When one meets Derek Lidow, the James Wei Visiting Professor in Entrepreneurship at Princeton University, one should be forewarned that a discussion about entrepreneurship will include interesting data. Derek is the founder of iSuppli, a business that provides important data to companies to assist them in making informed decisions, which he sold to IHS for $100 million in 2010.

Now located in Princeton and distant from the West Coast where he spent most of his career following his graduation from Stanford University, Derek is both teaching and writing a book about entrepreneurship. The book entitled "Startup Leadership" will be published in March 2014.

When I met Derek for lunch in downtown Princeton, we compared notes about working with family. My first business was a start-up with a sibling, while Derek joined a large generational business founded by his grandfather and then run by his father. He worked there with his brother and in Derek's words, "we had to work to be a team and we succeeded". Derek served as CEO before he left to found iSuppli and his brother was CEO up until 2008. I agreed totally with Derek on the special work that is needed to make "family in business" succeed.

Having attended Stanford, worked and then built his own company in Los Angeles, Derek is very familiar with the Silicon Valley model of venture backed highly scalable businesses. Our discussion focused on entrepreneurship that occurs outside the Valley and emulates its model.

Derek estimated that approximately 250,000 entrepreneurs across America aspire to the Silicon Valley model of building highly scalable fundable businesses. Mostly concentrated in or near urban hubs such as New York, Chicago, and Los Angeles, many of these startups Derek notes are working on solving the same problem. He sees a small number succeeding with great reward, a portion following with some success and the remainder failing.

The last point about failure moved our discussion to the definition of entrepreneurial success. Derek has written about entrepreneurial success in his personal blog and he challenges the definitions proffered by media and venture capitalists. The former's measure of success is primarily determined through lists that measure a venture's rate of growth or valuation, while the latter places emphasis on fundability and scalability. Derek fears that entrepreneurs using these sets of measures to evaluate their own success may draw wrong conclusions.

Lists commonly created by media that place entrepreneurs and their companies at the top of a category almost by definition create an element of exclusivity for a relatively small group. As Derek sees it, "This definition groups virtually all entrepreneurs, past and present, into a category of also-rans. "

Derek identified some key statistics put together by the Kauffman Foundation about Inc. Magazine's annual list of the 5000 fastest growing private companies that lessen it as a full measure of success. "According to the latest Kauffman Foundation analysis, about 63% of Inc. 5000 companies are still in business 5 or more years after making it onto the list (this research is generally consistent with research done on the Inc. 500 in previous time periods). About half of the companies still in business have shrunk from the size they were when they made in onto the list. Thirty-seven percent of the Inc. 5000 were sold or went out of business. Many of the 32% of Inc. 500 entrepreneurs that sold their companies go on to try again, becoming serial entrepreneurs (search for "life-after-the-inc-500-fortune-flameout-self-discovery" at http://www.inc.com). This implies that most of the entrepreneurs that sold their companies were not completely satisfied with the outcome. Undoubtedly a fraction of these Inc. 5000 serial entrepreneurs did well in the sale of their companies yet still wanted to launch another company because they find founding companies exciting. But the point is that just because an entrepreneur has a company that grows fast doesn't mean that the firm will continue to have even non-negative growth, or, that the entrepreneur will be satisfied with his outcome."

Though not an ideal measure for success, I see the "top lists" created by media as being valuable vehicles for public recognition that have multiple benefits to an entrepreneurial stage company that they can parlay. This includes attracting investors and new business opportunities. This should not be underestimated.

However, with regard to funding by venture capitalists as an indicator of entrepreneurial success Derek contends, "The US entrepreneurial community in particular propagates the idea that getting outside funding is the most prestigious of entrepreneurial merit badges. In many circumstances outside funding represents major progress, but is it success?" Going further he notes that prestigious venture capitalists limit entrepreneurial success even further to those entrepreneurs who have achieved the rarified air of dramatically disrupting an industry, viewed as "change the industry or bust". Clearly, that is a very small number and a very exclusive club.

I feel that Derek's most important point is that most ventures contribute significantly to the economy without meeting the success standards of either media or the venture capital community. He states, "Non-VC backed entrepreneurs create the overwhelming majority of the wealth in the US. Only around 12% of all the companies on the Inc. 5000 have taken money from VCs or angels. Another 17% raised growth equity after they had established stable positive cash flow.....Over seventy percent of all Inc. 5000 companies did not need to sell part of their company to professional investors to start up or to fund their fast growth. We cannot use VC mindsets to define entrepreneurial success nor let VCs redefine the word startup to mean hyper-growth".

Derek is not criticizing the promotion of entrepreneurship via top lists compiled by the media, he is advocating that entrepreneurs be mindful of other more meaningful measures for assessing their own success. I see entrepreneurship as an all-consuming undertaking. It impacts so many lives both personal to the founding entrepreneur, as well as those who are the beneficiary of its job creating power. It is important to have more elevated discussions outside of broad popular media. This has been happening for quite a while via the Kauffman Foundation and organizations such as the Small Business Institute Association. American Entrepreneurship Today has its Thought Leaders section on its web site for this very reason.

Not intending to be just critical, Derek hopes to catalyze discussion while offering an alternative measure of success, "Successful entrepreneurs turn ideas into self-sustaining value producing enterprises. One criterion of this definition requires that the entrepreneur gets his enterprise to the point where it produces net positive value; in the case of a company this means consistent profitability. The other criterion requires the entrepreneur create an enterprise that can consistently generate new products that capture new groups of customers to at least replace those that no longer need or want his product".

"Without this ability to capture new sets of customers a firm will just peak and decay, no matter how fast it grew. This is a criterion that almost half of the surviving Inc. 5000 did not meet. With any fewer success criteria the enterprise is on a path to eventual failure. With any more criteria we are creating arbitrary standards for deciding whom we call successful. This definition is very balanced and we can rightly leave it up to each individual entrepreneur as to whether they set some additional size or valuation criteria for their personal standard of entrepreneurial success."

Most of the 250,000 entrepreneurs who are aspiring to be the next Silicon Valley like success story will not reach the standards set by venture capitalistsundefinedthey will not be funded and not be disruptive. They also will not be on a media list. Yet, as statistics indicate a portion will be in business for a long time, generate great wealth for the founders and shareholders, create jobs and be on whole a net contributor to the American economy.