In any given year millions of Americans start new businesses. And in any given year millions of Americans close businesses down. Each new business, on average, contributes four jobs to the national economy; and each closure puts, on average, four people out of work.
Howard Aldrich, a professor of sociology at the University of North Carolina-Chapel Hill, wonders why it is that in modern capitalist societies so many entrepreneurs get into business and so few make a go of it.
Aldrich will address such questions when he visits Princeton University’s Keller Center on Tuesday, March 6, at 7 p.m. to present “Lost In Translation: Celebrating Entrepreneurship While Acknowledging Its Costs” at the Friend Center on Olden Avenue at William Street. The event is free. Visit http://commons.princeton.edu/kellercenter.
A college professor for more than four decades, Aldrich seems born to study entrepreneurship. His father, grandfather, several uncles, and oldest son all are entrepreneurs, and Aldrich himself has been studying the subjects of entrepreneurship, startups, and free markets since the early 1980s.
He earned his bachelor’s in sociology and psychology at Bowling Green in 1965 and his Ph.D. in sociology from the University of Michigan in 1969. He became a professor at Cornell, studying labor relations, until 1982, when he moved to UNC.
The fantasy. Say you want to start your own business and supportive pats on the back show up faster than blowflies. Websites extol the virtues of entrepreneurship, magazines give example after example of people just like you who did it too, and everyone from media pundits to the people on your contact list tells you that there’s nothing better than being your own boss.
This praise for being autonomous highlights the romance of escaping the cubicle farm, which Aldrich says promotes the idea that starting a business is feasible and desirable. So is Aldrich against this propagation of the idealized vocation of entrepreneur?
“I’m indifferent,” he says. “Entrepreneurship is a fact of capitalist life, but without it we’d be in trouble.”
The trouble. With the Cold War won long ago, proponents of western capitalism can point to the Soviet communist approach to business and know that the free market was the better option.
Aldrich says that Soviet restrictions on the market — indeed, it was almost unheard of that anyone in the USSR could start or own a business — led to economic stagnation and, by western standards, a miserable standard of living. Meanwhile, the free-market west has weathered countless economic storms and contributed to innovation and healthy competition.
Capitalism has its downsides, of course, but Aldrich says the ability for everyday people to start and run businesses can propel the economy forward in a way that societies lacking free markets cannot. This is as true in the United States as Europe, Asia, or anywhere the average person is allowed to operate private enterprise.
And small business growth has been one of the only positive economic forces in the United States these last few years. Public policy has tried to be friendly to small enterprise, Aldrich says, and it has helped to at least keep things from getting way worse. Still, there is not much pure business growth, since so many businesses that had started in the past few years are closing now.
Of courses. Aldrich’s research looks into why there is such a gap between enthusiasm and success. His thoughts on the reason? “I’m not going to tell you that because then nobody will come to my talk,” he says. But he does admit that part of the problem is the lack of real experience in a given field.
There is no shortage of courses, workshops, seminars, and certificate programs designed to teach people how to do things. With no experience, you can get certificates in everything from plumbing to haute cuisine.
Then, according to the romance, you can get a new job or start a business in a new field. But do these training programs work? “There is little evidence for training being any good,” Aldrich says. “You can learn some mistakes and how to avoid them, but experience in some field helps more.”
Aldrich’s best advice to would-be entrepreneurs is to be pragmatic; to learn from experience and by trial and error, rather than from a textbook.
Don’t expect a course to teach you what it is like to run any kind of business. If you are familiar with an area and take a course, that could help a lot, particularly in the “what not to do” department, but a course alone will not give you the real flavor of the day-to-day realities of running a business.
Resources. All that said, Aldrich says there is no excuse these days for not knowing something about a particular field, given the vast amount of resources at everyone’s fingertips. This, in fact, is the biggest change he’s witnessed in small business since he started studying it in the early 1980s.
Beyond the Internet, there are countless business incubators, DVDs, college courses, night courses, and trade programs that can at least give you an idea what you’re getting into.
Just don’t expect them to be all you’re going to need.