Dangers of Pushing Entrepreneurship

Part of what made me fall in love with the San Francisco Bay Area was the palpable energy of so many people in one place, so determined to change the world through entrepreneurship. People here tend to carry an almost starry-eyed belief in the raw power of entrepreneurship. As a consequence, the Bay Area attracts like-minded people who come here intent to make their ideas into actual enterprises - producing valuable things and creating jobs. Many succeed, while many more fail but keep trying.

The virtuous cycle of entrepreneurship that yields success is powerfully reinforcing. People here who are a part of it become wealthy beyond the dreams of most people in the world, and they see their products enriching lives (or, at least, making money) around the globe. In a recent piece in the New York Times, retired entrepreneur Mark Leslie captured this sentiment perfectly when he said:

“One of perhaps the most compelling things about Silicon Valley is that it is a place where you can fail, and if you do, you can raise money and try again...it’s a miraculous place; the streets are lined with gold here.”

I agree (though, if you're a low wage worker, it can be as rough here as any other place - but that's a topic for another piece) . We do indeed live in a miraculous place that's a critical driver of social, economic and commercial change for the nation and the world. But over the years, I've come to see some unintended consequences of the Valley's sacrosanct reverence for the power of the entrepreneur - and these consequences can be dangerous. It makes me envision some corollary to the phenomenon of people dressing up and acting like real life superheroes, without considering what may actually follow. (such as making an unexpected appearance on LinkedIn)

Many successful entrepreneurs believe the world would be better if there were many more people like them. While there is truth in this, some of the most influential people in the Valley seem to believe that the panacea for the country and the world is for nearly everyone to become an entrepreneur.

I think this is a dangerous idea. I believe we need to be much more incisive and strategic about leveraging the power of entrepreneurship. Here are five way to do so:

First: Let's get real about how hard it really is to be an entrepreneur. It requires an enormous tolerance for risk and the ability to withstand financial hardship. The majority of Americans (I can't speak with real knowledge about people from other countries) simply do not have an actual appetite (or financial ability) to tolerate the kinds of risks and economic hardships that come with being an entrepreneur. The mythology of American entrepreneurship depicts people who work hard for a few months and then - Shazam! They're rich! The real story is brutal. Most new enterprises simply don't make it - and in many cases, the entrepreneurs who started them lost all their savings and worked for no real income for years.

Second: Entrepreneurship doesn't have to be a zero-sum game. Some of the most powerful approaches to entrepreneurship - illustrated by Savers at my nonprofit EARN or borrowers at California's leading microlender Opportunity Fund, involve hard working people who make a small venture work, with low barriers to entry and lower start up costs. This approach is sometimes dismissed by some who say they don't see enough skin in the game. I think this is an unfair criticism that fails to acknowledge how devastating the consequences of a failed enterprise can be.


Third: Make the important distinction between encouraging people to become entrepreneurs, and being entrepreneurial. I'm 100% behind encouraging every man, woman and child on earth to be entrepreneurial. This is a powerful way to get people to create, innovate and advance things that benefit all of us. These advances need to come more often from entrepreneurial government bureaucrats, middle managers at Fortune 1000 companies, or front-line staff at nonprofit organizations.

Fourth: Please stop trying to persuade people to skip college and instead begin starting companies. Yes, college is incredibly expensive. Yes, you can make a terrible investment decision by choosing the wrong college. But it is easy, in an unfair way, to persuade impressionable young people to take risks they simply don't understand yet. If a smart enterprising person wants to go to college and finds a way to afford it responsibly, it doesn't mean they'll jeopardize the opportunity to also become an entrepreneur. But there is huge downside risk in skipping college for someone intending and able to attend at a reasonable cost.

Fifth: Don't stop teaching entrepreneurship - just do it with points 1-4 in mind.

Some of you may cry foul that advice like this will dampen entrepreneurship. Hogwash! Real entrepreneurs won't let anyone or anything keep them down. That's why they're special and more rare than people like to believe.

Photos: Tattooed JJ/Flickr (top), SheilaEllin/Flickr (middle), both used under Creative Commons licenses.

About Ben Mangan: Ben is President, CEO and Co-founder of EARN, a lecturer at UC Berkeley's Haas School of Business, and a blogger for the Huffington Post. Follow Ben at LinkedIn and Twitter for provocative, truth telling about leadership, social enterprise, the social sector and doing good in the world (and, for amusing pictures too).

Brian McKeown

Helping Startup Founders with Crowdfunding, and Turning their World Changing Ideas into Reality.

10 年

Great article Ben. I agree with many of the sentiments espoused by Nikolai. Education is the foundation of knowledge (and a practice, a way of life not just a factory that turns out degrees), entrepreneurship is the daring, the risk-taking, the application of that knowledge. In order to spread that risk it is oftentimes better to do so in a collective or shared risk situation so as to minimize/diversify risk, increase knowledge base which increases chances for success. Thinking entrepreneurial is the ticket, you hit a home run on solution #3. Thanks for your sound judgement and your inspirational leadership at EARN. EARN Ambassador,

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Tom Skeele

Looking to cap my 30+ year career in land and wildlife conservation and international development with a senior management position (executive, operations, program, development, and/or communications).

11 年

Well done, Ben..... I offer three supportive perspective that I believe strengthen your thesis. First, for some, going to college - getting into college and/or paying for it - is an act of entrepreneurship. To those people for whom college not readily available due to whatever circumstance(s), I say go to college and start practicing the act of entrepreneurship - because for many, it is an act of entrepreneurship to get into and through school. Second, in full agreement with your third point and playing off Selena Soto's point a bit, one need not start a new venture to be entrepreneurial. Coming out of 20 years in nonprofit management, I know how I and my staff could be entrepreneurial in accessing programmatic needs or administrative functions and coming up with better ideas to serve our community support mission. This seems just as valuable to the long term well-being of people, communities, countries and the planet as starting a separate venture anew. This is also a way to get people revved up about being part of the entrepreneurship movement, even if they are not in Silicon Valley. Finally, and maybe most important, thanks so much for your second point. In the spirit of getting more of us to be part of the solution, I think it is dissuading to the average Jane and Joe to think they have to raise half a million bucks and start some enterprise that gets acknowledged by Ashoka to be a successful entrepreneur. This high investment-high profile standard is not engendering a sense that more of us can play a role in changing the world. It's not very empowering, which is counter to part of the purpose of promoting entrepreneurship. In total, your piece reminds me of an infographic making its way around Facebook of late: "the world is changing, and I'm on the transition team." We need more people on the team, and so I think you are spot on in your encouragement to make entrepreneurship something for the masses (no matter their wealth, education and access), and not just for Silicon Valley. Onward into our bright futures, Tom

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Joseph Bute

President at Food21 of Pennsylvania

11 年

Well said. I remember developing an inner city youth enterprise program in Oakland in the early 80's and we purposely focused on building teams to launch community businesses. We were already tired of the image of the heroic entrepreneur (very topical in 1981 in the East Bay) and suggested that success in most business relies on teams of people who can get along, manage to support one another and project their individual skills and talents in such a way as to increase the success profile of the business. Today as a private business investor I lean toward teams over the strong entrepreneur - because in the end most businesses are complex and require different skill sets. Just a further thought to your well-said column Ben.

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Leif Wellington Haase

Political Consultant, Health Care Expert

11 年

Ben: This article is spot-on and deserves to be widely circulated/ reprinted. I have forwarded to a successful Silicon Valley entrepreneur who is founding a college devoted to teaching entrepreneurial skills (but not insisting that everyone become a full-time entrepreneur).

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Ben Mangan

Advisor to Philanthropists and Impact Investors | CEO and Founder | Senior Fellow at Aspen Institute

11 年

Thank you Francesca Amann and Fiona Macaulay for your very kind words! Thanks too, Cheryl Ellemberg and Alyson B. Miller for your perspectives.

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