The Origins of Entrepreneurship

28% Before age 21 72 As an adult Jim Benedict had 15 teenagers working for him -- shoveling snow off shopping-center roofs in his hometown of Buffalo -- by the time he was 10 years old. By age 27 he had started three more companies, including the advertising and marketing agency he now owns. You can find these entrepreneurial wunderkinder if you look hard enough, men and women with company building apparently in their blood. Depending on how you count, anywhere from one-sixth to one-third of our sample are these Born Entrepreneurs (see page 3). But if you want a more typical case history, consider Jim Hanahan. Or maybe Mark S. Smith. Hanahan, 56, runs a third-party administration company, as it's known, which manages self-insured health plans for corporate clients. You wouldn't have pegged him for an entrepreneur: no childhood businesses, no other start-ups, just a 23-year career with multibillion-dollar Connecticut General Life Insurance Co. (now CIGNA) in the staid old insurance industry. Smith, 41, worked in Southern Railways Inc.'s marketing department and wound up with the wonderfully bureaucratic title of manager of intermodal pricing. If Southern hadn't wanted to transfer him from Washington, D.C., to Roanoke, Va., he might still be there, instead of running his own transportation service company out of Overland, Kans. What makes Hanahan and Smith typical? Just this: two-thirds of our respondents grew up in households where their parents worked for wages rather than running their own businesses. Nearly as many undertook no entrepreneurial ventures as children. Three-fifths started no companies other than the one that landed them on the Inc.500. Almost all of the respondents, in fact, did just what most people do: they went to school, got jobs, took up a particular line of work. Ask them how important for their current role were the skills they acquired while working, and a whopping 85% check "critically important" or "somewhat important." Ask them to cite the single most important source of their abilities as a company builder, and at least twice as many point to "work or professional experience in an industry" as to any other answer. There's a theory, dubbed trade skill, that argues for the importance of early exposure to entrepreneurship. "Usually the person who successfully starts and runs a small business," write the people who invented the concept, "either had a parent or close relative who had a business or . . . they had significant business experience themselves before the age of 18." For about a quarter of our respondents, that theory seems to hold true. Like snow-shoveler Jim Benedict, they point to family background and childhood experience as the key source of their talents, and report that they had the most important skills and abilities for company building by the time they turned 21. And doubtless a much larger fraction of our CEOs come from entrepreneurial backgrounds than you'd find in the population as a whole. But if the trade skill theory doesn't describe you, don't despair. It doesn't describe Hanahan, Smith, or most of the other Inc. 500 founders either. For the majority of respondents, what made the difference between continuing a career and starting a company wasn't any formative childhood experience. It was the simple fact of spotting -- and developing -- a new idea.

3USE OF ENTREPRENEURSHIP The new wave of entrepreneurship is changing the startup landscape for sure. Its nearly free to start a company online, even teens are having wild success, and young people areflipping web sites like boomers flip houses. Life as an entrepreneur has never been so fun, but that is very annoying to hear if you are in a corporate job. Fortunately, this trend is so big at this point, that its affecting corporate life as well. Here are five ways to use entrepreneurship to make your corporate job better. 1. Think of entrepreneurship as a safety net that allows you to demand more from your job. If you dont like the job offers you have, you can leave. Start your own company. The history of the organization man is someone who is defined by whatever track the company puts him on. You dont want to be that. Today, you have the freedom to figure out who you are and what you want, even in the context of the company, because if you find out that you are not compatible, you can leave. The freedom to leave gives you the freedom to truly examine who you are. Chris Britt is chief executive of accounting firm Priviley. He founded the firm after a quick stint doing finance in the hotel industry and finding that he was not well suited for the environment. Britt is an example of the massive wave of young people who are testing big-company waters and then striking out on their own. 2. Think of intrapreneurship as a launching pad for who are waiting for the right idea. Seventy percent of young people say they eventually want to work for themselves. The problem is that only a fraction of those people have an idea for a companyor a friend with an idea for a company. So there are a lot of people in corporate America waiting for their moment, but thinking of themselves as entrepreneurs at heart. These people are great at taking a project and making it their own. They create a project arena for themselves that have the feel of a small company within a large company, and then take ownership like its a start-up. Of course this is incredibly annoying to some old-school managers, but to a young person hellbent on entrepreneurship, starting something small within something bigwhich is what intrapreneurship isoften is the only way to make big company life palatable. 3. Get in a rotational program to learn a broad range of skills that many entrepreneurs learn as they go. Some of the most popular post-college routes today are management training programs at companies such as General Electric or Procter & Gamble, where superstar candidates get to test out the work in lots of departments in a company. Candidates often see these programs as stepping stones to running their own business, when the time is right, because as an entrepreneur you wear so many different hats.

4. Recognize that with no clear ladder to climb, youre an entrepreneur even if you never leave corporate life. Even if you dont want to launch a start-up, you still end up functioning like an entrepreneur in todays new workplace. There is no long-term stability, so the way you create stability is with your skill set and your connections. You are the product, and you are the sales and marketing team for your product. On average, people today are changing jobs every two to five years, which means you must function like an entrepreneur nearly all of the time if you are going to bring in a steady paycheck. 5. Think of corporate jobs as a way to fund entrepreneurship. It used to be that you were either corporate or an entrepreneur. Today, people move in and out of big companies and start-ups, using the steady paycheck to fund the risky venture. This is what Britt did, using the money he earned from the hotel industry as the seed funding for Priviley. This model gives founders the benefit of not having to divert their attention to raising angel funding. The self-funding model has spawned a generation of scrappy founders who use virtual tools and low-budget marketing. Priviley, for example, provides services to a wide range of other start-ups, creating a community of entrepreneurs that model these larger trends. And, of course, the self-funding model also allows founders to reap benefits more quickly because they dont have to share large pieces of their pie. Priviley is doing so well, for example, that at this point Britt is able to take an afternoon off to go flying.

4.Process

Although enterprises are as different and unique as the entrepreneurs who create them, most entrepreneurs appear to work through a process that we can observe and describe. Often entrepreneurs discover this process through trial and error, but you can shorten your learning curve by benefiting from the experiences of others. Note how the diagram below illustrates a logical sequence of activities.

5 ENGINEER GREGORIO G. SANCHEZ, JR. Founder Lacto Bacillus Pafi Techno Resources Corp. Innovation Entrepreneur 2005 Engr. Gregorio G. Sanchez just had to find a way to keep alive the hundreds of piglets in his livelihood program. A kitchen experiment resulted in a food supplement formula that fattened the piglets and eventually, became the foundation of a full-blown business. Engr. Sanchez is a civil engineer whose early career was in the construction business. After returning from the US in 1983 following the assassination of Ninoy Aquino, he became a street parliamentarian. Engr. Sanchez was subsequently appointed as Board Member of the Province of Cebu in 1986, reappointed in 2003, and became Vice Governor in 2004. It was between his appointments to the Provincial Board when Engr. Sanchez developed Lactopafi Probiotic Bacteria. He was led to do research on lacto bacillus after his pig dispersal program failed because of the piglets malnutrition. He performed countless experiments with only pots, pans and a small tank for equipment. His persistence yielded a food supplement that would suppress bad bacteria in livestock. Those who witnessed the positive effect on livestock urged Sanchez to produce a health drink for human consumption. He developed Lacto Pafi Probiotic Bacteria, currently among the superior probiotic

bacillus strains in the world (probiotics are dietary supplements containing live bacteria taken orally to restore beneficial bacteria to the body). Those who took the concoction claim to have been healed from various ailments. Lacto Pafi's reputation spread by word of mouth and through testimonies broadcast in local radio. The product was registered with the Bureau of Food and Drugs and Sanchez decided to manufacture it commercially. Engr. Sanchez also developed new products with the lactobacillus component such as soap, shampoo, toothpaste, and other personal care products. Lacto Pafi products have reached Norway, France, Australia, New Zealand, Hong Kong, Japan, and the US. Engr. Sanchez is also breaking into the rest of the Southeast Asian region and China. For his contributions to business and the community, he was awarded Most Outstanding Alumni of the University San Jose-Recoletos in 2003. In 2005, his product was cited as Most Outstanding Lactobacillus Health Drink and Best Pro-Biotic Supplement by the Philippine Marketing Excellence Award Group and the National Product Quality Excellence Awards Group, respectively. The product was approved in 2005 by the US Food and Drug Administration.

BRYAN C. TIU Founder Teriyaki Boy, Inc. Young Entrepreneur 2005 Mr. Bryan Tiu grew up absorbing the entrepreneurial culture of Divisoria where his parents ran a textile business. Most of his father's clients were Japanese and his exposure to them led to his appreciation of Japanese culture. As an aficionado of Japanese cuisine, Mr. Tiu saw a gap between Japanese fine dining and low-end Japanese restaurants. He saw this gap as a potential niche and was confident that he could provide good Japanese food without necessarily hurting the diners' pockets. In 2001, Mr. Tiu established his first Japanese casual dining restaurant in Madison Square Greenhills. The restaurant was named Teriyaki Boy, introducing the image of an animated Japanese boy to appeal to a more relaxed target market. Teriyaki Boy started to attract adolescents and young working professionals. Since then, it has built a loyal following from the C and B markets. By 2005, Teriyaki Boy had grown into a chain of 10 restaurants in the Metro Manila area. Teriyaki Boy's swift and steady growth prompted Mr. Tiu to consider a merger with a company that could ensure Teriyaki Boy's long-term presence in the industry. After a year of careful consideration, he signed a merger with the Lorenzo Group in late 2005. The Lorenzo Group now controls 70% of the Teriyaki Boy, and Mr. Tiu retains 30% ownership. This decision, he believes, was a major breakthrough in assuring Teriyaki Boy's future by stabilizing its presence in the industry. The merger has also allowed Mr. Tiu to focus on the aspects of business closest to his heart: site development and research and development for Teriyaki Boy.

SOCORRO C. RAMOS Founder and General Manager National Book Store, Inc. Entrepreneur Of The Year Philippines 2004 Woman Entrepreneur 2004 In 1940, when Ms. Socorro C. Ramos was approaching 18, she began working as a salesgirl in Goodwill Bookstore in Escolta. The store was owned by her brother and his wife. The store was located on the ground floor of the building that housed Panciteria Nacional. Later on, because of her selling skills, she was put in charge of the store. She married Jose Ramos and together they started National Book Store. After overcoming many hurdles brought by the Japanese occupatiom, fires, and natural disasters, National Book Store made its transition from a general merchandise store to a store that sells more than books. Upon finally settling in a nine-story building along Avenida Rizal in 1965, National Book Store has been growing nonstop. It has lived up to its name, selling school books, office supplies and even greeting cards. In 1973, Ms. Ramos successfully obtained licenses to reprint Hallmark greeting cards. She also convinced publishing giants like McGraw Hill, Prentice Hall, and Addison-Wesley to allow National Book Store to reprint textbooks, making them much more affordable to Filipinos. Today, nearly 65 years after the Ramos couple opened the first National Book Store in Escolta, the red and white colors of the companys brand are seen in over 70 locations nationwide. In 1996, the family opened Powerbooks to address the reading publics need for specialty books at affordable prices. Nanay Coring, as she is fondly called, also deals with her 2,500 people with motherly concern, and has been rewarded with the loyalty of her employees and a relatively low turnover rate. Among her awards are the Agora Award for Outstanding Achievement in Entrepreneurship (1991) and the DTI Outstanding Filipino Retailer Award (2001). In the next five years, Ms. Ramos and her family plan to increase their stores to a hundred. Many communities still lack access to affordable books and school supplies, and Ms. Ramos goal is to widen National Book Stores reach in the Visayas and Mindanao. ATTY. FELIPE L. GOZON Chairman, President and CEO GMA Network, Inc Mater Entrepreneur 2004 Atty. Felipe L. Gozon is credited for the impressive turnaround in recent years of GMA Network, Inc., a conglomerate of companies engaged in radio and TV broadcasting, post production services,

filmmaking, music recording, and new media. Atty. Gozon was part of the triumvirate which, in the mid-1970s, brought GMA from the original American owner, Mr. Robert "Uncle Bob" Stewart. The other two major owners were Gozons brotherin-law Menardo Jimenez and former Rizal Congressman Gilberto Davit, now represented by chief operating officer EVP Jimmy Davit, Jr. At first, Atty. Gozon served as GMAs Chairman while Jimenez served as CEO. GMA occupied the No. 1 slot for some time, but slipped to second place in the mid-1980s. When Atty. Gozon assumed leadership of the network in 2000, he rallied everyone to strive to be No. 1 again. All his efforts paid off when GMA grabbed the No. 1 spot in the daytime slot on December 23, 2003, and the network has been on the rise since then. GMA currently has a network of 46 VHF stations and can be seen via satellite in a number of households in Asia, Australia, and Hawaii. It can also be heard on airwaves through AM and FM stations in Manila and Cebu and through 27 RGMA radio stations throughout the country. GMA recently launched its international channel. Among his plans for the network are the re-launching of its UHF channel and the raising of additional capital through GMAs initial public offering in the first quarter of 2005.

TOMAS VICTORINO A. MENESES Founding Chairman and CEO Tynor Drug House, Inc. Emerging Master Entrepreneur 2004 Contrary to his name, Mr. Tomas Victorino Tiny A. Meneses is a big man in the pharmaceutical industry. The Founding Chairman and CEO of Tynor Drug House, Inc. established the company in 1978 as a manufacturer and distributor of locally produced and Swiss-made pharmaceutical products. After graduating with a Humanities degree from Ateneo de Manila on a scholarship, Mr. Meneses was hired as a sales representative for Swiss pharmaceutical company Ciba-Geigy (now Novartis). After several years of working in the industry, he learned the trade and decided to put up his own company: Tynor Drug House, Inc.

Mr. Meneses started out with me-too products but soon realized that to succeed in the industry, one has to constantly innovate. He focused on research and development, which led to the foundation of unique products which have gained a strong following in the local market: the Cherifer product line, a leading brand in its market and a multivitamin highly prescribed by pediatricians; OB Max and OB Smart, used as both prenatal and post-natal supplements; and Natalac, 100% natural lactation enhancer. At present, Tynor is just one of the companies in the growing Meneses Group of Companies. Sister companies in the group are Time Machine Cosmetiques, Inc., which formulates skin care products; PMB Salon Specialties, Inc., which manufactures, imports, and distributes hair and scalp care products; InterMed Marketing Philippines, Inc., which markets and distributes Tynor products; Gruppo Medica, Inc., which manufactures pharmaceuticals and food supplements; and Tynor Agrovet Division, Inc., which markets imported and locally manufactured veterinary products. Over the next few years, Mr. Meneses is eyeing expansion on the region and in the USA.

Process Initiative Organization Administrator Relative autonomy Risk tking