Are entrepreneurs born or made? It is nurture over nature? Is the theory or practice of entrepreneurship a better teacher?
With business schools, accelerators and incubators multiplying like mushrooms on super-compost, you might be forgiven for assuming the battle is won in favour of the theory. They are financially bound to favour theory when it comes to the discussion of theory of practice of entrepreneurship.
The expansion of teaching entrepreneurship reminds me of the growth of the interior design industry in the 80’s and 90’s. Coming from the side-lines to be one of the most-talked about industries, led in part by television programmes. And a big, big money spinner. Small surprise everyone wants you to believe that in theory or practice of entrepreneurship, theory wins hands down.
And as with interior design, when an industry grows that fast, many people jump on the bandwagon, taking advantage of people’s desire to join the industry and opening colleges and in this case accelerators and incubators. All hail that they are the best chance you have of joining the industry, that the theory or practice of entrepreneurship debate is already won, with theory coming out a necessity.
I saw a very wise blog by Oliver Woolley of Envestors who I had the pleasure of interviewing a few years ago recently, concluding that these establishments were in dire need of regulators. Just as some design schools emerged with minimum training or knowledge and relying entirely on their network and market need, so has the entrepreneurship training market blossomed. No regulation means at best extremely mixed quality of delivery. Would you choose a school for your child that operated outside a regulated body and had no obligation to report its results?
In the interior design industry, all it took was asking your buddies to come and speak, a bit more networking to throw some top names into that mix, some money for glossy marketing and you were up and away with a leading “college”. It is identical watching many of the entrepreneur courses emerge in an identical way.
Small surprise that everyone I spoke to on accelerators and incubators for articles and books (for example Ranzie Anthony of Athlon in Scale for Success or Shem Richards of Goldilocks Suit in Start for Success – all report the same thing: that the true value they got out of going to accelerators and incubators was the network they built up.
But not a great advert for the theory winning the theory or practice of entrepreneurship debate.
Theory or Practice of entrepreneurship – advantages of theory
While developing a peer network to help you on your journey or even developing an unrivaled little black book of contacts in the investment world might be massive bonuses on your entrepreneurial journey, they cannot possibly come under the heading of theory.
Certain things are undoubtedly valuable to understand. An accountant I knew taught me how to do a cash flow forecast on the back of an envelope early in my business career. I have never forgotten it. It gave me a basic understanding of how cash flow worked in reality that no course has ever come near.
On another financial course, the greatest value I came away with was an understanding of how different people learn and understand things, words, shapes, patterns. With finance in this case, we digest information in different ways. I understood for the first time that as a leader, it was hugely relevant to share information in different formats. The gain from that was colossal. Can I remember what was actually being taught that day? Sadly not.
Occasionally, we all come across a great teacher, someone with an outstanding flair for storytelling and bringing the relevance of the subject alive. Those lessons, relevant or not, stay with us. But the majority of classroom-speak is short-term gain, especially if not applied.
The pros of practice
If you know you are untaught, you are relatively unsurprised as an entrepreneur that everything is a massive learning curve. You try things, you test them out, you fail daily.
If you have gone the theory route, you might assume it is a different story. But while you may have done a great deal more planning, and absorbed quantities of information, the reality is that nothing will have entirely prepared you for the reality.
Ask any entrepreneur and they will almost without exception tell you that for years at least they felt as if they didn’t know what they were doing. You can sit in a classroom and drive a car, even play games and use simulators, but it is still not the same as the reality.
For me the contest between the theory or practice of entrepreneurship is over before it has begun. And practice wins every time.