By Andrew Yang, CEO & Founder, Venture For America
I know dozens of entrepreneurship professors at campuses around the country and they’re almost universally great guys (they are typically male). I love what motivates them. They’re truly dedicated to developing young people.
But I’ve also spoken to hundreds of students groping for next steps. And I have to say that, at this point, it’s clear that entrepreneurship education, as it’s currently practiced, does not work.
The numbers are stark. Entrepreneurship classes and programs in colleges around the U.S. have quadrupled in the past 25 years. Meanwhile rates of private business ownership for households under 30 have declined over 60% during the same period. So, the more we teach entrepreneurship, the fewer young people actually start businesses. This has profound implications.
There are a number of schools that are producing real businesses. Northeastern, MIT, and Stanford come to mind, as well as a number of graduate business schools. But for most students at universities around the country, studying entrepreneurship is a pleasant intellectual diversion, not a professional choice, path, or commitment.
This is not the professors’ fault. It’s largely due to the structural difficulties in teaching entrepreneurship.
1. Action-oriented, not knowledge-based
Let’s say I were to teach you and 100 other people how to raise $1 million. I break it down step-by-step. You take excellent notes and are able to recount my lesson in full detail.
Can you then go out and raise $1 million?
Probably not. Or if you can, you probably could have before I did anything.
Starting a business is similar to an athletic endeavor, like serving a tennis ball. Telling you how to do it is useless. You actually get better through a combination of practice, coaching and repetitions with money on the line.
Do you really want to know how to raise $1 million? Go out and raise $100k from friends, family and fools. Then make everyone’s investment pay off. And then raise $500k. And then make that pay off too. After that you should be able to raise $1 million with no problem.
What if a professor were to stand in the front of class and say, “Half of you will fail this class, as partially determined by my rolling dice at the end of the semester.”
Most of the students would leave and the professor would be reprimanded and probably fired.
Yet, this is a reasonable depiction of what would happen in starting a business. Most businesses fail. And most every entrepreneur has a major failure or two in their early days. Bill Gates started a failed company called Traf-o-data before Microsoft. Sam Walton started a failed retail store before Wal-Mart. Selling is a bit like being a Major League baseball player — even if you’re good you don’t get on base a majority of the time. The trick is to get enough failure under your belt early so that you can get up and try again.
Schools don’t tolerate failure. Our students can’t accept it.
The best entrepreneurship course would give everyone who enrolls an F. Whoever takes it probably has the makings of a decent entrepreneur.
One student said to me after taking an entrepreneurship class – “It made me hesitate to start a business because it seemed so daunting, like there were so many things to do and know.”
If someone could start a million-dollar business, what would he or she do?
They’d drop everything and go do it. They would probably be nowhere near a classroom.
What you need most of all to start a business is courage. Conviction. Confidence. Belief. Heart. Spirit. Will. Perseverance.
Entrepreneurship classes tell stories about people who have these qualities. But they don’t convey them. Tacitly, the act of being in the classroom pushes one further away from actually taking on the challenge.
So how do you teach entrepreneurship?
In a word, apprenticeship. At Venture for America, we match top performers with early-stage companies for 2 years. Our Fellows have a front row seat to what it takes to raise money, sell something new to customers, and make tough decisions. More than 25% of our alums go on to co-found a company within a year of completion. Real companies, real responsibilities, real success and failure, real money = real entrepreneurs.
The more real you make it the better. The best programs push students out of the classroom, get businesspeople with real problems, and give strong teams an actual chance to launch and operate with access to real angel investors. Go out and get some customers.
The fundamental question is one of resources. Ideally, we’d give every entrepreneurship student $100k and a few years and let them have at it. The Dorm Room Fund invests $2 million a year in student-run ventures, as an example of something that works. Instead, we give $100k loans to law students, and then wonder why there will be 176,000 unemployed and underemployed law school graduates by 2020.
Let’s get serious about teaching and training entrepreneurship both in and outside the classroom. Our young people desperately want it – and it would be a tremendous boon to an economy that needs more new companies to take shape and create jobs in communities around the country.
This article was firstly published in Forbes.
About the author
Andrew Yang is the Founder and CEO of Venture for America, a fellowship program that places top college graduates in start-ups for 2 years in emerging U.S. cities to generate job growth and train the next generation of entrepreneurs. Andrew has worked in start-ups and early stage growth companies as a founder or executive for more than twelve years. He was the CEO and President of Manhattan GMAT, a test preparation company that was acquired by the Washington Post/Kaplan in 2009. He has also served as the co-founder of an Internet company and an executive at a health care software start-up. He has appeared on CNN, CNBC, Morning Joe, Fox News, TIME, Techcrunch, the Wall St. Journal, and many other media outlets. Andrew was named a Champion of Change and a Presidential Ambassador for Global Entrepreneurship by the White House for his work with Venture for America and one of Fast Company’s “100 Most Creative People in Business.” He is a graduate of Columbia Law and Brown University. Andrew’s first book, “Smart People Should Build Things,” was published by Harper Business in early 2014.