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# Can you learn entreprenuership in class? -- Debate 2

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Can you learn entreprenuership in class? -- Debate 2 [#permalink]

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26 Dec 2004, 04:43
Can you learn enterpreneurship in a classroom setting? what are your thoughts? Any experience with starting and running your business? Would love to hear your thoughts.

Last edited by Praetorian on 26 Dec 2004, 14:30, edited 2 times in total.

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26 Dec 2004, 05:30
I took a class on entrepreneurship....I dont know what you mean by teaching "entrepreneurship".

DO u mean - teaching about registering a firm, coming out with IPO, taxation laws, patent filing etc. or you mean - Motivating people to be "entrepreneurs".
The later part can ofcourse be taught in classroom settings.

But I dare say - its tough to motivate someone to start his/her own firm even though its possible.

Starting one's own firm is not easy.....that may lead you to penury....
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26 Dec 2004, 07:12
Yes, I should have said, can entreprenuership be learnt in a classroom setting?

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26 Dec 2004, 09:03
hi all,

praet this is a good discussion. i took a class in enterprenuership last fall in my school. it was boring and went over basic and fundamentals of accounting, management,marketing and finance, than had a test and a project. i didn't learn anything , because i had already taken all finance and accounting classes in my school - thats my major so i was bored. the class was horrible , there was nothing new in this class. it was all a recap and everybody was bored. therefore, from personal experience, i think that enterprenuership cannot be taught in a classroom setting. it is enought to get the fundamental classes in accountign, marketing etc. and if you have "it" you may make it as an enterprenuer. the term is quite broad, and one can define an enterprenuer a 1000 different ways. one must have a unique vision, skill and ability to be a successful enterprenuer. one has to be lucky too. or sneaky and cunning - just like bill gates in the late 70's. bottom line - you can teach someone how to be a good accountant or financial analyst, but you can't teach someone to be a revolutionary inventor or visionary. the latter has to have "it", whatever that it may be, in him.

kayser

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26 Dec 2004, 23:02
I largely agree with Kayser.

One could view e-ship as having two main components (there are really far more but just accept this point for now)

1) The paperwork and funding aspects

2) The "internal drive" and creative process

Classwork can certainly help with the first component with learning how to organize your venture and how to find the basic sources of capital. In addition, the degree itself and the connections you make in school (as well as any incubator programs) can help with funding to some extent.

For the second component, coursework is of limited utility- you are probably better off allocating the time and money to launching the business and learning from reality.

Academic work in e-ship is somewhat like the difference between learning art history and learning how to become a great artist. Learning about former greats might help you organize your thoughts and show you what has worked in the past but is unlikely to impart the artisitic vision if it is lacking in the first place.

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27 Dec 2004, 00:22
This was a nice summary by Hjort.

The last para was very well put....Hjort i need your permission to flinch the same into one of my essays.....
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27 Dec 2004, 04:10
Often, we are inspired by stories or by others actions or be talking to some people. How helpful would it be to have a case analysis of several entreprenuers and how they struggled to achieve what they wanted to? Not the HBS type cases, but "start up cases" or documented success of "small businesses". How about talks by entreprenuers in classroom?

I am not an entrepreneur , but i love to read about them. Here are some sources.

- The man himself, Mark Cuban : <A HREF= "http://blogmaverick.com">THe Mark Cuban Weblog</A> .. I have posted his articles on our blog.
- <A HREF="http://www.entrepreneurslife.com"> Entrepreneurs Life</A>
- <A HREF="http://www.startupskills.com">Start Up Skills</A>
http://www.inc.com --- excellent resource -- i subscribe
. http://www.fastcompany.com -- another gem --- i subscribe too

I will have more discussions coming up. Hope all of you can participate.

Praetorian

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27 Dec 2004, 08:26
hi all,

very nicely said hjort, as always very graceful post. i wish i could express my thoughts as elegant as you.
on the part what i read:

- inc magazine
- fortune
- forbes
- enterprenuer
- fast company
- money
- smart money
- popular science
- stuff, maxim, penthouse, fhm [for fun ;]]]

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27 Dec 2004, 15:16
I strongly agree that it is helpful to read inspiring stories of small businesses that overcame the odds and became successful.

Hjort

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28 Dec 2004, 03:24

Dear tobael,

I have found a number of interesting resources on the relationship
between formal education and entrepreneurial success. A few of these
are informal comments, but others consist of hard numbers and analysis.

First, an article in the Russian business magazine September 1st mentions
that the popular conception of the entrepreneur as a largely self-taught
individual is inaccurate.

"While it is frequently stated that entrepreneurs are less educated than
the general population, the research indicates this is clearly not the
case. Education is important in the upbringing of the entrepreneurs. Its
importance is reflected not only in the level of education obtained but
in the fact that it continues to play a major role in helping to cope
with problems and correcting deficiencies in business training. Although
a formal education (a diploma in a pocket) is not necessary for starting a
new business, as reflected in the success of such entrepreneur high school
dropouts as Andrew Carnegie, William Durant, Henry Ford, it does provide
a good background, particularly when it is related to the field of the
venture. Entrepreneurs need education in the areas of finance, strategic
planning, marketing (particularly distribution), and management. The
ability to deal with people and to clearly communicate in the written
and spoken word is important in any entrepreneurial activity."

1September: Archive: September 2000: Characteristics of Entrepreneurs
http://archive.1september.ru/eng/2000/no23_1.htm

A brief profile of entrepreneurs in the United States remarks that the
majority of those who start a new business have attended college at some
point in their lives.

"Most of those who started their own businesses are well educated. About
59.7 percent have received at least some college education, and more than
a tenth of this group (12.6 percent) has graduate school and professional
school degrees. A little less than two fifths have reached high school
level (37.5 percent)."

Power HomeBiz: A Profile of America's Entrepreneurs
http://www.powerhomebiz.com/vol14/profile.htm

In an article by a columnist who covers entrepreneurship, the author cites
statistics showing that highly educated entrepreneurs employ others at
a significantly higher rate than their less educated counterparts.

"Strong education-jobs link: The study data show a solid correlation
between entrepreneurship, education and job creation. Nearly a third
(30 percent) of entrepreneurs with less than a high school education
expect to remain self-employed over the next five years, while 35 percent
of the most highly educated entrepreneurs expect to employ 20 or more
people over the next five years."

NewWork: November 2003: Jane M. Lommel: Entrepreneurial Enthusiasm is Rising
http://www.newwork.com/Pages/Networking ... siasm.html

The Bureau of Labor Statistics, an arm of the U.S. Department of Labor,
reports figures dealing with the special case of entrepreneurs who already
have a salaried job. A significantly higher proportion of these second-job
entrepreneurs have attended college than non-entrepreneurial workers,
and significantly fewer have failed to graduate from high school.

"People who are second job entrepreneurs have primary positions in
wage-and-salary jobs and hold second jobs in which they are self-employed
in 1998 had at least some college. In comparison, 55 percent of all

"Only 4 percent of second job entrepreneurs in 1998 did not have a
high school diploma. Of all workers, 13 percent had not received a high
school diploma."

U.S. Department of Labor: Bureau of Labor Statistics: Education and
second-job entrepreneurs
http://www.bls.gov/opub/ted/1999/Oct/wk1/art04.htm

Another special case is that of entrepreneurs who have not only completed
an undergraduate college degree, but have taken a specialized program that
teaches entrepreneurial skills specifically. The following is a summary,
in PDF format, of a statistical study carried out at the University
of Arizona.

"Entrepreneurship education is highly advantageous for not only its
graduates but also the companies they lead or work for, according to
a new University of Arizona study. Compared to other graduates of the
Berger Entrepreneurship Program make more money and their firms grow
more rapidly."

University of Arizona: Eller College of Management: Economic & Business
Research: Entrepreneurship Education Impact Study Findings Summary:
http://ebr.bpa.arizona.edu/impactstudie ... ummary.pdf

The research paper based on this study, featuring hard stats as well
as qualitative analysis, concludes that specialized education is highly
the full paper in PDF format.

"There is strong evidence that entrepreneurship education
contributes to risk-taking and the formation of new ventures. On
average, entrepreneurship graduates are three times more likely than
for the personal characteristics of graduates and other environmental
factors, entrepreneurship education increased the probability of an
individual being instrumentally involved in a new business venture by

University of Arizona: Eller College of Management: Economic &
Business Research: Alberta Charney and Gary D. Libecap: The Impact of
Entrepreneurship Education
http://ebr.bpa.arizona.edu/ImpactStudie ... ft%208.pdf

A good source of entrepreneurial studies is the Kentucky Long-Term
Policy Research Center. One chapter from an online book states that
the cumulative implication of 43 different studies on the link between
earnings and education is that an undergraduate college degree increases
earnings by 12.4 percent. Note that this figure applies to all workers,
not only entrepreneurs.

"Research confirms what common sense suggests: higher education
generally leads to higher earnings. Formal acknowledgement of the close
relationship between education and income occurred in the early 1960s
in the work of Schultz, Becker and Mincer. Becker defined investments
in human capital as those that increase an individuals skills and
competencies. Education was identified as a type of in-vestment in
human capital from which positive returns are expected. Since the books
publication, the relationship between earnings and education has been
studied extensively. In a meta-analysis of 43 studies of this type,
Leslie and Brinkman estimate the mean rate of return to completing an
undergraduate education at approximately 12.4 percent. This estimate is
typical of most studies and represents the returns to higher education
in the form of higher earnings. Studies acknowledging the wider array
of higher educations benefits claim that these estimates considerably
underestimate the true returns and that the actual rate is quite possibly
twice the standard estimate."

Kentucky Long-Term Policy Research Center: LTPRC bookshelf: Amy L. Watts:
Social Benefits of Going to College
http://www.kltprc.net/books/educationco ... hpt_04.htm

On the same website, a chapter from another book relates the conclusions
of a Kentucky-wide study focusing on entrepreneurs. The study shows that
entrepreneurs have significantly more education than workers in general.

"Kentucky entrepreneurs tend to have more education, on average, than the
general population, a circumstance that correlates with other studies of
small business owners. Indeed, other studies have found that an educated
population is associated with entrepreneurism. In fact, successful
entrepreneurs average about 13 years of education. And when the firm
is involved in technology, the average increases considerably. Figure 3
compares the educational attainment of Kentuckys entrepreneurs with the
states general population. Around 40 percent of Kentuckys entrepreneurs
have at least three to four years of college and about 30 percent have
at least a bachelors degree. By comparison, approximately 27 percent of
adult Kentucky respondents (over age 18) to the University of Kentuckys
general population telephone survey report having at least three to four
years of college and around 21 percent report having at least a bachelors
degree. This sample, however, may overstate the educational status of the
general population given that it includes only those Kentuckians with
a telephone. March 1996 Census Bureau estimates placed Kentuckys adult
population (25 years and older) of college graduates at 17.5 percent."

Kentucky Long-Term Policy Research Center: LTPRC bookshelf: Michael
T. Childress, Michal Smith-Mello, and Peter Schirmer: Who Are Kentucky's
Entrepreneurs?
http://www.kltprc.net/books/entrepreneurs/Chpt_7.htm

This chapter includes a helpful graphic to which I link directly here.

Kentucky Long-Term Policy Research Center: LTPRC bookshelf: Michael
T. Childress, Michal Smith-Mello, and Peter Schirmer: Who Are Kentucky's
Entrepreneurs?: Figure 3: A Comparison of Educational Attainment Between
Kentuckys Entrepreneurs and the General Population
http://www.kltprc.net/books/entrepreneu ... Fig_06.htm

Finally, here is the prize of the bunch. You will surely be interested in
this 43-page scholarly paper, published in the Swedish Economic Policy
Review, which addresses precisely the question of how formal education
affects the success of an entrepreneur. The paper concludes, from its
empirical data and statistical analysis, that education is a significant
benefit to entrepreneurs. Indeed, education is evidently more beneficial
to entrepreneurs than to other kinds of workers.

"To what extend does formal schooling, one of the most
prominent manifestations of human capital, affect entrepreneurship
performance? [...] We discuss two recent applications of more advanced
empirical strategies. The first of these studies shows that in the US,
the returns to education are much higher for entrepreneurs than for
employees (14 and 10 percent, respectively)."

University of Amsterdam: Faculty of Economic Science and Econometrics:
Justin van der Sluis and C. Mirjam van Praag: Economic returns to
education for entrepreneurs
http://www1.fee.uva.nl/fo/mvp/SEPR_2004.pdf

I hope you are pleased with the materials I have been able to locate on
short notice. If you find that they are not quite what you were looking
for, please give me further guidance through a Clarification Request so
that I can fully meet your needs before you assign a rating.

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28 Dec 2004, 18:44
Praet's post includes an impressive array of citations to reports. However, perhaps entrepreneurs are highly capable people who tend to have high achievement in most aspects of their lives. Thus, the level academic education and e-ship might be correlated because of this general high achievement rather than a direct causal relationship between academic education and entrepreneurship.

Hjort

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28 Dec 2004, 21:07
Hjort,

I beg to differ when you state that there might be a correlation between e-ship and entrepreneurs tendency to garner higher achievements and their ability to do well in academics.

For one, most of the famous business persons in India ain't highly educated - Dhirubhai Ambani is one that comes straight off the mind. Also, you have people like Bill gates - a dropout of Harvard.

On the whole, I don't think that the education system (atleast in India) teaches people to take risks - which is very important for an entrepreneur. In fact, most MBA student would opt for the low risk option of taking up a high dollar value job.

I am sure that you would find that many entrepreneurs are MBA's or highly educated but then those are the ones who have had opportunity to earn a lot of money for many years after graduation. (A person with 10 million dollar fortune can think of starting a business with dollar 1 million - almost zero risk game...)

I feel - e-ship may also be a result of frustration with job, lack of motivation with the college education etc.
Also - most successful entrepreneurs have had one or two failures before they built their successful empire. Thus - the motivation to earn money/reputation etc. seem to be a key factor for successful entrepreneurs...this motivation should not necessarily lead them to do well in academics.
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28 Dec 2004, 22:24
Nitinag,

With due respect, I think that we are actually arguing similar points. I think that many highly successful entrepreneurs are people like Gates who are skilled individuals who qualify for education at advanced universities but often fail to finish their schooling since they have a passion to "get out there" and begin putting their ideas into practice. I agree that formal education often makes creative people unnecessarily risk averse and conventional in their thinking. A somewhat tangential put interesting point is that often firms started by entrepreneurs who lack formal qualifications later seek those qualifications when they hire new employees.

Hjort

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29 Dec 2004, 03:33
Good points. With my quote from google answers , we did move away a little bit from our original topic, but thats cool

I dont have sufficient knowledge to talk about enterpreneurship. So i hope you wont mind if i rely on quotes from sources.

I do not think money can be a motivation , we would not have so many failures otherwise. Of course, its just my opinion.

Also, here is a Q&A session with Guy Kawasaki, Garage technology ventures

Code:
"Maidment: Guy, you have a Top Five list of things an entrepreneur must accomplish. At the top of that list is Make Meaning. What does that mean, and why is it so important?

Kawasaki: It means that if you start a company to "make money" then you'll probably fail. Great companies start because the founders want to change the world ... not make a fast buck. Call me a romantic, but I think entrepreneurs should try to change the world. This comes from working at Apple ... old habits die hard.

Maidment: Is there ever a case in which 'making yourself rich' constitutes making meaning?

Kawasaki: Yes, absolutely. But that seems like an insipid reason to start a company. However, if you make meaning, you'll probably make money. If you make money, you might not make meaning. At the end of one's life, hopefully you've done more than simply make money.

ok moving on...

I think we all agree that the role of classroom education for success in the entrepreneurial or the business world is minimal , but I would still think that education remains important. Again, i speak from the research presented above in the google answers column. Now this brings us to the topic of "self-education" Here is an interesting article:

http://www.entrepreneur.com/article/0,4621,271823-2,00.html

"Gates still carves out two weeks every year for a private reading retreat in which he spends his days reading all the books he has set aside in the past year. In addition to this routine, Gates has acknowledged in interviews that he still tries to read books and magazines for an hour or so each day whenever possible."

"Profiles of Genius (Prometheus Books) by Gene N. Landrum features 13 business leaders who have made their mark since 1950 in America and abroad. Signs of self-education appear in almost all cases. Only six finished college, and some never even finished high school. Almost all 13 business leaders profiled by Landrum exhibited an intense love of reading and reliance on reading as a self-education tool.

Benjamin Franklin's own success is attributed in part to his habit of reading, even though by today's standards, he may not have read many books. However, he began reading very early in his life, and his childhood home seemed to be an environment that encouraged reading and information-gathering."

Interesting case here:

From Guy Kawasaki's column

"I dropped out of college to start my own tech firm. Although I'm following in the footsteps of quite a few tech billionaires, most of the VCs I meet tell me I'm too young and inexperienced. How do I combat that attitude?

You can do three things: find other VCs, bootstrap so you don't need VCs, or surround yourself with adult supervision that will ameliorate the feelings of the VCs who have already told you this. "

This is the big one....again from Guy Kawasaki

Q: What is the value of an M.B.A. these days for young college graduates who want to start their own company?

A: Probably about a negative \$250,000. (I have an M.B.A., and I was once a young college graduate.) I don't think an M.B.A. matters very much for starting a company. A much better educational background is an engineering degree. You can always hire M.B.A.s, but if you don't have the ability to conceptualize and deliver a product, you've got nothing. By the way, the founders of Apple Computer (nasdaq: AAPL - news - people ), Microsoft (nasdaq: MSFT - news - people ), Yahoo! (nasdaq: YHOO - news - people ) and Google don't have M.B.A.s, but I digress.

OK, finally my own :

My professor conducted a survey of CEO's and all of them had one thing in common : they read, read and then read some more. He used this example to reinforce the importance of lifelong learning,which is again linked to the concept of "self-education".

Thanks again
Praetorian

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Re: Hi   [#permalink] 29 Dec 2004, 03:33
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# Can you learn entreprenuership in class? -- Debate 2

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