The Changing Face of Entreprenuership
From the desk of Bob Bridge:
I have been in and around startups for thirty years. The world of entrepreneurship looks much different now than it did thirty years ago.
In the past people who described themselves at entrepreneurs were using a nice code word for saying they were unemployed. Serial entrepreneurs were most often folks who had repeatedly failed at running business and who couldn’t fit in at a big company.
The start-ups teams back then didn’t describe themselves as entrepreneurs and typically consisted of an experienced group of co-workers who spun out of a large company because the company was ignoring a market or technology that the team knew well. The team’s domain knowledge was deep. Their experience in making a team and business work was considerable. They were to create sustainable competitive advantages though innovative patents. They did not have to learn all-at-once everything about running business, technology, market, customers and competitors because they already knew that.
Today, entrepreneurship is all the rage. It is the business fad of our decade. Many fresh college graduates want to start their careers as a CEO of a start-up. It is inspiring to them to look at what Mark Zuckerberg accomplished at Facebook! Engineering graduates at MIT look down on their fellow graduates who join big companies. Their thought is that you can learn so much more, so much more quickly in a start-up, and have more fun at the same time.
Entrepreneurship education is moving down from colleges, to high schools and sometimes even to grade school. The push to give everyone the opportunity to learn how to be an entrepreneur can have a positive impact in terms of teaching about creativity, speed of executive, and what business is all about. That learning can well serve the students in any career that they choose to pursue.
The huge missing element for young entrepreneurs, which cannot be taught, is the scar tissue (from painful lessons learned) and the domain knowledge that comes from years of working in an industry. Having years of failures and successes in an industry is a great teacher. Without that experience it is much more difficult to create a successful start-up.
This is not to say that young entrepreneurs have no experience or skills. They have great educational experiences, and understand social media and social networking like no one older than them can hope to understand.
And software tools are so advanced that is possible sling the code needed for a minimally viable product in a short period of time and at low cost. But with no technical barriers to entry how does one build a sustainable, protectable business and competitive advantage?
Their challenge for the entrepreneurs is that they all the same domain knowledge (college and social media). Does the world really need another social network or a specialized on-line marketplace? The sameness of young entrepreneurs’ experiences creates an intensely competitive environment where almost all of the start-ups are bound to fail. Being the first start-up serve to well serve a market does not necessarily provide a sustainable advantage and does not guarantee success over the long term.