History, we know, is written by the victors. The same is true of current events, at least when it comes to assessing the state of U.S. entrepreneurship.
That's one explanation for an apparent contradiction. While in our recent State of Small Business survey, Inc. 5000 founders described entrepreneurship as booming, the rate of business starts has actually been in decline for decades. Similarly, a new study of Harvard Business School alumni painted a strongly positive picture of U.S. entrepreneurship compared with 10 years ago, and also in comparison with other countries. The concern posed by the authors of the HBS study: "Perhaps entrepreneurship has become more accessible to well-connected, educated individuals...but less available to Americans in general."
Owning your own business is viewed as "this traditional path to the middle class and a really important part of the golden age of the middle class," says Karen Mills, a former director of the Small Business Administration and a current HBS professor and co-author of the report. But what if being part of the middle class is no longer the goal for entrepreneurs, but rather the minimum starting point? What if, to quote the Book of Matthew, "whoever has will be given more, and they will have an abundance"?
Mills hypothesizes that "maybe folks like those on the Inc. 5000 are finding better and better entrepreneurial ecosystems springing up. But for the traditional entrepreneur who used to come to this country -- as my grandfather did -- and start a business, maybe those kinds of businesses are under pressure."
The Inc. 5000 don't see it that way. In response to a question on the survey, 61 percent said that entrepreneurship remains a very effective path into the middle class and beyond. Just 5 percent said entrepreneurship's power to create individual wealth was declining. We don't know how these founders started out in life: Certainly there are extraordinary rags-to-riches stories in the mix. But if you take higher education as a proxy for economic advantage, this is a fairly privileged crowd, with 44 percent holding a bachelor's degree, 30 percent with a master's, and 10 percent with a doctorate or a professional degree.
Todd Miller, founder of Zifty, a $10 million food-ordering and -delivery service, concedes that "it's more difficult if you don't come from some kind of money in the family or if you are still having to work another job. But part of being an entrepreneur is overcoming challenges and finding your way through things," says Miller. "Those hard years proving out the business are what makes it worthwhile."
And even if entrepreneurship is not a sure-fire route to financial stability, it's a better option than others, says Justin Bellante, CEO of BioIQ, a $15 million health care technology company. "These days it is so hard to climb that ladder within corporations because there is so little job security," says Bellante. "If you are looking for mobility to the middle class and within the middle class, you kind of have to roll up your sleeves and take the risk and get it done yourself."
The Inc. 5000 and alumni of HBS and other gold-standard business schools have built the country's high-growth champions. The opportunity to build comparable companies and -- more importantly -- profitable, sustainable Main Street businesses must be broader. For that we need more policies like the JOBS (Jumpstart Our Business Startups) Act, which, among other things, widened access to capital through equity crowdfunding. We'll also need more focus on career killers like student debt and more private-sector programs like the Initiative for a Competitive Inner City, a nonprofit research organization that studies and promotes entrepreneurship in the country's most economically troubled neighborhoods.
The goal is to add external support to the internal persistence without which entrepreneurship is not possible. "I didn't come from wealth, and I managed to start my fifth business," says Scott Brooks, managing partner of $6 million nutraceutical company LifeTree Manufacturing. "You scrape along. You find a way."