Singapore Entrepreneurs

The book entitled “The Illusions of Entrepreneurship: The Costly Myths That Entrepreneurs, Investors and Policy Makers Live By“, written by Scott A. Shane has not disappointed. In fact, it is a very well written book about the myths of entrepreneurship and showed some interesting and counter-intuitive results against common folklore about entrepreneurship. In my teaching of the same topic to students, I prefer to call it the dark side of entrepreneurship. Ultimately, I prefer an agnostic view of entrepreneurs. Here are some interesting issues to why I think that this is a must-read book for those out there. Before you really think of committing yourself to start a business, it might be good to learn some lessons from this book, because a lot of things you hear about are likely to anomalies rather than the norm.

My first impression from reading the book is that I will ask someone working in any of the government agency in Singapore to read it. In some sense, the author has specifically targeted the work for policy makers in the United States. To me, some of the lessons can be adapted for the case of Singapore. One interesting thing that the author has done is to look at some data on entrepreneurship based on several studies.You will be interested to learn that America is not as entrepreneurial as you think it would be. In fact, the data is showing that the proportion of the US population that is starting business is not growing but possibly shrinking. In fact, the author corroborated data with the US Small Business Association. If it does not convince you, On the self-employment rate in the Organization for Economic Cooperation and Development (OECD) countries, US is the third lowest with countries and rank lower than countries you would perceive to be entrepreneurial: Korea, UK, Japan, Turkey and Italy. The number of new businesses emerging is significantly much more higher than in China as compared to the US based on the Global Entrepreneurship Monitor 2005 report.One thing I enjoyed about the book is in the third chapter which he explored the genetic makeup of an entrepreneur. Specifically, he attacked the issue on what makes entrepreneurs tick. In fact, he demonstrated an interesting argument against people who thinks that entrepreneurship is a young people’s game. In reality, the chance of setting up a business at the age of 45-64 is far higher than the age groups of 18-24, 25-34 and 35-44 added together. There goes the argument that you should think of becoming an entrepreneur below 27. The argument is to tell you that there is no age limit to become an entrepreneur, and most people become entrepreneurs for reasons which you don’t read from Bill Gates, for example, they prefer to work for themselves at a lower wage as compare to working for others where they can’t find satisfaction in their lives.Here are some of the myths he talks about in the book which you might find disagreeable and surprising (which I will quote directly from the book):

• - The typical entrepreneur doesn’t start a business because of a desire to make money, for the thrill of starting a business, to support their families, or become well known; the typical entrepreneur starts a business because he doesn’t like working for someone else.
• - Education doesn’t hinder entrepreneurship; getting an education makes people more likely to start businesses.
• - Working for someone else increases the chances that a person will start a business.
• - It does not take a lot of money to start a business; the typical new business established in the United States take less than $25K in initial capital.
• - Informal investors are a more important source of capital for startups than venture capitalists.

Actually, if you think that the author seems to hammer those who want to promote entrepreneurship, I think that you are in for a surprise. The author is actually teaching entrepreneurship as a professor at an established university in the US. Somehow, I think that it is a good idea to write this book to debunk the romantic conceptions which some of us might have about being entrepreneurs.Author’s note: This review is first published in his personal blog.