On the shortlist of character traits that many successful entrepreneurs share, there are the things you'd expect--intelligence, passion, drive, and communication skills. But there's one more trait you might not have expected to see on that list--ego.
And it's not just my ego that motivates me to say that entrepreneurs don't get enough credit.
"Making the decision to switch from a corporate job to a startup or founding your own company can be incredibly difficult because it's like comparing apples and oranges" says Fooda Founder & CEO Orazio Buzza. "Usually people end up comparing compensation, job security, upside rewards, the business idea and culture, but I think an easier way to evaluate the decision is who do you want to bet on. If you are prepared to bet on yourself, then go for it. The timing will never be perfect."
Sure, a handful are treated like the rock stars they are--Zuckerberg, Blakely, Musk. But I'm not talking about those well-known, richly rewarded few. The entrepreneurs who, I think, don't get enough credit are all the rest of them. And I mean that, as a group, entrepreneurs don't get enough credit for the role we play in the economy.
Nearly every political, business, or economic leader in this country loudly praises the role of small businesses. They talk about how small businesses drive the economy and how they are a vital source of job growth. In those circles, "small business" is a buzz phrase repeated as fervently as supporting the troops or serving up a slice of apple pie. Who doesn't support small business?
There's even a federal agency dedicated to supporting the start up and growth of small businesses. And rightly so.
But here's why I think entrepreneurs aren't getting their due credit. According to a number of well-documented studies, the real driver of economic and growth isn't small business at all--it's new business. This means ventures that are five years old and younger. When the Kauffman Foundation looked at the source of jobs in the U.S. since 1980, they said that "without startups, net job creation for the American economy would be negative in all but a handful of years."
"Start-ups not only bring the benefit of more jobs, but also bring innovation," says TourBeat Founder and CEO, Julian Gonzalez. "New innovations can lead to the development of entire industries. American innovations like the silicon transistor paved the way for Silicon Valley. An entire industry that now represents 5.4% of our national GDP, was all started from a single start-up. Organizational support from banks, government and even large, stabilized businesses are not just important, but are the key to economic stability in a rapidly expanding global economy."
Those young businesses are often also small. So, given the large overlap, the confusion is understandable. But it bears repeating that job creation in the U.S.--and in most other countries around the world--is driven by startups.
There's just one problem: recent reporting indicates that the number of startups, in relation to business closings, is on the decline. According to the Gallup Organization, the U.S. now ranks 12th among developed countries in business startup rates--behind Hungary, New Zealand, Italy, and others. Those who take the risks and follow their dreams to create new, young businesses aren't just on the front lines of economic progress, they are the front lines period. In other words, if fewer startups turn out to be more than a blip--if it's an actual trend--we could be facing a huge economic problem long term.
Because I'm a proud entrepreneur, and I'm surrounded by others like me, I live with optimism. So I'm not ready to sound the alarm just yet.
But I am ready to say that there's good reason to start putting the focus on this problem. Entrepreneurship and entrepreneurs need more cheerleaders and supporters--and not just so many empty words from the politicians and columnists. We--all entrepreneurs--need much greater organizational support from banks, government, and even large, stabilized businesses. And we need to get the ball rolling right now.
The best way to link that support to growing entrepreneurship is by lowering risk for existing and prospective entrepreneurs. Small grants can make a big difference long term. Governments and large ventures have set-asides for contracting with small businesses; they should create set-asides for young businesses, too. And, personally, I'd love to see the name (and organizational focus) of the Small Business Administration change to the New Business Administration.
Making it easier and less risky to start a new business will induce more people with good ideas to put their ideas into action--spurring hiring and job growth. But we also need to be clear about the real work entrepreneurs are doing--and not just for their ego, but for all of us.