10 Years to Overnight Success and The Creator’s Code
Il Giornale. Fieldlink. SocialNet.
You probably have never heard the names of these products and companies before. Yet, they are behind some of the most iconic companies of our times. Il Giornale was the unsuccessful espresso bar created by Howard Schultz before he came up with the concept that made Starbucks ubiquitous. Fieldlink was the payment transfer system for Palm Pilots developed by Peter Thiel and Max Levchin before they started PayPal. SocialNet was the dating site founded by Reid Hoffman before he applied the lessons learned on social network to create LinkedIn, a company that went public more than a decade after he left SocialNet.
Business news and headlines can be very good at presenting successes: they mostly show what happened to entrepreneurs and companies. Sometimes, these stories even come across as overnight successes. However, what these reports often do not show is the how. How did the entrepreneurs build their companies? How did they get through the challenges between them and their seemingly overnight successes? How did they learn along the way? And, perhaps more relevant, how can aspiring entrepreneurs learn from them?
To answer these question and uncover a blueprint for business creation, Amy Wilkinson wrote the book The Creator’s Code, a project partially funded by the Kauffman Foundation.
To write The Creator’s Code Amy Wilkinson spent 5 years interviewing 200 high-scale founders, including the founders of companies like LinkedIn, Chipotle, Under Amour, Tesla Motors, Airbnb, and, PayPal. She distilled what she found into six essential skills every successful entrepreneur had. All six skills are relevant to the journeys of the entrepreneurs we cited above – the folks behind Starbucks, PayPal, and LinkedIn. However, one particular skill identified by Wilkinson, “flying the OODA loop,” is especially relevant for us to understand theirs and other stories behind some of the world’s greatest entrepreneurial successes.
The “OODA loop” is a framework for decision making created by Air Force combat pilot John Boyd, and is defined by “observe, orient, decide, and act.” Wilkinson argues that this loop is as applicable to business battles as it is to flying battles. The OODA loop may seem deceptively simple, but it contains a great truth: business conditions change rapidly, and entrepreneurs who do not adapt their original insights and ideas have higher chance of failure. The OODA loop got Boyd alive and successful through the Korean War. It also helped the entrepreneurs Wilkinson identified to achieve extraordinary success.
One of the underlying notions beneath the OODA loop framework for businesses is very straight forward: most original business ideas are bad, and entrepreneurs can only make these bad ideas into great insights through observing, orienting, deciding and acting. Eventually, after going through many OODA loops, these entrepreneurs developed insights about their industries other people did not have. But they mostly started with mediocre or straight up bad ideas.
Howard Schultz transplanted the coffee bar from Italy to the U.S. betting American consumers would love the European experience imitated down to the detail (they did not). Fieldlink, PayPal’s predecessor, started based on the concept that people would want to use their Palm Pilots to beam money to each other (they did not). Reid Hoffman based SocialNet on the premise that people would want to use a social network to find dates, roommates, and even tennis partners, all on the same website (they did not).
Although their original premises had holes, these entrepreneurs learned over time and were able to eventually discover their great ideas. Howard Schultz realized that he needed to tweak the European coffee shop to American tastes: adding tables, trading the opera background music to more American fare and creating an environment suitable to both socializing and working. The folks from Fieldlink learned that not nearly enough people wanted to send money using Palm Pilots, but quite a few of eBay users needed a better way to send money using email. SocialNet didn’t really work out, but Reid Hoffman learned that a social network should be great optimizing and dominating one single aspect of our networks, and that insight lead to LinkedIn, a website exclusively focused at professional networking.
The entrepreneurs behind these companies had to go to through endless OODA loops to arrive on their great idea, but they did not start with it. Even Peter Thiel, who defends that startups should be based on insights no one else believes in – secrets – had to go through many iterations before arriving at the secret that made PayPal successful.
Successful entrepreneurs rarely start with a great idea from day 1. For the most part, they start with ok ideas and great grit, daring, and persuasion, as suggested by Dropbox’s Drew Houston on an interview with Wilkinson. And that is probably the main lesson of The Creator’s Code: being an entrepreneur requires, above all, persistence and learning, rather than special credentials or superhero-like abilities.
Amy Wilkinson cracked the code on what the learning process for entrepreneurs look like, and created a blueprint for others looking to navigate a similar path. She charted a map. It is up to us to follow it.
Why the Lack of Women Leaders is a Problem for Businesses
5 Reasons to be Concerned About Student Debt
Defining Entrepreneurship: From Dataset to Mindset
The 2016 Mayors Conference in 14 Tweets
2017 Kauffman Junior Faculty Fellowships: Top Scholars Wanted
Is Entrepreneurship the Most Productive Part of our Economy?
Highlights from the 2016 REER Conference