Experimenting in business can benefit entrepreneurs

Imperial expert offers advice to budding entrepreneurs during week long international celebration.

This week is Global Entrepreneurship Week, which is the world’s largest campaign to promote entrepreneurship. Professor Erkko Autio from Imperial College Business School talks about why start-up businesses are good for the UK. 

Why is entrepreneurship so important for the UK’s economy?

The Government is making widespread financial cuts to its budget, which is leading to job losses. The private sector is playing an important role in soaking up workers, but entrepreneurs also have an important role to play. They are the drivers of innovation and knowledge in the economy, often developing new types of businesses that will help to help shape the economy of the future.

What advice would you give to aspiring entrepreneurs?

Be innovative and experiment with new ideas and business models.  For example, Apple developed innovative technology such as touch screen phones, which revolutionised the way people communicated and resulted in Apple being the highest valued company in the world. However, not all business ideas will turn out to be as successful as Apple’s and it is important that entrepreneurs learn from their mistakes, pick themselves up and develop their businesses further.  This is important in order to come up with services and products that have the most potential to be successful.

Age UK has recently said that the number of over-50s choosing o start up their own business is on the rise; are you surprised by this trend?

Not really. These days it is becoming more attractive for people, no matter what age, to become entrepreneurs. This is because they can run their business via the internet from their comfort of their home. In the past global trade was the preserve of large multi-national companies. All of a sudden the internet has opened doors, enabling people from different parts of the world to do business with one another, which is opening up a range of business opportunities.

The Welsh enterprise and business committee reported recently that youngsters should be encouraged to develop their business skills in primary school. Is this a good idea?

For sure! Young people should be exposed to a range of career options, be it in the private or public sectors or as their own start-up. However, they should also be given a realistic picture about the risks involved – and that it is often better to have some experience of working for an organisation before going out and setting up their own business. This is because you need to have built up a big list of business contacts in order to make your start-up a success.  It takes time to build those contacts and alliances.

A recent article in Forbes magazine stated that shows such as Dragons Den do not give a genuine insight into entrepreneurship, do you agree?

I disagree. These programmes provide an insight into the factors behind the success of new business ideas. In the case of Dragon’s Den, the ‘Dragons’ or financial backers dissect these business ideas, which is often painful to watch. However, it shows the viewer how unrealistic aspiring entrepreneurs can sometimes be with their ideas. Most new business ideas are weak, and the Dragons make this very clear to the entrepreneur. This is an important lesson for budding entrepreneurs who may think that their idea is good, but have not really checked the basics of their business plan. However, I do think there are elements of the show that are unrealistic.  For example most new businesses do not and should not seek equity funding from the outset. This is a process of raising capital through the sale of shares in a business or enterprise.  Selling shares in your business early on can turn out to be the most expensive decision you have ever made.  This is because if your business becomes successful it could cost a lot of money to buy the shareholder out so that you can take full control of the business again

 In what ways does the Business School support entrepreneurs?

The Business School offers MBA and MSc courses in entrepreneurship, design and innovation. The School also provides entrepreneurship courses to students across the College through the Entrepreneurship Hub.  The Hub aims to enhance the entrepreneurial culture within Imperial College by giving students the opportunity to explore business ideas and develop practical skills such as writing a business plan.  

Academics also carry out research that explores factors behind creating new business opportunities and growth. For example, we have developed the Global Entrepreneurship and Development Index (GEDI) of over 100 countries.  It ranks a country’s start up activity, attitude and aspirations towards entrepreneurship.

What research you are working on in regards to entrepreneurship?

We are currently putting together GEDI data for the European Union’s 2014 Cohesion Report.  This report will inform the allocation of EU funds designed to even out wealth inequalities amongst the member states by funding programmes or activities in countries or areas that need it the most.