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05 FEBRUARY 2019
Teaching entrepreneurship is about understanding the markets
by Professor Andrew Godley
The first thing you learn when it comes to teaching entrepreneurship is that you can’t teach it like any other subject.

There are many reasons for this; from the fact that it is still a comparatively new discipline compared to other subjects taught in business schools to the reality that it is a very practical field as opposed to the theory that underpins other areas of study.

The second thing is learning what it’s not. Entrepreneurship is not synonymous with innovation, entrepreneurship is about engaging with the market not creating a service or a product, that’s what inventors and innovators do.

And therein lies the truth of both of these statements – the greatest failing I have found among entrepreneurs who do not succeed, is their inability to converse with the market. I spent almost seven years more than a decade ago working with the UK government conducting tens of thousands of interviews with British entrepreneurs and small businessmen and women helping to formulate the government’s SME policies.

I was looking to discover why entrepreneurs fail. My respondents fell into two categories: a small minority failed because they had no clue about managing a business, these were people who had either inherited family businesses or who had moved from salaried employment to self-employment, normally following retrenchment.

The vast majority of my respondents who did not succeed though, were those who had great products and were passionate about what they were doing but did not know how to access the market. They had no idea about revenue models or alternative revenue models or strategies to move into markets. Because of this, they were locked into a pattern of behaviour that was unsustainable in a competitive environment.

Teaching entrepreneurship is about understanding the markets and, most importantly, how to communicate with them. We can teach students about entrepreneurship in the classroom, we can teach those basic business skills like economics and strategy, but learning to become an entrepreneur is a different skill entirely. The only way you can learn that is through a process of observing entrepreneurs in action.

At Henley, we adopted a range of pedagogies that are different from classical business school teaching. For us, learning isn’t so much about the acquisition of information through fieldwork during the internship but the deep reflection afterwards. The theoretical grounding for entrepreneurship draws from economics and strategy, psychology and even some sociology, the practical grounding is one that is based on action learning which is premised on ongoing reflection, marrying the theoretical with the actual. How you make sense of it, leads to the deep learning.

The success of the approach has been so profound that academics in other business school disciplines, especially in North America, have been writing papers wondering whether observational deep learning should not be applied to other subjects and courses. This is largely because there is no emphasis on the personal development of executives traditionally in US business schools, whereas it’s effectively written into our DNA at Henley. We believe unequivocally that for a manager to become a senior leader in any organisation, they must first learn about themselves.

The third thing we learnt, and we too as teachers continue to learn all the time, was the need to create environments where people can become more entrepreneurial to transition from unemployed or semi-employed to fully self-employed and even employing others.

Far too often, people and governments are quite naïve when it comes to entrepreneurship as a panacea for stimulating the economy or creating jobs. Entrepreneurship is difficult to conceptualise without conceiving markets.

So, what are markets? They’re an exchange of information rather than products being exchanged for money. Entrepreneurs prosper and become more viable when they are in an information rich environment. As you increase the amount of information between suppliers, manufacturers and buyers, so too does the prospect of success increase exponentially. The most important source of that new information for entrepreneurs is from other entrepreneurs.

The key thing about this is that just building a structure and calling it a small business hive or incubator isn’t enough. What needs to happen is the creation of a virtual space where entrepreneurs can meet and feel comfortable enough to talk about ideas and other issues of mutual interest, while sharing news of opportunities.

It’s an important space too to peer-review each other’s ideas and even partner on certain projects, because in today’s day and age, it is highly unlikely that one entrepreneur will be able to see the whole picture for themselves or supply the full product and become a great business in the process, instead the route to achieving just that will be through collaboration.

So, where do these hubs or rather entrepreneur eco-systems exist? We created, almost by accident, the perfect one in the UK in Reading where our main campus is. We had to find entrepreneurs nearby to demonstrate entrepreneurship to our students but we had to offer something in return, so we started bringing in experts who they could talk to, arranging talks, all those standard things. The benefit wasn’t anyone particular thing, but rather this community of entrepreneurship that organically evolved with the culture of the ecosystem being one where collaboration was obvious.

This could only exist because of the core of trust that had built up. As we reflected on this, we realised that there has to be some body or institution that safeguards that trust by acting as a loose coordinator for all the participants, literally an honest broker. The best suited institution to be that is a business school because it has no skin in the game.

That was 10 years ago. Today the Henley Centre for Entrepreneurship is well established and ready to be extended to Henley Business School Africa, it is no coincidence that the entrepreneurial hub for the UK, the tech start-up epicentre is now in Reading, west of London.

Entrepreneurship is a very creative proves that involves creating a way of interacting with people through this anonymous thing called a market. There’s something very elegant and beautiful about creating a new market. I am really looking forward to seeing it roll out here in South Africa.

Professor Andrew Godley is the academic director of the Henley Centre for Entrepreneurship at the Henley Business School, University of Reading.

Henley Business School
At the core of Henley’s philosophy is the belief that we need to develop managers and leaders for the future. We believe the challenge facing future leaders is the need to solve dilemmas through making choices. We work with both individuals and organisations to create the appropriate learning environment to facilitate the critical thinking skills to prepare for the future. Visit our InfoCentre or website.

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