Description
A tradition began last year with the first of these USASBE keynote lectures.
Unfinished Business (Entrepreneurship) of the 20th
Century
USASBE Address, January 1998
San Diego, California
Karl H. Vesper, University of Washington
Introduction
A tradition began last year with the first of these USASBE keynote lectures. It was
given by Arnold Cooper of Purdue University and carried the following title:
"Entrepreneurship; The Past, The Present, The Future". Now there is a challenge for this
lecture. What else is there to talk about?
Actually quite a bit, I suppose, because his topic doesn't treat: "Entrepreneurship:
the Wasn't, the Isn't and the Won't be". That leaves unfinished business to work on. But
which of it is worth working on? This presentation will discuss that. Hopefully as a start
for the meetings that follow and beyond. It could be looked upon as unfinished business,
or better yet Unfinished Entrepreneurship. That is the opportunity of the century, the next
century.
I see seven categories that might be used to classify this unfinished business. I will
list them briefly and explain further. Some of you will think of others I missed and more
remedies than I suggest. I hope it will be possible for me to learn about those further.
Figure 1 following presents the six:
Figure 1 - Some Categories of Unfinished Entrepreneurship
1. Legitimacy
2. Targeting
3. Paradigms
4. Content
5. Balance
6. Permanence
7. Liberty
1. Legitimacy
Although entrepreneurship has certainly become fashionable there are signs that it
has not yet attained full citizenship in the academic world. There are, according to Jerry
Katz of St. Louis University, over 200 endowed chairs in entrepreneurship, somewhat
widely defined. Many, when they come up, however, are appointed to people whose major
dedication has been other than entrepreneurship, which suggests that for many faculty who
vote on those appointments, entrepreneurship is not a validated faculty source. Moreover,
at some schools, such as Washington and, I understand Texas and Harvard,
entrepreneurship chairs remain unfilled, years after the donors gave them. Washington
managed to find candidates internally who were “good enough” for 95% of its two dozen
chairs in other business subjects, but could not recruit anybody, even from a nationwide
advertised search, considered qualified for its entrepreneurship chair. So acceptance still
has a ways to go in some quarters.
There are over a hundred university entrepreneurship programs worldwide, and the
number is growing. Top U.S. universities, such as Carnegie-Mellon, Chicago, Columbia,
Harvard, Northwestern, Stanford, UC Berkeley, UCLA, and Wharton now have programs
in entrepreneurship. But so far every U.S. university degree entrepreneurship program,
whether at these universities or others, is subordinate to a business school, with the
exception of one that is under an engineering school. No U.S. university has a school of
entrepreneurship to the best of my knowledge, although there is at least one "school of
business and entrepreneurship." So entrepreneurship, as a school, seems not yet to have
arrived, at least in the U.S.
Most university entrepreneurship programs are heavily staffed with adjunct faculty.
It is a good way to operate, because adjunct faculty are typically real-world entrepreneurs
who have been successful and therefore bring to class a kind of magic that non-
entrepreneur academics cannot. They are low in cost to the school, which is an advantage
in gaining support from administrators who must balance budgets. And they are
untenured, which administrators also like because it allows flexibility to add and subtract
people from the faculty at will.
But adjuncts are not full citizens of the university. They cannot vote and they do
not have tenure, which renders them politically weak. That leaves the non-
entrepreneurship faculty politically strong, which in turn handicaps entrepreneurship from
taking initiatives and blazing trails that it otherwise might. With greater political strength,
for instance, entrepreneurship faculty might be able to end run conventional core courses
by incorporating basic training in core subjects like marketing, finance and accounting into
entrepreneurship courses and teaching only those parts of such subjects that entrepreneurs
find most useful. Entrepreneurship faculty might even shrug aside concern about
conventional business accreditation or introduce their own accreditation.
But at present it is the other way around. Entrepreneurship faculty can only do
what non-entrepreneurship faculty let them do and within accreditation constraints. That is
still a lot, which is fine. But why not reach further?
2. Targeting, Market-wise
It is obvious that we have some very different categories of customers in
entrepreneurship classes. But there is still much to be done in sorting them out and fine-
tuning courses to serve them. We need clearer ideas about (1) what the categories are, (2)
which of them we should recruit to which classes, and (3) how those classes should be
tailored to them.
Here and there are data points. But how do they fit together? Last year some of us
followed up a commercial program sponsored by US West called NX Level, a clone of the
Fast Track program. I personally heard participants who had taken the course say that
because of the course, they had been able to start successful enterprises that they would
otherwise not have started. So the course impact seemed to be very real and positive.
In contrast, at our school when we were discussing entrepreneurship curricula
designed to serve the entire campus, a computer science professor who was part of the
program asked what was the point of the MBA entrepreneurship course. It wasn't
necessary, he said, for his computer science department. The real core of their start-ups,
after all, was new software. They could easily pick up information and expert help on
topics like business planning, venture capital and selling from other sources without
participation of the business school. So an MBA entrepreneurship course, for his
department at least, was a redundancy. (Coincidentally, the December 28, 1998 cover
story in Forbes uses government data to question very logically the necessity of even a
university education for business, let along successful entrepreneurship.)
More encouraging seem to be reports on the Scottish Enterprise Program
presented at the Babson conference in 1997. It aimed to impact entrepreneurship on a
national basis through education from elementary school through university, plus public
relations and financing initiatives. Moreover, it collected tracking data on the effects those
efforts. The results indicated that the program really worked on a national basis, both to
develop in the public a more favorable attitude toward entrepreneurship and to increase
the number of start-ups.
But where does that leave us in universities? We have a mix of students with
varying backgrounds and objectives. How do we aim? Is it better for us to offer survey
courses in entrepreneurship that hit a spread of topics shallowly, or specialized courses in
topics like intellectual property and IPO's that treat some in depth? Should we have
courses that specialize by industry, like software, web technology application,
biotechnology and restaurant creation? Should universities themselves specialize
differently?
Figure 2 below suggests some market segments based upon student objectives
regarding ventures. This could be further stratified, both as to prior experience and as to
type of business, to produce a virtually endless array of possibilities. Our finding in the US
West study, however, offered some relief from the need to target too finely, because it
appeared that participants drew upon the various course elements, such as instructor,
book, exercises, other class members, and assignments selectively according to their
needs. It was as if the course were a buffet table from which students individually selected
meals. That is not to say, however, that tuning could not improve it further. The choice of
what to put on the table likely is important.
Figure 2
Student Market Segments Now Later
1. Starter
2. Runner
3. Acquirer
4. Internal team member (“venture helper”)
5. External team member
6. Venture investor
7. Scholar/teacher
How should a given university focus its entrepreneurship education efforts on the
spectrum that runs from nuts and bolts of start-up at one end to cultivation of general
mental abilities at the other end? Graduates of top law schools are notorious for their
inability to pass bar exams without supplementary trade school prep courses. But they are
highly regarded for teaching students to think like lawyers, whatever that is taken to mean.
Does it follow that the best university entrepreneurship programs will be those that teach
students to think like entrepreneurs? If so, how is it that entrepreneurs think, anyway? Or
does it depend on the particular entrepreneur, the particular industry or the particular
venture, and if so, how?
I hope and suppose we are groping our way toward answers to questions like
these. But I haven't noticed systematic reporting of the results, except here and there as I
mentioned earlier. The Int Ent conferences of the European Business School at Frankfurt
are a useful forum for exchange, and some sharing of such information occurs at the
Babson and Academy of Management research conferences, but a better coordinated data
sharing system could, I think help further. I see real optimism for progress on this frontier
as we move into the next century.
3. Paradigms
We should also have more and better paradigms for grasping the field of
entrepreneurship to transmit its growing body of knowledge to others. One of Arnie
Cooper's predictions was that there would be no great entrepreneurial paradigm for the
field, (perhaps just like no great American novel). That may be true, but we do need more
paradigms, at least smaller ones if not “the big one.”
One reason we need them is to deal with what might be called the “snippets
problem.” A letter I received from a dean in the Midwest illustrated this difficulty. He said
he liked the idea of introducing entrepreneurship as a field of concentration in his school
but he could not figure out how its content should be defined. He had looked at various
textbooks with the word entrepreneurship on the cover and come away with the
impression that they were mostly just books for survey courses in business. The topics
included a little bit of accounting, a little bit of law, some marketing, production, and
human resource management — snippets duplicating parts of other courses across his
business school's curriculum.
Are we stuck with that? After all, entrepreneurs on occasion can find useful the
tools of law, marketing, production, HRM and even finance. Does that mean the subject
of entrepreneurship is inescapably redundant?
Maybe not. For one thing, it hooks information from these traditional subjects
together somewhat differently. Because of the way new companies develop and the fact
that not everything can be done at once by the entrepreneur, it may make sense to treat
these topics as linked sequentially in ventures. A scheme for viewing this might look like
the one in Figure 3 below. Using this paradigm, the field may be considered as a series of
linkages among specialties, rather than just snippets.
For entrepreneurship there is a different starting point, and consequently it is
possible that the introduction of topics like marketing and finance might be taught as parts
of venture development processes, rather than as separate courses taught in separate
departments. That would be a different way of looking at those topics, which is not to say
it is a great new paradigm. But it is different than what we now use, and for teaching
about venturing as a distinct field, it may be worth trying.
Attainment of increased legitimacy for entrepreneurship as a field through
development fresh and better ways of looking at it should help us strengthen legitimacy,
which in turn will increase our freedom to further explore.
Figure 3 - Sequence for Exploring Topical Linkages in Start-up
Getting Out
Coping with Growth
Causing Growth
Cash Control
Starting Operations
First Sales
Financing
Teaming
Siting
Facilities
Legal Form
Protecting Ideas
Planning
Screening
Idea Formation
Choosing Entrepreneurship
4. Content
Although paradigms may be part of knowledge content, the content goes beyond
them. Entrepreneurship as an academic field is criticized by some for having insufficient
content. Part of our job is to figure out what it is useful for entrepreneurs to know and
then to decide what part of that knowledge can be taught in school. Figure 4 presents one
simple way to classify knowledge useful to entrepreneurs. Business schools that have
entrepreneurship courses normally offer the first two categories of knowledge. The second
two are typically not.
1. Business-General Knowledge - This is knowledge that applies to businesses in
general, both new and established firms. It includes such things as basics of accounting,
marketing, business law, finance, operations and human resources, plus subdivisions of
those subjects. In short, it includes the curricular core. It also includes some of the
electives that branch off of it, but not all of them. There may be courses specialized for
auditors, courses in insurance or real estate, and research methods courses that apply to
particular groups of specialists.
Figure 4 - Four Categories of Business School Content
1. Business-General Knowledge (applies
to most firms, including start-ups)
2. Venture-General Knowledge (applies
to most start-ups, but not so much to going
firms)
3. Opportunity-Specific Knowledge
(Information about specific market holes or
resources available for venturing)
4. Venture-Specific Knowledge
(Technical know-how for performing set-
up and conduct of the operations of a
specific kind of business)
2. Venture-General Knowledge - This is the content in entrepreneurship courses
that is distinct from business-general knowledge but fairly general to ventures. It includes
things like the following:
• What is venture capital and how does it work?
• How do entrepreneurs find opportunities and ideas for new firms?
• What is a venture plan, who finds it useful and how, where does information for it
come from and what is the difference been a mediocre versus good one?
• How is development of initial customers for a start-up different than in an
established business and how do founders cope with it more versus less
effectively?
• How should founders best find partners and recruit talent?
• How may defense of intellectual property be special for entrepreneurs and how
should they decide what to do about it?
• How do the headwaters of great success get built into a new company and in what
stage of its development?
The list here can be lengthened, and elaborated in more detail, which would add
content. But should we elaborate? Couldn't we just say that the way to learn
entrepreneurship is to "Just Do It?" Almost all entrepreneurs to date have followed that
advice. They not only didn't have enriched content from an entrepreneurship program.
They didn't get any curriculum in entrepreneurship, or business either for that matter. And
here they are, successful. Again, the computer scientist at our school said. "We don't need
you people. We can learn the basics of entrepreneurship on our own." And of course, like
Jobs, Wozniak, Gates and Allen, they can, provided they have the other two types of
knowledge in Figure 4.
3. Opportunity-Specific Knowledge, which is to say knowledge about the existence
of an un-served market and where physical resources to serve it might be obtained is the
first of these others. With that type of knowledge Jim Bezos was able to start
Amazon.com through recruitment of people who possessed the fourth type of knowledge.
4. Venture-Specific Knowledge. This is the knowledge of how to produce a
particular product or service. In the case of the Apple entrepreneurs it was how to make a
good microcomputer, and in the case of Gates and Allen it was how to write computer
code. Starting with this they found their way to un-served markets by acquiring
opportunity-specific knowledge. Business general and venture general knowledge they
acquired through seeking advice and recruiting other people.
Neither of these last two types of knowledge applies to ventures in general. They
are specific to a particular start-up. Moreover, as soon as awareness that in their nexus
potentially profitable ventures exist, they quickly become obsolete discoveries. For both of
these reasons schools cannot deliver them, except in rare and, typically, anomalous
situations.
Sadly for us, the last two are generally the most important of the four types of
knowledge for start-up success. They are like maps to unclaimed gold veins, rarely
available, and then only at extremely high cost. The general business and general venture
types of knowledge are, to continue the analogy, like how to shovel and transport ore.
They are necessary, but relatively easy to learn or cheap to buy.
So is there something of real value to entrepreneurs for scholars of
entrepreneurship to study and teach?
I think so, and it's part of our job to add more. To continue the mining analogy,
there are such things as shoveling better, transporting better, smelting better, getting a
better price and parlaying the mine into something valuable rather than losing the venture,
as do many entrepreneurs. Adam Osborne and others spotted and pursued wonderful
opportunities in the early days of the microcomputer industry with great technical
sophistication but went broke anyway.
Another helpful analogy can be an automobile race, the Indy 500. Typically, each
year the speeds get higher in this race due to discovery of ever better techniques, even
after the many decades that have already been applied to refinement. The speeds creep up
to a point where the race becomes too dangerous. Then the officials inject some new
handicap: smaller engine size, restricted fuel composition, reduced intake area, to lower
the speed to a safe range. Consequently, speeds drop. Then it starts to creep up again,
even with the handicap, until again it becomes unsafe, at which point another new
handicap is added, and so forth.
What produces the speed upcreep? Sometimes big breakthroughs, like introduction
of two-way radio for the drivers or controllable spoiler wings, and always many small
things, like better tire material, tiny aerodynamic refinements, and improved coordination
patterns for pit crews.
We have seen both types of improvements also for the practice of
entrepreneurship. There have been big breakthroughs like microcomputers for many
business functions and the web as an electronic vending machine.
There have also been lots of smaller things (LOST is the acronym) like annual
improvements in tax software, more telephone feature options, and revelation of new
tricks available through specialized consultants. For instance, a recent restaurant start-up
in the Seattle area used special consultants not only for architecture and law, but also for
recipe design, menu design, interior design, focus group utilization and staff training. The
venture took two years to design and set up, and then was opened with no advertising.
Within two weeks the waiting line for dinner was two hours, where it has remained. No
doubt much of what the consultants provided was venture-specific. But when and how to
use them may have been venture-general techniques that school can help with.
Inevitably, it is the people in industry who will originate most of the improved
methods for venturing. They, by the millions, are tinkering and trying approaches that will
let enter business more profitably. This represents a massive experimentation effort, with
industry as the laboratory, which academics certainly can't match, but can assist. Our job
must include noticing the improvements that arise from these experiments and helping
diffuse them to other application sites. "Just do it" may have been good enough for the
present century, but in the next one it should not. Instead, the slogan should be "Do it
better than last time." More about that shortly.
The magazines and other media also have this mission, of tracking and reporting
about best entrepreneurship practices, in parallel with us. But for them there is higher
priority on discovery of the occurrences, whereas we are called upon more to codify and
cumulate the information about improved methods so that useful knowledge will ratchet
forward and not be forgotten, only to need rediscovery.
This adds to the content we offer, so it can reach beyond snippets, and also beyond
paradigms for looking at or connecting snippets. It builds a unique content for the field of
entrepreneurship. A likely result will be that other fields will tear off pieces of it to claim
as their own.
5. Balance, Research-wise
In the search for new knowledge that we call research represents we have much to
work on, not just in quantity, but in direction, balance and even underlying philosophy.
Top priority, it seems to me, should be to work on two types of balance that need to be
improved in entrepreneurship research.
The first is topical balance. There is too little attention being given to some topical
areas relative to other topical areas. Graphically, this is illustrated by Figure 5. This figure
depicts the distribution of articles by topic of 1,679 articles from three academic periodical
series; Journal of Business Venturing, (JBV)Marketing at the Entrepreneurship
Interface(MEI), and Frontiers of Entrepreneurship Research(FER) plus Inc. Magazine.
The categories coded along the horizontal axis of the figure are described in Figure 6 and
are somewhat similar but not identical to those of Figure 3.
Figure 5 - Article Quantity by
Topic Area
0
50
100
150
200
250
1
a
2
a
3
b
4
b
5
c
6
b
7
b
8
c
9
b
1
0
b
Inc
JBV
MEI
FER
Topic codes – Please see Figure 6
Article
Count
Figure 6 - Topics Used For Sorting Articles
Code Topic
1. Venturing and Entrepreneurs
1a Occurrence and economics of venturing
1b Entrepreneurs' characteristics and careers
1c Thinking about entrepreneurship
2. Venture Ideas
2a Mental departure in quest of opportunity & ideas
2b Guiding the search for successful ideas
3. Idea Screening
3a Assessing physical and market feasibility
3b Assessing personal fit
3c Strategic vision, design and refinement
4. Venture Planning
4a Forecasting sales, expenses and cash needs
4b Writing and presenting business plans
5. Venture Financing
5a Equity sources early on, including angels
5b Borrowing and banks
5c Formal venture capital
5d Capital from going public (IPO's)
6. Setting Up Ventures
6a Protecting ideas
6b Designing the business legal form
6c Physical location and facilities
7. Help in Venturing
7a Partnering
7b Help from outsiders
8. Starting Up Ventures
8a Getting sales
8b Initiating physical operations and quality
8c Controlling cash
8d Continuing advance of the venture's tech
9. Acquisition Entry
9a Finding and checking out acquisitions
9b Acquisition dealing
9c Entry through becoming a franchisee
10. Downstream From Entry
10a Trajectories of growth
10b Managing growth and corporate venturing
10c Exits from ventures
It can be seen from the bar heights in Figure 5 that there are some significant
differences in distribution among the periodicals themselves. For instance MEI is the
source of almost all the academic articles on getting sales in new ventures (category 8a).
Inc. much less emphasizes articles on venture capital (category 5c), while the
academic sources, particularly JBV and FER seem to highly emphasize venture capital,
even relative to banks (category 5b), notwithstanding that extremely few entrepreneurs
deal with venture capitalists, while virtually all must deal with banks. This seems strange.
More important may be the almost complete lack of attention to other subjects
such as how to find viable venture ideas (2a, 2b), how to check them out (3a, 3b), how to
protect ideas in a new venture (6a) and how to deal with acquisitions (9b). Certainly, these
are important subjects to entrepreneurs, and areas where undoubtedly things can be done
better. So it seems regrettable that they appear to be so undertreated.
By far the most treated, as can be seen from the bar chart, are topics at the two
ends of the chart. The left-end topics have to do with overall occurrence of
entrepreneurship in various economies, plus psychological makeup of entrepreneurs. How
study of those topics is likely to give insights to better techniques of accomplishing
entrepreneurship is not so easy to see, which makes it hard to defend the unbalanced
attention these topics appear to receive.
At the right-hand end of the chart emphasis seems inordinately high on topics
directed toward study of generating and coping with growth in existing companies. Those
topics are of high interest and importance to managers in ongoing companies. But theirs is
not the role of the entrepreneur according Webster's definition. Management of ongoing
companies is a subject with an abundance of literature, research and otherwise.
Entrepreneurship lacks such abundance and is, therefore, where the research is more
needed.
Reasons for the apparent misdirection probably include inertia and resistance due
to the traditional emphasis of management schools, as well as researchers, following the
money. Start-ups generally can't pay for high consulting fees or expensive management
programs, whereas many fast-rising companies can and do. It is always easier to study
companies that are established, because most of the time they are easy to find and they
stay put. Moreover, there is usually information about them in print already from any
number of sources. To study them versus entrepreneurs in action is like photographing a
cow versus a grasshopper on the move.
This extension of the term entrepreneur into the realm of management also adds
confusion. Two people talking about entrepreneurship may have very different subjects in
mind. One may be thinking about individuals or teams who start companies, while the
other may be thinking of executives like the CEO of Chrysler. Perhaps we should develop
a lexicon for the entrepreneurship field, which includes different types of entrepreneurs
having different appellations. One possible set, building upon the list shown earlier in
Figure 2, appears in Figure 7 below and is illustrated graphically in Figure 8.
Concentrating research on individuals and teams who enter independent business,
and in particular on what they do to accomplish that, which is to say shifting focus more
away from the economics and psychology of venture populations, can help add balance.
A second major driver of imbalance is created by academic fashion in
methodology. Using statistics is the proper way to establish representativeness. But in
entrepreneurship representativeness, typicality, normality, the mode, median or mean is
not all we should be interested in. Entrepreneurship is based upon exceptionality.
Entrepreneurs prosper by finding and exploiting anomalies, which is what they and their
ventures often turn out to be, at least until they are up, running and successful, at which
point management, hopefully still creative, and resourceful succeeds entrepreneurship.
Figure 7 - Defining Entrepreneur Types
Name Activity
Starter Enters independent business by creating a new one
Acquirer Enters independent business by acquiring a going concern
Runner Manages a small to medium business beyond start-up
Takeoff Artist Steers a company onto a high growth trajectory
Turnaround Artist Saves a failing company
Innovator Makes something new happen that is not a new company
Champion Supports subordinate innovator
Intrapreneur Takes extraordinary initiative for business unit creation inside
an established company
Industry Captain Runs a big business artfully
Figure 8 - Roles in Venturing Over Time
Starter
Runner
Acquirer
Takeoff
Artist
Turnaround
Artist
Industry
Captain
Company size
versus time
So we should be looking in our research not just for the typical in populations, but
also for the outliers and the range. We should seek to identify and map the arrays of
venturing methods that are effective and how those arrays are caused. That can help
enable the injunction for would-be company starters to change from "just do it," to "do it
better."
Maybe USASBE should each year impanel two teams of scholars and have each
team answer two questions. First, in what ways, maybe for selected industries, is new
venture creation performed better today than it was five years ago? Second, how might
best practices in entrepreneurship be better five years hence than they are today? After five
years, the answers should be graded and one team should be given an award for guiding
vision. This could be continued on a rolling basis year after year to keep our eyes directed
on the course.
6. Endowment
All the tasks mentioned so far require time, money and persistence. It's not enough
to have an effort begin and then be blown away. But that is what has happened repeatedly
over the years. Consider the start-up studies of pioneers in the field like Hoad and Rosko
at Michigan and Collins and Moore at Michigan State. They put those schools at the
forefront then, but that leadership was not continued. Had there been endowments behind
those early and significant research activities, instead of only temporary government
contracts, and had those endowments been written with tight contracts binding them
permanently to entrepreneurship, those schools would almost certainly still be prominent
in the field and we would also have more good research content from continuation of their
efforts.
What the money is for also seems to make a difference. A good thing about those
two studies that I just mentioned was that their aim was to produce published results.
Consequently, their output lasted.
A contrast to that publication emphasis would be previous programs that
concentrated on activity to the exclusion of collection and dissemination of findings about
entrepreneurship. For instance, in the seventies the National Science Foundation spent
millions on so-called innovation centers at several major U.S. universities. Unfortunately,
nobody was contracted to monitor the results independently, so the only reporting of the
experiments consisted of what amounted to applications for renewal of the contracts.
Later, years after the projects had begun and finally ended, an investigation to report the
results in hindsight was mounted, but since it was commissioned by the same agency that
had spent the money, it was not very penetrating. It seems likely that a considerable
amount of learning about what worked well and what did not work was lost. This invites
repetition of mistakes and consequent financial waste.
During the eighties the Canadian national government mounted a couple dozen
entrepreneurship stimulation projects at universities around the country. Again, nobody
was given a contract to monitor the results as a third party, and again we have no results,
that I am aware of, to show for it.
Without sustained effort, all these programs vanished. Very recently, the same
thing has happened at two other universities. At the University of Dortmund in Germany
an outstanding effort in entrepreneurship was going on, including development of new
software, new outreach courses and a major international conference on entrepreneurship
education. The university, however, was less than fully supportive of all this, and when the
prime mover received a better offer and moved to the European Business School near
Frankfurt the Dortmund program completely dried up.
In a similar vein, at Australia’s Swinburne University, an engineering professor
developed an entrepreneurship masters degree program that was producing an impressive
number of start-ups directly from the university. That professor just retired and, I'm told,
the program is being abolished. Another Australian university, Murdoch, may adopt it, but
for how long if there is no endowment?
What should be done? One remedy would be to develop longer-range plans for
financial support, including creation of endowments for entrepreneurship program
development and research. The second is to make sure that when money is given it goes to
entrepreneurship, not to some sort of undesignated purpose beyond simply memorializing
the donor's name. Universities always prefer unrestricted funds. But when they get them
rarely make entrepreneurship the beneficiary.
I'm not a money-raising expert. But we need more of them with specialized
expertise in tax angles that wealthy entrepreneurs can play by contributing to
entrepreneurship programs. We need people who can persuade entrepreneurs to look at
entrepreneurship programs like they might look at college football teams and also as
programs that can help young people who are much like they were earlier on.
7. Liberty
Even with endowed financial support, however, entrepreneurship in universities
still must deal with barriers and constraints that we should keep finding ways to penetrate.
Entrepreneurship in universities has so far been developed as an add-on to business
education, first as an elective course, then more courses, and finally as a concentration,
major or program. So far it has largely been tucked in around the existing core. Its
teachers presently must be approved by established faculty of other fields. Its courses
currently must fit into the existing curriculum, grading system and calendar. It serves the
students who for the most part apply for a conventional business education.
To quote a famous past-president's wife, I suppose there's nothing really wrong
with that. But what might be different if we had started first with a school of
entrepreneurship and then added a few courses for a concentration or major in middle
management?
Would it be a school of art, science or profession? Would it be aimed at imparting
knowledge content, tools and skills or ways of thinking? If ways of thinking, what would
they be and how would the school seek to impart them? What would graduate students
carry with them in the way of not only course content but also venture memories, mentor
memories and perhaps portfolios of their creations such as product designs and
prototypes, business plans, parts of plans, contacts from field studies and ideas about
potential future opportunities as well as plans for continuation of their personal
development and contact networks to enable them more effectively with time to become
successful as venturers and helpers of other venturers?
Is there some reason, other than lack of progress, that there should not be a
graduate school of entrepreneurship in the United States and why it should not be first
class? For that matter, since this meeting is in San Diego, what would be a better place for
such a school than in San Diego?
The San Diego business community, although not as big as those of other major
cities on the West Coast, has a rapidly advancing growth frontier that includes both high
technology and a very active adjacent international border with Mexico that also links it
with other countries in both Europe and Asia. There are many entrepreneurs here locally
and vastly more within commuting distance just up the coast along I-5 and inland up I-15.
Venture capital firms are not here permanently yet, but hundreds of them show up here in
San Diego annually for the technology showcase hosted by UCSD, and local venture
capital firms are bound to arise as the economy grows, particularly in high technology.
San Diego State University has a world-class venture plan contest and an active
entrepreneurship program that is well supported by the community faculty. But it has no
doctoral program and, by the nature of the California State University system, has a
mission that is oriented primarily toward teaching, not research. Those functions are
instead the mission assigned by the state to the University of California system.
But if a new graduate school of entrepreneurship were created nearby, and if
adequate financial support could be raised, then faculty from San Diego State could
participate as members of the new school’s faculty on either a joint or summer basis. They
could also belong to or supervise committees of its doctoral students on relevant doctoral
research.
The University of California at San Diego, like Berkeley, UCLA and the other
members of the University of California system, has the mission to pioneer and develop
new knowledge. It has strong schools in engineering, medicine and the sciences. It also
has an exemplary extension program that is strongly oriented toward new business
ventures. But it has no business school, and the extension program is not authorized to
offer degrees, only certificates. All of this makes it ideal as a collaborator with the local
business schools, as it would also be with a graduate school of entrepreneurship, if one
were nearby. A case in point is its collaboration with the MBA program at the United
States International University here in San Diego, which just began accepting extension
courses from UCSD to satisfy its MBA core.
It, like San Diego State, offers undergraduate and masters degrees in business. In
addition, it has a business doctoral program. But that program is to be cut back, and it is
not in entrepreneurship anyway. So a new graduate school with a doctoral program in
entrepreneurship could be complementary, providing a basis for collaboration.
There is also a business school at the University of San Diego, a small school that
is high in quality. It is unlikely to mount either a major entrepreneurship program or a
research program in that field. But it has two active faculty in entrepreneurship who might
collaborate with a local graduate school of entrepreneurship on doctoral or other research
if the conditions were right.
There are other nearby business schools as well, such as to the north in Vista, Cal
State, San Marcos. That business school serves a region with increasing numbers of start-
ups and could pick entrepreneurship as a direction of future development.
Each of these schools provides important parts to the picture of entrepreneurship
education in San Diego. But their combination still leaves, as opportunities, some gaps.
The existing business schools here either have or are seeking AACSB accreditation, which
imposes some restrictions that an entrepreneurship school might be better off without. A
new school free from accreditation could make unrestricted use of adjunct faculty. It could
offer a one-year masters degree in entrepreneurship without the inertia of traditional
business core courses. It could design its own doctoral program around the special
research needs of entrepreneurship. That doctoral program, by its wide-open nature, might
be able to draw participation of distinguished doctoral mentors in entrepreneurship at
universities elsewhere in the nation in addition to faculty of nearby schools, and it could
include scholastically inclined members of the entrepreneurship community from outside
the academic world as well.
The array of programs that would then be available, including those of a new
graduate school of entrepreneurship, is displayed in Figure 9 following, from which it can
be seen that the addition should be largely complementary and not duplicative.
Figure 9 - Potential Program Offerings With A New Graduate School of Entrepreneurship
in San Diego
Courses Certificate Diploma BS 2 YR MBA 1 YR MSE Ph.D
.
UCSD X X
SDSU X X X
USD X X X
USIU X X X X
GSE X X X X
In the longer term such a school, if done with sufficient freshness, imagination and
quality, might even be eligible for adoption by UCSD, which would thereby become the
only top quality university in the world with a graduate school of entrepreneurship and no
business school, at least provided it did not wait too long for the adoption. That, it seems
to me, would make an interesting page in the 21st century history of the United States,
and one that everyone concerned could be proud of. It could also pave the way for
emergence of other such schools in the U.S. and elsewhere.
A graduate school of entrepreneurship in America could have happened in this
century. But so far it has not. To give it a good start money would clearly be required,
millions to do it right, and such amounts usually take time to get. So maybe such a school
will not begin in the few months left of this century. But if not it should in the next one,
and the sooner the better, and if not in San Diego, then still someplace in the U.S.
To Be Done
In summary, Arnie Cooper is right. The field is young, has come a long ways in a
short time and is likely to keep on building, because its driving forces are continuing, for
the foreseeable future. But there is also a tremendous potential for doing more than is
likely to happen automatically. We have to drive it if we are going to maximize the win
from it.
I have lived long enough to reach the belief that many opportunities are bound to
be exploited sooner or later, and if not by one person or group or institution, then by
another. But there are also opportunities that will never be exploited within our experience
even though they could be. Maybe skateboards, snowboards and windsurfers were
inevitable, but they certainly could have been done earlier. The same is true of the internet,
Fed Ex and jet airliners, not to mention products like Trivial Pursuit, Pictionary, the
Happy Massager and Magic, the card game. All of these could have been done sooner, or
not at all. Initiative made the difference.
Our initiatives should recognize that although the entrepreneurship field is growing it
still is short on both legitimacy and permanence. Further clarification of student market
segments and finer tuning of curricula for them can help, as can more creative thinking
about fresh paradigms for understanding the subject. Research efforts should be guided
more toward areas that are thinly treated and with an eye toward discerning and
disseminating the small improvements industry invents for performing entrepreneurial
processes better. Emphasis should be reduced on study of central tendencies, means and
modes in favor of more study about ranges and exceptions to be found in the tails of
sample curves. We should develop a better science of our own for raising money and
making sure it gets applied to entrepreneurship, not for just doing it, but for learning how
to do it better. And someplace in the U.S. the next century should see an independent
graduate school of entrepreneurship that, if its success warrants, can be the first vessel of a
new fleet.
doc_166235935.pdf
A tradition began last year with the first of these USASBE keynote lectures.
Unfinished Business (Entrepreneurship) of the 20th
Century
USASBE Address, January 1998
San Diego, California
Karl H. Vesper, University of Washington
Introduction
A tradition began last year with the first of these USASBE keynote lectures. It was
given by Arnold Cooper of Purdue University and carried the following title:
"Entrepreneurship; The Past, The Present, The Future". Now there is a challenge for this
lecture. What else is there to talk about?
Actually quite a bit, I suppose, because his topic doesn't treat: "Entrepreneurship:
the Wasn't, the Isn't and the Won't be". That leaves unfinished business to work on. But
which of it is worth working on? This presentation will discuss that. Hopefully as a start
for the meetings that follow and beyond. It could be looked upon as unfinished business,
or better yet Unfinished Entrepreneurship. That is the opportunity of the century, the next
century.
I see seven categories that might be used to classify this unfinished business. I will
list them briefly and explain further. Some of you will think of others I missed and more
remedies than I suggest. I hope it will be possible for me to learn about those further.
Figure 1 following presents the six:
Figure 1 - Some Categories of Unfinished Entrepreneurship
1. Legitimacy
2. Targeting
3. Paradigms
4. Content
5. Balance
6. Permanence
7. Liberty
1. Legitimacy
Although entrepreneurship has certainly become fashionable there are signs that it
has not yet attained full citizenship in the academic world. There are, according to Jerry
Katz of St. Louis University, over 200 endowed chairs in entrepreneurship, somewhat
widely defined. Many, when they come up, however, are appointed to people whose major
dedication has been other than entrepreneurship, which suggests that for many faculty who
vote on those appointments, entrepreneurship is not a validated faculty source. Moreover,
at some schools, such as Washington and, I understand Texas and Harvard,
entrepreneurship chairs remain unfilled, years after the donors gave them. Washington
managed to find candidates internally who were “good enough” for 95% of its two dozen
chairs in other business subjects, but could not recruit anybody, even from a nationwide
advertised search, considered qualified for its entrepreneurship chair. So acceptance still
has a ways to go in some quarters.
There are over a hundred university entrepreneurship programs worldwide, and the
number is growing. Top U.S. universities, such as Carnegie-Mellon, Chicago, Columbia,
Harvard, Northwestern, Stanford, UC Berkeley, UCLA, and Wharton now have programs
in entrepreneurship. But so far every U.S. university degree entrepreneurship program,
whether at these universities or others, is subordinate to a business school, with the
exception of one that is under an engineering school. No U.S. university has a school of
entrepreneurship to the best of my knowledge, although there is at least one "school of
business and entrepreneurship." So entrepreneurship, as a school, seems not yet to have
arrived, at least in the U.S.
Most university entrepreneurship programs are heavily staffed with adjunct faculty.
It is a good way to operate, because adjunct faculty are typically real-world entrepreneurs
who have been successful and therefore bring to class a kind of magic that non-
entrepreneur academics cannot. They are low in cost to the school, which is an advantage
in gaining support from administrators who must balance budgets. And they are
untenured, which administrators also like because it allows flexibility to add and subtract
people from the faculty at will.
But adjuncts are not full citizens of the university. They cannot vote and they do
not have tenure, which renders them politically weak. That leaves the non-
entrepreneurship faculty politically strong, which in turn handicaps entrepreneurship from
taking initiatives and blazing trails that it otherwise might. With greater political strength,
for instance, entrepreneurship faculty might be able to end run conventional core courses
by incorporating basic training in core subjects like marketing, finance and accounting into
entrepreneurship courses and teaching only those parts of such subjects that entrepreneurs
find most useful. Entrepreneurship faculty might even shrug aside concern about
conventional business accreditation or introduce their own accreditation.
But at present it is the other way around. Entrepreneurship faculty can only do
what non-entrepreneurship faculty let them do and within accreditation constraints. That is
still a lot, which is fine. But why not reach further?
2. Targeting, Market-wise
It is obvious that we have some very different categories of customers in
entrepreneurship classes. But there is still much to be done in sorting them out and fine-
tuning courses to serve them. We need clearer ideas about (1) what the categories are, (2)
which of them we should recruit to which classes, and (3) how those classes should be
tailored to them.
Here and there are data points. But how do they fit together? Last year some of us
followed up a commercial program sponsored by US West called NX Level, a clone of the
Fast Track program. I personally heard participants who had taken the course say that
because of the course, they had been able to start successful enterprises that they would
otherwise not have started. So the course impact seemed to be very real and positive.
In contrast, at our school when we were discussing entrepreneurship curricula
designed to serve the entire campus, a computer science professor who was part of the
program asked what was the point of the MBA entrepreneurship course. It wasn't
necessary, he said, for his computer science department. The real core of their start-ups,
after all, was new software. They could easily pick up information and expert help on
topics like business planning, venture capital and selling from other sources without
participation of the business school. So an MBA entrepreneurship course, for his
department at least, was a redundancy. (Coincidentally, the December 28, 1998 cover
story in Forbes uses government data to question very logically the necessity of even a
university education for business, let along successful entrepreneurship.)
More encouraging seem to be reports on the Scottish Enterprise Program
presented at the Babson conference in 1997. It aimed to impact entrepreneurship on a
national basis through education from elementary school through university, plus public
relations and financing initiatives. Moreover, it collected tracking data on the effects those
efforts. The results indicated that the program really worked on a national basis, both to
develop in the public a more favorable attitude toward entrepreneurship and to increase
the number of start-ups.
But where does that leave us in universities? We have a mix of students with
varying backgrounds and objectives. How do we aim? Is it better for us to offer survey
courses in entrepreneurship that hit a spread of topics shallowly, or specialized courses in
topics like intellectual property and IPO's that treat some in depth? Should we have
courses that specialize by industry, like software, web technology application,
biotechnology and restaurant creation? Should universities themselves specialize
differently?
Figure 2 below suggests some market segments based upon student objectives
regarding ventures. This could be further stratified, both as to prior experience and as to
type of business, to produce a virtually endless array of possibilities. Our finding in the US
West study, however, offered some relief from the need to target too finely, because it
appeared that participants drew upon the various course elements, such as instructor,
book, exercises, other class members, and assignments selectively according to their
needs. It was as if the course were a buffet table from which students individually selected
meals. That is not to say, however, that tuning could not improve it further. The choice of
what to put on the table likely is important.
Figure 2
Student Market Segments Now Later
1. Starter
2. Runner
3. Acquirer
4. Internal team member (“venture helper”)
5. External team member
6. Venture investor
7. Scholar/teacher
How should a given university focus its entrepreneurship education efforts on the
spectrum that runs from nuts and bolts of start-up at one end to cultivation of general
mental abilities at the other end? Graduates of top law schools are notorious for their
inability to pass bar exams without supplementary trade school prep courses. But they are
highly regarded for teaching students to think like lawyers, whatever that is taken to mean.
Does it follow that the best university entrepreneurship programs will be those that teach
students to think like entrepreneurs? If so, how is it that entrepreneurs think, anyway? Or
does it depend on the particular entrepreneur, the particular industry or the particular
venture, and if so, how?
I hope and suppose we are groping our way toward answers to questions like
these. But I haven't noticed systematic reporting of the results, except here and there as I
mentioned earlier. The Int Ent conferences of the European Business School at Frankfurt
are a useful forum for exchange, and some sharing of such information occurs at the
Babson and Academy of Management research conferences, but a better coordinated data
sharing system could, I think help further. I see real optimism for progress on this frontier
as we move into the next century.
3. Paradigms
We should also have more and better paradigms for grasping the field of
entrepreneurship to transmit its growing body of knowledge to others. One of Arnie
Cooper's predictions was that there would be no great entrepreneurial paradigm for the
field, (perhaps just like no great American novel). That may be true, but we do need more
paradigms, at least smaller ones if not “the big one.”
One reason we need them is to deal with what might be called the “snippets
problem.” A letter I received from a dean in the Midwest illustrated this difficulty. He said
he liked the idea of introducing entrepreneurship as a field of concentration in his school
but he could not figure out how its content should be defined. He had looked at various
textbooks with the word entrepreneurship on the cover and come away with the
impression that they were mostly just books for survey courses in business. The topics
included a little bit of accounting, a little bit of law, some marketing, production, and
human resource management — snippets duplicating parts of other courses across his
business school's curriculum.
Are we stuck with that? After all, entrepreneurs on occasion can find useful the
tools of law, marketing, production, HRM and even finance. Does that mean the subject
of entrepreneurship is inescapably redundant?
Maybe not. For one thing, it hooks information from these traditional subjects
together somewhat differently. Because of the way new companies develop and the fact
that not everything can be done at once by the entrepreneur, it may make sense to treat
these topics as linked sequentially in ventures. A scheme for viewing this might look like
the one in Figure 3 below. Using this paradigm, the field may be considered as a series of
linkages among specialties, rather than just snippets.
For entrepreneurship there is a different starting point, and consequently it is
possible that the introduction of topics like marketing and finance might be taught as parts
of venture development processes, rather than as separate courses taught in separate
departments. That would be a different way of looking at those topics, which is not to say
it is a great new paradigm. But it is different than what we now use, and for teaching
about venturing as a distinct field, it may be worth trying.
Attainment of increased legitimacy for entrepreneurship as a field through
development fresh and better ways of looking at it should help us strengthen legitimacy,
which in turn will increase our freedom to further explore.
Figure 3 - Sequence for Exploring Topical Linkages in Start-up
Getting Out
Coping with Growth
Causing Growth
Cash Control
Starting Operations
First Sales
Financing
Teaming
Siting
Facilities
Legal Form
Protecting Ideas
Planning
Screening
Idea Formation
Choosing Entrepreneurship
4. Content
Although paradigms may be part of knowledge content, the content goes beyond
them. Entrepreneurship as an academic field is criticized by some for having insufficient
content. Part of our job is to figure out what it is useful for entrepreneurs to know and
then to decide what part of that knowledge can be taught in school. Figure 4 presents one
simple way to classify knowledge useful to entrepreneurs. Business schools that have
entrepreneurship courses normally offer the first two categories of knowledge. The second
two are typically not.
1. Business-General Knowledge - This is knowledge that applies to businesses in
general, both new and established firms. It includes such things as basics of accounting,
marketing, business law, finance, operations and human resources, plus subdivisions of
those subjects. In short, it includes the curricular core. It also includes some of the
electives that branch off of it, but not all of them. There may be courses specialized for
auditors, courses in insurance or real estate, and research methods courses that apply to
particular groups of specialists.
Figure 4 - Four Categories of Business School Content
1. Business-General Knowledge (applies
to most firms, including start-ups)
2. Venture-General Knowledge (applies
to most start-ups, but not so much to going
firms)
3. Opportunity-Specific Knowledge
(Information about specific market holes or
resources available for venturing)
4. Venture-Specific Knowledge
(Technical know-how for performing set-
up and conduct of the operations of a
specific kind of business)
2. Venture-General Knowledge - This is the content in entrepreneurship courses
that is distinct from business-general knowledge but fairly general to ventures. It includes
things like the following:
• What is venture capital and how does it work?
• How do entrepreneurs find opportunities and ideas for new firms?
• What is a venture plan, who finds it useful and how, where does information for it
come from and what is the difference been a mediocre versus good one?
• How is development of initial customers for a start-up different than in an
established business and how do founders cope with it more versus less
effectively?
• How should founders best find partners and recruit talent?
• How may defense of intellectual property be special for entrepreneurs and how
should they decide what to do about it?
• How do the headwaters of great success get built into a new company and in what
stage of its development?
The list here can be lengthened, and elaborated in more detail, which would add
content. But should we elaborate? Couldn't we just say that the way to learn
entrepreneurship is to "Just Do It?" Almost all entrepreneurs to date have followed that
advice. They not only didn't have enriched content from an entrepreneurship program.
They didn't get any curriculum in entrepreneurship, or business either for that matter. And
here they are, successful. Again, the computer scientist at our school said. "We don't need
you people. We can learn the basics of entrepreneurship on our own." And of course, like
Jobs, Wozniak, Gates and Allen, they can, provided they have the other two types of
knowledge in Figure 4.
3. Opportunity-Specific Knowledge, which is to say knowledge about the existence
of an un-served market and where physical resources to serve it might be obtained is the
first of these others. With that type of knowledge Jim Bezos was able to start
Amazon.com through recruitment of people who possessed the fourth type of knowledge.
4. Venture-Specific Knowledge. This is the knowledge of how to produce a
particular product or service. In the case of the Apple entrepreneurs it was how to make a
good microcomputer, and in the case of Gates and Allen it was how to write computer
code. Starting with this they found their way to un-served markets by acquiring
opportunity-specific knowledge. Business general and venture general knowledge they
acquired through seeking advice and recruiting other people.
Neither of these last two types of knowledge applies to ventures in general. They
are specific to a particular start-up. Moreover, as soon as awareness that in their nexus
potentially profitable ventures exist, they quickly become obsolete discoveries. For both of
these reasons schools cannot deliver them, except in rare and, typically, anomalous
situations.
Sadly for us, the last two are generally the most important of the four types of
knowledge for start-up success. They are like maps to unclaimed gold veins, rarely
available, and then only at extremely high cost. The general business and general venture
types of knowledge are, to continue the analogy, like how to shovel and transport ore.
They are necessary, but relatively easy to learn or cheap to buy.
So is there something of real value to entrepreneurs for scholars of
entrepreneurship to study and teach?
I think so, and it's part of our job to add more. To continue the mining analogy,
there are such things as shoveling better, transporting better, smelting better, getting a
better price and parlaying the mine into something valuable rather than losing the venture,
as do many entrepreneurs. Adam Osborne and others spotted and pursued wonderful
opportunities in the early days of the microcomputer industry with great technical
sophistication but went broke anyway.
Another helpful analogy can be an automobile race, the Indy 500. Typically, each
year the speeds get higher in this race due to discovery of ever better techniques, even
after the many decades that have already been applied to refinement. The speeds creep up
to a point where the race becomes too dangerous. Then the officials inject some new
handicap: smaller engine size, restricted fuel composition, reduced intake area, to lower
the speed to a safe range. Consequently, speeds drop. Then it starts to creep up again,
even with the handicap, until again it becomes unsafe, at which point another new
handicap is added, and so forth.
What produces the speed upcreep? Sometimes big breakthroughs, like introduction
of two-way radio for the drivers or controllable spoiler wings, and always many small
things, like better tire material, tiny aerodynamic refinements, and improved coordination
patterns for pit crews.
We have seen both types of improvements also for the practice of
entrepreneurship. There have been big breakthroughs like microcomputers for many
business functions and the web as an electronic vending machine.
There have also been lots of smaller things (LOST is the acronym) like annual
improvements in tax software, more telephone feature options, and revelation of new
tricks available through specialized consultants. For instance, a recent restaurant start-up
in the Seattle area used special consultants not only for architecture and law, but also for
recipe design, menu design, interior design, focus group utilization and staff training. The
venture took two years to design and set up, and then was opened with no advertising.
Within two weeks the waiting line for dinner was two hours, where it has remained. No
doubt much of what the consultants provided was venture-specific. But when and how to
use them may have been venture-general techniques that school can help with.
Inevitably, it is the people in industry who will originate most of the improved
methods for venturing. They, by the millions, are tinkering and trying approaches that will
let enter business more profitably. This represents a massive experimentation effort, with
industry as the laboratory, which academics certainly can't match, but can assist. Our job
must include noticing the improvements that arise from these experiments and helping
diffuse them to other application sites. "Just do it" may have been good enough for the
present century, but in the next one it should not. Instead, the slogan should be "Do it
better than last time." More about that shortly.
The magazines and other media also have this mission, of tracking and reporting
about best entrepreneurship practices, in parallel with us. But for them there is higher
priority on discovery of the occurrences, whereas we are called upon more to codify and
cumulate the information about improved methods so that useful knowledge will ratchet
forward and not be forgotten, only to need rediscovery.
This adds to the content we offer, so it can reach beyond snippets, and also beyond
paradigms for looking at or connecting snippets. It builds a unique content for the field of
entrepreneurship. A likely result will be that other fields will tear off pieces of it to claim
as their own.
5. Balance, Research-wise
In the search for new knowledge that we call research represents we have much to
work on, not just in quantity, but in direction, balance and even underlying philosophy.
Top priority, it seems to me, should be to work on two types of balance that need to be
improved in entrepreneurship research.
The first is topical balance. There is too little attention being given to some topical
areas relative to other topical areas. Graphically, this is illustrated by Figure 5. This figure
depicts the distribution of articles by topic of 1,679 articles from three academic periodical
series; Journal of Business Venturing, (JBV)Marketing at the Entrepreneurship
Interface(MEI), and Frontiers of Entrepreneurship Research(FER) plus Inc. Magazine.
The categories coded along the horizontal axis of the figure are described in Figure 6 and
are somewhat similar but not identical to those of Figure 3.
Figure 5 - Article Quantity by
Topic Area
0
50
100
150
200
250
1
a
2
a
3
b
4
b
5
c
6
b
7
b
8
c
9
b
1
0
b
Inc
JBV
MEI
FER
Topic codes – Please see Figure 6
Article
Count
Figure 6 - Topics Used For Sorting Articles
Code Topic
1. Venturing and Entrepreneurs
1a Occurrence and economics of venturing
1b Entrepreneurs' characteristics and careers
1c Thinking about entrepreneurship
2. Venture Ideas
2a Mental departure in quest of opportunity & ideas
2b Guiding the search for successful ideas
3. Idea Screening
3a Assessing physical and market feasibility
3b Assessing personal fit
3c Strategic vision, design and refinement
4. Venture Planning
4a Forecasting sales, expenses and cash needs
4b Writing and presenting business plans
5. Venture Financing
5a Equity sources early on, including angels
5b Borrowing and banks
5c Formal venture capital
5d Capital from going public (IPO's)
6. Setting Up Ventures
6a Protecting ideas
6b Designing the business legal form
6c Physical location and facilities
7. Help in Venturing
7a Partnering
7b Help from outsiders
8. Starting Up Ventures
8a Getting sales
8b Initiating physical operations and quality
8c Controlling cash
8d Continuing advance of the venture's tech
9. Acquisition Entry
9a Finding and checking out acquisitions
9b Acquisition dealing
9c Entry through becoming a franchisee
10. Downstream From Entry
10a Trajectories of growth
10b Managing growth and corporate venturing
10c Exits from ventures
It can be seen from the bar heights in Figure 5 that there are some significant
differences in distribution among the periodicals themselves. For instance MEI is the
source of almost all the academic articles on getting sales in new ventures (category 8a).
Inc. much less emphasizes articles on venture capital (category 5c), while the
academic sources, particularly JBV and FER seem to highly emphasize venture capital,
even relative to banks (category 5b), notwithstanding that extremely few entrepreneurs
deal with venture capitalists, while virtually all must deal with banks. This seems strange.
More important may be the almost complete lack of attention to other subjects
such as how to find viable venture ideas (2a, 2b), how to check them out (3a, 3b), how to
protect ideas in a new venture (6a) and how to deal with acquisitions (9b). Certainly, these
are important subjects to entrepreneurs, and areas where undoubtedly things can be done
better. So it seems regrettable that they appear to be so undertreated.
By far the most treated, as can be seen from the bar chart, are topics at the two
ends of the chart. The left-end topics have to do with overall occurrence of
entrepreneurship in various economies, plus psychological makeup of entrepreneurs. How
study of those topics is likely to give insights to better techniques of accomplishing
entrepreneurship is not so easy to see, which makes it hard to defend the unbalanced
attention these topics appear to receive.
At the right-hand end of the chart emphasis seems inordinately high on topics
directed toward study of generating and coping with growth in existing companies. Those
topics are of high interest and importance to managers in ongoing companies. But theirs is
not the role of the entrepreneur according Webster's definition. Management of ongoing
companies is a subject with an abundance of literature, research and otherwise.
Entrepreneurship lacks such abundance and is, therefore, where the research is more
needed.
Reasons for the apparent misdirection probably include inertia and resistance due
to the traditional emphasis of management schools, as well as researchers, following the
money. Start-ups generally can't pay for high consulting fees or expensive management
programs, whereas many fast-rising companies can and do. It is always easier to study
companies that are established, because most of the time they are easy to find and they
stay put. Moreover, there is usually information about them in print already from any
number of sources. To study them versus entrepreneurs in action is like photographing a
cow versus a grasshopper on the move.
This extension of the term entrepreneur into the realm of management also adds
confusion. Two people talking about entrepreneurship may have very different subjects in
mind. One may be thinking about individuals or teams who start companies, while the
other may be thinking of executives like the CEO of Chrysler. Perhaps we should develop
a lexicon for the entrepreneurship field, which includes different types of entrepreneurs
having different appellations. One possible set, building upon the list shown earlier in
Figure 2, appears in Figure 7 below and is illustrated graphically in Figure 8.
Concentrating research on individuals and teams who enter independent business,
and in particular on what they do to accomplish that, which is to say shifting focus more
away from the economics and psychology of venture populations, can help add balance.
A second major driver of imbalance is created by academic fashion in
methodology. Using statistics is the proper way to establish representativeness. But in
entrepreneurship representativeness, typicality, normality, the mode, median or mean is
not all we should be interested in. Entrepreneurship is based upon exceptionality.
Entrepreneurs prosper by finding and exploiting anomalies, which is what they and their
ventures often turn out to be, at least until they are up, running and successful, at which
point management, hopefully still creative, and resourceful succeeds entrepreneurship.
Figure 7 - Defining Entrepreneur Types
Name Activity
Starter Enters independent business by creating a new one
Acquirer Enters independent business by acquiring a going concern
Runner Manages a small to medium business beyond start-up
Takeoff Artist Steers a company onto a high growth trajectory
Turnaround Artist Saves a failing company
Innovator Makes something new happen that is not a new company
Champion Supports subordinate innovator
Intrapreneur Takes extraordinary initiative for business unit creation inside
an established company
Industry Captain Runs a big business artfully
Figure 8 - Roles in Venturing Over Time
Starter
Runner
Acquirer
Takeoff
Artist
Turnaround
Artist
Industry
Captain
Company size
versus time
So we should be looking in our research not just for the typical in populations, but
also for the outliers and the range. We should seek to identify and map the arrays of
venturing methods that are effective and how those arrays are caused. That can help
enable the injunction for would-be company starters to change from "just do it," to "do it
better."
Maybe USASBE should each year impanel two teams of scholars and have each
team answer two questions. First, in what ways, maybe for selected industries, is new
venture creation performed better today than it was five years ago? Second, how might
best practices in entrepreneurship be better five years hence than they are today? After five
years, the answers should be graded and one team should be given an award for guiding
vision. This could be continued on a rolling basis year after year to keep our eyes directed
on the course.
6. Endowment
All the tasks mentioned so far require time, money and persistence. It's not enough
to have an effort begin and then be blown away. But that is what has happened repeatedly
over the years. Consider the start-up studies of pioneers in the field like Hoad and Rosko
at Michigan and Collins and Moore at Michigan State. They put those schools at the
forefront then, but that leadership was not continued. Had there been endowments behind
those early and significant research activities, instead of only temporary government
contracts, and had those endowments been written with tight contracts binding them
permanently to entrepreneurship, those schools would almost certainly still be prominent
in the field and we would also have more good research content from continuation of their
efforts.
What the money is for also seems to make a difference. A good thing about those
two studies that I just mentioned was that their aim was to produce published results.
Consequently, their output lasted.
A contrast to that publication emphasis would be previous programs that
concentrated on activity to the exclusion of collection and dissemination of findings about
entrepreneurship. For instance, in the seventies the National Science Foundation spent
millions on so-called innovation centers at several major U.S. universities. Unfortunately,
nobody was contracted to monitor the results independently, so the only reporting of the
experiments consisted of what amounted to applications for renewal of the contracts.
Later, years after the projects had begun and finally ended, an investigation to report the
results in hindsight was mounted, but since it was commissioned by the same agency that
had spent the money, it was not very penetrating. It seems likely that a considerable
amount of learning about what worked well and what did not work was lost. This invites
repetition of mistakes and consequent financial waste.
During the eighties the Canadian national government mounted a couple dozen
entrepreneurship stimulation projects at universities around the country. Again, nobody
was given a contract to monitor the results as a third party, and again we have no results,
that I am aware of, to show for it.
Without sustained effort, all these programs vanished. Very recently, the same
thing has happened at two other universities. At the University of Dortmund in Germany
an outstanding effort in entrepreneurship was going on, including development of new
software, new outreach courses and a major international conference on entrepreneurship
education. The university, however, was less than fully supportive of all this, and when the
prime mover received a better offer and moved to the European Business School near
Frankfurt the Dortmund program completely dried up.
In a similar vein, at Australia’s Swinburne University, an engineering professor
developed an entrepreneurship masters degree program that was producing an impressive
number of start-ups directly from the university. That professor just retired and, I'm told,
the program is being abolished. Another Australian university, Murdoch, may adopt it, but
for how long if there is no endowment?
What should be done? One remedy would be to develop longer-range plans for
financial support, including creation of endowments for entrepreneurship program
development and research. The second is to make sure that when money is given it goes to
entrepreneurship, not to some sort of undesignated purpose beyond simply memorializing
the donor's name. Universities always prefer unrestricted funds. But when they get them
rarely make entrepreneurship the beneficiary.
I'm not a money-raising expert. But we need more of them with specialized
expertise in tax angles that wealthy entrepreneurs can play by contributing to
entrepreneurship programs. We need people who can persuade entrepreneurs to look at
entrepreneurship programs like they might look at college football teams and also as
programs that can help young people who are much like they were earlier on.
7. Liberty
Even with endowed financial support, however, entrepreneurship in universities
still must deal with barriers and constraints that we should keep finding ways to penetrate.
Entrepreneurship in universities has so far been developed as an add-on to business
education, first as an elective course, then more courses, and finally as a concentration,
major or program. So far it has largely been tucked in around the existing core. Its
teachers presently must be approved by established faculty of other fields. Its courses
currently must fit into the existing curriculum, grading system and calendar. It serves the
students who for the most part apply for a conventional business education.
To quote a famous past-president's wife, I suppose there's nothing really wrong
with that. But what might be different if we had started first with a school of
entrepreneurship and then added a few courses for a concentration or major in middle
management?
Would it be a school of art, science or profession? Would it be aimed at imparting
knowledge content, tools and skills or ways of thinking? If ways of thinking, what would
they be and how would the school seek to impart them? What would graduate students
carry with them in the way of not only course content but also venture memories, mentor
memories and perhaps portfolios of their creations such as product designs and
prototypes, business plans, parts of plans, contacts from field studies and ideas about
potential future opportunities as well as plans for continuation of their personal
development and contact networks to enable them more effectively with time to become
successful as venturers and helpers of other venturers?
Is there some reason, other than lack of progress, that there should not be a
graduate school of entrepreneurship in the United States and why it should not be first
class? For that matter, since this meeting is in San Diego, what would be a better place for
such a school than in San Diego?
The San Diego business community, although not as big as those of other major
cities on the West Coast, has a rapidly advancing growth frontier that includes both high
technology and a very active adjacent international border with Mexico that also links it
with other countries in both Europe and Asia. There are many entrepreneurs here locally
and vastly more within commuting distance just up the coast along I-5 and inland up I-15.
Venture capital firms are not here permanently yet, but hundreds of them show up here in
San Diego annually for the technology showcase hosted by UCSD, and local venture
capital firms are bound to arise as the economy grows, particularly in high technology.
San Diego State University has a world-class venture plan contest and an active
entrepreneurship program that is well supported by the community faculty. But it has no
doctoral program and, by the nature of the California State University system, has a
mission that is oriented primarily toward teaching, not research. Those functions are
instead the mission assigned by the state to the University of California system.
But if a new graduate school of entrepreneurship were created nearby, and if
adequate financial support could be raised, then faculty from San Diego State could
participate as members of the new school’s faculty on either a joint or summer basis. They
could also belong to or supervise committees of its doctoral students on relevant doctoral
research.
The University of California at San Diego, like Berkeley, UCLA and the other
members of the University of California system, has the mission to pioneer and develop
new knowledge. It has strong schools in engineering, medicine and the sciences. It also
has an exemplary extension program that is strongly oriented toward new business
ventures. But it has no business school, and the extension program is not authorized to
offer degrees, only certificates. All of this makes it ideal as a collaborator with the local
business schools, as it would also be with a graduate school of entrepreneurship, if one
were nearby. A case in point is its collaboration with the MBA program at the United
States International University here in San Diego, which just began accepting extension
courses from UCSD to satisfy its MBA core.
It, like San Diego State, offers undergraduate and masters degrees in business. In
addition, it has a business doctoral program. But that program is to be cut back, and it is
not in entrepreneurship anyway. So a new graduate school with a doctoral program in
entrepreneurship could be complementary, providing a basis for collaboration.
There is also a business school at the University of San Diego, a small school that
is high in quality. It is unlikely to mount either a major entrepreneurship program or a
research program in that field. But it has two active faculty in entrepreneurship who might
collaborate with a local graduate school of entrepreneurship on doctoral or other research
if the conditions were right.
There are other nearby business schools as well, such as to the north in Vista, Cal
State, San Marcos. That business school serves a region with increasing numbers of start-
ups and could pick entrepreneurship as a direction of future development.
Each of these schools provides important parts to the picture of entrepreneurship
education in San Diego. But their combination still leaves, as opportunities, some gaps.
The existing business schools here either have or are seeking AACSB accreditation, which
imposes some restrictions that an entrepreneurship school might be better off without. A
new school free from accreditation could make unrestricted use of adjunct faculty. It could
offer a one-year masters degree in entrepreneurship without the inertia of traditional
business core courses. It could design its own doctoral program around the special
research needs of entrepreneurship. That doctoral program, by its wide-open nature, might
be able to draw participation of distinguished doctoral mentors in entrepreneurship at
universities elsewhere in the nation in addition to faculty of nearby schools, and it could
include scholastically inclined members of the entrepreneurship community from outside
the academic world as well.
The array of programs that would then be available, including those of a new
graduate school of entrepreneurship, is displayed in Figure 9 following, from which it can
be seen that the addition should be largely complementary and not duplicative.
Figure 9 - Potential Program Offerings With A New Graduate School of Entrepreneurship
in San Diego
Courses Certificate Diploma BS 2 YR MBA 1 YR MSE Ph.D
.
UCSD X X
SDSU X X X
USD X X X
USIU X X X X
GSE X X X X
In the longer term such a school, if done with sufficient freshness, imagination and
quality, might even be eligible for adoption by UCSD, which would thereby become the
only top quality university in the world with a graduate school of entrepreneurship and no
business school, at least provided it did not wait too long for the adoption. That, it seems
to me, would make an interesting page in the 21st century history of the United States,
and one that everyone concerned could be proud of. It could also pave the way for
emergence of other such schools in the U.S. and elsewhere.
A graduate school of entrepreneurship in America could have happened in this
century. But so far it has not. To give it a good start money would clearly be required,
millions to do it right, and such amounts usually take time to get. So maybe such a school
will not begin in the few months left of this century. But if not it should in the next one,
and the sooner the better, and if not in San Diego, then still someplace in the U.S.
To Be Done
In summary, Arnie Cooper is right. The field is young, has come a long ways in a
short time and is likely to keep on building, because its driving forces are continuing, for
the foreseeable future. But there is also a tremendous potential for doing more than is
likely to happen automatically. We have to drive it if we are going to maximize the win
from it.
I have lived long enough to reach the belief that many opportunities are bound to
be exploited sooner or later, and if not by one person or group or institution, then by
another. But there are also opportunities that will never be exploited within our experience
even though they could be. Maybe skateboards, snowboards and windsurfers were
inevitable, but they certainly could have been done earlier. The same is true of the internet,
Fed Ex and jet airliners, not to mention products like Trivial Pursuit, Pictionary, the
Happy Massager and Magic, the card game. All of these could have been done sooner, or
not at all. Initiative made the difference.
Our initiatives should recognize that although the entrepreneurship field is growing it
still is short on both legitimacy and permanence. Further clarification of student market
segments and finer tuning of curricula for them can help, as can more creative thinking
about fresh paradigms for understanding the subject. Research efforts should be guided
more toward areas that are thinly treated and with an eye toward discerning and
disseminating the small improvements industry invents for performing entrepreneurial
processes better. Emphasis should be reduced on study of central tendencies, means and
modes in favor of more study about ranges and exceptions to be found in the tails of
sample curves. We should develop a better science of our own for raising money and
making sure it gets applied to entrepreneurship, not for just doing it, but for learning how
to do it better. And someplace in the U.S. the next century should see an independent
graduate school of entrepreneurship that, if its success warrants, can be the first vessel of a
new fleet.
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