Is the Entrepreneurial Development Ecosystem (EDE) Ignoring Entrepreneurs?
At a conference on the future of EDE, anything remotely related to new business seemed to fall under the EDE umbrella, including:
· Venture Development, Entrepreneurial Development and Social Development: Venture development is the Tech-VC model based on new innovations. Entrepreneurial development is the entrepreneurial skills based model. Social development attempts to solve social problems with entrepreneurial strategies. All have been discussed as part of the EDE.
· Small businesses and venture capital backed companies: Small businesses and venture capital-funded unicorns were discussed as perhaps the two types of entrepreneurial for-profit companies.
· Profitable enterprises, social enterprises and lifestyle issues. The assumption seems to be that entrepreneurial skills can help find new solutions to any problem.
The Entrepreneurial Development Ecosystem has two underlying themes:
· Venture development, which is based on opportunity and capital, includes idea innovation, strategy, pitch, angel capital, and VC. VCs replace the entrepreneur with a professional CEO after the potential of the opportunity or strategy is clear
· Entrepreneurial skills, including the expertise to start, launch and grow the business into a successful business. Using financially savvy skills to grow with or without VC, the entrepreneur stays on as CEO and controls the venture and the wealth it creates. These skills can help anyone, anywhere.
Here are some key questions for Business Schools:
· Does the EDE Business School have the resources and expertise to do justice to all of the above (venture development, entrepreneur development, social development, small business, etc.) or should it focus on that? And if so, where?
· Is the Business-School EDE focused on Entrepreneurial Skills for students and entrepreneurs, or does it also include Venture Development, assuming it is the same as Entrepreneurial Skills?
Here are 4 reasons why Business-School EDEs should focus on entrepreneurial skills, not entrepreneurial development.
Skills are the foundation of any business. VC is the basis for nothing
· Skills are the foundation of any business, be it a growth company, a small business or a social enterprise. VC is the basis for nothing. “Everything” it adds (according to some entrepreneurs) is capital after proof of potential and fails in about 80% of funded ventures.
· Skills are not dependent on VC because entrepreneurs go to Aha without VC. VC relies on skills to take the venture to Aha where VCs can see evidence of potential.
Venture Development focuses on enterprises. Entrepreneurial skills focuses on entrepreneurs
Venture Development focuses on product innovation, pitch competitions, angel capital, minimum viable product and VC. The assumption is that VC will finance promising ventures and replace the entrepreneur with a professional CEO. So Venture Development does not have to worry about financially smart strategies or skills to grow without VC
· Entrepreneurial skills focuses on the needs of the entrepreneur. It teaches the proven skills and financially savvy strategies of unicorn entrepreneurs to take off without VC and grow with or without VC after takeoff. VC helps very little after Aha. Entrepreneurial skills can help anyone before and after Aha. These skills bridge the gap from idea to Aha when the potential is clear.
Venture Development needs VC. Entrepreneurial skills require expertise.
Venture Development looks for a viable product and strategy to attract angel capital and VC as entrepreneurs are replaced.
· Unicorn-Entrepreneurship leverages financially savvy skills, strategic innovation, smart capital and launch without venture capital. Entrepreneurial skills can develop self-sufficient entrepreneurs. Not all entrepreneurs can and do not want to attract a team and capital.
Venture Development helps few. Entrepreneurial skills help everyone.
Venture Development and VC work for ~20/100,000 entrepreneurs, for about 6% of billion dollar entrepreneurs who received early VC and were replaced as CEO, and for about 3% of VCsalmost all of whom live in Silicon Valley and are said to earn about 95% of VC profits.
· Entrepreneurial skills can teach self-sufficiency skills and smart strategies from Unicorn entrepreneurs, which has worked everywhere and for everyone. It has helped about 94% of billion dollar entrepreneurs who avoided or postponed VC and remained in control of their ventures.
MY TAKE: There isn’t enough capital to fund all of the world’s entrepreneurial hopes. Instead of focusing on capital-intensive entrepreneurial development, business schools can focus on financially savvy entrepreneurial skills to help anyone develop more successful ventures everywhere – with less capital. Guess what? Even the VCs can benefit – there will be more unicorns to fund them.