As most of us know, times are tough for many right now. Even those in “safer” professions (police officers, teachers, etc.) are facing budget cuts and furlough days. Those in the private sector are dealing with cutbacks and lay-offs. If there is a silver lining to our current economic situation, I feel it is many are starting to really analyze their jobs and some are going off on their own and pursuing careers they are passionate about.
Vivek Wadhwa of The Washington Post recently wrote an article about Five Myths of Entrepreneurs. Since many are going out on their own right now I thought it would be a good time to discuss these myths.
Myth 1 – America’s typical tech entrepreneurs are in their 20′s
This is simply not true. In a survey of 549 company founders, researchers found that the median age of those that started companies was 40 years old. In fact, twice as many were over 50 as were under 25. 70% were married and 60% had at least one child. There are some that started their own business at a young age – Mark Zuckerberg of Facebook immediately comes to mind- but the fact is many don’t venture out on their own until they are older and get tired of working for someone else.
Myth 2 – Entrepreneurs are like top athletes: They are born, not made
The research on successful entrepreneurs shows that 52% of them were the first in their immediate families to start a business. Around 39% had an entrepreneurial father and only 7% had an entrepreneurial mother. This shows that you can become a business owner even if your parents did not have a business mind.
Myth 3 – College dropouts make better entrepreneurs
Many of us know the story of Bill Gates and how he dropped out of college but the research shows that the business owner’s level of education directly corresponds to the rate of how successful his/her business will be. It is always fun to hear stories of people who made it despite going against the norm but the truth shows that having a college education is important when starting a business.
Myth 4 – Women can’t cut it in the tech world
Girls now match boys in many mathematical tests, 140 women enroll in higher education for every 100 men, and women earn more than half of all bachelor’s and master’s degrees and nearly half of all doctorates. In fact, women do very well running a business. According to research by the venture capital firm Illuminate Ventures, women-led companies are more capital-efficient, and venture-backed companies run by women have 12% higher revenue. Many buy into this myth because of old stereotypes. Many parents don’t encourage their daughters to start a business (it’s a man’s world) and many venture capitalists assume a woman will not be able to devote herself full-time to company once they have children. This myth is slowly going away. There was a recent article in Time Magazine that shows that men are now helping out around the house as much as women. This is good news for me as a father to two young daughters.
Myth 5 – Venture capital is a prerequisite for innovation
Research shows that less than 5% of venture capital goes to early-stage companies — those taking the risk of developing innovative products. The Kauffman Foundation ran an analysis of companies on the Inc. magazine 500 list and found that only 16% of them raised venture capital. Instead of seeking the next big thing, many venture capitalists look for companies that are already doing a good job and seem like a good risk.
I found this article very encouraging. Many have doubts about following their passion and creating their own business. They believe some of the myths listed above and create roadblocks to realizing their dreams. As with many things, don’t always believe the hype.