TEN SECRET ELEMENTS OF THE ENTREPRENEUR EXPERIENCE
By Heidi Neck
The rhetoric is out there—our economic future depends on entrepreneurship—but we can’t get there with the current national narrative. Within the current story, entrepreneurship is viewed as central to just a few advanced markets such as technology and health care; is confined to known places of activity such as university labs, incubators, or Silicon Valley; is so narrowly defined that only a few are recognized as entrepreneurs; is largely absent from our education and work force development systems; and relies on well-trodden 20th century support environments, platforms, and tools.
The stories we tell ourselves and those we see throughout popular media shape our common understanding of entrepreneurship and tend to perpetuate myths that limit entrepreneurial activity and in some cases preclude individuals from envisioning entrepreneurship as a viable path. The dominant entrepreneurship narrative is still the lone individual with the brilliant idea who, against tremendous odds, makes it big—the homerun at the bottom of the ninth. The founder myth focuses on and bestows celebrity status on a relatively small set of highly successful, rich, predominantly male, technology-focused entrepreneurs.
This narrative permeates and has come to define much of the entrepreneurial culture in the United States. For instance, the VC funding model, which defined the funding landscape for many years, is built around the search for high-growth home runs, the proverbial “next Google.” A similar attitude guides current incubator and accelerator models, which focus almost exclusively on fast, high-growth companies to the exclusion of others. However, the majority of entrepreneurs fall outside this narrative. As one entrepreneur put it, “There is nothing wrong with a $10 million company.” Yet, relatively few actually embrace this fact.
At the Babson Entrepreneur Experience Lab we have studied over 250 entrepreneurs launching ventures here in the United States, and below we describe seven findings on how individuals actually experience entrepreneurship. Though not seen in the popular myths and rhetoric about entrepreneurs, these ten elements were commonly found in our research into how individuals actually experience entrepreneurship.
First, identifying as an “entrepreneur” is not something that comes immediately to all people—many building businesses don’t think of or refer to themselves as entrepreneurs. Turns out that for many, identifying as an entrepreneur is less important than identifying with the entrepreneurship path. It’s critical that people see the creation of their own opportunities as a viable and attainable possibility for themselves. Once the path is seen, the motivations and entry points are diverse—a diversity not accurately represented by the search for a single definition of what an entrepreneur is and who can be one.
Second, entrepreneurs everywhere understand the need for community and peer groups in the practice of entrepreneurship. The openness and pay-it-forward culture evident within these communities is deeply engrained. Yet, for all the openness and accessibility present in these communities, cliques do exist—exclusive, segregated groups that require specific qualifications for membership. Segregation can prove beneficial (entrepreneurs can share common interests, views, purposes, and patterns of behavior), but it can also be pejorative and perpetuate differences between sectors and groups that belittle some entrepreneurs in favor of others, and prevent broad sharing of innovative approaches to support one another.
Third, despite the rise of social media and mobile technologies, entrepreneurship remains place-based. Many people startup and practice where they live, drawing from local resources. Others choose location with intent, based on a place’s entrepreneurial reputation or its “feel.” All cite the need for face-to-face encounters. Places develop ecosystems over time—interactions of people, organizations, and infrastructure—which combine to heighten or diminish entrepreneurial activity. But ecosystems provide much more than resources. They define the entrepreneurial culture of a place. Places where this culture is local, visible, and accessible in the day-to-day interactions of entrepreneurs make it much easier for people to identify with the entrepreneurial path, but new ecosystems that are merely copies risk the creation of an entrepreneurship monoculture.
Fourth, entrepreneurs are literally surrounded by stories—it’s the universal language of entrepreneurship. Stories convey lessons learned and allow entrepreneurs to create and communicate the intangible, but many do not have the necessary storytelling or story-decoding skills to avoid pitfalls and misdirection.
Fifth, all entrepreneurs hear stories about failure. Businesses will fail, and accepting this, and learning from others about that experience or steps to prevent it is a central component of being an entrepreneur. But, the predominant use of the term ‘failure’ is really framing another important aspect of entrepreneurship that’s little understood and discussed in entrepreneurship circles. The practice of entrepreneurship requires iteration and experimentation, but many are simply not wired for iteration.
Sixth, in some ways, nearly the entire entrepreneur experience can be understood by looking deeply at what and how they learn. An entrepreneur’s education is largely informal. Precedents and proxies bridge gaps in individual experience but practice is key—learning is inseparable from doing.
Seventh, all entrepreneurs find fundraising, networking, and team building to be a challenge. While money is now more accessible than ever before, navigating the money landscape from self-funding to venture capital is still one of the most taxing elements of the entrepreneur experience.
Eighth, networking is another space where some entrepreneurs excel and others struggle. A mechanism for building social capital—a trusted network of people through which you gain access to knowledge, resources, talent, and any number of things—the lack of social capital can thwart even the most passionate entrepreneur.
Ninth, in the pursuit of a great idea or funding for a venture, many entrepreneurs tend to overlook the value of their teams and the impact that teams have on the viability and success of their venture. The importance and challenge of teams take many entrepreneurs by surprise; many are under prepared and surprised when people-related issues take center stage. Finding co-founders, maintaining relationships, and building teams are among the most challenging (and potentially rewarding) experiences facing entrepreneurs.
Tenth, entrepreneurship traditionally has been associated with launching new businesses. However, many individuals and institutions are beginning to think of entrepreneurship as a vital life skill that extends far beyond the ability to launch a venture—a life skill that prepares individuals to deal with an ambiguous and uncertain future.
The ten elements are not meant to be exhaustive—the contemporary entrepreneur experience is far too complex to properly capture in a single study or document. Instead, they call attention to converging insights that are particularly critical and overlooked, that cut across multiple types of entrepreneurs, and that imply opportunities for how we teach and support entrepreneurship.
"The Babson Entrepreneur Experience Lab" (a partnership between Babson College and the Business Innovation Factory) is a research platform that puts the voice and experience of real-world entrepreneurs at the center of an ongoing effort to design, develop and experiment with new education and support solutions that will help shape future generations of entrepreneurs. For more detail on our emerging research, please see our companion web portal at www.businessinnovationfactory.com/elab.
How do people actually experience entrepreneurship? This was the central question we sought to address in the first phase of research in the Babson Entrepreneur Experience Lab. To discover the answer, we modeled our approach on thinking like a designer. Using a human-centered design process—one that begins by including the very people we are designing for—we were able to walk in the shoes of entrepreneurs, to listen to their stories, and to see their world as they see it. The research plan integrated a core set of ethnographic methods that ensured significant exposure to the people, places, and things that make up the entrepreneur’s experience (see graphic below).
All research activities took place in the field or remotely through an online research platform. With fieldwork, we were able to interact with participants at a single point in time in the same location. With “Web work,” we could bring a group of entrepreneurs from different places and of different types into one environment and engage them in a variety of research activities, asynchronously, over a period of weeks.
The two approaches combined gave us deep insight into the entrepreneur experience. To get the appropriate mix of entrepreneurs, we chose ecosystems and entry points as the primary criteria for participant recruitment. With little consensus in the literature and no generally accepted framework to quantify and compare ecosystems across geographies, entrepreneurial activity was used as a gauge for the relative strength of entrepreneurship ecosystems and as a basis for selecting locations in which to conduct our research. With no generally accepted definition of an entrepreneur, we worked toward a mix of traditional startups, family businesses, social enterprises, franchises, and business acquisitions to ensure an appropriate diversity and range of experiences for optimal insight generation.
INTERVIEWS (126)—individual, group, and expert—were the primary means of eliciting the voice of the entrepreneur. Using a semi-structured interview protocol, a broad range of topics were addressed with study participants including self-identification, venture background and lifecycle, teams, funding and resourcing, networks and community, education, and support systems.
SHADOWING & OBSERVATION (105) provided the opportunity to track individuals’ experience and their shifting needs over the course of several hours, and to understand the activities and behaviors of entrepreneurs in a variety of contexts by directly observing daily participation firsthand.
SELF-DOCUMENTATION (22) extended the reach of the research team by putting reporting tools into the hands of entrepreneurs so they could frame important aspects of their experience, environment, and relationships as they see them, uninfluenced by our presence. All research activities took place in the field or remotely through an online research platform. With fieldwork, we were able to interact with participants at a single point in time in the same location. With “Web work,” we could bring a group of entrepreneurs from different places and of different types into one environment and engage them in a variety of research activities, asynchronously, over a period of weeks. The two approaches combined gave us deep insight into the entrepreneur experience.
To get the appropriate mix of entrepreneurs, we chose ecosystems and entry points as the primary criteria for participant recruitment. With little consensus in the literature and no generally accepted framework to quantify and compare ecosystems across geographies, entrepreneurial activity was used as a gauge for the relative strength of entrepreneurship ecosystems and as a basis for selecting locations in which to conduct our research. With no generally accepted definition of an entrepreneur, we worked towards a mix of traditional startups, family businesses, social enterprises, franchises, and business acquisitions to ensure an appropriate diversity and range of experiences for optimal insight generation.