Are Entrepreneurs Born or Made? (Part II)

Editor’s note: For a long time, academia ignored the important roles played in an economy by such factors as creative destruction and entrepreneurship. Even today, in most economics programs an economy is described primarily according to the National Income Accounting Equations, in which government actions such as fiscal and monetary policy are the prime determinants. 

But entrepreneurship is making its way onto more and more campuses, perhaps more as a “how to” approach than as a field of academic study. With its increased presence comes more focus on the age-old question: can entrepreneurship be taught or is it hard-wired into us? 

Today’s Pope Center commentary presents arguments by two distinguished writers on the topic. This one, by Buck Goldstein, an Internet entrepreneur and “Entrepreneur in Residence” at UNC-Chapel Hill, suggests that entrepreneurship is more a “habit of mind” that can be developed. The other (available here), by former university president and economist James V. Koch, suggests that entrepreneurship is primarily a matter of our inherent gifts.

Entrepreneurs Are Made, Not Born 

By Buck Goldstein

“[E]veryone who can face up to decision making can learn to be an entrepreneur…. Entrepreneurship…is behavior rather than [a] personality trait…. [I]ts foundation lies in concept and theory rather than in intuition.” – Peter Drucker, Innovation and Entrepreneurship  

“Entrepreneurship is risky because so few of the so-called entrepreneurs know what they are doing.” – Peter Drucker, Innovation and Entrepreneurship 

“Zuckerberg could be found reading Peter Drucker….” – David Kirkpatrick, The Facebook Effect

For the last decade I have taught entrepreneurship to literally tens of thousands of students in big classes, small seminars, and on the Internet in a massively open online course (MOOC). The sheer diversity of these students—their abilities, their backgrounds, their personal traits, and their motivations for taking my courses—is staggering. 

For some students my classes were a way of polishing skills and a mindset they had lived with virtually their entire life. Others were exposed to entrepreneurial thinking and actual entrepreneurs for the first time, and the experience opened previously unimaginable opportunities. For a third group, the experience was at best perplexing and at worst terrifying.  They learned that entrepreneurship was not for them. 

The short take away is the mindset and methods associated with entrepreneurship can be taught much like the scientific method or critical thinking, but just as all biology students don’t become scientists, not all students of entrepreneurship will or even should become entrepreneurs.

My conviction that entrepreneurship can be taught is grounded in a broad definition of what it means to be an entrepreneur. This definition, adapted from the writings of Peter Drucker, bears little resemblance to the typical entrepreneur as portrayed in the popular media. 

First, entrepreneurship is a mindset, not a business activity. Although entrepreneurs may be involved in starting or growing a business, they are not confined to start-ups or small companies but may also function within large corporations or organizations of any kind. The entrepreneurial mindset is not limited to economic institutions but can be employed in virtually any organization or setting in our society, including social, artistic, or educational enterprises. 

Essentially, entrepreneurship is about doing things differently—and presumably better—rather than fine-tuning what is already being done. Entrepreneurs often gravitate toward areas of the society undergoing rapid change; at other times, they see an opportunity to initiate a needed change where none has occurred for a long time. In either case, they engage in what has been called creative destruction. 

If a person is willing to function in a rapidly changing environment filled with uncertainty and make critical decisions with imperfect information, then they can benefit from learning a systematic approach to entrepreneurship. There is a rich body of writing about entrepreneurship that lays out a systematic approach to innovation and entrepreneurship. Additionally, there is no shortage of personal accounts of entrepreneurial endeavors of all kinds, many of which chronicle in compelling detail the successes and inevitable failures associated with doing something that is truly different. 

My colleagues and I have developed a systematic approach to teaching entrepreneurship that, according to our students, actually works. It involves the following: 

  • Opportunity Identification. There are systematic approaches to identifying and quantifying areas of opportunity that allow entrepreneurs to focus on areas with the highest likelihood of success and avoid expending time and money on opportunities that are almost sure to disappoint. 
  • Customer Intimacy. No matter what the enterprise, there is always a customer. And developing a deep understanding of how to engage and continuously learn from customers is critical to successful entrepreneurship. 
  • Strategy. A common mistake made by those inclined to be entrepreneurs is to before they look, assume that if they run faster than anyone else, they will win. The problem with this approach is you eventually get tired. Understanding the importance of a strategy can make the difference between a cool idea that is unlikely to succeed and a sustainable organization. 
  • Assembling Necessary Resources. Although they don’t always understand it, entrepreneurs cannot succeed on their own. Assembling the right human and financial resources to turn your idea into reality is a process that can be learned through a combination of study and real life experience. This includes practicing the art of “telling your story,” which is often the key to getting others’ cooperation.
  • Continuous Learning. Entrepreneurs must understand that their work is a journey and not a destination. More often than not, this means beginning with an imperfect model that is good enough to get started and then engaging in a series of adjustments or pivots along the way. This process, which is known as lean start-up, is not obvious to young entrepreneurs. It is often incorrectly mistaken for failure. 
  • Practice. Entrepreneurship is a contact sport requiring the kind of practice that can only happen outside the classroom. A combination of internships, competitions, coaching from experienced entrepreneurs, and outside speakers can inject an element of reality into entrepreneurship education. Ideally, students will experience many of the biggest entrepreneurial challenges, including failure, before they enter the challenging world outside academia.

Mark Zuckerberg read Drucker’s book for good reason. He understood that being decisive and willing to take risks was necessary but not sufficient to become a successful entrepreneur. A rigorous combination of theory and practice gives those who are willing to embark on an entrepreneurial journey a much higher likelihood of success.