10 Entrepreneurship myths
Media and politics have come to realize the grave importance of entrepreneurship to create prosperity, innovation, and growth. However, the increasing popularity of entrepreneurship has coincided with the rise of many myths and misunderstandings regarding its meaning.
Prof. Nikolaus Franke, Academic Director of the professional MBA in Entrepreneurship & Innovation at the WU Executive Academy and head of the Institute for Entrepreneurship & Innovation at WU Vienna, explains why they are all wrong.
Myth 1: An Entrepreneur is a “Lone Hero”
Wrong. The media frequently reports about entrepreneurs like Richard Branson, Elon Musk, Mark Zuckerberg, and Jeff Bezos – people who, unlike some other celebrities, have really done something for society. Their teams and employees are hardly mentioned. People easily gain the impression that entrepreneurs are lonely superheroes who make all decisions and achievements single-handedly. Entrepreneurship, however, is almost always a team performance.
Myth 2: It is crucial for entrepreneurs to have a brilliant idea
Wrong. Entrepreneurship is a journey. In the beginning, there is often an idea. In the course of the process and in exchange with potential customers, partners, suppliers, and financiers this original idea is almost always changed. It is precisely the ability to be flexible and the willingness to review and evaluate one’s ideas that are decisive success factors for entrepreneurs.
Myth 3: Entrepreneurs are hipsters and rock stars, entrepreneurship is a glamour lifestyle
Wrong. Entrepreneurship is primarily hard work. A vision is not realized “nine to five”. There are two reasons for this misjudgment of the lifestyle of entrepreneurs. Firstly, the permanent contact, exchange and networking with clients, financiers, and potential partners are essential for entrepreneurs to be successful. These activities are easily and falsely confused with pure amusement and social visits. Secondly, entrepreneurs have a higher level of life satisfaction and motivation than other individuals. They accomplish their aims by creating something new and making independent decisions, that is what makes people happy.
Myth 4: Entrepreneurs are mainly interested in money
Wrong. Empirical studies show that the main motivation for successful founders is the joy of realizing their own ideas. The enormous growth of the social entrepreneurship sector proves that entrepreneurs do not correspond to this stereotype. Contests such as the Social Impact Award or the activities of Ashoka clearly demonstrate how entrepreneurial energy can solve social problems such as poverty, hunger or educational deficits.
Myth 5: It is crucial for an economy to have a high start-up rate
Wrong. The rate alone reveals little. The decisive factor is that these start-ups are potentially growth-intensive. A single successful start-up in a growth sector such as biotechnology may have more significant economic policy implications for jobs and economic growth than dozens of newly established flower shops or pubs.
Myth 6: The survival rate of foundations shows how founder-friendly an economy is
Wrong. A high survival rate can also be the result of a high proportion of low-risk start-ups. The economically important and innovative growth-oriented start-ups necessarily mean risk. The best planning strategies and the greatest competence do not prevent mistakes from occurring. The development of the market, competition and technology can never be designed or predicted perfectly.
Myth 7: Entrepreneurship is being promoted in Austria, yet there is a lack of transparency
Wrong. In Austria, there is a lack of large funding sources. Support services are still not sufficiently developed in the economy and society as a whole. Although it should be mentioned that plenty of funding measurements have been implemented in Austria in the last few years, they are mainly related to later founding phases when the team has already been established and the business model has already been developed. Every educational institution in Austria should provide early support and establish initiatives such as the WU Founding Center.
Myth 8: The state should specifically promote the growth-intensive start-ups
Yes and no. On the one hand, the decisive growth and prosperity effects of growth-oriented start-ups are the basis of innovation. On the other hand, it is practically impossible to recognize “unicorns” such as Facebook, WhatsApp or Zalando from the beginning. State support should make it a priority to ensure that the greatest possible number of start-ups is created.
Myth 9: Entrepreneurship is only for company founders
Wrong. Both, an “Entrepreneurial Mindset” and concrete entrepreneurial skills are indispensable for practically every career track. This can be seen as the most important qualification to have in the 21st century. Attributes such as risk-tolerance, performance orientation, creativity, flexibility, openness, and responsibility are crucial with increased digitalization. If someone wants to succeed, the early identification and evaluation of business opportunities as well as the development of the strategy, organization, financing, and marketing are essential. Entrepreneurship should, therefore, become part of the core curriculum of schools, universities, and other training institutions.
Myth 10: Entrepreneurship can not be taught. The entrepreneur is born.
Wrong. Successful founders are like Olympic athletes: Without talent, even the best training won´t suffice to mold a 100-meter track champion. In the past one-hundred years, however, there have been no Olympic athletes, whose aptitude has not been promoted and improved with years of targeted and rigorous training. The same is true for entrepreneurs: without the existence of certain basic conditions, nothing is possible. If, however, these conditions are met and entrepreneurial skills are discovered, promoted, and trained as well as further enriched by knowledge, contacts, and experiences, the probability of success increases exponentially.