Germany needs more entrepreneurs. But while recent surveys agree that 25% to 30% of young scientists have good chances for creating a start-up, only 5% currently dare to take this step. In our ongoing series, Next Wave Germany and the Berlin Institute of Entrepreneurship have invited leading experts to discuss ways in which the culture of entrepreneurship can be fostered at German universities. This week, Sven Ripsas, entrepreneurship professor at the Free University Berlin, Germany, and also managing director of the Berlin Institute of Entrepreneurship, writes about the importance of finding role models for young scientists to enter the world of entrepreneurship.
"Role models are an important factor in the creation of entrepreneurial activities."
The Art and Science of Entrepreneurship is the title of a book edited by Donald Sexton and Ray Smilor (1986). And it is precisely the title that leads us to the point that entrepreneurship is still far from being fully explicable with the help of formulas and laws alone. It also is an art. Although research has achieved a lot in describing financial factors influencing the outcome of the entrepreneurial process, it is still the entrepreneur as a person who seems to be the key variable.
So we have to deal with the question of "How do artists learn?" and how scholars can prepare themselves for their own ventures. In its pioneering article " `Who Is an Entrepreneur?´ Is the Wrong Question" (1989) William Gardner clearly states that focusing on personal characteristics alone might lead to the wrong direction. You don't teach classical music or literature by studying the characteristics of great composers or writers. Instead the entrepreneurship scholar might learn much more from successful predecessors by studying how they solved the problems any start-up entrepreneur faces. The consequence is that the entrepreneurial process itself becomes the object to be studied.
Since entrepreneurship studies put the emphasis on the specific tasks (Writing a Business Plan, Entrepreneurial Marketing, Entrepreneurial Finance) during the different stages of the process (pre-seed, seed/start-up, growing), it has received more acceptance in the academic world as well as in the real business world. But again life is more complex than most researchers want it to be. Every single decision-making situation in every start-up process is unique and hardly comparable. The entrepreneurial process is based on assumptions and the reading of market signals. So the task for the entrepreneur is not only to gather all the information needed to make the decision--he or she also has to interpret it the right way.
However, if you ask a venture capitalist what the success factors in the entrepreneurial process are, you might receive an answer like this: First, the entrepreneur; second, the entrepreneur; and third, the entrepreneur. How does that go with what we learned from Gardner? Maybe we can take the best of both worlds. Of course, knowing the business and management tools is helpful to every single entrepreneur. On the other hand, it is also correct to say that a lot of as-yet-undiscovered success factors are hidden in the person of the entrepreneur. And as every decision-making situation is different, there are a lot of strategies that work (and, of course, at least as many that do not).
Role models, i.e. successful entrepreneurs, can help people to learn how to use the information available to make decisions. They can show them how they gathered and processed information and what management strategies and tools work in different situations. Finally, they can also help to understand which psychological qualities one needs to succeed. Making university students meet real-life entrepreneurs is a central element in entrepreneurship education. With their help, the academic teacher overcomes another imperfection: his own lack of experience.