Commentary: Indiana needs social entrepreneurship

February 11, 2008

In the Middle Ages, the French coined a new word that today we would identify as "undertake." Around 1828, this old French word, "entreprendre" was absorbed into the English language and after some use and m o d i fi c a t i o n s became a word we recognize and vener ate in our society today ... entrepreneur.

As a nation founded and populated by men and women who risked life and fortune to reach our shores, we have celebrated the entrepreneurial spirit since America's founding. Alexis de Tocqueville's seminal analysis of American politics and society highlighted this uniquely American pursuit of profit when he noted, "As one digs deeper into the national character of Americans, one sees that they have sought the value of everything in this world only in the answer to this single question: How much money will it bring in?" Today's Americans are in pursuit of the same dreams and ideals that brought all our forebears to this nation's shores, with the only exception being those who were here before the arrival of European explorers.

Most reference books today define "entrepreneur" as a person who organizes, operates and assumes the risk for a business venture. However, the success of an entrepreneurial endeavor is rarely the result of a single individual. As Jim Collins and many other management gurus have discovered, sustainable, successful business enterprises are not the result of a single individual, but of individuals who create a culture that rigorously finds and promotes talented, disciplined people to think and act in a disciplined manner.

Too often in Indiana, our entrepreneurial successes have been the result of the sale of an enterprise and the attendant palatial home and automobile collection that often follows. While a welcomed, necessary and vital part of the economy, seldom do these successes result in the development of diverse and deep pools of capital that have the benefit of invigorating a multiplicity of entrepreneurial and philanthropic activity for our state.

The term, "Microsoft millionaire" was and is an honorable sobriquet in Seattle to identify the thousands of individuals who contributed to the creation of one of the most profitable business enterprises of all times. The lessons learned from building that organization are being applied in hundreds of instances to the creation of new careers, companies and, in many cases, new and novel approaches to philanthropy. Today, the same can be said of the employees of Google and elsewhere from which those entrepreneurs are beginning to branch out into new fields.

The virtuous cycle of economic success, which should be widely distributed within an enterprise, provides individuals with skills and the abilities to pursue and fund ventures that build upon their experiences and expertise. Time and again, this cycle of entrepreneur-funded innovation and experimentation has resulted in the creation of enterprises and industries. Prominent names and results exist in many segments of the economy-all able to sprout and grow because the leaders at the top decided to share the wealth and success of the initial enterprise.

The Gates Foundation and other notfor-profits funded by Microsoft executives have brought to the fore the concept of social venture capital, leveraging business objectives and metrics to ensure philanthropic aims are being achieved.

Locally, Exact Target and Aprimo are companies that have pioneered markets, just like their coastal competitors. Their management structures and expectations of employees are more similar to successful modern companies than the traditional Hoosier work environment. Ideally, their successful initial public offerings and subsequent growth and prosperity will provide us with a broader understanding of entrepreneurship and the economic and civic benefits it can bring.
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