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Can Entrepreneurship Be Taught?

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A very thought interesting debate on whether Entrepreneurship can be taught or not from Wall Street Journal.Across the country, schools are rushing to introduce entrepreneurship classes. Self-help books for business founders are topping the best-seller lists.

All of which is rekindling an age-old debate in the business world: Is entrepreneurship a skill that can be taught, or one you have to develop by doing?

Education proponents argue that if you can teach people general skills that are useful in business, you can instill lessons about running their own companies, too. What’s more, the proponents argue, research in the field of entrepreneurship has improved by leaps and bounds in recent years, so educators can do much more to help entrepreneurs avoid common problems.

But many critics think that the education boosters’ logic is flawed. Starting and running a business, these critics say, requires skills that a person can only develop in the real world, not in a classroom setting—everything from dealing with many different types of people to handling the constant uncertainty that so often comes with a start-up company.

Yes: Learn About the Pitfalls
By Noam Wasserman

Eighty years ago, Ralph Heilman, the dean of Northwestern University’s School of Commerce, wrote an article entitled, “Can Business Be Taught?” His answer: yes. Take the lessons about what works and what doesn’t, analyze and organize them, and then teach them—just as we do with engineers, doctors and lawyers.

Clearly, the process works for training M.B.A.s. So, why not entrepreneurs? After all, entrepreneurs are the ultimate general managers. They can benefit from much of the same knowledge that business students gain about marketing, finance and other topics, complemented by lessons that are specifically tailored to start-ups.

And those lessons are getting better all the time.

Early entrepreneurial education was largely based on case studies and anecdotes. Over the past decade, though, academics have brought a new level of sophistication to analyzing what leads to entrepreneurial success or failure. We’re now developing a “Moneyball for Founders”—rigorous data with which to scrutinize anecdotes and rules of thumb—that promises to revolutionize entrepreneurial education just as a similar movement revolutionized baseball a decade ago.

Beyond Gut Feelings

Founders tend to put a lot of stock in their gut feelings, but sometimes the data say just the opposite. We can teach founders to use that data to avoid common hazards.

For instance, with the passion and confidence they feel early in a venture, entrepreneurs often dramatically underestimate the resources and time that it will take to put everything in place. Likewise, most founding chief executives are too optimistic about their personal prospects. They anticipate staying in place when the venture is successful, but by the time of a start-up’s third round of financing, more than half of founding CEOs have been replaced.

Learning about these pitfalls, and what the data suggest to be better choices, helps entrepreneurs to make more informed decisions from the outset, rather than having to fail and try again.

Founders of start-ups clearly believe that they can learn. Over the past two decades, demand for entrepreneurship programs and courses has skyrocketed. In 2011, “The Lean Startup” was not only a best seller but was also considered by many to be the best business book of the year.

Of course, sticking to the classroom entirely is a mistake. Entrepreneurship can and should employ other modes of learning as well, such as role playing, self-evaluation exercises and work with mentors. In fact, a host of programs are available that mix formal education with experiential learning and mentorship.

Common Problems

Are there elements of entrepreneurship that can’t be taught? Sure, just as there are elements of engineering, medicine and law that can’t be taught. And, as some critics point out, these unteachable elements involve people skills: for instance, how salespeople can figure out how to get to “yes” with potential customers after hearing “no” after “no.”

But everybody has to develop people skills to get along in the world. Everybody has some experience building relationships and motivating people. Harnessing those experiences and then extending them through real-world experience applies to all walks of life.

Some critics further argue that the real world is more uncertain than any classroom lesson could possibly be. The real world is indeed messy. Doesn’t that make it even more important to educate people about the common challenges they will face, so that they’re better armed to deal with the remaining messiness?

Then there’s the argument that failures and mistakes are an inevitable—and, indeed, valuable—part of an entrepreneur’s education. That line of thinking ignores the fact that many types of failure are predictable and avoidable.

Wouldn’t we teach a scientist that lighting gunpowder is dangerous? Would we let the scientist learn that critical fact firsthand? By learning about common mistakes, the scientist will become a more effective experimenter. The same goes for entrepreneurship.

Consider some more numbers. Nearly two-thirds of high-potential start-ups fail due to tensions within the founding and executive team. Our research is showing that many of those tensions are caused by early, ill-advised decisions about whom to involve in the start-up and how to involve them. These are problems that founders with some entrepreneurial education will be much better equipped to avoid.

Every day, ill-advised, and easily avoidable, decisions are killing off great ideas that could help restore entrepreneurial magic to our economy. By educating founders about those kinds of pitfalls, we may be able to increase their success rates—and give the country a boost along the way.

Dr. Wasserman is a professor of entrepreneurship at Harvard Business School and the author of “The Founder’s Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup.” He can be reached at reports@wsj.com.

No: The Best Class Is Real Life
By Victor W. Hwang

Entrepreneurship can’t be taught in a regular classroom any more than surfboarding can. To learn it, you have to get your feet wet in the real world.

Why? Entrepreneurship is messy. For an entrepreneur, there are rarely clear-cut right or wrong decisions day to day. Real life gives entrepreneurs the ability to better make those kinds of judgment calls.

Entrepreneurship is also a team sport, not a solo skill. We all know the myth of the “lone wolf” entrepreneur, tucked away in a basement or garage tinkering with an invention. In reality, an entrepreneur has to deal with lots of different people daily, all of whom present social barriers to overcome, whether it’s geography, culture, language or just plain distrust.

Entrepreneurs have to understand people well enough to get them to surmount their barriers and deliver their best efforts. Those kinds of skills can’t be taught in a formal classroom, and they can’t be fully developed in the span of a semester or even a few years. Entrepreneurship is learned through the aggregate experience of a life that is lived.

A Different World

That’s why comparisons with traditional business education don’t hold up. M.B.A. training helps you learn to allocate resources and calculate risk, which are skills that can be quantified and taught. The life skills needed for entrepreneurship can’t be.

I have seen successful executives who left corporations and joined start-ups and were unprepared for the experience. They knew how to manage, but they weren’t ready for the uncertainty in almost every aspect of decision-making, informal handshakes in place of formal agreements, raw conflicts among company founders and investors and the need to do everything oneself—from emptying garbage cans to fixing jammed copiers.

Leading a start-up also demands a deep understanding of people that can only come from real-world experience.

Imagine a potential employee who’s trying to decide between joining a large company or a tiny start-up. Just looking at the numbers, it would be insane to go with the smaller firm. You would almost certainly make less money, you would take on huge personal risk and emotional burden, and you could even wreck your reputation if the venture failed.

An entrepreneur has to help that potential employee see beyond all of the negative incentives, to see why joining this little company is worthwhile. One person, for instance, might want a chance to change the world. Another, meanwhile, might be motivated by the joy of adventure, the thrill of a challenge or the love of novelty.

Which approach is going to work best with the prospective hire? You’re not going to find that out sitting in a classroom, talking to the same people day after day.

The same logic applies to every aspect of running a start-up. Imagine you’ve got a new product to sell that promises to change your industry. But having a better mousetrap isn’t enough. You must be able to read your potential customers and answer crucial questions about them.

For instance, who’s the right person to pitch, someone who will really understand your idea and be in a position to act on it? What are the buyer’s incentives to take such a huge risk with a start-up product?

Free to Fail

Admittedly, there’s a booming interest in entrepreneurship education these days, and its proponents claim that there’s more science behind the subject these days. But I think that much of what traditional entrepreneurship classes teach—the best ways to avoid mistakes—is misguided.

Telling entrepreneurs to avoid failure risks causing them harm. They’re tempted to fall into endless planning and product engineering, without real-world experimentation. Failures and mistakes are inevitable and are the equivalent of testing hypotheses and learning in the scientific world. Just as we would never tell scientists to avoid running experiments that might fail, we shouldn’t tell entrepreneurs to avoid making mistakes and risking failure.

Entrepreneurs hone their craft through experimentation and collaboration in the real world. They learn best by rolling up their sleeves and building companies, while surrounded by a supportive mentor and peer community.

We can’t teach entrepreneurship in the traditional sense. But we should come up with ways to help entrepreneurs help themselves to learn more effectively. This means finding ways to provide them with a network of mentors and advisers and nurturing a business culture around them that says: dream big, open doors and listen to new people, trust and be trusted, experiment, make mistakes, treat others fairly and pay it forward.

Working this way means looking beyond the traditional focus on individual entrepreneurs and finding ways to cultivate the communities that surround them. But it’s a move that can pay tremendous dividends.


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