Garage entrepreneurs

Garage dreams

Legend has it that Silicon Valley started in a garage when William Hewlett and David Packard founded HP. Since then, the garage has become a potent part of the American dream: it conjures up images of entrepreneurship, rags to riches and a can-do meritocracy.

by California Management Review, Vol 48 No 1, Autumn 2005
Last Updated: 23 Jul 2013

There is even a demonstrable correlation between the number of mentions of garages, dorms and basements in news articles about entrepreneurs and total VC investment. But how accurate is the garage belief? Why does it persist? And why is it so popular?

The garage is likely to be temporary state; it is not a prerequisite for founding a company, even if it is an emotionally resonant one. Most entrepreneurs gain the resources necessary to start a business at existing organisations. The garage belief is misleading, misrepresents the entrepreneurial process and may result in poor choices by individuals, companies and governments when it comes to allocating resources.

But the legend persists, even if the stories that gave rise to it do not bear much scrutiny. If we look at where entrepreneurs come from, it is almost always from within organisations in similar industries that have provided them with the confidence, knowledge, information and social ties they need to go it alone.

If we look at the most famous 'garages', HP's founders were able to draw heavily on the experience gained at and the resources of other organisations. Similarly, Apple drew heavily on HP and Atari. In both cases, the garage was a factor, but the entrepreneurs themselves were organisational products.

Overstating the garage factor has important implications: it offers the wrong lessons and gives an under-socialised view of the entrepreneur - as a loner toiling away in obscurity. Whereas the entrepreneur is far more likely to be found in an existing organisation that, wittingly or unwittingly, tends to incubate them. Unsurprisingly, some ideas will fall into the hands of entrepreneurs and result in new businesses. This has implications for individuals, businesses, policy makers and business schools, all of which still believe in the garage view.

Although garage belief is important, it should be recast as the legend it is and not seen as an accurate representation of the entrepreneurial process.

Source: A garage and an idea: what more does an entrepreneur need?
Forget the social dream: entrepreneurs are organisational products
Pino G Audia and Christopher I Rider
California Management Review, Vol 48 No 1, Autumn 2005

Review by Rhymer Rigby

California Management Review, Vol 48 No 1, Autumn 2005 recommends

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