Elaine Chen

Senior Lecturer & Entrepreneur-in-Residence

Building new ventures from the ground up

Building new ventures from the ground up
entrepreneurship

Elaine Chen is a Senior Lecturer at MIT Sloan and Entrepreneur-in-Residence at the Martin Trust Center for MIT Entrepreneurship. She teaches her students and corporate clients the skills to be successful entrepreneurs.

By: Daniel de Wolff

For many, the term entrepreneurship calls to mind venture-backed private companies that rocket up steep growth curves on the way to hundreds of millions in revenue. But Elaine Chen reminds us that entrepreneurship is not tied to a particular model. Rather, it is the act of taking the risk and the responsibility of building a venture from the ground up—something that can take the shape of a startup but can just as easily find legs in a large company, a nonprofit, a government agency, or in the military.

Chen is a Senior Lecturer at MIT Sloan and Entrepreneur-in-Residence at the Martin Trust Center for MIT Entrepreneurship. She has nearly 30 years-worth of VP-level engineering and product management experience, including her time with startups like Rethink Robotics, Zeo, Zeemote, and SensAble Technologies. She’s also the founder and Managing Director of ConceptSpring, a corporate entrepreneurship consulting business that helps leaders make their organizations more entrepreneurial by providing innovation enablement consulting and entrepreneurial training services.

According to Chen, the corporate entrepreneur and the startup entrepreneur face similar challenges from a new venture creation standpoint. Both need to embrace an entrepreneurial spirit and an antifragile mindset, finding opportunities in chaos and thriving despite uncertainty and obstacles.

In addition, both need to learn the skills of the trade for entrepreneurship. First, they must develop an understanding of the market, the customer, and the problem they are trying to solve. Then, they need to solve the problem with a differentiated solution and develop a viable, sustainable business and operating model. Above all, both need to take a big vision, break it up into small components, and run rapid experiments to iterate their way towards the end goal.

Regardless of the setting, the would-be entrepreneur can find themselves in the weeds pretty quickly. To help make sense of a complicated process, Chen teaches Disciplined Entrepreneurship, a framework developed by Bill Aulet, Professor of the Practice and Managing Director of the Trust Center. “There is so much information out there about how to start a new venture,” says Chen. “At the Trust Center, we think there’s a better way to teach entrepreneurship than boiling the ocean and trying to learn everything at once.”

We start with understanding the market and the customer to come up with a solution to a problem. Only then do we talk about making money.

Based on Aulet’s book, Disciplined Entrepreneurship, the framework is a prescriptive, 24-step process to practice innovation-driven entrepreneurship. “We start with understanding the market and the customer to come up with a solution to a problem. Only then do we talk about making money,” says Chen. It’s an important aspect of what she teaches her students at MIT. It also forms the basis for the entrepreneurial training she provides to executive education students and other corporate and non-profit leaders like Schneider Electric, Amazon, and the International Monetary Fund.

But building a new venture in a startup setting as opposed to a corporate setting is an entirely different animal. The standalone startup lacks customers, it has no legacy business, and it doesn’t have any reputation risk. In the beginning, there is only the team and the passion driving the team. They are free to iterate quickly, take risks, and experiment. Properly managed, this engenders agility and adaptability.

On the other hand, a big company at scale already has customers and a well-functioning set of existing businesses, not to mention the potential for significant reputation risk. Corporate entrepreneurs very often lack the same freedom to experiment that helps define their startup counterparts. Furthermore, the systems and processes that are geared towards supporting the legacy business may stifle new venture creation.

As a result, the corporate entrepreneur needs to embrace the same entrepreneurial spirit and skills as the startup entrepreneur while having a deep understanding of how to navigate their organization. “Corporate entrepreneurs need to be ninjas at reading their own organizational chart,” says Chen. “They also need to figure out who are the stakeholders that can help them build their venture, and who are the stakeholders that might be opposed to them.”

Only then can they assemble a broad coalition of support by aligning the new venture with the interests of various stakeholders within the company. They also need to identify assets (e.g., an existing customer base, sales channels) and obstacles (e.g., a risk-averse culture, heavy processes not well suited to innovative ventures) within their company, and figure out how to leverage the assets while overcoming the obstacles.

In a rapidly changing world, corporations must keep pace to survive and thrive. But large companies are designed to be repeatable and predictable. How then do they maintain their legacy business while making time to innovate? Chen suggests they need to find a way to run a dual operating system that allows the core business to work in an optimized fashion, making use of existing processes, while the new venture is free to experiment (and even fail).

Some separation between the two ventures is good, explains Chen. But the internal venture must be aligned with the company’s overall strategy. Corporate entrepreneurs need to be well versed in the company’s current and future plans as well as market and technology trends. They must make sure they are solving real problems that are relevant for the company’s existing businesses or are working on a new venture that could generate net new business value.  In addition, good connectivity between the core business and the new venture is essential, allowing business problems to flow from the former to the latter, while business value is delivered from the latter to the former.

Corporate entrepreneurship is hard, but companies must invest in it to survive and thrive in a rapidly changing world—especially as they work through crises like the coronavirus pandemic. It really behooves companies to find a way to stay innovative because there is a club you definitely don’t want to join: the companies that were great once and are no more.

“Corporate entrepreneurship is hard, but companies must invest in it to survive and thrive in a rapidly changing world—especially as they work through crises like the coronavirus pandemic,” says Chen.  “It really behooves companies to find a way to stay innovative because there is a club you definitely don’t want to join: the companies that were great once and are no more.” She mentions Kodak as a prime example of a corporation that dominated its industry but was swept aside in large part due to an inability to innovate in the face of changing consumer and technology trends.

Depending on the makeup and challenges of your company, innovation and entrepreneurship enablement programs can look very different. If your organization lacks the culture to build something new, you may find the best way to innovate is to partner with a startup. Or, maybe you have employees with great ideas but no process for surfacing the ideas and no innovation pipeline to develop the ideas into solutions. In this case, Chen suggests you define a set of innovation tools and programs to help find internal entrepreneurs and put them through the training to help cultivate the necessary skills and entrepreneurial spirit.

But it’s not necessarily one or the other. Many companies benefit from a multi-faceted approach to innovation and entrepreneurship, enabling their employees to be entrepreneurial while maintaining connectivity with universities, startups, and other external partners via a portfolio of enablement programs and tools.

This is where Chen sees MIT ILP playing an important role, bridging the gap between industry, the Institute, and its startup ecosystem. “MIT has a lot to offer to organizations looking for new ideas and approaches,” she says, “and the Industrial Liaison Program serves a really important function, helping organizations navigate MIT and connect with the centers, the faculty members, and the students conducting cutting edge research and developing impactful new ventures that can change the world.”

Elaine Chen
Elaine Chen; Senior Lecturer, MIT Sloan; Entrepreneur-in-Residence, Martin Trust Center for MIT Entrepreneurship