16 March 2013

The Popularization of Entrepreneurship is Already Underway

Shark Tank is reality TV / drama / comedy / technology / business advice show mash up. Each week various entrepreneurs make a proposal to investors. It is the highest ranked Friday night show and its viewers have grown from 4.2 million in the first season to 6.4 million in this, its fourth season. Tim Sae Koo, founder of Tint, writes about how what he learned from watching Shark Tank helped him to get his startup funded.

I don't doubt that there are a number of stories like Tim's. As entrepreneurship becomes more visible, more people will consider it as a choice. McDonald's spends nearly a billion each year in advertising because they know that we only choose from the menu we're aware of: if you don't know about something as an option, you simply don't pursue it. Shark Tank is just one of the more obvious ways that entrepreneurship is entering the mainstream as a choice for the average person.

Meanwhile, outside of TV land, the Internet is abuzz with entrepreneurial stories, resources, and organizations. Shark Tank lets viewers vicariously experience what it means to pitch ideas or be a venture capitalists. By contrast, Kickstarter lets actually lets people actually be venture capitalists, funding projects they believe in.  Susan Jones from Melbourne has the blog Ready Set Startup! that shares stories and strategies of successful startups. Startup Social has created a platform that allows entrepreneurs in LA to connect. Paul Barron, at rethink  is offering videos on business innovation. And these are just a few of the folks who have begun to follow my twitter account in the last week. (And of course there are folks who continue to hone their skills in this new economy, folks like Cody McKibben and Dan Andrews who are simultaneously creating and being created by a new generation of location-independent entrepreneurs, in the process creating a new economy that transcends both old practices and national borders alike.)

The internets are alive with stories, strategies, collaborations, plans, small businesses about to become huge, ideas about to become real, and people who are teaching each other things that no one even articulated decades ago. The obscure is becoming common and the unknown is getting mapped. We are at a stage of entrepreneurship akin to the stage of exploration when Columbus was taking inspiration from Marco Polo's book of adventures.

What people don't realize is that the success rate of these efforts only has to be in the single digits to transform the world as we know it. Imagine this scenario: 100 entrepreneurs try startups. One goes on to create a company with 10,000 employees. The result? We end up with 100 employees for each entrepreneur - even with a success rate of only 1%. And as social entrepreneurs can tell you, business entrepreneurship is just part of the story: there is not a segment of society that will emerge unscathed from the  popularization of entrepreneurship: education, religion, and government will all be changed - indeed, transform is not hyperbole in the context of what will happen in the next couple of decades.

Most people are still wandering the mall unaware of the tsunami of change that will follow from the popularization of entrepreneurship. (A recent article of mine about this here and my book, The Fourth Economy, here.)

The Industrial Revolution was transformative. Starting in 1700, for the first time in 6,000 years, incomes began to rise. One reason for this is the math of capitalism. As Benjamin Franklin put it, "Money makes money and the money money makes also makes money." Compound interest is powerful. Wealth that increases by 1% a year will double in 70 years; wealth that increases at 7% a year takes only a decade to double. This math represents the phenomenal rise in wealth since the birth of Franklin in 1706.

The math of the entrepreneurial economy is even more impactful. It is the 1 in a 100 that leads to a 1,000. That is, the one successful entrepreneur out of 100 aspiring entrepreneurs who goes on to employee 10,000. We've never seen anything akin to the popularization of entrepreneurship, a force that could make this sort of math more common.

If you are a young parent, it is likely that your child will grow up to consider entrepreneurship as seriously as you considered college. Wrap your head around the impact of that. But that is the essence of progress: what was once rare becomes common.

Stay tuned. The world is just going to get more interesting.
ABC's promo here:


Susan Jones @ ReadySetStartup said...

Great article Ron.

The momentum in entrepreneurship is amazing and I agree with you that we are looking at a movement that can be transformative across many sectors and countries of the world.

People are flocking to entrepreneurship because it gives them personal options out of situations which are becoming unbearable: whether it's an entrepreneur in a developing country seeking their way out of poverty for their family, a parent seeking a way to work more flexibly around her family, a skilled professional who has been made redundant and can't find another job or a Gen Y with an idea who wants to test their mettle instead of working for the man.

I am watching the startup momentum in my local area rocket. Startup meetups here have gone from 30 people attending 2 years ago to over 300 currently. Entrepreneurship is definitely seen as an option by more people.

What does concern me in these observations, is to make sure that women are not left behind in this new revolution. I constantly see a focus on the male dominated area of technology startups when there are viable businesses being built in other sectors as well. The panels and speakers at meetup events are often exclusively male and I watch women at these events deciding entrepreneurship is not for them because there is no one telling stories they can relate to.

In reality, there are thousands of women starting businesses - they just happen to look different from those so often reported on sites like TechCrunch and funded by VCs.

I would like to see the whole startup movement become more inclusive, both of women and minorities and of non-tech startups. I'm sure it will happen because entrepreneurship is too important and transformative - we leave out groups to the world's detriment.

Ron Davison said...

Love the note, Susan. And what a fascinating observation: a rise from 30 to 300 in just a couple of years.
I wonder when we'll finally hit a big transformation like this (democracy, entrepreneurship, etc.) without the big lag for minorities and women.

Susan Jones @ ReadySetStartup said...

Soon I hope! :-)