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.
[email protected]: You said not much funding comes from venture capitalists or angel investors.
How are entrepreneurs getting the money they need to execute their ideas?But you think the incubator isn’t having the desired effect that a lot of people are hoping for. Schramm: Again, empirically, very few companies come out of these incubators. I’m in the middle of writing an essay about incubators, and the premise is that as we turn towards 3% and 4% GDP, and much lower rates of unemployment and much higher demand for well-trained people, no one is going to want to spend time in an incubator. And that’s a really important part of the drama of becoming an entrepreneur.In the book, I make the case that the most effective place to learn how to be entrepreneurial is to go into a big company. More innovation happens in big companies than, for example, university laboratories. [email protected]: You give real-world examples in the book, including the story about vacuum cleaning company Dyson. James Dyson was an industrial designer by background, and he came to the view that vacuum cleaners had been a technology that hadn’t moved very far. If your idea clicks and you can make it work, and you haven’t taken your company public — that is, you still control it — you’re going to work there for the rest of your life. It’s an important point, particularly for people who are in higher education.My book is developed off 10 years of research that we did at the Kauffman Foundation.If you look at all our older major corporations — U. Steel, General Electric, IBM, American Airlines — and then you look at our newer companies like Amazon, Apple, Facebook, Microsoft, none of these companies ever had a business plan before they got started.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.His new book, , says the true blueprint for success requires innovative ideas, real-world experience and keen judgment.Schramm joined the [email protected] show, which airs on Sirius XM channel 111, to explain why inventors and entrepreneurs should light a few matches and get on with it.(Listen to the full podcast using the player at the top of this page.) Carl Schramm: It’s the basis of much of the teaching about how to start a business, and so much of what’s taught is basically conjecture.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.