Can Entrepreneurship Be Taught?

January 31, 2010 - Author: Peter Mui - Co-Founder of the MIT $10K Competition

Among the many features of the MIT $100K Entrepreneurship Competition is that it acts as an invaluable sandbox for students testing their mettle as would-be entrepreneurs: in that sense, the competition is a teaching tool.

But can entrepreneurship really be taught? Since the competition started in 1990, lots of course offerings and degree programs, at MIT and other schools, have emerged claiming to provide the knowledge and hone the requisite skills. The assumption is that one can emerge from these programs fully qualified to be entrepreneur.

Programs that claim to groom entrepreneurs waver in popularity. Many of these programs started at the height of the dot com frenzy, only to see enrollment drop and interest wane after the internet crash as people returned to more conventional career paths. More recently, educational programs offering life science-specific entrepreneurship emphasis flourished, but they’re off their peak as well. Now, green tech and energy seem to be all the rage.

So for the purposes of this discussion, I’ll contend that there are three core qualities to a successful entrepreneur: 1) lowered sense of risk aversion, 2) an ability to ignore the true personal opportunity cost, and 3) passion.

1) Risk assessment / Risk management: Entrepreneurs discount risk less steeply than others; there’s a “willing suspension of disbelief” as an entrepreneur’s subjective risk assessment tends to discount the reality of what’s probably ahead against the vision of what could be assuming all goes according to plan. Risk analysis can be taught, but in almost all startups an objective risk analysis would conclude that the venture is too risky to pursue. Why do entrepreneurs forge ahead anyway in the face of objective data to the contrary?

2) Ignoring the opportunity cost: In the less economically developed areas of the world people become entrepreneurs because they simply have no other choice: there’s no well-developed job market for them to join. But for most people with the academic credentials and other resources to enroll in an entrepreneurship program, taking traditional paid employment provides an expectation of higher income overall than setting out on your own in a startup. Do entrepreneurs weigh the security of a long-term position with an established firm differently? Are they more willing to accept uncertainty overall? (It’s true that many companies now claim to be looking for employees with entrepreneurial qualities, so these programs may be training people to be “entrepreneurial” rather than being “entrepreneurs” — maybe that’s a topic for a follow-up post?)

3) Passion: This is perhaps the key defining property of an entrepreneur: the determining factor that sets them apart from the crowd. To try and fully define passion here would be an effort in frustration, but we all know it when we see it: it’s the determination to persevere in the face of all sorts of adversity, to refuse to give up, to refuse to take “no” for an answer.

Can these qualities be taught? Sure, anything can be taught, esp. given the caliber of students typically entering these programs.
But is it being taught? My gut feel is that entrepreneurial programs serve a valuable role providing people who already had the “right stuff” an opportunity to self-select, a way to congregate, and make connections. They also teach important business nuts and bolts. But truly creating an entrepreneur might involve incorporating additional academic disciplines it currently doesn’t, or even a kind of training that’s totally different to anything that higher education’s used to offering now.

Do you agree? What can the MIT $100K Competition, MIT, the larger educational process, and society overall — do better to improve outcomes?

Peter Mui is founder of the MIT Entrepreneurs Club and co-founder of the MIT $10K Entrepreneurial Competition. He’s been involved in numerous startups, taught entrepreneurship at UCSF, and has judged business plans and mentored teams at MIT, UCSF, UC Berkeley, UC Davis, University of San Francisco and Babson College.