Entrepreneurship Requires Practice (Like Everything Else)

When a student wishes to start a business, I usually show them this article by Fortune Magazine.  In a nutshell, the author argues that success requires about 10,000 hours of focused work.  That's 5 years of full-time 40-hours-per-week of work.  Applying this to STEP, a successful entrepreneur will not only need a two-year master's program in innovation and entrepreneurship at Case Western Reserve University, but 6,000 more hours of practice that will be interspersed with jobs, family, house, etc.  At ten hours per week (some of which might be attained on-the-job), this adds an additional twelve years.  If the average age of a STEP graduate is 25, then you can guess that the average age for a successful entrepreneur might be around 37.  Without a focused program like STEP, one can guess that the average age for a successful entrepreneur might be around 40.

Recent studies have shown this to be true.  The following excerpt is reprinted from SSTI Weekly Digest by SSTI and is licensed under a Creative Commons Attribution-Noncommercial-Share Alike 3.0 United States License:

In a recent report, "The Anatomy of an Entrepreneur," Vivek Wadhwa, Raj Aggarwal, Krisztina Holly and Alex Salkever examine the socioeconomic, educational, and familial backgrounds of 549 high-tech entrepreneurs, and the factors that motivated them to start a business. The authors find the entrepreneurs started their business at the average age of 40 years old, 70 percent were married at the time of launch, and 60 percent already had at least one child when they started their business. These findings may contradict existing stereotypes of tech entrepreneurs as primarily young people coming straight out of college without existing commitments to family.

The authors' analysis also found a full 95 percent of the entrepreneurs had bachelor degrees, with 47 percent having advanced degrees. Only 3 percent of their sample had a high school degree or less. From a socioeconomic perspective, 72 percent of respondents reported themselves as coming from a variety of middle-class backgrounds, as opposed to 6 percent from lower-class backgrounds. The authors contend, as a whole, entrepreneurs come from "stable, comfortable family existences" and poverty seems to be a significant barrier to entrepreneurship.

So, is being out of work what drives people to start companies? Not so much, according to the study, with 5 percent stating the inability to find work was an important factor in starting their own businesses. What really drives entrepreneurship, they found, is the desire to build wealth - indicated as an important motivation by three-fourths of respondents. Looking at industry experience, three-fourths of the entrepreneurs worked as employees at other companies for more than six years before starting out on their own.

As the survey examined entrepreneurs in high-growth industries such as the aerospace, semiconductor, biotechnology, software and engineering fields, the authors contend their research cannot be generalized for the entire population of U.S. entrepreneurs. And with many types of studies in this field, a certain "survivor bias" exists, such that the researchers interviewed are only the entrepreneurs who are still running companies, as opposed to those whose companies are no longer in existence.

"The Anatomy of an Entrepreneur" was released by the Kauffman Foundation and can be accessed at:

http://www.kauffman.org/uploadedFiles/ResearchAndPolicy/TheStudyOfEntrepreneurship/Anatomy%20of%20Entre%20071309_FINAL.pdf

When building and selling our programs in entrepreneurship, we must be very cognizant of the fact that entrepreneurship and innovation indeed follow the same rules as playing the violin, becoming a professional athlete, or becoming an expert engineer.  We must understand that an entrepreneur will not receive the kind of on-the-job training that a freshly-graduated engineer will receive (so that in 5 or 6 years she will become an expert in her field).  Unless we build an additional long-term support infrastructure for budding entrepreneurs, we must accept the fact that our students will not build great companies or innovations shortly after graduation.  This would be delusional and nothing short of gambling.