It seems as though every young person with a laptop and an idea is encouraged to set up a business these days. But there are dire consequences for those who don’t make it, and for the economy at large, writes Ezra Butler.
Countless times a day, I see stories about entrepreneurs or tips for entrepreneurs invading my Twitter, Facebook and email. The word is splattered across almost every website I visit. Conversations with friends, business contacts and strangers in Virgin America First Class are casually peppered with it. Nicki Minaj mentions it in “Super Bass”.
I am not totally innocent either, as my current job, as listed on Facebook, includes it.
It is not a stretch to suggest that we are currently living in a “golden age of entrepreneurship”, as a 2011 post by Bryce Roberts, co-founder of O’Reilly AlphaTech Ventures, suggests.
Entrepreneurship is heralded as the great and powerful force that will propel us out of the Depression. A popular category of headline in 2011 was some variant on the “Can Entrepreneurs Save X” model, as far afield as Pakistan and Greece.
Over 200 colleges and universities worldwide offer an undergraduate degree in Entrepreneurship. There are countless incubators, accelerators, workshops, events, conferences, publications, websites, magazines, blogs, forums and organisations created to facilitate streamlined entry into the world of entrepreneurship.
The consequence of all this is that the term “entrepreneur” can be applied to anyone these days. A recent GigaOm article, entitled “Why 2012 will be the year of the Artist-Entrepreneur”, listed which new trends, technologies and services will assist authors, musicians, comedians and others earn money from their creations.
A similar article in The Next Web by Courtney Boyd Myers profiled platforms like Etsy, Goodsie, Skillshare and Chloe + Isabel that enable “creative entrepreneurs” to “make money doing what [they] love on the Internet”.
I ran a simple series of comparative queries on Google to examine how mentions of the word “entrepreneur” have changed over the past decade, both in the news and on blogs.
Blog mentions of the word “entrepreneur” jumped six-fold from 2006 to 2007 and a staggering twenty-two-fold from 2010 to 2011, while mentions in news articles rose roughly 140 per cent and 300 per cent in those years, respectively.
Understanding the jump in 2007 is not too difficult: the world was witnessing the rise of Facebook, with Mark Zuckerberg at its helm. While Steve Case wrote us emails on AOL, and Tom was our friend on mySpace, Zuckerberg was viewed as a celebrity Wunderkind who made the news and found himself in that liminal space between being personality and corporate figurehead – one he still occupies.
Moreover, Zuckerberg represented the aspirations of the Millennial generation. Steve and Tom were figureheads, plain and simple. Mark was an entrepreneur, through and through. For the current crop of tech entrepreneurs, he became the new basis for comparison.
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This trend is reminiscent of the use of “engineer” in the former Soviet Union from the 1950s to the 1980s. Polytechnic institutions were created and everyone was taught the sciences in order for them to be well-rounded enough to work in any science-related field: factory work, really. In the spirit of the Communist Manifesto, education would only be provided for a utilitarian end.
What Ivan knows that Johnny Doesn’t, a comparison of the Soviet and American educational curricula for children, was published in 1961 by American educator Arther Trace. He suggested that Soviet children were actually more well-rounded than their American counterparts, despite the fact that American educations circumscribed the humanities.
Unfortunately, research was released in the Literaturnaia Gazeta by Russian scholars in 1966 that proved the output of American engineers to be 3.6 times greater than that of Russians. Another scholar, a Professor Kapitsa, estimated the productivity of each Soviet engineer be roughly 50 per cent of that of an American engineer.
All of this is a roundabout way of making the point that, when the barrier to entry to achieving a title is lowered dramatically, the resulting influx dilutes the original expectations associated with the term.
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The new entrepreneur doesn’t value an education in the humanities. In addition to the aforementioned myriad of schools who have started an “entrepreneurship” track, venture capitalists are becoming actively hostile to traditional educational paths.
Notable examples are Peter Thiel with his Thiel Fellowship, intended to encourage students to spurn university, and YCombinator’s self-confessed track record of investing in founders with highly technical backgrounds. One young entrepreneur remarked recently in a presentation aimed at other young entrepreneurs, “I didn’t need college to teach me how to code, so I dropped out.”
In the former Soviet Union, the top seven per cent of students in the arts were siphoned off at an early age and placed into specialist schools. Driven by the drive to be functional and utilitarian, these schools existed to create Communist performers to play patriotic songs, Communist artists to paint portraits of Marx, Lenin and Khrushchev, and Communist teachers to prepare the next generation of indoctrinated artists and performers.
Reports from visitors included:
“High technical skill was obvious, but creativity was absent. The training may be described as purely representative art without imagination.”
“Pupil presentations revealed an extremely high level of precision, emphasis on perfection of movement, teamwork, and timing, but no opportunity for individual self-expression.”
Today, entrepreneurs visit sites like Mixergy or the new, advice-laden TechCrunch, read books like Eric Ries’ The Lean Startup or – shudder – Guy Kawasaki’s The Art of the Start, attend mixers to find co-founders and locate mentors in the Seedcamp or YCombinator mentor pools.
To be successful, they fall back on beautifully designed infographics, pamphlets and checklists with best practices of previously successful entrepreneurs.
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The Soviet educational system was based on the concept that every student was equal and therefore should be taught the same subjects at the same level. In comparison, Millennials in the United States are considered the “trophy kids”, given awards for participation and not only for excellence.
As Ron Alsop wrote in 2008: “Millennials also want things spelled out clearly. Many flounder without precise guidelines but thrive in structured situations that provide clearly defined rules and the order that they crave.”
I was recently referred to a new start-up called Startup Plays, which promises “[to help you] hit the ground running instead of researching, and produce a result in record time that makes it look like you’ve done this kind of thing a thousand times before.” Ghastly.
Much of the innovation currently seen falls into an “X for Y” archetype, as M.G. Siegler satirised recently on his personal blog. To contrast, in September 2000 David Burnett wrote an article on entrepreneurship, in which he describes entrepreneurs who aren’t innovators:
For example, entrepreneurs in [less developed countries] rarely produce brand new products; rather, they imitate the products and production processes that have been invented elsewhere in the world (typically in developed countries).
I am reminded of the top seven per cent of Russian students who were taught how to copy, without passion or humanity, the works of the masters. This may shine some light on why Russians have only won 27 Nobel Prizes as opposed to Britain’s 120 or the United States’ 333.
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At the beginning of 2011, President Barack Obama announced the Startup America programme. As a logical solution to create new jobs in America, he called on people to become entrepreneurs.
In a earlier era of Depression, President Franklin D Roosevelt had created the New Deal, to invent jobs through public works programmes: building national parks and playgrounds, schools, hospitals, railways and roads.
While America needed many of these things constructed, the raison d’être of the programme was to raise the nationalistic fervour of Americans, especially those working “to build America”.
In the same spirit, President Obama declared: “Entrepreneurs embody the promise of America: the idea that if you have a good idea and are willing to work hard and see it through, you can succeed in this country.”
The term “entrepreneur” has now, to its discredit, become synonymous with the resurrection of the American Dream. No longer do people hope for a house in the suburbs with a white picket fence and to contribute to their communities. They wish to be an entrepreneur. It is the dream they can afford to hope for.
The unspoken truth is that entrepreneurs cannot legally collect unemployment benefits, which means that for each individual who decides to declare himself an entrepreneur, that is one less unemployed American.
Many scholars call the “New Deal” an economic failure, one that did not accomplish its goals. It was smoke and mirrors designed to give the appearance of progress.
“Startup America” is similar, and so is the disastrous encouragement of every man woman and child to aspire to entrepreneurship. It has become an industry, commoditised like every other.
Entrepreneurship has become the Ritalin of the masses, focusing their efforts on doing something “positive”. The difference being, there isn’t even a feverishly drafted assignment ready at the end of the binge.
Many who describe themselves as “entrepreneurs” have no job or career prospects on the horizon, thus pay nothing in taxation and are economically valueless.
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At a time when the middle class is disappearing, it helps every university graduate or newly laid-off worker is led to believe that they, too, can become the next billionaire founder. But to achieve this new American Dream, people are eschewing education and originality.
America is mimicking less-developed countries, in the preposterous hope that an under-educated citizen with “a good idea” may create the next big advance “in medicine [or in] advanced manufacturing”. In reality, even the very best are creating little more than “the x for y”.
The entrepreneurs of yesteryear failed and succeeded without a safety net. They were not offered grants of $150,000 simply because they were accepted to a program. They found mentors and partners organically. They learned from their mistakes and did not insinuate themselves into an artificial ecosystem. They took risks.
In the last five years, the American “entrepreneur” has become like the Soviet-Russian “engineer”: platitudinous and potentially disastrous.