A finely crafted, tightly defined, highly detailed business plan seems like a perfectly rational tool for getting your entrepreneurial ideas off the ground. Schramm, an economist, Syracuse University professor and former president of the Ewing Marion Kauffman Foundation — a non-profit that encourages entrepreneurship — says that crafting a business plan is one of the biggest misconceptions about how to start a company on the right footing.
It’s also where you learn all the skills that make a business work, where you’re exposed to what scale looks like in a business. He was using a vacuum cleaner and noticed that the more you used it, and the dirtier the dustbin got, the less power it had. His wife was a teacher, and he lived off a much more modest income. When he began to push his product out, no companies in the United States or England wanted any part of it. They become places where your own creativity works, and you can keep at it. Students in universities are programmed to think that somehow people who work in the government or in nonprofit or NGOs are somehow more creative.
This is critical and this is experiential knowledge. This became the question that triggered his search. They resisted it because they were making a lot of money on selling paper bags for conventional, old-fashioned vacuum cleaners. When it became successful in Japan, American and British companies tried to steal his design. The best part of Dyson’s story is he never had outside investors. They’re like the people who take art and art history and design in college, or people who write music.
I said, “Holy smokes, if I want to really make this work and actually change the world, I can’t do it by writing an academic paper.
I have to start a business.” [email protected]: How should we teach our kids about entrepreneurship? Because if you look empirically at where entrepreneurs come from, if they have formal training, it’s not in entrepreneurship.
So, I largely view the creation of a business plan as something of a waste of time.
The third problem is that it seems to make starting a business somewhat like a cookbook.And the whole schema, including the notion of a business plan as the formal way to teach how to start a business in a college classroom, is geared to 20-year-olds.Much of our mythology is that unicorn companies are started by people, like Mark Zuckerberg, who are in their 20s.Schramm: One reason people can become entrepreneurs at midlife is they turn to their own savings, their own assets, to friends and families for loans.By the time you’re 40, which is the average age at which people start businesses, you’ve settled your student debt. You’re likely to have a spouse who has a job, which is a huge protection if you start a new company because she or he has health insurance and other benefits. [email protected]: In the book, you also talk about the incubator.Schramm: I don’t think [the current curriculum] can be tweaked. It’s in engineering or the STEM subjects, the technical subjects. At MIT, there’s one professor in the business program there who teaches entrepreneurship.Many, many more entrepreneurs come out of MIT because it’s an engineering and a technical school. But it doesn’t matter because if they didn’t teach it at all, these schools would be producing many, many new businesses all the time.I’ve seen students who are passionate about having a web app for frying pans. I’ve judged business plan competitions at the college level and seen the same idea come up five times.Invent a sensor for a frying pan, and it tells you on your phone when your eggs are cooked.But the reality is, the vast majority of people who start businesses are middle-career people who have been surprised by the fact that they actually had an idea, and their idea was good enough to build a business around.Another thing wrong with how we write about entrepreneurship, how it’s taught, is that somehow people set out to be entrepreneurs as if they set out to be a dentist or an accountant.