Are U.S. Entrepreneurs Misunderstood?

Babson College and the Business Innovation Factory spent a year researching entrepreneurs by spending time with 250 of them. The conclusion: The U.S. needs to more effectively help startups.

Image: Babson College

After a full year of spending time with 250 American entrepreneurs, researchers at Babson College and the Business Innovation Factory could only conclude one thing: The United States doesn’t really get entrepreneurs, and without that understanding is not doing enough to help them.

President Barack Obama has emphasized that the nation values the brainpower of its entrepreneurs, wants to encourage more moneymaking ideas like Facebook, and that the government is deploying the Small Business Administration to encourage more of a startup culture to help boost the economy. But so far, the nation isn't doing a great job of it, new research released today says.

"It is clear that the entrepreneur support system in the U.S. must be transformed to be relevant to today's entrepreneur," Saul Kaplan, founder and chief catalyst at the Business Innovation Factory, said in a release issued Tuesday. "It's time for a new national narrative that can unleash the entrepreneurial energy and economic prosperity we all want and need."

The college and its Business Innovation Factory released its findings in a 76-page Entrepreneurship Experience Lab report, which included 200 video and audio clips featuring entrepreneurs. The research was based upon observations and insights gleaned from engaging glimpses into the everyday lives of 250 entrepreneurs who were launching ventures in the United States.

One of the issues pointed out in the research findings is that entrepreneurs are often characterized strictly as “lone individuals with the brilliant idea, who, against all odds, makes it big.” Most people think of entrepreneurs as working in tech, but the research shows that there are many entrepreneurs—even though they may not call themselves entrepreneurs—who are not at fast-growth companies, but are toiling away at entrepreneurial pursuits in other fields, and they are often ignored.

Some other key tips and conclusions from the study of entrepreneurial culture:

There are too many entrepreneurial stereotypes: The stereotype of the white, male, tech-centric, VC-backed entrepreneur is actually keeping some people away from entrepreneurship, the study finds. “How can we build support around entrepreneur’s diverse motivations and entry points?” the study asks.

Be open to different types of entrepreneurs: If you state you’re an entrepreneur, you might be more likely to gain access to classes at the local incubator, but “if you state you’re a social entrepreneur, you may not be able to access resources at the local tech-centric incubator, even if you would, in fact, benefit from those resources,” the report says. Some entrepreneurs simply describe themselves differently depending on who they’re talking to and what resources they are after. One woman, depending on the situation and her needs, alternately calls herself a "female entrepreneur," "small-business owner," or a "social entrepreneur," for example. But those trying to help entrepreneurs should be more open to those who have more unique identities, the study says.

Add more storytelling and less pitching to the entrepreneurial skill set: Instead of focusing on the technical details of the business, it’s better for entrepreneurs to know how to craft the right story for the right audience. In addition to an entrepreneurship course, public speaking and persuasive communication classes would better serve would-be entrepreneurs well, the research suggests.

Offer cross-discipline assistance: The study notes that there are often more similarities than differences between different types of entrepreneurs, and most startups need the same thing: HR, insurance, fax, and email. “These things can be shared or easily provided, like a company in a box. Then the entrepreneur can focus on the idea,” the report says.

Take the frustration out of fundraising: Even for serial entrepreneurs, getting funding for a venture is lengthy and takes time away from the venture itself, and it’s most difficult for those who fall outside or between traditional categories. “How can we educate investors about opportunities outside their area of expertise?” the study asks. Helping entrepreneurs approach and cope with fundraising is another area that needs exploration, the study found.