Dr. Lawrence Carr on Entrepreneurship for Veterans

Dr. Lawrence Carr is a Professor of Management Accounting at the Graduate College of Business at Babson College, one of the top business schools for entrepreneurship. He is the recipient the Kennedy Award for Teaching Excellence. He got his MBA from Union College after serving in the Vietnam War and holds the rank of Captain (Retired) in the US Navy. Before entering academia, Carr spent 18 years in the corporate workforce, most notably as the CEO of OSRAM (a division of Siemens). In this interview, he discusses the similarities between military culture and startup culture, and provides advice to veterans who are considering starting their own business.

What is your background working with veteran entrepreneurs?

I’m Larry Carr, I’m a professor at Babson College and I’ve been there for about 23 years. I’m a veteran myself. I got an MBA right after Vietnam and pursued a career in industry and then switched over to an academic career later on.

So, I was teaching at the premier school for entrepreneurship. We see a lot of military students that come through, and naturally myself and a couple of others that are military veterans would kind of look after them and take a special interest in their progress in the program.

What made you decide to get your MBA?

I was a line officer on a ship and did two tours in Vietnam and I felt that the MBA was a general purpose degree to launch me into some sort of business career. Also having been in the military, and being responsible for a lot of people and a lot of material and situations from a management point of view that you would never see until a much older age, I needed a buffer to kind of transition from the military to the civilian life.

I stayed in the reserves and made a career in the reserve in the military and retired after 26 years. So I stayed in the military because I had the GI Bill and the reserve pay was a good supplement to the salary and I wound up getting nice assignments and interesting jobs, and I stayed in it until I made Captain.

How can an MBA help veterans who are looking to start their own business?

What you find is that for an entrepreneur to succeed, they certainly need to have good business acumen, certainly an opportunity-seeking mind and some sort of tolerance for risk, all of those combinations; but, for the entrepreneur to be successful, they really need a set of integrated business skills. That’s where the MBA really helps them to balance the things they have to consider from sales and marketing to operations, to finance, to raising money, to delighting the customers and the details of promotion and brand building.

So, there are a lot of things that come together, and what we find is that the general MBA, and in particular a focus on entrepreneurship, really helps the students first of all to shape their idea in a more business-like, business plan manner, and then raise the money and have a chance to be much more successful in launching and executing the idea.

Many franchise companies target veterans. Do you think franchising is a good option for veterans who want to start their own business?

I do, but they have to be very careful of what franchise. They need to make sure that they do their homework. So it’s not just a franchise that they read out of a catalog, but actually go talk to the people, experience the product from both sides of the counter and understand what it’s all about. I think franchising can be very helpful and the veteran can be very good at that, but, they have to be very careful because you have to know the territory, the product, what you’re really selling. So, from my perspective, I think that it can work, but they’ve got to do their homework.

What are some of the similarities and differences between military culture and start up culture?

It really depends on the experience, but the start up culture can very much be like a tour in Iraq or Afghanistan or any of the places where you have to be innovative. Yes, there are rules and regulations and structures; but, when you get into situations, you have to use your common sense, you have to use your ingenuity, your creativity, your cleverness to solve them. So, I think that from that point of view, the entrepreneurship and the military have a nice synergy.

There is a stereotype that veterans have trouble with innovation since they are coming out of a regimented environment. Is innovation something that veterans have to learn, or do you think serving in wars gives veterans a sense of innovation?

From my experience from Vietnam, throw out the rule books, throw out the structure. To be successful and survive in the military, you have to be pretty clever and pretty innovative. There are a lot of rules and regulations and a lot of procedures. People are well trained, but situations happen and you have to make decisions, you have to understand things. I think that in many ways, a person on the ground on a patrol is like an entrepreneur. They don’t know what’s going to come, what’s happening. There are rules and regulations, but when you’re out in the field those can evaporate.

So, I think while you think that, “oh the military, they like the structure, the form and the bureaucracy would work very well in big corporations”, I think that’s true if your tour experience was primarily the Pentagon; but if you were in the field and out in the operations, it would be just the opposite.

What types of veterans make good entrepreneurs? Are there certain military branches or roles that are better for creating entrepreneurs?

I don’t think it’s one branch of the service or the experience. I think what makes good veterans and a good entrepreneur is confidence in himself. That’s what the training has done for a lot of military people. They've taken people and they really have built their confidence, shown them what they could do, what they’re capable of doing, stretched them; so, the confidence that the military veteran can bring to the entrepreneurial situations goes a great way in helping them to be successful. They know that if they can figure things out, they know that they can be successful; they know how to access situations. So, I think having that confidence helps them be a successful entrepreneur.

What can veterans do to make the transition from military to entrepreneurship easier?

I think the best thing the veteran can do if they’re thinking about entrepreneurship is to look in the mirror and start to understand, are they okay on their own? Are they okay without structure? Do they have a tolerance for risk? Are they willing to bet their little fortune that they have or a little accumulated wealth that they have on an idea or a concept? I think what we find is that if they have that kind of willingness to take a risk, built in sense of confidence of they can execute and then finally seeing an opportunity, identifying a need, a product, a service that’s out there and being able to test that and validate it and then execute the plan, I think that the veteran can do very well.

Should a veteran or anybody going into business school, should they be seeing the opportunity when they go in?

What I think happens is that you probably have been thinking about the opportunity. You might think about a product or you might think about a service that you don’t have, or what people should have, or you saw something in your travels that you thought “oh, wouldn’t that be good here that's not being offered”, those kinds of things. So, I think that the people in the service have been exposed and have a chance to think about a lot of different things and entrepreneurial ideas come in all different flavors and varieties. I think the veteran has a chance to think them through before they want to execute on them.

What advice do you have for veterans who are looking to start their own business?

First of all, make sure you’ve got a good idea, you’re confident in what you do; and then secondly, build your team, your support team and your operating team that’s going to help you execute it. Finally make sure that you secure the funding. Lots of times it’s family and friends and maybe your own savings or angels and so forth; but what we find is the funding usually takes longer than you think, put together a good business plan, plan for a lot of unscheduled events and make sure you have enough cash.

Is there anything else that you would like to touch on?

As you’re starting to look to get veterans through the MBA program, I see at our school we’ve had a number of folks that have come out of the service. We find them to be very excellent students. They’re generally much more capable than somebody that maybe worked on Wall Street for two or three years, certainly in seeing the broader picture -- an integrated picture of the business world. So I think that the military veteran can cash in their training and their confidence that they’ve gained to execute on a plan that's something that they want to do.

I think one of the other things is that they see in the military is that in any big corporation, sometimes the individual doesn’t always make out, and that taking full control of your life and your career gives the veteran a lot of flexibility and independence which many of them are seeking.