Given the difficult economy, large corporations are laying off workers or simply not hiring. As a result, entrepreneurial ventures are becoming more popular than before. In response, many universities—including my own, the University of California at Davis—are teaching entrepreneurship not as a study of a heroic few, but as a set of skills that every student should acquire.
People tend to think that entrepreneurship refers to the innovation and risk associated with starting and running one's own business, but that is misleading. The attributes that make for successful entrepreneurs apply in many careers and settings—whether taking a company in a new direction, starting a nonprofit venture, or developing a new research program—and are more valuable than ever before.
What are the best ways to teach entrepreneurship to students? Pedagogically, there should be no distinction between teaching about entrepreneurship and making your students more entrepreneurial. To teach the theory without putting it into practice is to forget the truism that in theory there's no difference between theory and practice, but in practice there is.
At the Center for Entrepreneurship at Davis's Graduate School of Management, we've discovered seven important lessons of entrepreneurship that students should learn:
1. Don't invent. Connect. History often mistakes entrepreneurship for invention, with the resulting misperception that it takes a brilliant new idea to have an impact. But most great businesses are built on old ideas. Apple's iPod was not the first digital music player, and Henry Ford's mass production combined ideas and experts from bicycling, breweries, and meatpacking. Ford once said: "I invented nothing new. I simply assembled into a car the discoveries of other men behind whom were centuries of work. ... To teach that a comparatively few men are responsible for the greatest forward steps of mankind is the worst sort of nonsense."
Students must learn that, whether developing a new product or a new curriculum, plenty of good ideas are already out there. The biggest impact comes in combining them in new ways.
2. The network is the innovation. We should also teach students that the difference between the companies that make history and the ones that are forgotten comes down to the particular network—of investors, employees, suppliers, distributors, and users—that an entrepreneur builds around his or her idea. While Edison alone didn't invent the light bulb, he did build the first network of investors, manufacturers, salesmen, and installers to put lights into our homes.
3. Mind the intersections. Most people approach entrepreneurship with either a clear "market" need (a problem) or a novel technology (a new solution). But the best new ventures avoid being problem-driven or solution-driven by focusing on finding the best fit between the two.
For example, one team of students in our program developed a method for diagnosing periodontal disease. As a "science project," they raised the accuracy to high levels, but they inadvertently made the machine too costly. By evaluating what the technology could do and what customers really needed, they found where the best intersection lay between accuracy and cost. That means colleges should teach students to be flexible in their choice of tools and markets because finding the best fit means providing the most value, not creating the coolest technology or chasing the richest customers.
4. Consider the "think/do" cycle. Students typically get one shot on a test, essay, or other project. But in entrepreneurial efforts, a vital skill is to to cycle between building and testing ideas (doing), and learning about and refining them (thinking). Indeed, identifying the best combination of problem and solution requires many small experiments. As Edison said, "The real measure of success is the number of experiments that can be crowded into 24 hours." At the center, we encourage students to find projects that enable them to learn by rapidly building and testing their ideas. A microbiologist, for example, pursued scented nail polish because it allowed her to quickly develop and test new batches, experiment with packaging, and even try selling her products in a downtown store. She spent those months far outside her comfort zone, experimenting with half-baked ideas and, as a result, learned both about the market and how much she enjoyed the feedback and sense of accomplishment of the process.
5. Sell your ideas. The notion of having to sell an idea can be distasteful to students; shouldn't good ideas sell themselves? And yet, whether debating in class discussion, arguing about a grade, applying for a research grant, or publishing a paper, nobody—even students—can avoid the sales process. We try to teach students to sell their ideas in the right way to the right audience. To the entrepreneur, everyone is a customer, including employees, investors, and suppliers. Selling becomes a proxy for making sure you're pursuing something that anyone and everyone working with you would benefit from.
6. Know what you don't know. In a rapidly changing world, it's often good to rethink your assumptions. Teaching entrepreneurship helps students learn to deal with uncertainty by structuring work as a series of experiments. For example, one of our favorite tools is the "customer call," which requires students to identify real customers, create a list of basic questions, and spend 20 minutes on the phone finding out what those customers actually want. One student working on a novel pathology device talked with surgeons, and their overwhelmingly positive response gave her the confidence to pursue her project. A classmate, working on a different technology, received exactly the opposite reaction and, as a result, switched to a more promising effort.
7. Know what you know. Entrepreneurs face more options than people in more traditional work. Colleges should teach students that, to get anything done, they must develop goals that drive their decisions and avoid distractions. The most important decisions in his career, Steve Jobs once said, were the ones to which he said no.
A simple yet powerful way to create that sense of purpose in students is to require them to develop an "elevator pitch," a 30-seconds-or-less description of their objectives for the next six months, five years, or their entire careers. The pitch will evolve, yet the simple act of making it concise and saying it out loud forces students to establish and own their goals and—just as important—to begin helping one another reach them.