March 24, 2016

Why Teaching Entrepreneurship is Critical

Why Teaching Entrepreneurship is Critical

Half of the S&P500 will be replaced over the next 10 years at current rates of churn.

187 companies in the list today first entered it in the past 10 years alone.

Long standing incumbents are being replaced by companies such as Facebook, Amazon, Google, PayPal, eBay, EMC, Netflix, and Salesforce, among many others. Driving this disruption is faster, cheaper and ubiquitous internet access, Moore’s law, advances in data science, the cloud and rock bottom business startup costs.

There’s also a new breed of companies who haven’t yet hit the S&P500 that are having a huge impact on technological progress and human evolution. Companies such as Elon Musk’s Tesla and SpaceX are reinventing the way we consume energy, travel and explore the cosmos. Not only that but the impact that electric cars and innovations such as the Powerwall can have on our environment can not be understated. The Airbnbs and UBERs of the world are democratizing the way we access almost anything.

In healthtech, companies like Surgical Theatre are bringing flight simulation to the operating room to improve surgery success rates, ReWalk is helping people with spinal cord injuries to walk again while uMoove’s face and eye tracking capabilities help people with disabilities control technology and empower themselves to embrace technology and ultimately get more out of life.

Agriculture employs 40% of the world’s population and generated $120.6 billion for American farmers in 2013 - as such, improvements in farming methods can have a dramatic effect on both western and in particular, developing economies. Companies such as The Climate Corporation,

Granular and Tule are changing the way farmers work for the better, materially increasing and optimising crop yields while materially decreasing manual labour and resource waste.

Microfinancing companies like Oradian are vastly improving the opportunities and lives of people in developing countries by empowering them to build their own businesses and radically improve their earning power and lifestyles. Mobile payment vendor MFS Africa make it easy for workers in Africa to move and access their cash quickly and easily whereas they previously had to trek for hours through barren and dangerous lands to get to city centres - not only presenting a massive waste of time and opportunity cost but often resulting in physical degradation and harm on the perilous trek to and from the city.

People who run these companies see the world differently. They challenge “the way things have always been done around here”, they move quickly, they experiment and take risks, they measure relentlessly, they scan the landscape for opportunities both near and far, they connect these opportunities, they’re astute networkers, their curiosity doesn’t subside, and above all, they have a complete disregard for the common man’s definition of what’s possible.

They make sure that the companies they build and the people that work for them also embody these values.

The world is moving too quickly to stand still. According to Peter Diamandis of Singularity University, in 2001 it cost $5 million to start a company, in 2011 it was just $5,000. The microprocessor transistor count in 2015 was over 5.5 billion, it was less than 1 billion in 2011.

All of this means that a startup with a small team, a relentless focus on the customer and a problem, a fail fast approach to product development, with access to better technology than multinational corporations had several years ago, can play and disrupt companies with 1,000 times the resources who insist on operating under yesterday’s model.

Yesterday’s model of course refers to looking at things through a lens of absolute certainty. What’s the business case, how long will it take to build, who’s the market, what are the features, how much will it cost...what’s the ROI?

But in a world that moves as quickly as it does today, this model doesn’t work, and only ever lends itself to safe decisions that result in minor, incremental innovation - because truly disruptive innovation can not answer these questions, there are simply too many unknowns.

And the only way to uncover these unknowns is to move quickly, take risks, experiment, measure relentlessly and embrace the impossible. Sound familiar?

While there’s no shortage of startups and emerging high growth companies tackling challenges related to healthcare, education, environmental sustainability, agriculture and economic development in the third world and so on, they are in the minority.

The majority of resources are still locked up by organisations who refuse to take bold bets.

In the US, Government expenditure alone accounts for 41.6% of GDP while S&P500 companies account for about 13% of GDP - the majority of this spend is framed by old world thinking.

Take large bets, slowly.

Avoid failure at all costs.

Avoid risk.

This is testament to an education system that rewards the ability to recall facts, punishes failure and doesn’t focus anywhere nearly enough on critical thinking and problem solving. And in the corporate world we’re no better. Shareholder concerns, short term reporting, cookie cutter performance reviews and metrics like NPV ensure we only ever focus on sure things - which is never disruptive.

Can we afford future leaders to think like yesterday’s?

Can we afford another generation of risk averse leaders, taking safe bets while sitting on massive budgets with which they could achieve so much more, not only for themselves, not only for their company but for the wider good.

Imagine a world where leaders thought a little bit more like Elon Musk and did just a little bit more with their budget? We’re not proposing throwing out the old business model which is after all where companies make money today, rather we’re proposing the carving out a bigger piece of the pie for the exploration of disruptive, game changing innovation.

After all, billions are wasted on failed IT projects that go nowhere, due to the very fact that they embrace the old model of certainty based decision making - as such, they are complex, deliver little value to customers and often result in overblown budgets. Gartner found that these were some of the key reasons why Government IT projects so often fail.

Teaching children entrepreneurship is not only critical in a world where 60% of today’s jobs will be replaced in 10 years time, it’s also critical to pushing the human race forward tomorrow and moving us towards economic and environmental sustainability and prosperity for all.

Innovate or die.

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Steve Glaveski

Steve Glaveski is the CEO and Co-Founder of Collective Campus which he established to help companies and their employees to create more meaningful impact in the world in an age of rapid change and increasing uncertainty. Steve also founded Lemonade Stand - a children's entrepreneurship program, wrote the Innovation Manager's Handbook vol 1 and 2, hosts Future², an iTunes chart topping podcast on corporate innovation and entrepreneurship and is a keynote speaker. He previously founded HOTDESK, an office sharing platform and has worked for the likes of Westpac, Dun & Bradstreet, the Victorian Auditor General's Office, Ernst & Young, KPMG and Macquarie Bank. Follow him at @steveglaveski and Book a free 15-minute call with Steve to talk through your innovation objectives.

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