A whole generation is being trained to sell their companies as quickly as possible - rather than doing any actual work to nurture them
The culture I’m talking about is one which has glamorised start-ups as the easiest way to share a table with the super wealthy in Mayfair restaurants, have a flexible work schedule and be recognised as a celebrity – as long as you have the force of ambition. Unsurprisingly, venture capital firms – an equal victim of this culture – are showering British start-up industry with cash, because for many potential entrepreneurs they are becoming some of the only people bold enough to invest money on weird ideas.
Unfortunately this notion that it only takes a "killer idea" (preferably something based on an app) and just enough funding to conquer the innovation-hungry consumers is a lie. It goes against traditional business-making practice, where companies respond to the demands of consumers rather than the other way around. True, we all heard stories of successful innovators who indeed delivered revolutionary products to the consumers, but it’s perfectly reasonable to doubt that every millennial has the same trick up their sleeve.
There’s no question whether this culture is damaging to young people. These new entrepreneurs don't want to sit in boardrooms with calculators trying to balance their books with puritanical asceticism, or conducting extensive market research for their products. No, the prevailing mantra of "to earn you must spend" dictates the direction of most start-ups, which then leads to the absurd belief that the absence of consumption is a fault of lack of marketing. In reality, however, a high "burn rate" of cash by start-ups and lack of market need are the most popular reasons why start-ups eventually fail.
ven when true innovation happens, there’s increasing tendency not to attempt to create a business with a long-lasting plan, but instead chuck it towards larger corporations in exchange for a handful of cash. Business cards stating "serial entrepreneur" – those who move from project to project – are becoming a norm. The idea of nurturing a company is in terminal decline. In the past, making sure that the company is thriving and has a competitive edge used to be the defining aspect of good entrepreneurship. Nowadays, by contrast, selling your company for a life-changing sum of money is the mark of success. This breeds a new type of entrepreneurship, which centres on the short-term boom, and turns the creation of start-ups into an industry itself. Start-up culture shifted the focus away from company ownership to either "get rich by selling" or participating in never ending game of start-up creation.
This culture, in which young people have immaturely bought into, tells a tale where aspiration is rewarded with piles of cash, yet ignores the reality of business. The failure rates of start-ups is significant enough to break the myth. In Britain, at least half of companies fail to last more than five years, while in the United States the figure goes up to as high as three out of four start-ups going bust without managing to turn a profit. This exemplifies the fact that ambition and funding aren’t enough to create a successful enterprise. Take, for instance, the website Digg, which undoubtedly had the same idealistic belief in its ability to stand out from larger competitors, but despite being hosed with money, failed and was sold for next to nothing.
These would-be/will-be entrepreneurs also ignore the fact that running an effective business requires expertise and sense of maturity, which cannot necessarily be learned on the spot. Inspired by stories like that of Mark Zuckerberg, they rush out of university to start companies regardless of having no experience of working in the private sector, thus increasing the chances of failure.
It must be noted that though start-ups are viewed as a hip thing for the youth, the most successful entrepreneurs have at least 10 years of industry experience prior founding their first start-up.
It’s unlikely that the myths told by start-up culture will die soon. The powerful force behind them offers a vision for many young hopefuls. But acknowledging the shortcomings of this modern gold rush is the first step. For now, the austere entrepreneur is dead – all hail the new allergic-to-accounting entrepreneur.http://www.telegraph.co.uk/technology/11765609/Start-up-culture-is-corrupting-our-youth-and-killing-real-entrepreneurship.html
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