The corporate lanscape is ever-changing, presenting new challenges for entreprenuers.
These challenges are a key focus area for the Ewing Marion Kauffman Foundation, a nonprofit based in Kansas City, Mo. The foundation conducts research and offers programs to advance entrepreneurship.
Smart Business had the chance to sit down with Lesa Mitchell, vice president of advancing innovation for the foundation, at the 2011 Strategic Growth Forum to discuss current entrepreneurial trends and challenges.
What are trends you’re seeing in entrepreneurship?
Global is the biggest trend — global companies are popping up everywhere that you can imagine in the world. Companies are starting global instead of kind of the old school way of starting local, then starting in your region, then going to your country.
The other absolute biggest trend — but frankly this one is predominantly in the United States — is women. If you’ve looked at the numbers, it’s no longer a gender issue; it’s an economic issue. The availability of women that could be high-growth entrepreneurs is frankly in some sectors way higher than men. And so the fact that we’re not engaging them as entrepreneurs is kind of a problem.
What new challenges do companies that start out global face?
In the old days when you created a company, you’re thinking about “Who’s my customer?” And what was easiest to think about was the customer that you knew. Well, in the new world of social media — whether it be Twitter or Facebook or Google or whatever — you’re not going to know your customer. … Platforms are everywhere and they’re unbelievably hard to do.
A lot of these new firms make serious mistakes in the first one or two years that they don’t know are mistakes until they’ve hit real growth, and you kind of can’t get out of it.
What would be an example of one of those mistakes?
Number one example is founder issues: your deal structure with your co-founders. … Frankly, 50 percent of companies melt down because of founders’ issues. It’s such a huge number and it all happens in that zero to five (year) space.
If you’re already starting global and then you’re scaling and then you have these issues, we are really worried about what that’s going to mean. Because literally companies … totally and completely blow up and go away because usually they won’t agree on their deal structures and it becomes personal. They’ll never agree, they won’t give the other person the company and you literally have to shut it down.
We really have to make sure that we’re surrounding entrepreneurs at an early stage, surrounding them with the right advisors that are global. But they have to be global.
I’ve had multiple of the “winning women” tell me that they’re in these kind of niche places, and they end up trying to work with advisors that are around them but have experience growing a company 20 years ago and literally don’t get kind of how to grow a company in the new world, so they end up having to reach out way beyond their community to find somebody big enough to do that. And so there’s a huge shortage of global experience for some of these early entrepreneurs.
What are the challenges unique to women entrepreneurs?
Women don’t think big.
There’s a young woman here that’s an entrepreneur “winning woman.” … I sat down with her this morning … and asked her about her goals and her targets, and I was very unhappy with her response. It was in the multimillion. I said, “I don’t understand. You have a rock star technology company. You could be a billion-dollar company. Why is nobody saying that you could be a billion-dollar company to you?” And she kind of looked at me with this shocked look on her face, and she said “Nobody’s ever said that to me before.”
I think women have the skills, they have the capability to start these companies, but women don’t necessarily … talk about how great they are. … Men will come right in and meet you the very first time; “I’m growing my company to a billion.”
In many cases, (women) don’t ask for help, they kind of feel like they have to go at it alone. Zero percent of the entrepreneurial “winning women” have advisory boards. Zero.
Even very successful women don’t get asked to sit on boards. That’s why we have very few companies with women entrepreneur board members. So it’s kind of this “don’t ask for it, isn’t offered.”
HOW TO REACH: Ewing Marion Kauffman Foundation, 816-932-1000 or www.kauffman.org