By: SCOTT OMELIANUK
“Time for a poll,” I say, standing at the front of the classroom. “How many of you think you’ll go to work in corporate America?” More than a dozen hands shoot up. And then, I ask, “Entrepreneurs? Who is going to start their own business?”
One day a week, I step away from a consulting practice working with startups and companies in transition to lead a class in the business school at what U.S. News & World Report has named a Top 25 Innovation University. Despite its relatively small size, Stevens Institute of Technology ranks No. 14 on the list of patents granted to alumni. Its students—electrical and computer engineers, majors in quantitative finance—are, you know, smart.
And so in the classroom this day, in answer to my second question, only three or four confident hands rise. Despite the constant stream of blogs lauding Silicon Valley and celebrating young billionaires and glorifying what’s been called “startup porn” (something that curiously features very few women—more on that later), America’s best and brightest are, it seems, loathe to jump into entrepreneurship.
In fact, American entrepreneurialism, as tracked by the Census Bureau and other indexes, is in steep decline. That’s alarming, given how much our economy depends on the small and midsized businesses (SMBs) that startups become when they go from crawling to walking to running. SMBs are where the U.S.’s world-leading spirit of innovation develops, and it is where job creation happens. In fact, as legacy companies periodically shed businesses and employees (hello, GE; hiya, GM), startups may be the most dependable source of net, quality job creation.
In class or on the job, almost every day I bump up against seven things blocking entrepreneurship. Seven things that, sadly, we are responsible for—in our failure to ignore economic imbalance, our pursuit not just of returns but ever bigger returns, our belief in a business philosophy based in gender and other biases. Of course, given that responsibility, it’s fixable, if we’re so inclined.
STUDENT DEBT
For gen-Z, like those in my classroom, or those just out of school, the spiraling cost of a college education limits possibility. As I said, these kids are smart, and being smart, they can calculate how hard it’s going to be to pay off the average student loan debt of $37,000 and continue to eat and purchase pants just by rewriting code, business plans, and pitch decks with former classmates in a shared apartment while hoping they can create the next Snapchat.
MILLENNIALS
A lightning rod for all ills, most imagined, but in this case, statistics prove that 22- to 35-year-olds are becoming entrepreneurs at a lesser rate than any prior generation, with about one-quarter the number of self-starters as compared to gen-X or baby boomers. But then how much risk tolerance should we expect from a generation that grew up being told life came with certain guarantees? That the right internship or right school or right GPA, or just simply hard work, was all they needed to succeed in the world? In reality, the only certain thing about startups is a failure rate of 90% (and more like 98% if you’re in health tech). So it’s not surprising that a group unaccustomed to failure would be the near opposite of those who grew up in more precarious times—like my father-in-law’s father, a Depression child “only-in-America” character, who worked as a press agent, produced a TV game show, owned a forerunner to schools like Apex Tech, and even, briefly, an international airline. The risk of failure wasn’t a deterrent for him.
GENDER BIAS
Why is an entrepreneurial boot camp class I teach to high schoolers 80% male? Why, in the last hackathon I judged, was only one of the 20-plus participants a woman? Because we still treat startups like boot camp—before women could serve as soldiers. We may tsk-tsk bro culture, but we still embrace startup machismo as a necessary esprit de corps. We glorify the work-life imbalance of someone like Elon Musk as if he were a World War I soldier in the trenches. And the way VCs fund male-founded ventures is reminiscent of the Pentagon on a spending spree. To be sure, we have begun to address this issue with STEM education and women-founder-focused investment funds and, of course, #MeToo, but until female founders receive more than just 2% of the $85 billion VCs put into startups last year and we have as many female Mark Zuckerbergs and Jeff Bezoses as we do male ones, we’re in your father’s army.
UNICORN BIAS
To a certain kind of person, shooting clay pigeons isn’t as much fun as hunting big game. Such people have issues. As do investors who, because of ego, or the insatiable appetite for moremoremore, or the need to promise bigger and bigger returns to those who subscribe to their funds, too often ignore perfectly viable smaller ideas while tracking the billion-dollar babies. Github, Mailchimp, Shopify, and GoFundMe were all bootstrapped for want of VC dollars. They were lucky, of course. Lack of capital is a top five reason for new businesses to fail, and it results in a lot of unnecessary carcasses.
Read more >> https://www.fastcompany.com/90282990/the-7-greatest-impediments-to-american-entrepreneurs
