I teach a MedTech course at the University of Cambridge each spring, partly to convey product insight and process tips, but also to inspire students to build a business around their ideas. “You can do this!” we exhort: Build a company, market a product, raise financing, and exit with a fortune.
Politicians are sounding the same themes. Obama, Perry, Romney have all given speeches advocating pro-growth policies that unleash entrepreneurship and create new jobs. In the UK, David Cameron pledged support for "the doers and grafters, the inventors and the entrepreneurs who get this economy going." The high-profile Startup America Partnership seeks to “maximize the success of America’s entrepreneurs – and maximize America’s competitiveness in an increasingly global world”; a similar Startup Britain is up and running. (No Startup Nederland yet…)
Their goal is to give people with ideas the encouragement, knowledge, tools, cash, and personal support that allow them to take the plunge. But I don’t think that friction stands in the way of many committed entrepreneurs.
Rather, I believe that most people just aren’t cut out for it.
Running a business is difficult – I feel like I spend most of my time on things that are off-center from creating an innovative product and marketing it to customers. I just spent three days (over the weekend) on finances, accounting, and VAT, collecting records and scanning receipts. I spent months pitching ideas to angels: bank financing was never an option. A press release is a major negotiation between lawyers, universities, and investors: I’d have guessed it took two days, we’re dragging into three weeks.
No matter how easy you try to make starting a business, it still takes all of these things, and more, to succeed. I know that starting a business later in life has given me advantages of seeing how things are done inside successful corporations: knowing the process, passing through the regulations, pitching a customer. I have networks of colleagues who bring skills and resources; I have experiences and presentation skills that reassure investors. I had a severance package that supported my first year and relationships that let me earn money consulting while the business found its legs.
I’m not surprised, then, that so few students take the plunge. Similarly, I understand why simple political moves to showcase role models,e xhort banks, and cut regulations fail to spur entrepreneurship. For most people, it’s just not a practical alternative, no matter how desirable it looks from the macro perspective.
But I think that there’s a good alternative…