Facebook Nation Calls for Protectionism

Today on Facebook I participated in a ‘Davos’ question regarding protectionism. You can see from the image below that I voted against it, while 61% voted for it.

This is yet another bad data point for entrepreneurs as the Federal Government has more leeway to dig deeper into our economy. This will allow govts to use protective measures to preserve 19th/20th century industries and business models. Entrepreneurs, alternatively, benefit from international competition, cooperation, and interaction.

If this ‘Facebook Nation’ attitude represents wider swaths of the public, this will open many policy windows for those who want to buy many votes in the short and medium term. This will lead to higher prices, lower quality, and less innovation. This will also damage international opportunities for social entrepreneurs looking to work outside the US.

The worst part about this is that it highlights that consumers of products and services from global firms (like Facebook, Nintendo, Toyota) have no notion of the international web of partners, suppliers, financial markets, competitors, and others that help produce the goods or services they love. 61% supporting protectionism is shocking.

The fight to keep markets open and barriers to trade and cooperation low is crucial to entrepreneurs (both social and commercial) and overall societal improvements in standards of living.

Review of Existing Lit on Graduate Entrepreneurship

An older, but interesting study/lit review called Making the Journey from Student to Entrepreneur from the UK’s National Council for Graduate Entrepreneurship via a foreign language blog (from Northern Europe?).

Obama’s Social Entrepreneurship Policy… What and When?

Nathaniel Whittemore over at Change.org has a piece highlighting President Obama/WhiteHouse.gov’s plan on social entrepreneurship. No idea when these ideas will be floated and legislated, where the exactly the money will come from, and how the policies will be implemented once , but here is what Whittemore writes,

“Whitehouse.gov continues the Change.gov and my.BarackObama.com traditions of simplifying the major policy bullet points. So what’s there for the social entrepreneurs?

• Social Investment Fund Network: Use federal seed money to leverage private sector funding to improve local innovation, test the impact of new ideas, and expand successful programs to scale.
  • If the team does this well, it could be really exciting. I think the way that Good Capital was brought into a larger investment for Adina Drinks in order to focus on the fair trade/social mission side of things could be a good model for partnerships for this initiative
• Social Entrepreneurship Agency for Nonprofits: Create an agency within the Corporation for National and Community Service dedicated to building the capacity and effectiveness of the nonprofit sector.

What My (Your) Region Looks Like

While we talk about national economies all the time, it is typically your local city/metro/region economic health that matters most to your business, housing values, etc. Today, via Potomac Tech Wire, I received news that VC in my metro (the DC metro) is down quite a bit… From the newsletter,

DC-area companies raised $193.6 million in venture capital during the fourth quarter, the lowest total in seven quarters, according to new figures from Dow Jones VentureSource. The largest chunk of that funding, about $83.6 million, went to companies in the information technology sector, including McLean-based Trust Digital ($14.5 million) and Reston-based LucidMedia ($8.8 million). Bethesda-based medical software firm CodeRyte had the largest round of any local company in the quarter, closing $47.2 million in October. The lower overall numbers mirrored a national trend, which saw U.S. companies raise $5.5 billion during the quarter, 30% less than the fourth quarter of the prior year. “The data confirms what we’ve being hearing anecdotally for some time that many venture capital firms are circling the wagons to weather the downturn and are focusing more on the health and vitality of current portfolio companies rather than new investments,” said Jessica Canning, the director of global research for Dow Jones VentureSource.

While my venture has not gone out for funding, we often look to our local peers for feedback etc. Another way in which a local economy can influence the growth of a new venture. That said, in recent weeks, I have used the GMU network to put feelers out related to angel funding.

As a consumer related gaming company we are very out of step with many of the new ventures in our neighborhood. Fortunately, we are close to New York and hook up with many firms through trade groups.

2 Part Interview with Social Entre Author David Bornstein

Bornstein’s book, How to Change the World: Social Entrepreneurs and the Power of Ideas, was used often in my class on social entrepreneurship at GMU’s School of Public Policy. Here is a two part interview with Bornstein from Buzzflash.com — part 1, part 2. Bornstein explains to motivation of entrepreneurs and many other important topics. As we often highlight, the entrepreneur is driven to create. From part 1 of the interview:

The first one is a global misperception, which is that entrepreneurs only start businesses, and that the basic motivation behind the entrepreneur is the desire for wealth – personal wealth. There’s lots of research to show and I can speak from my own experience that that’s not the case. In fact, entrepreneurs are primarily motivated by the desire to build something. To see their ideas come to life.

Worth reading these interviews.

Tulane BPlan Comp: Social and Business Tracks

Just received word that the Tulane Business Plan Competition is open for entries until Feb. 15. They are awarding $40,00o in cash to the winners. There is a social venture track and also a business innovation track.

I would expect the social track to be a competitive field given Louisiana’s recent history and also the fact that it is the first state to have an Office of Social Entrepreneurship.

The contest is open to teams across the US as long as one member of the team is a student at an accredited university. Good luck. Go Green Wave!

New Study on Education and Entrepreneurship

Thanks to Schumpeters Century for alerting us to a newish paper, Education and Entrepreneurship Selection and Performance: A Review of the Literature. (You need a sub — usually through a university — though if you email the authors they may send it to you?).

The authors, Justin van der Sluis and Mirjaam van Praag, looked at over 100 studies and came to some very interesting conclusions. Here is a snippet from the beginning of the paper;

The first set reflects the combined findings of the studies
in our sample. First, the effect of education on entry is neither positive nor negative.
Second, entrepreneurship performance, regardless of the performance measure used,
is significantly and positively associated with formal schooling. Third, the returns
to education, as measured by means of conditional correlations, are estimated at
6.1%.3 Fourth, a compilation of studies estimating the return to education for both
entrepreneurs and employees in a comparable fashion shows that the entrepreneurs
in the USA have a slightly higher return to their education than employees, whereas
the reverse is true in Europe. Fifth, the returns to schooling in entrepreneurship are
higher in the USA than in Europe. (p.2)

Looks pretty interesting. I am excited to read it.

Frontiers of Midwest/West Created Modern Am Univ.

As we continue researching and trying to understand the rise of entrepreneurs in and around campuses, we came across this in Rudolph’s The American College and University: A History (1990);

In the post-Civil War period, however, it became apparent that the American state university would be defined neither in the South, the first home of the state university movement, nor in the Northeast, where the old colonial institution precluded it growth. The American state university would be defined in the great Midwest and West, where frontier democracy and frontier materialism would help to support a practical-oriented popular institution.

(Rudolph, p. 277)

The point here is that until the Midwestern/Western state university institutionalized practical subjects and activities, the American college and university was pushing classic subjects that an American populace with a frontier mindset (practicality, innovation, etc.) had little interest in.

Harvard, Yale, and the like followed the path that leaders at schools such as University of Michigan and Wisconsin blazed with their frontier populations, turning the schools into institutions reflecting the needs and population of America. (I am sure Zuckerberg and Gates are thankful for that.)

NY Times Special Feature on Campus Entrepreneurship

Was alerted by NDE to a special section on entrepreneurship in a recent NY Times Education Life. Many interesting articles and examples of campus entrepreneurs and the issues they face. From the feature story, Dreamers and Doers, by John Schwartz:

 

“We’re really a dorm of dreamers and doers,” says Prinya Kovitchindachai, who is hoping to market a vile-tasting pill, imported from Thailand, that he touts as a hangover treatment. “College students are the largest group of binge drinkers,” he says, quietly gleeful at the prospect of such a large market so close at hand. Friends have helped him bone up on the basics of international shipping, of securing shelf space and — in a consultation with a neighbor who was wearing a towel and still dripping from the shower — of creating Web sites.

“Any school can teach entrepreneurship,” he says, “but at Babson, we live entrepreneurship.”

Musical Campus Entrepreneurs

As we know, smart academic leaders are embedding entrepreneurship across campus. Inside Higher Ed’s David Moltz has a nice piece on music schools across the country and how they are integrating entrepreneurship into their curriculum.

Really worth reading. With media seeping throughout society and cheap production/distribution available, its clear being a professional musician demands entrepreneurial skills.

From the article,

Later this month, the Eastman School of Music at the University of Rochester will host a three-day workshop, in which a number of music schools will participate, entitled “Preparing the Generation-E Musician.” The workshop will explore the place of entrepreneurship in higher education music school curriculums. This discussion comes at a time when many music schools are hoping to ease their graduates’ transition into a world where it is increasingly hard for fine arts majors to make a living.