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Start-Up Soup

NEW YORK – Last month I was in Kyiv, speaking at a conference focused on entrepreneurs. I wanted to give a talk that would be of general interest but also concrete. So I started with one of my favorite parables.

It is a familiar folk tale. A confidence man shows up in a village with what he claims is a magic stone. Put the stone into a pot of water over a fire, he says. Then just add a few ingredients – maybe some vegetables, some ham bones from yesterday, a few spices – and you will soon have a delicious, life-giving soup with magical healing properties.

Of course, this man is a trickster; the point of the story is that his magic stone is just a plain old rock. To modern eyes, however, he is an entrepreneur. His “magic” stone is perhaps the germ of an idea, a product concept, or a marketing innovation. The entrepreneur takes the stone and adds ingredients (commodities or software), attracts people, gets them to work together, and perhaps tosses in a pinch of branding. The result is value where before there were only unexploited resources.

But that is only the beginning of the story. In the long run, the entrepreneur’s job is not to cook soup, but to create a restaurant – or, better yet, a chain of restaurants – so that the magic soup can be made reliably, day after day, by a team that can work on its own without the impresario’s direction. Over time, the company will continue to evolve, improving the soup, adding other items to the menu and opening up restaurants in new markets.