• September 1, 2014

7 Ways to Make Students More Entrepreneurial

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.

Andrew B. Hargadon is a professor of management and the faculty director of the Center for Entrepreneurship at the University of California at Davis.

Comments

1. trendisnotdestiny - March 31, 2010 at 09:15 am

Just what we don't need at this moment of financial chaos; more reasons to further an economic model (neoliberal) that increases individual and social risk while privatizing the gains....

Nothing wrong with entrpreneurial spirit or the article for that matter except: the timing is off!

Since we are dismantling the last vestiges of the new deal, many who take risk now may not fully understand what challenges lay ahead in the next decade: family budgets, food and transportation costs, unfunded pension liabilities and deficits, the value of the US dollar, potential trade war with China, continuing meltdown of commercial real estate market, unemployment, the retirement of the baby boom's generation and their effect on stock prices (a glut of people who need to sell their assets to generate income affects stock prices negatively), the rise of the multi-generational family living under one roof, college tuition inflation, unemployment and I could go on about the lack of trust in investment community for awhile....

Yeah, after thinking about this for the last decade; now is not the best time to take on big permanent risks to ones' credit, family and future for profit....

Maybe we should solve some of these problems before
dispelling this suggestable and garbled strategies of entrepreneurship... If there is one thing the last twenty years has proven is that the promise of investing in your future can be taken away at the last moment, no questions asked...

2. spellettieri - March 31, 2010 at 10:28 am

Great article! I think the question is how can we get students exposed to entrepreneurship at an earlier age. The obstacle in my mind is that the teaching establishment doesn't have much experience to draw from and hence would need outside speakers (like yourself) to help them shape a curriculum.
Students might also be interested in a website, coming soon, called Enterthegroup.com which allows them to manage projects online for free.

3. tcnjsociology - March 31, 2010 at 06:41 pm

Great article, and EXACTLY the sort of thinking that those of us in the traditional arts & sciences need to infuse into our curriculum. Far too often we pride ourselves on our detachment from the marketplace, assuming our ignorance is bliss. But it is our students who suffer for our ignorance, as they graduate without a clue how to transfer/translate the invaluable learning skills acquired in our courses into our risk economy, and it is higher education that suffers in general, as more and more question whether sufficient value is gained through a time and cost of acquiring a college degree.

To be sure, these 7 agency skills need to be counterbalanced against a solid knowledge of structural limitations. But it is high time that we put as much energy into identifying and teaching agency as we do structure, and this fine piece offers a good starting point.

4. tgroleau - April 01, 2010 at 02:39 pm

trendisnotdestiny said "...after thinking about this for the last decade; now is not the best time to take on big permanent risks to ones' credit, family and future for profit..."

There's another way to think about this. In the future that you envision, which is riskier: having all of your income depend on a single source (your employer) or having your income from multiple sources (perhaps 20 clients of your business venture)?

If you lose your job, then you lose all your income. If you lose a client, then you lose only part of your income. True, the single-source income is partially backed up by unemployment payments but it's at least worth considering the possibility that the self-employed are taking less risk than those of us with regular jobs.

5. drj50 - April 01, 2010 at 02:50 pm

@trendisnotdestiny:

This is the first time I've ever heard entrepreneurship viewed as "neoliberal." All those Republicans in Congress trying to promote business creation are going to be awfully surprised that they have
a "neoliberal" philosophy. What am I missing here?

6. trendisnotdestiny - April 02, 2010 at 12:03 am

drj50

neoliberalism is commonly one of the most misunderstood terms in academia/society; it refers to a set of economic processes....

many confuse this terms as having significance to a liberal or conservative socio-political positions; and since neo-conservatism often is used to describe the far right (Heritage Foundation, American Enterprise Institute, Cato etc.) it is not an unintelligent assumption to jump to neoliberalism...

However, you would be mistaken in this case... Neoliberal thought is mostly defined by a series of economic processes starting with:

1) Selling free markets ------ Calling for Open Access
2) Assessing Profitability --- Identifying Global Profit Centers
3) De-Regulation ------------- Erasing Statutory/Regulatory Rules
4) Privatization ------------ Major Assets are owned; not shared
5) Cut Social Supports ------ Slash education, health, safety net
6) Protect Profits ---------- Bailouts, Judicial Protection

This is important because by selling free markets and entrepreneurial skills, students begin to resemble little tiny corporate actors... we create a whole generation of consumers who accept embedded economic models that create wealth disparity, investment bubbles and systemic fraud....

I have a hundred examples of this but I'll leave you with five:
1) Enron ---- no regulation, accounting fraud, energy market
2) Madoff Ponzi ---- regulatory capture and sanctioned theft
3) S&L Crisis (1987) -- real estate fraud and regulatory capture
4) Lehman Brothers ---- Repo 105 accounting fraud; Dick Fuld
5) Goldman Sachs (2010) --- Greek Debt Crisis; Proprietary Trades
6) Gold & Silver Manipulation --- Andrew Maguire, CFTC, Gensler

Nothing wrong with promoting entrepreneurship as a tool of learning; but you need to know your history (financial); we do a poor job of educating our young about money, debt, and financial literacy in this country.... Maybe we should start with the 1933 Banking Act that created the FDIC, Glass Steagall Act (separated investment banking from consumer banking).....

drj50: you aren't missing anything! All these things require seeking out information outside of the mainstream... many do not get access to these types of dialogues and concepts or are labelled communists... The problem I see with academia (this article specifically) is that the tenured are so much better at aligning as a wannabee elite than as a public translator of complexity and financial history....

My apologies for the long-winded reply

recommend: Simon Johnson's: 13 Bankers
Bill Black's : The best way to rob a bank is to own one
Naomi Klein: Shock Doctrine
John Perkins: Confessions of an Economic Hit Man
Ellen Brown: Web of Debt
Howard Karger: Shortchanged
David Harvey: Brief History of Neoliberalism
Bob Sullivan: Gotcha Capitalism
Kevin Phillips: Bad Money
Mark Achbar: The Corporation

7. optimysticynic - April 02, 2010 at 08:17 pm

OK, so looking at your definition of "neoliberal economics", it is isomorphic with what the rest of us would call "conservative ecomonmics."

8. trendisnotdestiny - April 02, 2010 at 10:22 pm

conservative economics has a certain social connotation that I would avoid; conservatives co-opted the ideology and the policies during the Reagan Administration (union busting the air traffic controllers and privatizing the financial sector as the main engine of economic GDP growth)... but democrats are also to blame either through complicity or ignorance...

The point of contention I have about your comment optimsticynic is that socio-political binaries (left and right)do not provide enough context for most people to understand how Milton Friedman's economic policies originated... However, love your use of isomorphism (a huge concept in my field and really makes my contention less important, and more nit-picking)

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