Entrepreneur’s Challenge: Taking Action While Still Gathering Data ~ by Thomas Zurbuchen

A common entrepreneurial mantra is “when in doubt – act.” This refrain has often confused young innovators. They believe that “just acting” is counterintuitive to the type of detailed analysis, thinking, and approaches we teach at places like the University of Michigan. But I believe this misses the point.

My observations of successful innovators suggest a behavior that is more nuanced. Many of the best entrepreneurs I have grown to know are amazing data-people and they spend more time than their less innovative counterparts analyzing the strangest questions and doing research that often has almost nothing to do with the topic at hand. I remember having deep discussions with internet icons about what limits the speed of light in air, in water, in glass, and other substances. I remember discussions with aerospace innovators about the theoretical maximum speed a fish can swim. I have been in discussions with entrepreneurs who can recite market numbers and user behavior statistics at an amazing level of detail.

In fact, it’s the qualities like intense curiosity that lead people with an entrepreneurial state of mind to spend a lot of time thinking and looking at data. Suggesting that entrepreneurs do not take time to analyze is misguided. Many latch on to data wherever possible; sorting through and recognizing trends with great speed. But, they also understand the limitations of data.

Here is the crux of data and the future: Innovation is about analyzing and modeling a future and that involves data that are just not yet available. There are academic disciplines that allow for such forecasting and some of it is pretty good. For example, forecasting the tomorrow’s weather is well over 90% accurate, on average, but even using the best models today, forecasts ten days out is only accurate 50% of the time – flip a coin and you do just as well as the model. The limitations of weather forecasting are due to the physical processes in the system.

Other disciplines, like those focused on business and markets, have similar limitations. In fact, many market models are just plain wrong, even in big business. Bob Lutz once said: “It’s time to stop the dominance of the number-crunchers, living in their perfect, predictable, financially-projected world (who fail, time and again) …” It is critical to stop analyzing when there are diminishing returns – at this point, the best way to learn is to act!

Here is where an entrepreneurial state of mind matters: Innovators understand the diminishing influence of forecasting in many areas, and the importance of gathering data through action. “When in doubt — act” does not mean that you start running a race before you know where the finish line is, it means that you recognize that you learn a lot while you’re busy putting one foot in front of the other, rather than waiting for the perfect conditions to tell you when to begin.

There are no guarantees in entrepreneurship. You won’t know if your product will catch on until you build it, put it into the hands of a customer, and gather feedback. There is an element of risk where the data does not show a clear path. As President Kennedy once said, “There are risks and costs to action. But they are far less than the long range risks of comfortable inaction.”

Comments (3)
  • diepak benie

    November 2, 2014

    Talking about entrepreneurial state of mind in my opinion means, being smart, different, analyzing from a different angle and last but not least, be smart. Grow a network of people/friends you can depend on when hitting a brick wall.

  • James

    November 5, 2014

    Being an entrepeneur means multi tasking and wearing many different hats

    -James
    Online SAT Prep

  • Sonia

    November 18, 2014

    Collection of data, analysis of data, and then taking the appropriate action is the best business strategy for entrepreneurs.

Leave a Comment

* required