How important is education to entrepreneurism, and how can educators best support and encourage it? What do successful entrepreneurs learn in the education environment that help them thrive? These key themes emerged in a lively give-and-take when a panel of academics, business and policy leaders discussed the findings of the 2014 Amway Global Entrepreneurship Report (AGER). Following are discussion excerpts.
ENTREPRENEURSHIP EDUCATION IS MORE THAN TEXTBOOK LEARNING
Professor of entrepreneurship and management at New York University Stern School of Business
Teaching from a textbook does not work for developing entrepreneurs and entrepreneurial qualities. The passion and determination has to come from them.
If we are teaching people to be entrepreneurs, we are talking about a mindset of thinking about opportunity first, and believing that obstacles that could stop you are things you find a way to get around. How to evaluate a business opportunity; how to start and run a business – these are all skills that can be taught. And you can do that not just by teaching someone how to start and run their own business but also how to employ an entrepreneurial mindset to help grow an established organization.
Breakthrough entrepreneurship, which breaks industry models and disrupts the way people have always thought about doing business, is a different story. The creation of Amway is a case in point. Learning to do that kind of entrepreneurship takes much more than learning how to apply business concepts and tools to build and manage a new business. It requires a highly creative and deep thinking approach to coming up with revolutionary solutions to important problems or needs.
Experiential learning is vital to both of these types of entrepreneurship. For example, how do people learn to recognize whether they have a good business idea without taking unnecessary risks? Well, first you have to find out whether you are really solving an important problem with a superior solution for which customers will pay. To do that, you need to talk to potential customers and find out what their real needs are, and whether or not your product or service provides a solution that is significantly more desirable to them than currently available solutions. That is part of what we now ask our students to do in many entrepreneurship courses. We have developed much more of a practicum aspect to the education process, which we believe makes it more effective.
It is also very important to note that the locus of entrepreneurship education has moved from the business school to the university, so that people in arts and sciences schools can also learn about the process of entrepreneurship. They, too, can learn how to develop innovative ideas and new technologies into successful businesses.
Entrepreneurship Ecosystems Project leader, World Policy Institute
You have to have critical thinking skills to be an entrepreneur. In places where the educational system doesn’t encourage and foster critical thinking skills, you see people less inclined to start their own businesses. Critical thinking is what enables us to write an effective business plan, say, or pitch potential investors on your idea. And that can be taught at any point in life.
Being able to think critically also builds confidence, and that’s important. In business ownership, I think we’re all afraid of something – the difference between entrepreneurs and everyone else is that entrepreneurs are willing to go after their ideas more than they’re afraid of it.
HIGHER EDUCATION IS IMPORTANT TO ENTREPRENEURSHIP
Once you have the goal of developing an entrepreneurial mindset, then it’s about designing an educational program that will teach people how pay better attention to potential business opportunities and to take the necessary analytical and practical steps to move the best business opportunities forward while avoiding unnecessary risks.
Amway Business Owners:
Amway Business Owners who don’t have a formal business education shared their thoughts on areas in which they wish they’d had more education or training to help them in running their businesses. Given the opportunity to attend college now, most said they would jump at the chance to take courses in basic business skills, including accounting, public speaking and law.
Accounting, law and finance are the language of business. Business owners need these basics mostly so they can ask the right questions and have intelligent conversations with their accountant, lawyer and others who specialize in various aspects of their business.
Some education in behavioral sciences and organizational behavior is also is very helpful for understanding how to manage and motivate the people that work in their firms. Several studies show that venture capitalists, when asked to provide the most common reason for why their portfolio companies fail, point to people problems.
We also have to train potential entrepreneurs to be leaders. Entrepreneurs have to be able to lead people to accept and implement their ideas and to go the extra mile to achieve organizational and economic success in highly uncertain environments.
Columnist, author and owner, The Marks Group, PC
Here’s what I’ve discovered in 20 years of running my business. The people stuff turns out to be the most difficult to learn, and the most important.
Every day I have to deal with challenging customers, partners, vendors and employees. And, like everyone else, I’m trying to point them in the direction towards achieving my goals. This is not an easy thing to do. The more I learn about human behavior the easier it becomes for me to collect money, negotiate contracts, motivate employees, calm down upset customers, light a fire under a supplier.
The more training and education about human psychology a business owner gets then the better he or she will be at dealing with the biggest challenge we all face: that’s managing people.
Also participating in the 2014 AGER panel were Lisa Miller, chief growth officer, Network For Teaching Entrepreneurship, New York and Kevin Hassett, director of economic policy studies, American Enterprise Institute. For their comments on entrepreneurial mindset, see the first article in our series, What makes an entrepreneurial mindset?