Wanna Start a Company in Your Garage? Go Work for a Big Company First.
August 29, 2007
I came across this article about the myth of “garage” business creation a bit late (it was published in Fast Company in March), but:
(1) it’s good;
(2) maybe you missed it too; and
(3) I want to put my own gloss on it.
The Myth
Some ordinary guys, without money or power, triumph via a brilliant insight and scrappy groundwork, just like Hewlett and Packard, who started in their garage. Or Jobs and Woz, who founded Apple in another garage. Or Michael Dell, who lived the same tale but upgraded to a dorm room. All rebels who triumphed over Big Business.
The Reality?
Two researchers from the Haas School of Business at UC Berkeley, Pino Audia and Chris Rider, have debunked the Myth of the Garage in a recent paper. The garage, they say, “evokes the image of the lone individual who relies primarily on his or her extraordinary efforts and talent” to triumph. The reality is that successful founders are usually “organizational products.”
A separate study of VC-backed companies found that 91% were related to the founders’ prior job experience. Audia and Rider say entrepreneurial triumphs aren’t due to lonely, iconoclastic work–they’re “eminently social.” Wait a minute: Entrepreneurs aren’t rebels, then, so much as recently departed organization men.
This is valuable insight. It suggests that entrepreneurial ventures are more likely to succeed if built on a foundation of experience with one or more successful businesses run by others.
However, the more frequently people make these transitions, the more frequently disputes arise regarding unfair competition and misuse of intellectual property.
Budding young entrepreneurs would thus be well advised not only to become “organization men” (or women) before taking the leap into business creation, but also to bone up on the law of noncompete agreements, trade secrets, patents, and copyrights (and probably consult an intellectual property lawyer before, not after, legal accusations begin to fly).
As an “organization man” (or woman) one often cedes ownership of one’s ideas to the organization. One is also bound not to misuse specific information learned on the job, if it meets the definition of trade secret. Even absent a noncompete agreement (which are increasingly common), trade secret law may thus seriously constrain options for competing with a former employer.
And, though state laws on this vary greatly, for the most part it is a dangerous myth that noncompete agreements are not enforceable. Ignore them at your peril (again, if in doubt, consult a lawyer). Source: The Myth About Creation Myths
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Comment by Workplace-law
Agree with most of the above. I think being part of an organisation before you start on your own (and it doesn’t need to be a big organisation, btw), also allows you to build up contacts and ‘friends’ who turn out to be invaluable in the log run.
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