The Economist lists top five entrepreneur myths

Guess what? The Economist has proclaimed entrepreneurs “global heroes”. This month it has done a special 17 page report proclaiming that entrepreneurs are enjoying a renaissance the world over.

In fact it says the entrepreneur idea has gone mainstream, supported by political leaders on both the right and left, championed by powerful pressure groups, and reinforced by a growing infrastructure of universities and venture capitalists and business heroes like Richard Branson.

But lots of myths about entrepreneurs still prevail, it says.

Here are the top five.

Myth 1: That entrepreneurs are orphans and outcasts, lonely Atlases battling a hostile world. In fact, it says, entrepreneurship is a social activity, and they almost always need business partners and social networks to succeed.

Myth 2: Most entrepreneurs are just out of short trousers. While that is true of the Bill Gateses of the world, the Kauffman Foundation examined 652 American-born bosses of technology companies set up between 1995-2005 and found the average age of the boss was 39. And the number of founders over 50 was twice as large as that under 25.

Myth 3: Entrepreneurship is driven by venture capital. While this is true for capital intensive industries, most of the money for start ups comes from debt, or the three “Fs” – friends family and fools. 

While people in the US might think this is a myth, there are very few Australians who are under that misconception.

Myth 4: To succeed entrepreneurs must produce some world changing new products. Most successful entrepreneurs concentrate on processes not products.

Myth 5: Entrepreneurship cannot flourish in big companies. Yes, The Economist says, some start ups are often more innovative than large companies. But big companies work hard to keep their people entrepreneurial. More importantly many large companies provide start ups with their bread and butter, contracting out innovation to smaller companies.

Related article:

• 20 deadly start-up myths