The Arizona Department of Education has invited me to speak to them today about state standards for teaching high school kids about entrepreneurship. This forces me to think what young entrepreneurs (and their teachers) really need to know.
1) It takes a certain temperament — a fearlessness –to be an entrepreneur. Young people, especially in high school often have this. They also have little to lose, so they would, in theory, make great entrepreneurs.
2) Thinking about problems and solutions should be stressed. Successful entrepreneurs need to look at problems in their worlds and find solutions. Sometimes these problems can create very big businesses even though they are very small problems.
3)Research skills are important: who is the competition? What are they doing? How big is the market? How much does it spend to solve this problem? Who is solving the problem now? Research is readily available on the internet, but kids have to be taught how to go beyond the obvious.
4)Financial literacy is critical. Entrepreneurs need to know how to budget, because a budget is a business plan in numbers (or a business plan is a verbal budget). They especially need to know cash flow statements, P&Ls, and even balance sheets. These will not be easy to teach; they have to be taught in context, not as isolated skills and facts.
5) Old forms of business are collapsing. Think virtual businesses without office space, even without retail space. Encourage e-commerce.
6)Hiring is out. Outsourcing is in. Everything but the key component of a company can and should be outsourced.
7)Evangelism is the new form of marketing. Do not bother teaching advertising or marketing in the old ways. Teach Facebook, Twitter, and other social networks as the best marketing tools.
8) There is free software for running businesses. For finances, there is Quickbooks Online, or Freshbooks. There is also Microsoft Live Small Business, and Google Apps.
9) Use your ingenuity to bootstrap. There is no money for startup businesses. But get to know a banker in advance in case you survive for three years and become bankable.
10) Mentoring is invaluable. Form an advisory board of people who have been there and want to help others. They are remarkably easy to find. Put people on that board who cover your own weaknesses, like accountants, lawyers, and salespeople.
11)Get legal documents and set your business up right from the start. Use YCombinator.com for complicated documents, and any online document service for thinks like forming an LLC. See an attorney for a free consultation, but make sure you see a business lawyer, not a divorce lawyer or a real estate lawyer.
I would urge the teachers to populate their classes with outside resources, as someone who has spent his/her life receiving a public pay check has no clue about the world of the entrepreneur, which is a world of total uncertainty and ingenuity, much like manipulating a speeding car around a racetrack. I’m not sure entrepreneurship can be taught using Bloom’s taxonomy of educational objectives:-)