Before we can build a great entrepreneurial program, we need to clearly state the definition we want to use for our program. A recent report of a provost commission focused on the University of Michigan’s definition of Entrepreneurship I’d like to address this. Key parts of this post come from the report which is posted here.
There are lots of definitions of entrepreneurship out there – some make sense, and some do not – and very few are actually useful in academia. A good definition for entrepreneurship helps students, professors and administrators to rally around key values and it helps everybody understand why some activities are prioritized and others are not. It further helps traditional academic disciplines how to link into entrepreneurship and innovation education. That is particularly important at the University of Michigan. With its nearly 100 top-ten programs, U-M provides an almost unmatched richness of breadth of entrepreneurial talent and opportunities. But that richness can only be materialized if these units actually collaborate towards a common goal.
The basic challenge academic units have been struggling with is the tension between an overly narrow and an overly board definition of entrepreneurship. On one hand, entrepreneurship could be defined as “starting and growing companies.” That may be a crisp definition but it runs afoul of both employers of our students and also of large parts of the on-campus community. Recruiters of existing companies like Google, SpaceX, IBM, and also of more traditional companies like GM and GE, tell us about the importance of entrepreneurial talent in their ranks. Here is what we hear: “We need to find a way to constantly reinvent ourselves”; “We need employees that can talk to the CEO”; “We need employees who question the status quo”; “We will only survive if we innovate!” Thus, it would be doing our students a dis-service if we only focused on the startup process. Our faculty across the university see entrepreneurship and think new ideas and innovation as the most important characteristic of entrepreneurship, the ability to generate social value and make the world a better place, an action-based implementation. Yes, business creation is part of that, but that’s not where it stops.
The other extreme of entrepreneurial definition is to equate entrepreneurship to “creative problem solving.” That, of course, includes all the broadening aspects of the definition by employers and by the on-campus community, but it misses the point. Fundamentally, a broad definition like this basically leads to a relabeling of already performed tasks and teaching, without adding much value at all. Is everything innovative we teach in entrepreneurship, most engineering classes may be classified as entrepreneurship, because they are about solving problems and new technological solutions? Thus, the definition has to be broader than “starting a business,” but narrower than “creative problem solving.”
Therefore we believe, U-M, entrepreneurship should have three defining characteristics and one measure of true success:
1) Serve a relatively large external constituency
Entrepreneurship is primarily about an external community, not about an individual. It’s about service and it’s about service at scale. An entrepreneurial venture is not just about you and your four house-mates, or you and your sorority – it has to be large enough so the target audience is not under your control – a truly external.
2) Propose a product or service, broadly defined, that the external constituency would appreciate, based on an in-depth understanding of the culture, values and needs of the constituency.
Here is the truly personal aspect of entrepreneurship. It’s the coupling of something new that is generated within a person or a small team that is focused towards the outside per 1. These creative and innovative ideas are informed by knowledge of the outside. In the CFE, we focus on these two parts using a process called customer development, a term coined by our friend Steve Blank.
3) Include the design and implementation of the product or service, recognizing all of the physical, economic, and social constraints that would impede adoption, or at minimum a plan for doing so that has resolved all questions of feasibility and cost.
We are strong believers that entrepreneurship is action based. We learn about entrepreneurship through implementation of a plan and by continually including feedback from the target audience that is to be served. In the CFE, we most often use a process called the Business Model Canvas, an active way to search for a business model that connects our creative idea (defined under 2) with the target audience (defined under 1), while taking into account all constraints from financial, legal, societal and other constraints.
The forth part of entrepreneurship is the kicker and perhaps the hardest to learn – you get to choose your target audience, you get to choose your key innovative idea to implement and even how you want to go about this – but, you do not get to choose whether you are successful!
4) Be evaluated by the external constituency itself, not just the team or other inside parties (e.g. an instructor).
For entrepreneurship to deserve that title there has to be external validation. It’s not primarily measuring inputs and actions of the entrepreneurs – it measures reactions and impacts of the entrepreneurial venture. Entrepreneurial ventures are outward facing, and serve others. Note that in a business context serving others can generate personal profits, but that is not a necessary condition for our definition.
There are a number of key ingredients to entrepreneurial education. They spread over many different units, demonstrating that entrepreneurship by our definition is a perfect fit for our excellence over breadth here at U-M. Among others, entrepreneurial education should include:
- The ability to develop an in-depth “anthropological” understanding of a population of people.
- The ability to identify significant problems to be solved in that population.
- The ability to generate creative alternative concepts, based on technology or otherwise, for solving the problem and to methodically evaluate and choose the alternatives with the best balance of feasibility and value.
- The ability to scale a solution to serve a big community, often requiring new technologies, new implementations and new partners.
- The ability to conduct market or audience research.
- Project management, the ability to plan and manage the implementation of the chosen alternative effectively, across its physical, social, and economic dimensions.
- Understanding of the language of business and also some legal constraints.
- The interpersonal and leadership skills required for team problem solving and implementation.
- The self-presentation skills that allow for successful representation to the wider world.
- An understanding of the importance – and mechanisms – for an evaluation of the solution by the population at which it is aimed.
According to this definition, entrepreneurial projects can be a new tech startup, obviously. But, it can also be a social venture, as described here, or an artistic project. In other words, entrepreneurial projects are the very projects we at U-M are most proud of: big projects that make the world a better place!
Can you imagine how big and impactful U-M entrepreneurship can become once we all have this common vocabulary across all disciplines, and we deploy the excellence of many academic departments and talented professors to teach towards these objectives and enabling entrepreneurial projects we know of and many none of us have even dreamt about!