Is the entrepreneurship industry creating any real value?

New research suggests that aspiring entrepreneurs might want to think twice before attending another one of those inspirational seminars

As a business owner who struggles every day to deal with the multiple challenges that such a position presents, I often find myself getting annoyed by the endless entrepreneurship gurus that have now become a ubiquitous part of our society. Often selling a quick-fix, easy-as-pie version of entrepreneurship, these gurus offer simple rules of success that have little relevance in the real world. Anyone who has spent more than five minutes reading a business magazine or scrolling through LinkedIn has undoubtedly seen their “top 10” lists or their “must have” e-books, just a few manifestations of their tendency to condense complex problems into simple platitudes. And we’ve probably all known someone who’s followed one of these gurus down the rabbit hole – an aspiring entrepreneur who has descended into an ineffective and ultimately futile spiral of entrepreneur-worship and self-celebration. The result, more times than not, is little more than the guru profiting from the emptiness of his claims (and, of course, the unfortunate gullibility of his consumers).

I’ve often wondered if this "entrepreneurship industry" is really creating any economic value, or if it’s just the latest incarnation of the self-help phenomenon that has become such an infectious component of modern Western society. [i] In other words, are the entrepreneurship gurus actually helping aspiring entrepreneurs to succeed as founders and business leaders? Is my scepticism just me being cynical, or is there any evidence to support my suspicions?

In my quest for answers, I was pleased to discover some recently published academic evidence to support the idea that the entrepreneurship industry has in fact not done a great job at fostering entrepreneurial success. Writing in the Journal of Small Business Management, American researchers Richard Hunt and Kip Kiefer are the first academics to undertake a comprehensive study of the entrepreneurship industry and the impact it has had on entrepreneurial success and economic development.[ii] The authors assert that the global industry currently produces around $13 billion in revenue, broken down across eight separate sub-components, the largest of which are professional services support ($3.5B), consulting and advisory ($2.8B), and conferences and expos ($2.4B).

The "Entrepreneurship Industry", as adapted from Hunt and Kiefer (2017)

In addition to their detailed exploration of what exactly composes the entrepreneurship industry, the real gold of this article is in the conclusions the authors offer in relation to their research. Focusing solely on an exploration of the American market, Hunt and Kiefer offer a startling discovery: consumers of the industry are in fact motivated to create organizations at a higher rate than non-consumers. However, these same consumers are also more likely than non-consumers to fail. In other words, the entrepreneurship industry has clearly mastered the ability to encourage and inspire the launching of new ventures, but has been largely unsuccessful in helping the individuals behind these ventures to achieve long-term success. The industry, the authors assert, suffers from a “front-loaded” value proposition – it creates the desire and motivation to create, but not the skills to see those creations through to any degree of measurable success.

Like any academic study, Hunt and Kiefer are quick to assert that their study has its limitations, and that further research is required to really make sense of their initial conclusions. Nonetheless, the initial findings of their study should confirm what most business owners and entrepreneurs already know: having the courage, creativeness, and resources to start a business is a wonderful thing, but what really counts in the long-run is execution, and this is not a concept that can be easily taught to aspiring entrepreneurs. Because the ability to execute is a highly complex skill that draws from a huge variety of sub-skills, such as technical knowledge, emotional intelligence, resilience, intelligence, and creativity, to name just a few.

In the case of aspiring entrepreneurs, if one simple and practical conclusion can be drawn from this article, I think it’s probably this: the next time you see a seminar or a self-help book or a conference that seems beneficial, ask yourself if your time and money would be better spent engaged in a task that sharpens your abilities to execute. This could be something as simple and straightforward as mastering a piece of universal business software – say, Excel or PowerPoint – or engaging in a task that is more complex and challenging, like volunteering your time doing something outside of your comfort zone but which allows you to learn an intangible skill related to entrepreneurship. At the end of the day, the success of an entrepreneur probably has very little to do with how many inspirational seminars you’ve attended, and more to do with a mastery of the skills that lead to success in almost every other area of life: creativity, hard work, technical knowledge, emotional intelligence, and tenacity. These capabilities are the real foundations of execution and long-term entrepreneurial success.

So do yourself a favour, aspiring entrepreneurs: the next time Shark Tank or Dragon’s Den is on, turn off the TV and find something more productive to do. Your future business will thank you.

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[i] The phrase “entrepreneurship industry” was coined by Richard Hunt and Kip Kiefer in the study referenced below.

[ii] Hunt, R.A. & Kiefer, K. (2017). Journal of Small Business Management, 55 (S1), 231-255.