keep doing the same thing over and over in different mix-and-match combinations, rather than finding the next Charlie Kaufman or Lena Dunham, who may be less palatable at first. Their algorithms will keep the industry grinding the same old water over and over and over, in different easy-to-digest combinations. In order for this finite number of combinations to not be depleted, they will rely on innovative production companies that must survive. So don’t kill off Indie Hollywood just yet – it is the truly innovative startup community within the industry.

Here lies the difference between a discovery and an invention. The sciences rely on discoveries. The creative world relies on inventions. Big data is great for discoveries; it can lead to realizing things we never knew were there. But just because we did not know they were there does not mean that they did not exist already. Big data is dangerous for creative inventions, because once Netflix makes boatloads of money, everyone will want to emulate them and it will become increasingly difficult to justify an expansion of the existing creative horizons, beyond what the average TV viewer is currently capable of seeing. Netflix’s technology, as well as their business plan for rocking the foundations of traditional network TV, are admirable. However, hailing them as a game changer from a content point of view is wrong. Let Netflix be the parable for the critical difference between discovery and invention.

Since 1975, Winner has been quietly gathering ammunition and waging battle in support of American culture by focusing her life’s work on the scientific study of arts education. In light of automatic federal spending cuts taking effect this month, and the continued attrition of our nation’s cultural and educational institutions, Winner’s four books, including Studio Thinking: The Real Benefits of Visual Arts Education (now in its second edition), and over 100 published research articles, surface as potent testimony to several decades spent measuring the invaluable habits of mind that arts education teaches us, and investigating how the skills acquired from arts education can transfer and have significant impact on other areas of our lives. Additionally, Winner directs the Arts and Mind Lab at Project Zero, which focuses on cognition in the arts in typical and gifted children.

Thirteen years ago, Winner and her colleague Lois Hetland conducted a set of meta-analyses of 188 reports drawn from 11,467 research articles, books, technical reports and theses on the arts and academic improvement. Their findings, published in 2000 in a special issue of the Journal of Aesthetic Education detailed which claims about arts improving academics were causal, correlational, or simply false. Winner’s firm approach to justifying the arts in terms of their own intrinsic value has included the systematic debunking of poorly-backed claims, and as a result has generated heat from arts advocacy groups aiming to justify the arts via spill-over effects on other academic subjects.

MITER: In Project REAP, you wrote “Let’s stop justifying the arts instrumentally. This is a dangerous (and peculiarly American) practice.”  In your own words then, what exactly is the intrinsic value of the arts, and why is this continually an area under siege in education, when other civilizations throughout history have not contested its important place in culture?

EW: First, the arts have been around longer than the sciences. The earliest humans made art, and it’s universal. People get joy out of art, self-medicate with art, and make art even in the most terrible circumstances, such as in concentration camps and in prisons. There must be something very powerful that humans gain from engagement in the arts.  The arts are a powerful way of self-expression, meaning-making and understanding the world. Nelson Goodman, a philosopher of art who influenced me a great deal, argued that the sciences and the arts are both ways of understanding our world1.

Why is it such a battle to justify the arts in our schools? We are obsessed with math, science and technology, because we think that the purpose of education is to make our economy move ahead. It started with Sputnik in 1957, competing with the Russians, and we’re still doing it! We’re forgetting about the fact that civilizations are judged by their art. To think only about math and science is a very narrow view of humanity.

MITER: There is a common perception that people who are good at math will be good at music, and vice versa. At this point, what are the biggest myths and do we definitively know about the effect of music study on the brain and cognition?

EW: There is NO definitive evidence that music improves math. Just yesterday, I was speaking about this with a mathematician at Boston College, who said that the claim music improves math ability is silly when you consider that the kind of mathematics that you need for music is so simple and so basic. We did a study of mathematicians’ self-reported musicality, comparing them to humanists. We asked over 100 PhDs in math, and over 100 PhDs in the humanities to self-report on all kinds of measures of their musicality. And guess what we found? No difference. People in the humanities are just as likely to report being musical (including playing an instrument) as people in mathematics.2

The cognitive psychologist Glenn Schellenberg has conducted one of the few studies actually demonstrating causal transfer from music training to academic performance..3 He showed that a year of music lessons compared to a year of theater lessons raises IQ by 3 points –a statistically significant increase.4 He also found that the children taking music lessons improved more than those in theater on academic tests.

Why might music stimulate IQ and academic performance? Schellenberg argues that studying music is a very school-like task. You sit down, work with an adult/teacher 1-on-1, you read music from left to right, you practice daily. A school-like task like this may train school-like focus and executive functioning abilities. Schellenberg has also shown that the direction of causality also goes the other way: children with higher IQ’s are more likely to study music than those with lower IQ’s. That isn’t about music affecting IQ, it’s about IQ affecting your choice of music.

MITER: Back in the 1990’s, psychologist Frances Rauscher documented an experiment in which became popularized as “The Mozart Effect,” which claims that listening to Mozart for 10 minutes improves a person’s performance on a spatial-reasoning test. Can you comment?

EW: It is true that Frances Rauscher has shown that listening to ten minutes of Mozart’s music improves spatial reasoning.5   She showed that experience making music improves children’s “spatial-temporal” reasoning – that means their performance on spatial tasks where you hold an image in your mind and manipulate it over time. The Paper Folding task is an example: you must imagine a piece of paper in your mind, and then fold it again and again, put a hole through it, and then unfold it and see what it would look like.

But not everybody has been able to replicate her findings, and I’m not convinced about why music should train spatial thinking. Schellenberg showed that the “Mozart Effect” is not specific to music but has to do with being in a state of positive arousal.6 It is true you get the Mozart effect- if you play Mozart, people do better on a spatial task- but it turns out that if they prefer to listen to a Stephen King story, and you let them listen to a Stephen King story, they also do better and rate themselves as more positively aroused. This is entirely consistent with what many cognitive psychologists have shown: that being in a state of positive arousal improves performance on cognitive tests.

MITER: Even though you came under fire from arts advocacy groups after publishing Project REAP, essentially you are all after the same thing- more quality arts education in schools. What’s the best way to get there?

EW: After we got such hate-mail from our meta-analyses, my colleague Lois Hetland and I decided that one of the problems with all of the studies so far is that they haven’t really looked at what kids learned in an art form. The previous studies just said “If kids study the arts, are they better at X?” So we decided that if we wanted to look carefully at what transfers from the arts, we have to first look at what is learned in the “parent” domain, the arts being the parent domain.

Lois and I spent two years observing visual arts classes in high schools for the arts, videotaping, interviewing, and then analyzing and creating a model of what we’d seen. We found eight different habits of mind being trained, very important habits of mind that have potential generalizability. And they are not SAT score kinds of things. One of the habits of mind is Envision– imagining things that you can’t see and manipulating those images in your mind. Another is Express, which is leaning to go beyond the sheer technical to create a kind of mood and feeling in your work. Reflect  is learning to think and talk with others about one’s work and the process of making it. There is an impressive amount of meta-cognition going on in art classes because there are critique sessions where you have to A) talk about your process, ie “This is what I was trying to do, this is what I did, and this is where I think I failed,” and B) you have to develop your judgment, ie “This is working because…, this is good because…, this is bad because…,” etc. Our findings are published in our book Studio Thinking: The Real Benefits of Visual Arts Education.7

We are now trying to demonstrate whether these skills transfer to other areas. Lois Hetland, Lynn Goldsmith, and I have just completed a study of the effect of visual arts training on geometric reasoning.8 We’ve been looking at whether training kids in art improves their geometry performance. What we’ve found is that students at an art high school studying the visual arts grow more in geometric reasoning performance over two years than do students in the same school who are majoring in theater.  In addition, students who are really deficient at three-dimensional rendering are also poor at geometry. We think that poor drawing ability may be an early warning sign of an inability to reason about geometry.

MITER: You’ve published numerous books and articles and dedicated a great portion of your research to understanding giftedness and genius in young children. How do you define and recognize genius / giftedness?

EW: Usually it’s totally obvious whether or not a child is gifted. If you have to ask whether your child is gifted or not, he or she probably isn’t. One quality that gifted children show is a “rage to master.” That phrase, which I introduced in my book on gifted children, seems to have struck a chorc with parents. They often write me and say “That’s what my kid has, a rage to master. You just can’t tear them away from their activity. That’s all they want to do.” And of course gifted kids are years ahead of their peers in some ability. I’ve seen kids who have taught themselves to read by age three, or kids who can draw representationally at age two, and who begin to draw fairly realistically at age three. If you compare their drawings to a typical three year old, the contrast is staggering. In music there are all kinds of anecdotes…little Mozart or little Mendelssohn plucking out tunes on the piano just from hearing them.

You can have prodigies in all kinds of domains.  Tiger Woods was obsessed as a five year old with hitting golf balls. I’ve seen a child who began to speak in full sentences before the age of 12 months (note that typical children usually begin saying their first words at the age of 12 months). Chess prodigy Josh Waitzkin used to watch people play chess when he was very young and the first time he actually played the game he came up on his own with a sophisticated strategy that takes a long time for most chess players to learn.

In short, you recognize giftedness when skills and performances emerge abnormally early. There is no firm boundary between a typical children, a moderately gifted child, and a prodigy…it’s just all one big continuum. Where you want to slice it is arbitrary.  

MITER: In the book Outliers, the author Malcolm Gladwell talks about “the 10,000 hour principle” and the importance of cultural legacy, luck and social engineering OVER inherent talent in the formation of unusually successful people. He describes several cases, including Lewis Terman’s Genetic Studies of Genius…quoting Terman as saying “…we have seen that intellect and achievement are far from from perfectly correlated”… Can you comment on this in the context of your own research and observations on the nature/nurture debate about giftedness, and also the long-term achievements of people who are known to have been child prodigies?

EW: Malcolm Gladwell is commenting on research that was started by Anders Ericsson, who published an article that made a lot of headlines in the 90′s about the effects of what he called “deliberate practice,” which is a form of very focused hard work. He studied people who had achieved great heights in a variety of domains, whether it was athletics or music performance or whatever, and he asked them to figure out how many hours of practice in a lifetime they’d had. He then correlated their total hours of practice with the level of expertise they had reached. The greater the number of hours of practice, the higher the expertise that was achieved. This is a purely correlational finding, but it was touted as casual, that the hours of practice caused the expertise.

I’ve made the opposite argument. Nobody disputes the value of hard work. We all know that no one attains greatness without thousands of hours of deliberate practice. We also know that major creators tend to make their discoveries after 10 years of hard work in the field. After all, you can’t change the field until you master it. But Gladwell and Anders Ericsson seem to think that there is no such thing as innate talent and that all that matters ishard work. This leads to the absurd conclusion that you take anyone at random and subject them to this regimen, and produce an expert or a genius.
In addition, the rage to master is part of the talent. Why would someone be motivated to work 10,000 hours? You simply do not find this kind of motivation without the inherent genetic innate talent.

MITER: So you believe extreme talent is genetic?

EW: Yes, talent has to be biologically based because you see these things emerge so early, before parents have started training their kids. Nobody has discovered a gene for talent. That would be way too simplistic. And not all biologically based characteristics are genetic. They can also be due to the prenatal environment.  And as for what Lewis Terman said: of course we know that one’s inherent genetic potential isn’t always actualized. We know that bad environments can keep talents from being actualized, and that good environments can bring out the best in people. Sometimes child prodigies burn out because their parents push them too hard. Unfortunately most child prodigies don’t make it into the halls of fame.

Here is my take on why most prodigies don’t become major creators. Child prodigies are mastering something that has already been invented, but they are not inventing something new. In classical music, they are learning to perform the great masters. Math prodigies are mastering Western math. But to be a creative genius you have to do something new. Some prodigies make that leap from mastery to creation, but most do not. Doing something new is a very different kind of skill from mastery, and of course you have to master a domain before you can change it. Being a creator requires a certain kind of risk-taking personality. Yo-Yo Ma made the leap from prodigy to creator. So did Mozart. But many prodigies are excellent at mastery but not at challenging a domain.

Ellen Winner is Professor and Chair of Psychology at Boston College, and Senior Research Associate at Project Zero, Harvard Graduate School of Education. She directs the Arts and Mind Lab, which focuses on cognition in the arts in typical and gifted children. She is the author of over 100 articles and four books: Invented Worlds: The Psychology of the Arts (Harvard University Press, 1982); The Point of Words: Children’s Understanding of Metaphor and Irony (Harvard University Press, 1988); Gifted Children: Myths and Realities (BasicBooks, 1997, translated into six languages and winner of the Alpha Sigma Nu National Jesuit Book Award in Science); and co-author of Studio Thinking: The Real Benefits of Visual Arts Education (Teachers College Press, 2007). She served as President of APA’s Division 10, Psychology and the Arts, in 1995-1996, and in 2000 received the Rudolf Arnheim Award for Outstanding Research by a Senior Scholar in Psychology and the Arts from Division 10.  She is a Fellow of the American Psychological Association (Division 10) and of the International Association of Empirical Aesthetics. winner(at)bc.edu

Links

Ellen Winner’s websites and blog:

https://www2.bc.edu/~winner/

http://www.ellenwinner.com/

http://www.ellenwinner.com/blogs.html

Project Zero: http://www.pz.harvard.edu/

Project REAP: http://www.nd.gov/arts/arts_ed/images-pdfs/HarvardT.pdf

References

1. Goodman, Nelson. Languages of Art: An Approach to a General Theory of Symbols. 2nd Edition, 1976

2. Haimson, J., Swain, D., & Winner, E. (2011). Do mathematicians have above average musical skill? Music Perception, 29, 2, 203-213.

3. Schellenberg, E.G. (2008). Music lessons enhance IQ. Mensa Research Journal, 39(3), 35-39. [Reprinted from Schellenberg, E.G. (2004). Music lessons enhance IQ. Psychological Science, 15, 511-514.]

4. Schellenberg, E.G. (2011). Music lessons, emotional intelligence, and IQ. Music Perception, 29, 185-194.

5. Rauscher FH, Shaw GL, Ky KN. Music and spatial task performance. Nature 1993;365: 611.

6. Schellenberg, E.G. (2012). Cognitive performance after music listening: A review of the Mozart effect. In R.A.R. MacDonald, G. Kreutz, & L. Mitchell (Eds.), Music, health and wellbeing (pp. 324-338). Oxford, UK: Oxford University Press.

7. Hetland, L., Winner, E., Veenema, S., & Sheridan, K. (2013). Studio Thinking 2: The real benefits of visual arts education.  Second Edition. Teachers College Press.

8. Walker, C.M., Winner, E., Hetland, L., Simmons, S., & Goldsmith, L. (2011). Visual thinking: Art students have an advantage in geometric reasoning. Creative Education,  2, 1, 22-26.

And he wouldn’t have it any other way.

“LED will be ubiquitous in 10 years,” says Cancela.  “Almost 100% of lights will be LED.”

The revolution may not be televised… but it will be well lit.  LEDs, or light emitting diodes, are beginning to vastly change the way the world sees lighting. Since the advent of the florescent tube in the 1930s, the lighting industry has stayed relatively stagnant even as the rest of the mechanized world has progressed. Over the decades the incandescent quickly took hold, mainly due to the extremely low cost of mass manufacturing.  However, these bulbs have always been inefficient, wasting most of their energy in the form of heat as they pump electricity into filaments to make them glow. The first big alternative to ever emerge – compact fluorescent bulbs – have a harsher light quality, are difficult to dim, and most importantly, contain toxic materials.  LEDs, on the other hand, are based on chip technology, enabling them to last 5 to 7 times longer while consuming 90% less energy.  As the cost curve for LEDs has decreased, many major players have been taking notice.  According to a recent McKinsey and Consultants report, LEDs will penetrate 63% of the general lighting market by the year 2020 (up from the current 6% market penetration). In the commercial and industrial sector, use of LEDs is already on the rise, primarily because companies are doing the long-term cost-benefit analysis of light-based purchasing.

And they’re definitely liking what they’re seeing.

Looking to capitalize on the LED boom is Fernando Cancela, a young serial entrepreneur.  Cancela was in China for a different enterprise when he stumbled upon LED lighting in 2008 and immediately recognized its potential.  He founded Green Ray International a week later.

“The thing about light bulbs is, they’re literally everywhere,” Cancela quickly realized.  “Everything is your market.”

Cancela decided that owning the LED factory, coupled with overseeing the LED sales force, would be the key to achieving economies of scale, setting competitive pricing, and controlling the production quality all at once.  Today, Green Ray manages its entire supply chain, allowing it to be uniquely capable of customizing various LEDs according to the particular needs of each client.  It has honed in on selling to businesses with many lights and long hours, such as fast food restaurants, hospitals, convenient stores, and parking garages.  After landing a few major clients, Green Ray attracted venture capitalists, who have since begun funding the expansion of the company.

Yet like any start-up, the challenges are perilous and at times overwhelming.  Above any other barrier to entry, the LED price tag is precipitously steep, so Green Ray must convince clients that they are not simply buying lights but making an investment — an investment that pays for itself in reduced energy, maintenance, and replacement costs.  Another barrier is the century-old lighting industry, dominated primarily by powerhouses such as Philips, Osram Sylvania, and GE.  Finding a competitive advantage against this field is no easy feat.

Regardless of which company succeeds in tackling the red-hot, green-friendly LED market, a new challenge will soon emerge: since LEDs are so effective, people and companies will be buying far fewer bulbs – of any sort.  The Energy Information Administration estimates that total light bulb sales will fall 40% by 2015, to under one billion from 1.52 billion bulbs, and will continue declining to 530 million bulbs by 2035.  In other words, LED might almost be too good for its own good.  As a result, lighting manufacturers need to act quickly to establish themselves. Green Ray is very aware of this fact.  “The future of Green Ray depends on being a sales, service, and marketing company,” says Green Ray COO Josh Eaves. “We need to become the go-to industrial and commercial LED retrofitter. A lot of the big companies we work with want to make sure the retrofit runs as smoothly as possible, so when problems inevitably arise they want to know we will be there to fix the issue.”

So, is the future bright for Green Ray?  That all depends on timing.  Since LED lights last for so long without any need for replacement, whoever gets in earliest will reap the benefits of the illumination transition.  There will be no second chances.

The question then becomes: as a rising tide lifts all ships, which ones will remain when the LED storm has subsided?   Does the ocean have room for sleek skiffs and stealth canoes, or will massive cruise-liners continue to rule the high seas?  As in many industries, it is a battle of David versus Goliath – of the agile, aggressive, outmatched beginner against the established, bulky, been-there-done-that veteran.  No one knows who will emerge victorious, but size often overpowers entrepreneurial advantage via superior funding and global distribution.  By that logic, Green Ray must hone its focus to find its niche.  One strategy would be to serve only fast food chains, or only parking garages, or only hospitals, in specific countries less served or noticed by the big players, so that Green Ray can become the expert in one particular LED market, thereby remaining below-the-radar while reaping considerable profits.  By employing this ‘judo’ strategy, Green Ray will avoid fierce competition (and a lose-lose situation) to ultimately position itself for a large and lucrative exit (if it so chooses).

Regardless of its approach, the only certainty is that Green Ray has its work cut out for it.

Just the way Fernando Cancella likes it.

Allure

The Windy City is haunted by big ideas that got away, but that is changing.  The founders of Netscape, PayPal, Yelp and YouTube all studied at the University of Illinois, one of the best schools in the country for computer science and engineering, but upon graduation, they quickly decamped for Silicon Valley.  This is not surprising, given that Silicon Valley is the national hub for high-tech talent, having the highest concentration of engineers, programmers and designers of any US metropolitan area and offering the highest average high-tech salary at $145,000.

Midwesterners often embrace the traditional path of working for an established company as opposed to a high-risk venture. Many established companies have roots or headquarters in Chicago, including major corporations such as Accenture, Boeing, MillerCoors, and McDonald’s. While these corporations compete with startups for talent, they also serve as a rich source of customers for new products and technologies.

Ilene Gordon, CEO of Corn Products International, competes against startups for talent.  “We have global people in Chicago and we move people in and out.  That type of diversity excites the workforce.  We want to put people in jobs that stretch them.”

Chicago native Patrick Ryan started an insurance business in his 20s, after graduating from Northwestern, and grew it into Aon Corporation, a company with annual revenues in excess of $7 billion.  He ran Aon for over 40 years and is now starting a new company.  Ryan described the change in Chicago’s startup culture. “In 1964, entrepreneurs were looked down upon as people who couldn’t get a job at a big company.  When I graduated from Northwestern, a family friend tried to talk me out of starting an insurance company.  There weren’t many entrepreneurs then and there was limited capital.  Nowadays, you can attract great talent to a new venture.  People like the excitement of building, growing, and being a part of an enterprise.”

Finances

According to VentureSource, startups in the Windy City have raised $654 million in venture capital funding in 70 deals last year, whereas Silicon Valley firms have raised a whopping $12.6 billion.  41% of all US venture investments in 2011 went to Silicon Valley companies.  The region has investors with expertise crucial to building and scaling a company.  There is also an abundance of “recycled capital”— money from angel investors and serial entrepreneurs reinvested into startups. Several generations of successful Silicon Valley entrepreneurs have put their knowledge and capital back into the ecosystem repeatedly after they exited their ventures.

Networks

For decades, Chicago networks have seeded Silicon Valley with breakthrough ideas and ventures. Brad Keywell, co-founder of Groupon (and three other startups that also went public) and venture fund Lightbank, said:  “There are gaps between different constituencies in Chicago, including academics and the government.  Silicon Valley, on the other hand, has day-to-day connectivity and technology transfer.  The structure of those connections doesn’t exist in Chicago, or, if it does, it is very weak.”

Chicago tends to have pockets of innovation and entrepreneurship.  Northwestern and University of Chicago, for example, churn out a large pool of technological, legal and business talent.  These world-class institutions receive significant amounts of federal research dollars, create new technological knowledge, and attract many skilled engineers and scientists.  However, the key difference with Silicon Valley is that they are not concentrated and the city has yet to establish a communication platform for entrepreneurship.

Chicago is leading the charge on innovation by being especially hospitable to companies seeking the mix of talent, curiosity and audacity that leads to disruptive products and services.  The city is actively creating a burgeoning entrepreneurial ecosystem that creates network connectivity between investors, entrepreneurs, and mentors.  Policymakers, government leaders and civic officials are creating programs (such as Excelerate and Hyde Park Angels) and investing public dollars to help entrepreneurs gain access to capital.  Incubator growth, incentives for angel investing, and pre-seed and seed funds are all on the rise.

Based on the belief in the power of the environment on startup success, Chicago is investing in ecosystems to generate extraordinary creativity and output and encourage the combination and recombination of ideas, talent and capital.  New co-working and collaborative spaces for tech startups in Chicago, such as 1871 (occupying 50,000 square feet in the Merchandise Mart and housing about 100 startups), aim to create breeding grounds for the next Groupon.  Venture capitalist J.B. Pritzker, Comcast, Cisco Systems, and the state of Illinois are among the backers of 1871, created with the intent of fostering serendipity and a community of trust that is necessary for the creation of meaningful and enduring companies.  The idea is to foster an environment in which entrepreneurs help one another, investors meet rising stars, and large companies keep tabs on potential acquisition targets.  According to scientific research, innovation is an inherently social act, owing as much to tightknit networks as the garage tinkering of individual entrepreneurs.  1871 brings together young entrepreneurs and local industry, creating a powerful and ambitious high-tech community to rival the one in the West Coast.

Culture for Failure

There are many theories for Chicago’s perceived lack of entrepreneurial savvy and spark, including an aversion to risk and fear of failure.  Brad Keywell teaches a class at the University of Chicago Booth School of Business.  “I spend 3 hours on the topic of failure,” says Brad.  “What amazes me is that most students in the class have not spent a minute talking about failure in their MBA careers.  Assuming you are doing something new or innovative, the advice I always give is that with risk comes possible failure, but the journey is worth it.  So many young people have historically been afraid of risk.  Our media doesn’t help.  In the Midwest, if you fail, it is just horrible.”

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Challenges for Chicago, or any rival to Silicon Valley, include access to capital and conservative attitudes. But these are becoming less and less of a challenge for Chicago, where there’s been a rise in capital funding and transfer of technology ideas. Chicago as the next Silicon Valley might still just be a pipe dream, but may yet become a reality. Cultural characteristics, such as individualism and a society’s acceptance of business failure, exist there and create the innate entrepreneurial spirit essential for entrepreneurship. The rise of high-growth entrepreneurship and supportive eco-systems will continue to create radically disruptive innovations, and Chicago just may become the next Silicon Valley.