I had planned to take a few days off of blogging this week for spring break, but my neighbor brought over the latest issue of Fortune Small Business. I just had to respond to its cover story "Can Entrepreneurship Be Taught?" My short answer is, "yes," if by entrepreneurship you are talking about what a person does as they start and build their business.
I will start with my own experience. When we started our health care company I had three, count 'em three, business degrees in hand. What I soon learned was that my MBA in Finance (from 1980) and my DBA (from 1983) offered me no clue what to do day-to-day as our business grew. I could calculate the time value of money until the cows came home, but that did little to help me manage the uncertainty of our cash flow and negotiate terms with our banker. I could tell you why GM's structural changes were needed given the torrent of new competition from overseas, but I struggled with which key manager I needed to hire next (a Controller, HR, Operations) and how to group our employees into functioning departments that would help us better manage our growth. Much of my formal business education was irrelevant for the experience I was facing in the rapidly expanding venture.
So I looked to two sources of information to help. First, I drew from what I had learned from being in and around our family businesses. Second, I "went back to school" by reading everything I could about managing a growing company effectively. And as I learned from our successes and failures I swore that if I ever got back into teaching I would focus on providing the skills and knowledge it takes to start and grow a business. (I need to provide a little historic context. When I first taught in a business school, there were only a handful of schools teaching entrepreneurship.)
Let's get back to the Fortune Small Business article. Rather than affirm those famous entrepreneurs that they quote in the story who believe in educating entrepreneurs, I will address some of our skeptics.
"You cant' teach someone to be afraid when he is almost out of money or to believe in his idea no matter what." Wally Amos, Founder of Famous Amos Cookies
We actually can teach someone about the emotional aspects of being an entrepreneur. We do this in any number of ways. We bring in guest speakers who tell of the reality of being an entrepreneur. We give them case studies that immerse them in entrepreneurial experiences. We give them internships with entrepreneurs so they see first hand the daily struggles they will face. And at least here at Belmont, we throw them in the water to learn how to swim. We offer hatcheries where they can develop their own ideas into businesses within the context of their education or we give them campus-based businesses to help start and run. Failure is a real option with all of these experiences. We tell them that and we mean it. And out of these experiences some come away deciding to change their major to something, anything, other than Entrepreneurship. To me, that is just as much as a success as helping the next Michael Dell to open his new business.
And speaking of Michael Dell.....
"Most of entrepreneurship, for me, is about instinct and intuition. Many times I have been asked by someone considering a new venture if he should go for it. But an entrepreneur knows instinctively when to go for it." Michael Dell, Founder of Dell.
True enough, but once they make the decision, for goodness sake let's make sure they know what they are doing. People know instinctively that they want to be surgeons, airline pilots, and engineers. But I don't want someone cutting open my brain just because they "instinctively" know that they want to be a surgeon. I guarantee you that the success rates of those who have been properly trained in brain surgery are much higher! And so, too, for entrepreneurship. In fact, when you look at all of the studies of entrepreneurial success rates, we find that with education about the process of entrepreneurship, success rates almost double. Some studies show success rates of 80-90% for those who have been educated. That is probably a higher success rate than those who have taken a management position with Dell have had!
I believe there are two critical aspects of entrepreneurship education that increase success rates. First, we teach them what deals not to go into through the process of opportunity assessment. We teach them how to "fail on paper." They learn how to create discipline around their instincts and drive to move ahead blindly into the pursuit of their ideas. Second, we teach them about how to manage growth effectively. Any banker will tell you that this is where most businesses fail. We teach them about the challenges that success can create as their ventures grow. As one banker likes to say, "Too much success leads to failure."
"If you're passionate about what you are doing, you don't need to go to school. From the time I was 8 years old, I loved making clothes." Vivienne Tam, Founder of East Wing Code
What we teach in entrepreneurship programs is about the process, not the content. I don't know anything about making clothes (or picking them out, according to some of my students). But guess what? When your business grows you very quickly move out of making clothes (or what ever the content of your business is about) and into managing a growing venture. That is where we can help you succeed.
