Erroneous Entrepreneur Education

My Recent Posts

While at college, one of my professors had a notice on his door, directed at students who wanted to take his entrepreneurship course. The notice said that the entrepreneur course involved a lot of work, and that if they were not prepared to do a lot of work, they should not sign up for it. Being an entrepreneur involves a lot of hard work, and apparently many of the students thought that taking a course in entrepreneurship was a lot like the entrepreneurs that they read about; how just a few years, or even less, of being an entrepreneur would lead to a huge bidding war for their company and they would sell out, becoming billionaires almost overnight.

 

I know three entrepreneurs, one who is filthy rich that I rarely see, because I don’t run in the circles of the filthy rich (sorry to disappoint you) and two who make a comfortable living doing something that they enjoy. The richest of the three did what could be described as popular wisdom, and that was to start a computer business and then sell it to a bigger corporation. Like any job you acquire, nice work if you can get it. Remember, luck is where preparation meets opportunity. If you aren’t prepared, all the opportunities in the world will mean nothing.

 

Like so many of my essays, we’re going to leave fantasyland behind, consider some cases and numbers that don’t fit the popular, jovial descriptions that are tossed about in the media. Come to think of it, that’s probably why the popular media isn’t swamping my email; I’m too real for them. That’s another one of those “gee, we can’t tell you that” explanations that are withheld, because, for the most part, telling people what you know tells them what you don’t know.  So much for the explanation of backward reasoning, where what is not there reveals what is there in stark verisimilitude. (I always liked that word.)  

 

The entrepreneurs that I know had experience in the industry before they became entrepreneurs, probably because people with no experience in industries rarely make it in the entrepreneur world. The youthful, energetic twenty-four year old billionaire is the quintessential entrepreneur, idealized by the media, not often represented in reality. Of course, the exhausted looking, shop-worn business owner who runs a business day to day with customers who embitter him by the hour is not what the media, or, more importantly, the colleges, want you to see. I say colleges here because they know where the bread is buttered. The colleges want someone like Mark Zuckerberg to come along, and hopefully, generously donate to their alma mater. What’s a few million to a billionaire?

 

The facts from The Wall Street Journal:  “Americans who are 35 or older are 50% more likely to start a business than are their younger counterparts. The average entrepreneur is 39 when starting a company. Midcareer entrepreneurs are five times more likely to have a going concern five years later than those starting a business right out of college…It takes some time for people to recognize that their destiny is to start a company. Their inspiration usually comes not from a college program teaching them generic entrepreneurship skills but from what they’ve learned in previous jobs…A more strategic approach to encouraging entrepreneurship would recognize the demographic reality of who really starts businesses in the U.S. We shouldn’t be carried away by glamorous (and inevitably rare) tales of youthful success in Silicon Valley.” My favorites: “Local business incubators should be restyled from hip communal working spaces for young people to office arrangements more suited to midcareer entrepreneurs…Most managers just don’t see the entrepreneurship right under their noses. One reason is they think that only young people can start businesses.” (Excerpted from Carl Schramm, WSJ February 10, 2018.) More evidence that the popular wisdom isn’t wisdom at all.

 

Perhaps the colleges do not see midlife or mid-career entrepreneurs as potential students, especially when they already have captive audiences of enrolled young people. Unfortunately, the facts do not support the premise of young people as remaining in business after a few years, as noted in the previous paragraph. The academic perspective, as in so many cases, is not reality. As an older student, I occasionally raised my hand and offered a dose of reality to some of the more idealistic notions taught in my college classes. I can’t say that they were always appreciated, but then, reality and college are different things, now aren’t they?

 

The prof mentioned at the beginning of this essay was right in at least one way, in that informing the students that entrepreneurship is no easy task; but doing what you love isn’t work. I had a client who blamed his failure on my not giving him my work on credit, but then, I found giving credit means not making money, and they all seem to make the same promises, never paying for my efforts. Entrepreneurship has some hard lessons that I don’t think college can teach under any circumstances. We live in a youth-oriented society, as evidenced by the media, who rarely offer profiles of older entrepreneurs; Mark Zuckerberg is far more interesting, or at least they think so. The evidence is there, but again, a mid-life entrepreneur is nowhere near as entertaining as a boisterous twenty-something Silicon Valley computer nerd. More’s the pity that reality again escapes both the media and academia.

 

 

 

 

 

Comments

Doug Plumb Added Feb 11, 2018 - 6:12am
Popular wisdom is usually the very opposite of wisdom.
  You need to work hard for a long time before opportunity comes to lift you in business - many adults have families and can't work 8 days a week, 25 hours a day for peanuts to get the thing working.
Stephen Hunter Added Feb 11, 2018 - 8:30am
Well thought out article as usual Jeff.  As a National Sales Manager, some of the best people i have hired were entrepreneurs. Some may say failed ones, because they decided to go back to the cocoon of working for a big company and the benefit packages and all. However they seem to be very good at prioritization of where they spend their time and energy. 
Jeff Jackson Added Feb 11, 2018 - 9:00am
Doug, you are correct. Starting your own business involves a lot of time and devotion that people with families sometimes cannot afford, not that they don't want to, it just doesn't work for them, as much as they would like to. Thanks for the comments.
Jeff Jackson Added Feb 11, 2018 - 9:02am
Thank you Stephen. I think people how have had to make the bottom line or go hungry understand what it takes to make money. I have given away lots of work trusting people. That part of my experience is over. Thanks again.
mark henry smith Added Feb 11, 2018 - 3:17pm
I read a story about Robert Frost yesterday about his ideal life. He said it was to have his avocation, the thing he loved to do, become the thing he could do to survive in this world of real responsibilities. The bliss one finds in being able to wake each day knowing that they will be engaged in an activity of total satisfaction, no matter the hardships faced, was his description of Heaven.
 
It is a child like state, because that joy allows one to feel engaged in play, not locked in business. I have known many people who achieved this state, some when growing up and I was very fortunate to have them guide me. Never did they say that it wasn't hard work that made them successful, but they emphasized that hard word without joy is slavery, no matter how big the reward.
 
Frost tried to be a farmer and failed. No one ever told him he'd make a penny as a poet. Goes to show you. Follow your bliss, Jeff at any age.
Tamara Wilhite Added Feb 11, 2018 - 4:20pm
From personal observation, many of those starting their own businesses mid-career are because they got downsized or quit and started a business because they couldn't find another job.
They're just more successful than the young adults because they understand issues like marketing, management and finances better than the 20-year-old.
Jeff Jackson Added Feb 11, 2018 - 4:29pm
As always Mark Henry thanks for the comments. Yup work that you feel good about when it is over is the best. Thanks again.
Jeff Jackson Added Feb 11, 2018 - 4:33pm
Thanks Tamara, you hit upon part two of this essay. Yes, the reason a lot of older workers go into entrepreneurship is exactly as you say, that they are passed over for positions offered to younger workers. I will pose another question: Which would you have more confidence in, someone with years of experience in the industry or a newly-minted college grad? As mentioned in the article, college teaches some things, experience teacher other things. Thanks for your comments.
Mark Hunter Added Feb 12, 2018 - 3:29am
I never wanted to start my own business--I just wanted to make enough money writing to make a living at it. Sadly for me, they're the same thing, so entrepreneur I am.
opher goodwin Added Feb 12, 2018 - 5:45am
Jeff - I'm an entrepreneur - I write books. I don't do it to make money though. I haven't even started marketing. What I need is a good partnership with someone who'll do the editing and marketing. That would be great.
Mark Hunter Added Feb 12, 2018 - 6:03am
My wife does my editing--but she feels the same way about marketing that I do. We might have to draw straws to see which one of us gets stuck with that.
George N Romey Added Feb 12, 2018 - 9:21am
Good article Jeff. I’ve been reading that business ownership creation is at all time lows because of lack of capital and younger people no longer having the personal financial resources to start the business while supporting their family.
 
It takes a special breed to strike out on their own. They become the employers of tomorrow.
mark henry smith Added Feb 12, 2018 - 2:46pm
Excellent comments.
 
Marketing art is like marketing smoke. People see it everywhere and until you inhale it, it all tastes the same. The way you make a career in art is to have it taste good to the people who can sell, so they'll want to buy it, and not have too many to choke on it before they do.
 
One of the huge problems any small entrepreneur faces is all of that investment capital floating around with known actors in their research and development wing looking for a good idea to fly with. If you can't protect a good idea, it's guaranteed to be stolen in this environment. Companies have entire teams out looking for ideas, not people. People are as disposable as water bottles. That's why you have to have a product to show that is unique, not merely an idea, and people behind you with clout, legal clout.
 
I remember all of these ads, are you an inventor? Come to us with your idea. This guy made millions inventing the slip and slide. Have a story? We can help you sell it. Have a book, we can help you market it. No, you can't.
 
There is only one way to start a business. It's time tested and works every time. Create a product people want. If it is unique art, this will be a very difficult task, since tastes are not clear, and often need to be convinced by experts. Look at Van Gogh. Look at John Jakes. Etc...
 
Find customers to buy said product, and this means you have to give some away. No one ever bought a cookie they couldn't taste. Sounds good might get you a taster, but taste goods might get you a sale.
 
Be able to sell said product for more than it costs you to make, with enough revenue coming in to cover expenses and generate profits.
 
I know this is all elementary, but in writing I have found so many people who don't understand these basic concepts. In this environment of glutted entertainment, it's just as important for the writer to be a product as the work. I guess that might be true everywhere and in everything. I actually think this could be a positive.
 
Sorry to run long. One of my areas of interest.       
Katharine Otto Added Feb 12, 2018 - 6:27pm
Jeff,
I don't know why anyone would want to start a business in this environment.  There is so much up-front overhead and time involved before you even make the first penny, and there's no guarantee that revenue will come in at all, yet expenses are relentless, especially if you have debt.
 
I've been reading about the financial wizards of the mid 1800s, around the time of Lincoln's war.  First, they hired substitutes to fight the war for them, and they profited mightily on selling government bonds (Jay Cooke), or using other people's money.  John D. Rockefeller learned early he could make money easier by lending money than by working for it.  They used tricks like borrowing money to buy stock, then selling short, or owning controlling interest then watering down stocks.  
 
Maybe this is a little off topic, but it interested me that those who got the richest were ruthless and often deceitful, but they worked hard at it and enjoyed what they did.
George N Romey Added Feb 12, 2018 - 7:25pm
Zuckerberg screwed many of his original investors and early workers. The lad learned at a young age how to play the game. Katharine is right the right gimmick often works well.
Jeff Jackson Added Feb 12, 2018 - 9:55pm
George you are exactly right. Zuckerberg, if the movie about Facebook is right, got hooked up with some Silicon Valley veterans who were rather ruthless. Of course, they made him rich, along with the fees for their guidance.
Jeff Jackson Added Feb 12, 2018 - 9:59pm
Mark Henry you're right. All of this makes me wonder why we even have Human Resource people. It appears their responsibility is not so much to manage people but to cover the company when they get rid of people. I'm sure many people remember when companies were focused on the people who made the company successful. There are a few of them still around, like Nucor, which almost never lays off people, they, keep them and when the markets get hot, they're prepared to deal with high demand.
Jeff Jackson Added Feb 12, 2018 - 10:11pm
Katherine, I think some people see opportunities to make money, and since their options are limited, they go for it. Like my marketing profs always said "find a need, fill it." If you were rich in the Civil War, you could pay the government $300 and you didn't have to serve. Teddy Roosevelt's father did that, and Teddy had a severe guilt complex about it.
Incidentally, many of the manufacturing giants became quite wealthy and powerful during the Civil War, it was our first "industrial war." I have a problem with people who generate wealth and do not produce anything. Not that we should stop them, but, let's face it, we have a great number of wealthy folks that have never actually produced anything that could be worn, driven, or used. I think that the "paper traders" have not done very much for this economy. Yes, they provided funding, but if they were as brilliant as they claim, they might do more for our economy than trading paper all day. One of them I have mentioned, Brian Hunter, had lost millions, but his pals have kept him rich and his lawyers have protected him. You can read about Brian at https://en.wikipedia.org/wiki/Brian_Hunter_(trader)
Even A Broken Clock Added Feb 13, 2018 - 10:10am
Jeff, good article. I also want to say that I appreciate your alliterative titles in your posts.
 
I'm thinking that one big difference between mid-career entrepreneurs and those who began in college, is that those doing things later in life tinker around the edges, whereas those who begin in college are more transformational. Think of the guy who built the My Pillow - he had a good idea, developed a good product, but it is in an established field with many competitors. That is tinkering.
 
Now think of those who began early in life with transformational ideas. Think of a Bill Gates, or a Mark Zuckerberg. Their ideas transformed society and the entrepreneurial nature came out as part of achieving their transformation.
 
I don't have data to address whether this is a valid observation, but anecdotal evidence seems to show that it is youth who have the "bigger" ideas.
Dave Volek Added Feb 13, 2018 - 11:55am
Jeff
I started my first business when I was 25.
 
When I look back, my reason was that I wanted more control in my day. I thought my higher-level managers were idiots (but the lower level ones were pretty good). We were all paid well for doing what the big bosses told us to do. "If this company can still make money with such idiots at the helm, I can do better by myself," I thought.
 
I lasted six years before I had to close the doors. I can see that I was too young to take on this life adventure. I should have stuck around as a corporate slog for another couple years before venturing out on my own. 
 
The one thing I did learn from this business is that there is no magic wand in business. At any time, I had at least 20 different good ideas to improve the business, but could only afford to implement one or two of them.
 
Unlike other contributors to this thread, government regulations were not that difficult for my small business. The various agencies had set things up quite well for minimal reporting.
 
 
A. Jones Added Feb 13, 2018 - 7:40pm
I'm an entrepreneur - I write books.
 
Why would you think that writing books and vanity-publishing them on Amazon.com make you an entrepreneur?
Jeff Jackson Added Feb 13, 2018 - 7:52pm
Thanks Dave. Six years was a pretty good run in my book. Many times the market changes, and what you began with is not longer in demand, or other obstacles enter into the picture. Today's Wall Street Journal has an article of a meat processor that upgraded and made far more profitable Oscar Meyer, I think it was, but the now that it can make greater profits, the demand is sinking because of changes in what the public wants in meat, specifically processed meat. Most doctors I have heard are steering people away from processed meats, and that could mean a major change in the market. Whether they are able to adapt to that change remains to be seen.  Thanks for your comments.
Jeff Jackson Added Feb 13, 2018 - 7:56pm
Well A, you never know. John Jakes was made famous by a change in the marketplace, whose interest in history was captured by the bi-centennial of the U.S. There are lots of talented people out there who have never been noticed. It's like trying to become a famous poet, all you have to do is die, and your poetry will become quite popular.
Jeff Jackson Added Feb 13, 2018 - 7:58pm
Thanks Even. I try to make up snappy titles. Thanks for your comments. I'll try to keep coming up with those alliterative titles. Thanks again.
A. Jones Added Feb 13, 2018 - 10:54pm
Entrepreneurial activity is subject to risk: the entrepreneur puts "skin in the game" and loses it if the venture fails.
 
Writing books and vanity-publishing them online puts nothing at risk, so it's not entrepreneurial.
 
Just because an activity might be creative doesn't make it entrepreneurial.
mark henry smith Added Feb 14, 2018 - 1:38pm
Having never vanity published anything, convinced that the best route for my work is to search for the traditional outlets where the real money is, I see the activity as entrepreneurial completely. The amount of money risked is not the defining factor of an enterprise. The time spent creating a product, building lines of supply, finding customers, investors, all of it is entrepreneurial. Do you know how long it took the Wright Brothers to sell their first plane? The art of being an entrepreneur is belief in yourself, the potential of your product, and determination. Doubt has to constantly give way to, I can do this.
 
Writing, performing, art is usually not a big-money risk venture. It is a time risk. The time required to create great work is daunting and I would argue it's the main reason why so few writers do great work. Most don't have the time to wait and publish pieces they know are flawed, but are pushed by monetary concerns all around them. I think many of my pieces had potential to make money for me much earlier in life, but that was not how it happened. At this point I'm thrilled with that outcome, because the stories are still fresh to me, able to be spun into much better work by the much better writer I've become.
 
No artist knows when they start if they'll be successful monetarily, or exactly what their art is worth. The market makes that determination and the difficult part is getting your product to market and finding shelf space for it in the cluttered stacks. If you don't like the process, don't plan to become a professional. I always did. It's my goal in life.
 
No salesman knows before hand if the person standing in front of them will be a sale, but it doesn't keep them trying. In fact, I'd have to argue that it's half the fun, not knowing. With each sale and each miss you learn to refine your technique and become better. And for artists, the real art is themselves, and creating a better mechanism for artistic creation out of their troubled lives.  
George N Romey Added Feb 14, 2018 - 4:36pm
Marko skin in the game? How about countless hours unpaid until maybe one day a publisher gets an interest. Ask anyone about the cost of self publishing.
A. Jones Added Feb 14, 2018 - 5:01pm
The amount of money risked is not the defining factor of an enterprise.
 
I didn't say anything about money. I mentioned risk.
Jeff Jackson Added Feb 14, 2018 - 7:33pm
I'm not convinced money risked is the defining factor. My father had a tax business he ran from home, and while he had to invest in a desk, a file cabinet and chairs (and eventually a computer) I don't see how investment was a defining factor. Many people use the tools that they already have, and "test the waters" for potential clients. It's nice to rent an office and invest in all kinds of equipment, but you can always do that after you have established an operation and have the files of some clients that you know are going to bring in income.
A. Jones Added Feb 14, 2018 - 8:16pm
How about countless hours unpaid until maybe one day a publisher gets an interest.
 
How about it. Exactly the same amount of time would have passed had Goodwin decided to lie in bed, or sit on the couch and watch TV. Time passes "unpaid" no matter what you do, so while time-spent doing something (or doing nothing) is certainly an opportunity cost, it scarcely counts as a risk. "He risked his time"? That doesn't even make sense. He risked nothing. And when rejected by real publishers, he lost nothing (because time would have been spent anyway had he simply sat on his couch and watched TV).
 
If you comb a beach with a metal detector in the hopes of finding lost change or jewelry, you will be spending time, but that kind of activity is not entrepreneurial.
mark henry smith Added Feb 15, 2018 - 1:16pm
A Jones, I guess you never heard that time is money. It's not sitting on the couch watching TV versus writing, it's being out making money, or pursuing another avenue.
 
The thing about artists, about entrepreneurs, about strivers, is they really don't have a choice. Once they decide to give it a shot, they're all in. Real writers don't write because they can. They write because they can't do anything else. We're always writing, our heads are filled with ideas of writing. Real entrepreneurs aren't one and done. They're always looking for the next thing, like Al Jones with a golf club. 
 
I wish I knew what I know now. I would have taken the newspaper job out of college. It would have introduced me to people, given me a byline, but then again, so what. I didn't and instead decided to go back and try to reconcile with my parents who I'd hurt. I wanted to help them make things better. That's another funny story.
A. Jones Added Feb 16, 2018 - 6:44am
A Jones, I guess you never heard that time is money.
 
Time isn't always money (e.g., watching TV, playing ping-pong), and in many instances when time might be money, the activity is not entrepreneurial (e.g., beach combing with a metal detector: if you don't find loose change or lost watch in the sand, at the end of the day, all you have lost is time and the opportunity cost of some alternative activity — probably watching TV). If all you have lost is your time, it's safe to say the activity you were engaged was not an entrepreneurial one.
mark henry smith Added Feb 16, 2018 - 12:58pm
In economies without money, can there be entrepreneurship? Can you have an economy without money? What if all we really have is time and money is just a facilitator of time choice, or a hindrance? If I sit in a store all day and get no customers for my product, isn't that the same as beach combing with no success?     
Mark Hunter Added Feb 17, 2018 - 12:03am
Well said, Mark. Someone who’s striving for success, putting their time and sweat and soul into it, is an entrepreneur ... whether they’re making money right that moment or not. In that case time is an investment as much as money is; it’s absolutely not the same thing as watching TV on the couch.
Jeff Jackson Added Feb 18, 2018 - 3:24pm
Luck is where preparation meets opportunity- A is insisting that preparation is not an investment? Of course it is.