Helping entrepreneurs is HARD...
even harder than you might think. But we can help - read on!
The entrepreneurial support industry continues to boom.
And its ROI continues to lag.
Research by Richard A. Hunt (Virginia Tech) – “entrepreneurship industry”
[full disclosure: this is spiffed up with other existing knowledge, all with the aim of helping ecosystem builders. So please credit Rick (& team) with the genius bits; blame mistakes on Norris :) ]
Support being provided to entrepreneurs and budding entrepreneurs has exploded… over $13 billion/year, not counting VC/angels, university programs, etc. (Events, books/magazines, tv/radio programs, entrep training, scholarly work, consulting/advising, online resources, legal/admin support, etc.)
This nascent industry has become a profession or at least trying to look more professionalized. But is it?
Example: “Entrepreneurial Operating System” – turnkey franchise ($250K fee) Not all that and a bag of chips… [But could there be a model here for Ecosystem Builders??]
Biz model for Entrep Industry players typically requires convincing customers that:
(1) opportunities are bountiful and
(2) you need their help to get there. [bonus for vanity metrics, lol]
WHAT DID THE DATA SAY??
The more dollars you spend, the more hours you use =
the more likely you launch a tangible venture
but
The more dollars you spend, the more hours you use =
the shorter your venture’s life expectancy (and lower revenues)
WHOA… linear, too – even a small amount hurts on average.
Figure 2: Firm Formation and Survival – Quintile Comparison of EI Expenditures
We already know that the real ROI has always been low -even among accelerators, the only ones that consistently pay off are YC and TechStars. Incubators score worse. Government-funded programs also worse. (Note: Vanity metrics that say the opposite are rampant!) Of course, if we listened to the entrepreneurs, we would have known this!
SO WHAT WENT WRONG???
> People are matched to wrong resources; they need proper connecting there (& don’t get that). Most connectors have huge political and bandwidth constraints.
> Too many one-size-fit-all top-down programs – need expertise at mass customization?
> People do not take away the right lessons – they need help there too (& do not get it)
> Mentoring was not measured but research seems supportive if properly matched (see a theme?)
Can we identify exceptional individuals within these categories? Are there exceptions? If so, how would we know? Will not be easy – the key may be fit between program/tool and person...Human matchmaking imperative… (of course, SourceLink showed us that...)
How can WE help?? Key Roles for Ecosystem Builders!
That personalized matchmaking (which many Ecosystem Builders already do – how can we help them to do even better?) I love to brag on how our Idaho Connect & Idaho Women's Biz Center do this so well. May not scale easily but well worth the effort. A big key is connecting the connectors. Also, listening. Really listen.
“Good Housekeeping Seal of Approval” – rigorously vet various interventions (our scholarly friends want to help us) Be the LEED for entrep devel. Think fiduciary responsibility.
And, first, do no harm…. Rick also suggested that even better => having a code of ethics for entrepreneur support entities (individual & organizational).
Good mentors are nice but great mentors are PRICELESS. The matchmaking imperative applies here too, but what can you do to mentor the mentors? Maybe a mentor academy?
WHAT IDEAS DO YOU HAVE?
Leave them in the comments!
Norris
Thanks Norris Krueger, PhD for your post - for me it explores both challenges and opportunities for regional entrepreneurial ecosystems. Building on your points may I suggest: a) mentoring, from my experience, is like sports you start in pee wee, little league, minors and earn through competition to be in the majors: lessons I have learned: mentors are not a right they are earned and a resource that if valued should include exchange (lots of options) b) civic participation (be it skill building, voter reg, being on local PTA, volunteering, bridge building between silos,....) is a choice that requires investment of time, learning/unlearning, and dividends for community and individual; but like farming you sow what you reap, my sense is too few sow for years but opine over the BBQ instead. c) ecosystem builders/agents/architects seems to be a label added on top of day job roles with few individuals having a 'full time' job as ecosystem builder (unless funded by grant or self funded). In many ways ecosystem builders are like mothers or fathers of the region, you don't become one until you have had a child (something you don't own just caretake and guide for a number of years) maybe EBs become community parents in a similar way
Founder, Entrepreneur, Dyslexic, Investor, Author & Business Consultant, Entrepreneurship Ecosystem Builder. In love with Value Creation & Value Improvement Process (VIP). Kaizen + Entrepreneurship = Exponential Growth
2 年This is awful. Maybe we shall need to do a new industry that supports and help to the Entrepreneurial Ecosystem Builders to become better at what they do. We see that now everybody is called itself an ecosystem builder and probably has never opened a Lemonade Kiosk on their own. To many wannabe entrepreneurs helpers without the expertise or the knowledge, or the competences.