Entrepreneurship is a key part of the solution to ending poverty and social inequity, promoting women’s empowerment and implementing business solutions to the world’s environmental challenges. But the Global Entrepreneurship Monitor (GEM) 2019/2020 Global Report[1] found that entrepreneurship education “at school level is universally regarded as the least well-developed, weakest” factor for entrepreneurship to flourish. Unfortunately, this is especially true for developing countries,
Figure – The extent to which training in creating or managing SMEs is incorporated within the education and training system at higher education such as vocational, college, business schools, etc. Source:
Teaching Entrepreneurship
The Business Plan is a traditional methodology that stimulates students to look at all aspects of a venture. It usually involves at least a company description, marketing, operations and financial planning. The student is usually allowed to work on his/her own business ideas, but there is hardly any testing or validation involved, therefore, its validity is doubtful[4,7]. Therefore, in class most plans turn out fictitious; although students are asked to envision presenting their plan to a potential investor or a bank, in order to receive financing for their plan. Universities might use different templates to guide students through the process. The writing of a Business Plan has been the most applied teaching method for entrepreneurship for decades.
On the contrary, Lean Startup and Lean LaunchPad arose from practice and a more professional context, main literature includes Blank and Dorf[5], Blank[4] and Ries[2], complemented with the conceptualization of business models by Osterwalder[8]. The business model is used to sketch out initial hypotheses (“guesses”), which need to be validated in the market through a process of customer interaction, using tools like interviews, observations and experiments.
Blank and Dorf (2012) have set up the Customer Development Manifesto, which consists of the following principles:
- There are no facts inside the building, so go outside
- Combine customer development with agile development
- Failure is an integral part of your search
- Make constant iterations and pivots
- No business plan survives the first contact with a customer, so use a business model canvas instead
- Design experiments and use tests in order to validate your hypothesis
- Agree about your market type. It changes everything
- Startup metrics are essentially different from metrics in existing companies
- Fast decision making and cycles, rhythm
- Everything is about passion
- Startup jobs and job descriptions differ a lot from those in big companies
- Be conservative about money until you need it to scale. Then spend it
- Communicate and share what you have learned
- The success of customer development starts with the support you can get for it with your teammates and partners
Effectual Thinking[3,6] takes the development of an entrepreneurial mindset as a basis. It uses principles like using resources that are directly accessible, building on collaborations and investing only what the entrepreneur is willing to lose. Effectual thinking is the name Sarasvathy[3,6] gave to the distinctive way of thinking she found amongst highly and sustainably successful entrepreneurs in her extensive research. This way of thinking was remarkably present in the majority of entrepreneurs she investigated and, surprisingly, quite contrary to the way of thinking that is taught in Business Schools. It is a way of thinking that emphasizes opportunities and builds upon possibilities at the current moment, rather than planning for resources that still have to be acquired somehow.
Sarasvathy (2001, 2008) has described Effectual Thinking principles that represent its essence:
- Bird in the hand. Focus on the steps that you can take right now, things that are available at an arm’s length. So do not plan in a detailed way for an uncertain future, but focus on possibilities in the current moment.
- Affordable loss. Weigh your choices and investments carefully, only invest what you are willing to lose.
- Make lemonade. Do not hold on to a plan forcefully, but use unexpected turns to improve upon your ideas.
- Crazy quilt. Look for networks and collaborations with people who believe in your ideas and are willing to invest something of themselves in it. This way ideas might also take new directions.
- Pilot in the plane. Make sure the initiative is in your hands, focus on things that you can influence. Do not be a passive “passenger”.
Entrepreneurship Education in Universities
Nowadays, most universities teach entrepreneurship explicitly through entrepreneurship courses and also provide support through entrepreneurship centers. Teaching methodologies at the university level range from traditional methods like the Business Plan to more modern approaches such as Lean Startup[2,4,5] and Effectual Thinking[3,6]. The quality of education is generally considered high as universities are usually well-funded with resources.
Entrepreneurship Education in High Schools
Entrepreneurship education is increasingly being introduced in secondary education. In some countries, it has even become compulsory for high schools to teach entrepreneurship. However, approaches to entrepreneurship education and the quality of such education at the high school-level varies considerably. In some contexts, access to expertise lacks greatly and entrepreneurship professors end up focusing on necessity-based instead of opportunity-based entrepreneurship. There is still a lot of room for development in this entrepreneurship education space.
Outside the formal education setting, adult learners of any entry level or budget may have access to informal entrepreneurship education through books and online courses delivered through a multitude of MOOCs and other platforms are available to students. They may also gain access to various types of education provided through entrepreneurial collectives and coworking spaces on a low-entry level. For the most committed, the best way to learn about entrepreneurship might be through incubators and accelerators, where mentors are available to help entrepreneurs get their business off the ground through personalized training and coaching.
Entrepreneurship Games in Education
The Playground for Entrepreneurs Board Game aligns perfectly with a classroom method based on Lean Startup or Effectuation approaches to entrepreneurship. The game is a perfect starting point or introduction to more substantial parts of the class. Professors or teachers can facilitate meaningful conversations, whilst students are playing the game in order to assure maximum learning and fun. Students will become more and more entrepreneurial using the game, with the right mindset to explore opportunities.
References
[1] Bosma, N., Hill, S., Ionescu-Somers, A., Kelley, D., Levie, J., Tarnawa, A. and the Global Entrepreneurship Research Association (GERA). Global Entrepreneurship Monitor 2019/2020 Global Report Retrieved from GEM Global Entrepreneurship Monitor (gemconsortium.org)
[2] Ries, E. (2011). The Lean Startup: How Constant Innovation Creates Radically Successful Businesses. Portfolio Penguin.
[3] Sarasvathy, S. (2001). Causation and Effectuation: Toward a Theoretical Shift from Economic Inevitability to Entrepreneurial Contingency. Academy of Management Review, 26(2), 243–263.
[4] Blank, S. (May 2013). Why the Lean Startup Changes Everything. Harvard Business Review opgehaald van https://hbr.org/2013/95/why-the-lean-startup-changes-everything
[5] Blank, S., & Dorf, B. (2012). The Startup Owner’s Manual: The Step-by-Step Guide for Building a Great Company. K&S Ranch Inc.
[6] Sarasvathy, S.D. (2008). Effectuation: Elements of Entrepreneurial Expertise, Cheltenham, UK: Edward Elgar.
[7] Osterwalder, Workshop in Bogotá, September 2-3, 2013.