My first scientific publication is out, this is what it said
How to get 22% survival rate in your entrepreneurship course
Hooray: my first publication is finally online! It’s a chapter in a book on entrepreneurship education.
If you want the theoretical route you can read the paper, you can download it here (PDF download).
But for those who don’t like papers, here’s a non-academic take with some extra bonus rants.
What does a good entrepreneurship program do?
There are three types of entrepreneurship education at universities.
Theoretical exams don’t make you a better entrepreneur per se. It’s an academic endeavour, to make sure students read the papers. It might be that you don’t like that type of education, and I’m not a fan of exams like that either.
There’s value in the discussion of theories; furthermore, I believe writing of essays allows one to deeply understand theories. But, if you want to be a better entrepreneur, quite some academic theories are hard to apply directly.
Nevertheless, my beef is mostly with the business plan courses. This is because it gives students the impression that writing a plan for 10 weeks is time well spent in building a venture. Most plans are built on assumptions and 90% of the plan can be scrapped after the first customer contact, if that ever happens.
I’m a fan of venture-building courses, even though those courses are rarest in universities (a US 2012 study found about ±15% of courses are like that).
Why am I a fan of such a course? Because it teaches students how to launch a business. In my course, we’ve got a 22% survival rate: meaning 22% of ventures launched in the course are still alive. Fuck business plans.
The early stage is a design problem
If we want students to get practical knowledge on doing a certain task, we should understand the nature of said task. Here the task is getting through the first phase of launching a business. What is that first phase like?
It’s utter chaos. There are so many things unclear. You hardly understand what product you are building and for whom. A lot of things need to be determined. It’s like the start of thinking about what to cook tonight. The options are endless.
Theoretically speaking, characteristics of such a situation are high unclarity, high uncertainty and high undeterminedness. These characteristics are a problem because it hinders you to get further. Without defining your product, you will not build a business.
Such a problematic situation with high unclarity, uncertainty and undeterminedness is what academics (and designers) call a design problem. A design problem can only be solved by interacting with it.
It’s different from a mathematical problem, which you can analyse from behind your desk. You can’t analyse your way out of a design problem.
For example, you can’t determine and validate your customer segment without interacting with potential customers. You can declare your customer segment, but it will be 1) top down bullshit and 2) a superficial definition of your customer segment.
Venture building as design, not design thinking
You don’t just design a product. You are designing your startup as you talk with customers. You are designing your startup as you talk with suppliers. You are designing your startup as you make your first revenue model to check if you are profitable. Designing is this immersive activity that aims to integrate it all.
A couple of weeks ago I showed you how Flowline through continuous engagement with their customer defined their customer and made decisions on their business model including value proposition. As I said last week, making decisions is progress.
This is why I am a fan of venture-building courses. Because it’s immersive, they get the right data to make decisions and make actual progress. They get as close to actual entrepreneurial experience as you can get, by launching actual businesses through design.
So we should include design thinking in entrepreneurship courses? Those 5 steps to design cool things? Nope, design thinking and design are not the same thing.
Design thinking is a (management) fad: a simple recipe to arrive at a solution. It was created as a reflection of what a full-fledged design process looks like.
Today, it’s used as a cookbook for designing funky and playful products. In practice, it’s an hour-long session where you play with post-its. It mostly designs bad products such as the Playpump, a well-intended but awful-performing water pump for Africa.
The biggest issue with most applications of the design thinking method: it doesn’t get beyond ideation, such as in world saviour circle jerks as the SDG Global Goal Jams where the result is a bunch of post-its with ideas.
Why so cynical, Jeroen? Isn’t it good that people are trying to design a better world? There’s nothing wrong with the intention. However, in a lot of cases, the people that use a method like Design Thinking are very new to designing.
By focusing so much on ideation, millions of people are taught that an idea is all it takes. Any founder will tell you that an idea is at most 10% of the value you generate.
It’s similar to my beef with business plan writing courses. It sets the wrong example.
6 things startup programs get wrong
You should not enable design thinking, you should enable designerly behaviour. That’s interacting with an open mindset with customers and other stakeholders. It should embrace a fluidity around designing the entire startup, not just the product.
Here are 6 things that most courses get wrong.
1) Lack of ‘out of the building’-mentality
I’ve seen programs where the first customer reach-out is in week 8. In the first 4 weeks, they analyse markets like an MBA program. Then they design solutions based on assumptions. The odds of designing something that could work, or avoiding Swiss army knives, are low.
I’ve spoken to course coordinators that say: “Yes, we try to motivate them to reach out, but they don’t do it”. Well teacher, are you grading them on customer contact? No? Guess what students optimise for? It’s about incentives.
I designed and taught a course where I set the requirement to do 4 experiments in 4 weeks to pass the course. Guess what: 90% of the students ran 4 experiments.
2) Lack of mentorship
Research has shown that coachable founders with mentors outperform those without mentors. If you are designing a business for the first time, you lack a conceptual idea of what should be integrated into a startup.
In quite some venture-building courses, there’s limited 1-1 input from experts. Mentors speed up the process. If you have a course of 10 weeks, and students don’t speak to any mentor for 10 weeks, their pace will be very low.
For a lack of teaching staff, sometimes students are asked to give feedback to each other. Although this is valuable, this can’t replace talking to someone who has built 3 ventures already.
3) Too little time
Building ventures takes time. There are programs that try to squeeze venture building into 4 hours per week. 3 hours of workshop, 1 hour of doing homework. It’s like a side program, nice to have.
They won’t learn about actual venture building. Most likely they are filling a Business Model Canvas with assumptions over 6 weeks. Whoop dee doo. Don’t expect venture building if you do this.
4) Boilerplate, linear phased programs
Launching a startup is chaotic. What I’m seeing in my data is that week one can contain discussions on customers, competitors, products, revenue models and legal stuff. They don’t come in neatly, one by one in a logical order.
What is hard about startups is that the chaos is unpredictable. That means that for some startups, the revenue model will be most important where the product is quite clear and vice versa.
I’ve seen programs that don’t allow for flexibility on this. They force you through a boilerplate. This makes the boilerplate relevant for about 40% of the batch. The rest is either behind or ahead of the curve.
A program can have planned workshops, but it should have enough time for founders to do what is most important for their business right now. That will not always align with the planned workshops.
5) Focus on SDG or world saviour problems
As I often write, having a good problem to solve is important (1,2,3,4) yet also very hard. As a result, some educators supply problems of our society such as income inequality or ecological issues for startups.
I’ve heard feedback from students in my faculty that they are so done with trying to fix the world’s inequalities or other SDGs with innovations.
Some of these problems are extremely hard to solve, such as income inequality, let alone by a group of inexperienced students. The result is that they either get demotivated or depressed because they realise they can’t solve the problems.
Or they cook up lucid pipe dreams of solutions that are impossible to realise. What helps is to either get actual problems from industry or let students come up with their own projects, rather than forcing them to solve a specific problem.
6) It’s all about motivation and momentum
This is the hardest. Compulsory programs force entire faculties into entrepreneurship. If you don’t want to build a business, a business will not be built.
Most struggling student startups lack motivation. They wing it like a course that you just need to finish. This is unavoidable. However, to decrease this, you can give students freedom. Freedom to choose is what motivates students.
Like the previous point, having them work on their own idea or problem can increase motivation. Frequent expert or mentor meetings give energy to teams. Out of the building activities, although scary, gives students positive feedback from customers. This is extremely motivating.
Do you know what isn’t motivating? Completing homework assignments each week that distract from venture building. Make sure that homework assignments contribute to venture-building and not abstract learning goals.
Note: Not all points I’m making here appear in the publication. But I felt, while I’m at it, let’s give some extra pointers.
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