Does Entrepreneurial Experience Dim Future Job Prospects?

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An early release of one of the papers to be presented at the Academy of Management this year shares a surprising, and not terribly positive, insight: having entrepreneurial experience on one's CV may substantially decrease subsequent responses to job applications. 

The study* sent paired fictitious resumes to real job postings in the UK. All "applicants" had experience and current employment in medium-sized firms, but differed in whether they had "owned and managed a small HR consulting company" vs. worked as a "project manager for consulting teams providing HR services." A total of 192 applications evoked 22 positive responses, where 6 were for applicants from the self-employed group and 16 were for wage earners. Of the 15 positive responses for male applicants, 12 went to wage earners and only 3 to self employed. The upshot: "having previously been self employed in in itself a negative signal on the job market."

It's one of thousands of papers (including my own) that will be presented at the Academy of Management this August. I'm excited to learn more.

 *Koellinger, P. et al. 2012. Self Employed But Looking: A Labor Market Experiment. SSRN Working Paper. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2186293.

 

Happy, Healthy, and Hard at Work

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Every election brings with it odes to the "job creators" and long-winded discourses on importance of entrepreneurship, and this one was no different. After all, we know that entrepreneurs create jobs, and that employment figures drive election results. And although it turns out those are both partial truths, it IS true that entrepreneurship is good for the economy. But is entrepreneurship good for entrepreneurs? It's an interesting question that scholars like Chuck Eesley (in my research group) and others are working to unravel. It's been established, for instance, that the financial returns to entrepreneurship are negative relative to more traditional employment. In other words, entrepreneurs would do better to take a job than to create one. At the same time, research also finds that people don't necessarily enter entrepreneurship for the money: concerns such as autonomy and bringing ideas to life tend to top the list. But while being your own boss certainly sounds nice, entrepreneurship also brings a tremendous amount of stress. A common mantra among entrepreneurs is that "there are no weekends", and a coworker once joked to me that "the best way to ruin a marriage is to start a company."

So what's the net impact on entrepreneurs? A recent study by Michael Dahl and colleagues at Denmark's Aalborg University tried one novel way to find out.

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Hackers, Hostels, and Floating Hotel

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Hackers, Hostels, and Floating Hotel

In the few months leading up to my wedding, a number of really fascinating articles and stories piled up that I wasn't able to address. Digging back into the files, I came across one NYTimes article from July that definitely wants to be shared. It covers the Silicone Valley phenomenon of "Hacker Hostels."

These hostels offer cheap lodging and nerdy community for the waves of would-be entrepreneurs who flock to tech-mecca each year. And with a spot on a bunk going for $40/night, they're a pretty savvy piece of entrepreneurship themselves. Overhead is low (wifi and a roof), and the residents - typically techie men in their mid to late 20s - don't want much more than to be left to their work.

Cramped living conditions aside, these hostels a pretty popular idea. After all, cramming into tiny spaces is a time-honored tradition in the hacking community: HP was famously founded in a 12' x 18' rented garage, and early coders at MIT slept in their offices while waiting for time on the mainframe. When it was acquired in 2012, Instagram was still shoveling pizza boxes out from under the employees in a cramped SF office.

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A World Without Walls

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"If the Ivy League was the breeding ground for the elites of the American Century, Stanford is the farm system for Silcon Valley."  -Ken Auletta

This quote appeared in a New Yorker story from last April. While "Get Rich U" doesn't exactly wax eulogic on Stanford's educational priorities, it is a fascinating exploration of what makes the university the innovative powerhouse that it is. Stanford has quite a track record, after all, claiming credit for some five thousand companies including Hewlett-Packard, Yahoo, Cisco, Sun Microsystems, Netflix, Electronic Arts, LinkedIn, Fairchild Semiconductor, and Google. What makes the article particularly noteworthy, though, is how thoroughly the author walks through the themes discussed on this blog. It reads as a recipe for creativity.

1. Community Builds Creativity. The campus itself was designed by Frederick Law Olmstead as an open environment with no walls, broad avenues, and vast gardens lined by palms and California live oaks. Central plazas allow large gatherings and encourage chance encounters.

2. Diverse People = Diverse Ideas. The school cultivates economic and social diversity: caucasian students are a minority, 17% of Stanford’s undergraduates are the first member of their family to attend college, and if an undergraduate's annual family income is below a hundred thousand dollars, tuition is free.

3. T-shaped People. There is an overwhelming emphasis on interdiscplinary education. From the article: "[interdisciplinarity] is the philosophy now promoted at the various schools at Stanford — engineering, business, medicine, science, design — which encourages students from diverse majors to come together to solve real or abstract problems. The goal is to have them become what are called “T-shaped” students, who have depth in a particular field of study but also breadth across multiple disciplines. Stanford hopes that the students can also develop the social skills to collaborate with people outside their areas of expertise."

4. Dream Big Dreams. Stanford has a "bias towards action", and students profess a "sometimes inflated belief that their work is changing the world for the better." The culture emphasizes learning-by-doing.

I'd highly recommend that anyone interested in creativity or education give the article a read. And there's an interesting hook for the Stanford community as well: the article discusses the possibility that Stanford's current emphasis on entrepreneurship and innovation threatens the fundamental mission of the university itself. From former university president Gerhard Casper, "Stanford is now justifying its existence mostly in terms of what it can do for humanity and improve the world." All well and good, but what about learning for the sake of knowledge?

Check out the full article at the Newyorker.com.