This has to be one of the least-used sentences of this century. What causes this massive over-consumption? Not just food, though I could write about the obesity epidemic which we are told threatens our children, but more generally in terms of an ever-wanting lifestyle?
Clearly policy-maker-encouraged consumerism, aiming to bring (European) economies out of recession by stimulating people who can’t afford things to go into debt to afford them, extends also to the way expectations of entitlement are set in our society.
Take for example the recent policy positions in the EU attempting to encourage entrepreneurship amongst young people. Presenting successful entrepreneurs as those which have ‘the rock-star lifestyle’ is simply unrealistic – for every rock-star there must be hundreds of unknown session musicians, thousands of roadies, back room staff and events managers. But who sets out to be one of these?
The rewards here may be smaller at first, but perhaps they last for longer? A good session musician is aware of their importance to the rock star, and so can command a reasonable fee, but crucially they will always have the security of knowing they can adapt their talent to play for whichever star is in the ascendant. Limited aspirations, longer term security.
I’ve heard criticism that Europeans are risk averse. Some talk about how irresponsible it is that our (largely Christian) religious heritage somehow ‘holds back’ European entrepreneurs because it frowns on profit.
Let’s look at the situation again from a different perspective. There’s no doubt that as a shrinking public sector (caused by the trend towards lower taxes and lower services) and a shrinking private sector (caused by a trend towards greater efficiency, often through automation), resulting in massive European youth unemployment, there is a need for an entrepreneurship education to stimulate more to take their own future into their own hands.
But the drive towards the Tech Entrepreneurship model, with its potential for rock-star rewards, as the flagship exemplar for young entrepreneurs is flawed. ‘Fail fast, fail often, don’t be afraid of failure’, may be necessary in that sector, but the underpinning message is that eventually you will succeed and be a rock-star. Whereas the reality is, and will always be, considerably different for most. And in Europe, our society characteristically considers the majority. The lost opportunity cost of aiming for a rock-star type return is huge – how many years of essentially wasted life must it take to burn one investor’s money after another developing the Killer App? To go on the steep trajectory, and then fail, again and again?
What about allowing our young people to modify their expectations? Encourage those who can be a good session musician, or event manager, rather than the rock-star? In a smaller pool, they might really have sufficient differentiating qualities to make a real success of their (smaller, lifestyle) business. ‘Aim low, succeed, gain more knowledge / resources, aim higher, succeed, gain more knowledge / resources, aim higher, succeed…’ This shallow-trajectory approach looks for earlier achievable success, and self-funding of subsequent growth. The expectation is re-set to ‘over my lifetime, attract at least the same income as I would have expected to do if I had been employed.’ This is in fact what policy-makers stimulating entrepreneurship would really need. It causes individuals to look towards satisfying the needs of their local communities, and then widening this market.
They might not attract investors who themselves want rock-star returns, but they might attract local investors for the benefits to the local community.
So, when reviewing a Business Plan, and surprised to see that there is no exit strategy, and no obvious large salary / dividend reward, you might ask ‘Don’t you want rock-star returns?. Maybe we should be encouraging our young entrepreneurs to answer ‘no thank you – I have sufficient.’