A report from the Duke University Fuqua School of Business has revealed some interesting data. The researchers say most potential entrepreneurs give up before taking even simple steps to vet their ideas.
According to the authors, the data of their research suggests guiding entrepreneurs early to vet their ideas is important. In fact, they say it could be just as important as helping with complex planning later in the process.
One telling statistic in the research highlights this very point. Of the people who said lack of financing derailed their business idea, only 7% had actually sought financing.
This led professor Victor Bennet, a co-author, to say “So we think there’s a perception that there are barriers that might not actually be there.” Furthermore, entrepreneurs are not sharing their ideas with someone who is objective.
Aaron Chatterji, the other co-author, added: “A large percentage of our entrepreneurs never actually talk about their business idea to someone they don’t already know.” Suggesting, “A best practice would be talking to experts in the field who aren’t afraid to disappoint you.”
The data for this report comes from a survey of 30,409 Americans adults 23 years and older. In addition to demographic and professional information, they were also asked about any business ideas they had considered in the previous five years. This includes whether or not they took any steps to pursue their ideas.
The key finding is potential entrepreneurs didn’t get as far as the researchers expected. They didn’t do the simplest things to get their business off the ground, such as searching the internet to see if there is a business doing the same thing.
Those looking to start a business saw market opportunities in prior work experience (41%). For 26% their idea is directly related to their employer’s business, with another 15% going after a customer or supplier. More than a third or 34% say their idea is from an existing product they use.
Some of the other reasons include reading a media article suggesting potential market opportunity (6.6%) and partnering with someone else with an idea (9.6%).
The researchers recommend implementing policies to provide mentorship and structure for aspiring entrepreneurs. This they say can be as important as other policies such as favorable regulations and taxes.
Entrepreneurial Support System
Although some policies can help, adding yet another government entity in the entrepreneurial process may not be the answer.
Mentorships, on the other hand, can provide the answers to the problems this research highlights. With the right mentors in place, entrepreneurs can receive some of the insights from the report. This includes a need for standard step-by-step recommendations for moving from an idea to a functioning business. As well as ways to weed out ideas that don’t make good business sense.
The goal is to continue to inspire entrepreneurs so they can pursue their dream. With the right support system, they will not give up so soon on their entrepreneurial journey.
There is this fear of asking which makes it hard even for business owners to ask for help.