Book review: Finding business worth in ‘Worthless’

This is a good time to be an entrepreneur.

As the global economy has teetered on the edge of collapse, and former pillars of society from bankers to politicians have become mired in scandal, business founders have been lionized across the world as the saviors of capitalism and a source of hope for the future.

The general interest in the subject means that it is also a good time to be writing a book about entrepreneurship. Daniel Isenberg is the latest to do this with what he regards as an alternative look at the subject. His new book, “Worthless, Impossible and Stupid: How Contrarian Entrepreneurs Create and Capture Extraordinary Value,” was published by Harvard Business Review Press.

Isenberg is a widely respected authority on the subject, having spent the best part of three decades working with start-ups as an angel investor, a venture capitalist, an adviser, an academic tutor in entrepreneurship and a business founder in his own right. He taught for 11 years at Harvard Business School and is a professor of entrepreneurship at Babson College in Wellesley, Mass.

He has traveled the world to prepare case studies about entrepreneurial businesses, several of which find their way into the pages of his book. He also spent many years working with fast-growing companies in Israel, a country now renowned as a start-up capital of the world.

The first thing that Isenberg wants to tell us is that entrepreneurs are not what they seem (although he is not the first to say this).

The first three chapters of the book try to dispel three common myths about the nature of entrepreneurs: that they are innovators (the best ones actually just sell existing ideas better); that they have to be experts in their industry (the best ones are just good at spotting an opportunity); and that they have to be young (several studies show that the sweet spot for starting a business is in later life and that the average age of founders is rising).

“Nothing is obvious in entrepreneurship,” the author writes. His theme of “worthless” refers to the way in which entrepreneurs so often succeed because they identify the opportunity to make money from a situation that everyone else considers to have no value.

Linked to this is the point that entrepreneurship can happen anywhere, often in the places you least expect it — and certainly not just in Silicon Valley.

To prove his point, in the first five pages of his book, Isenberg name-checks interesting companies he has encountered in far-flung corners of the world.

The book contains several well-told stories about the challenges and failings that specific founders have had to overcome to build their businesses.

There is also a refreshing honesty about how some of the case-study companies did not achieve the success that their founders had expected. Isenberg even admits to having to write off $30,000 of his own money because the intellectual property of a business he was backing proved to be worthless.

If there is a criticism of the book, it is that Isenberg seems to change his mind at several points about what he wants it to be. After the chapters about entrepreneurship myths, he changes tack to spend a couple more chapters talking about why entrepreneurs seem crazy and their ideas worthless.

He then switches again to a third section on the difficulty of creating companies before finally moving to a more academic analysis on how to create value in a company. It feels as though the author had four great book ideas but could not decide which one to publish, and the movement between them is slightly jarring.

This is a shame, because there are abundant nuggets of knowledge in this book as well as frank confessions about how hard it usually is to create truly great companies. That kind of intelligence is not worthless, impossible or stupid.

Jonathan Moules writes for the Financial Times of London, in which this review first appeared.