The 90/10 rule for Entrepreneurs

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There is no doubt that in business, both technical and managerial skills are important to run and grow a successful venture. But how much of each?

During my Masters course on entrepreneurship and innovation I came across this rule that emerging entrepreneurs may find helpful when running their own business.

In the Beginning

90% technical knowledge / 10% managerial skills

At the start of your business venture it is critical to have more technical knowledge than managerial skills in order to create a solid system that will eventually run itself. Added to the fact that you may have less employees to manage at the start, it is also important to get into the nitty-gritty technical details of your business at that time.

As you grow

90% managerial skills / 10% technical knowledge

As your business grows and you have established a solid system, it becomes less important for you, the business owner, to have a lot of technical skills and more important to have strong managerial skills in order to hire, train, motivate, and manage your growing team.

The Exception

These rules seem to be fitting for most start-ups. There is however one exceptional case that is worth discussing. The case of Elon Musk with SpaceX and Tesla Motors. Musk’s technical skills continue to overcome his managerial skills even decades after both companies have grown into successful ventures. Perhaps the rule doesn’t apply to technological innovations that disrupt existing markets, or he may have just gotten away with it!

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MSc in innovation and entrepreneurship.

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Farah Ammash

Farah Ammash

MSc in innovation and entrepreneurship.

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