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Think back to the business world of 20 or 30 years ago. Among academic corridors and in major corporations, the term "entrepreneurship" was whispered as a dirty word.
When I came to the UK 19 years ago, it was almost impossible to imagine a parent suggesting their child became an "entrepreneur". Back then, there was a simple formula for success in business: graduate from a top university or business school, secure a corporate career and receive a gold watch when the time eventually came to retire.
How things have changed. For many parents in 2019, entrepreneurship isn't merely a viable career option, but a life choice they wished they had perhaps pursued themselves, envisioning the potential for more meaning in their working lives. In Silicon Valley today, there are more start-up founders aged 50-plus than there are under 25.
At present, one in 10 adult Americans is involved in setting up a business and, in California's Palo Alto (often regarded as the heartland of the entrepreneur), the figure rises to approximately one in four.
In the UK, start-up figures may not be quite as high, but there is clearly an entrepreneurial appetite, with one in 15 adults involved in a start-up and 10% of a typical LBS cohort going on to start their own business.
Why the shift? From a US perspective, individuals who may never have considered a career in entrepreneurship three decades ago have witnessed the phenomenal success of entrepreneurs like Steve Jobs and Michael Dell. In the UK, wannabe innovators have the example of Richard Branson for their inspiration.
Part of this surge in entrepreneurship relates to the strategy of downsizing many large companies followed during the nineties by deciding to pull out of certain industries in a bid to improve efficiency.
At this point, talented business professionals at the top of their field (and on track for a gold watch) sometimes found themselves without work or income. Today’s generation seems more interested in maintaining control of their own destiny.
“But isn’t entrepreneurship inherently risky? one might ask. In California, there is a saying universally relevant for entrepreneurs: "failure is an education on someone else's dime." The faster you can kill a bad idea, the better off you are.
There is a preconception most entrepreneurial ventures begin with a business plan with a staple in the corner. In reality, most businesses are started by a pioneer who finds a customer with a compelling problem. The entrepreneur says to the customer: "I'll solve this problem if you pay me."
At London Business School, we encounter many examples of "evidence-based entrepreneurship". We cannot simply hope a customer will go out and buy our products, unless we roadtest this idea to gather concrete evidence.
If you discover your concept isn't a worthwhile proposition, you can be grateful you've learned this information quickly, rather than wasting months (or even years) on an idea that doesn't make sense.
A colleague from Stanford University reminds me of a story relating to a group of students who had the idea to sell day-old sushi at half its typical price. In theory, they had it all: the price point and the market were right.
“There is clearly an entrepreneurial appetite, with one in 15 UK adults involved in a start-up and 10% of a typical LBS cohort going on to start their own business.”
To test whether there was an appetite for this notion, the students decided on an experiment. They convinced a shop on campus to place a 50% reduction sticker (dubbed “Second-Day Sushi”) on a sample of sushi (which was, in fact, perfectly within date).
Guess what? Hardly anyone bought the allegedly day-old sushi and the students quickly realised their idea wasn't viable. Evidence matters, especially when quickly and easily obtained!
London Business School had the experience to support entrepreneurs with the challenges we know they are going to face. First off, it's pretty clear they are going to have difficulties managing cash, attracting or retaining talent and identifying their target markets.
As a tutor, I often chuckle at the outcomes of our entrepreneurship summer school. On the first day of the programme, all the participants have the opportunity to present a new business venture they believe is feasible.
At the end of the programme, the students pitch again as to whether their original idea was feasible. By this stage, approximately half of those on the course say: "thank goodness I've gone through this exercise because I sure don't want to do that."
Another question we often hear relates to opportunities in emerging markets. Is it possible to become an entrepreneur in Argentina, Cuba or Bangladesh? And, if an idea is really meaningful there, is it possible to get it to scale?
The answer is a resounding yes and there are enormous opportunities in these markets. Why wouldn't it be possible to start and grow a business from one of these locations? Procter & Gamble’s main global supplier of toothpaste tubes is, in fact, an Indian company.
One Argentine software entrepreneur proves you can become a world leader regardless of your location. By identifying a compelling problem that cable TV operators had in provisioning their services, and providing an even more compelling solution, his company is now one of the major players in its niche sector. His clients now include some of the largest cable operators from all over the world.
Another key to becoming a successful entrepreneur is to surround yourself with like-minded individuals who are thinking of starting their own businesses. Perhaps, you could take a shared office space and immerse yourself in the entrepreneurial culture.
These days, success in the world of tech start-ups is driven by speed and execution, rather than geography. If you serve your customers well, you prosper. And, don’t forget, the internet has a global reach, which means entrepreneurs can harness the benefits of technology wherever they are in the world.
Should entrepreneurs avoid starting a business during recession? Not necessarily. If your key concept is sufficiently innovative, economic downturns can provide opportunities to flourish.
For proof, we have only to look at two entrepreneurs named Hewlett and Packard who started their business from a tiny garage in Palo Alto, California during the depths of a recession.
In fact, there are a number of advantages to launching a business during a recession. First, resources such as rent and talent are available more cheaply, which can provide a massive boost during the fledging stages of a business when cashflow may provide a challenge for the organisation's founders.
Second, many larger companies automatically regard a recession as a period of retrenchment and cut budgets or shy away from innovations that could upset the status quo.
On the other hand, there is a case for launching a start-up amid boom times in the economy. During red-hot economy periods, people have money to spend and this can make it easier to gain customer traction.
If your idea is strong enough, you shouldn't worry about the economic cycle, but focus on getting your solution to market.