Archive for May, 2006

The New Entrepreneurial Class

May 25, 2006

Time was, being an entrepreneur in Europe carried a lot more than just economic risk. In countries where social conformity prevailed and many workers sought comfortable lifetime employment, business failure often meant a permanent stigma. Even in the go-go 1990s, venture capitalists had to scour university labs and huge companies for hot technologies to spin off, and coax academics or managers to start their own companies

Now, a new breed of entrepreneur is starting to multiply, from MBA graduates determined to strike out on their own to seasoned executives eager to run their own show. In part, they’re inspired by so-called “serial entrepreneurs” — Dennis Payre, for example, the co-founder of France’s Business Objects — who are grabbing headlines as they launch second or third companies. That hardly ever used to happen in Europe .

“MAD, PASSIONATE ACT.” Business schools, too, are getting in the act of boosting Europe’s entrepreneurial base. In January, Fontainebleau-based management school INSEAD teamed up with Barcelona’s IESE to create what has been dubbed European Entrepreneurship Accelerator, a 10-week elective course that allows students to work side by side with serial entrepreneurs. “More and more students are joining business schools with the intention of becoming entrepreneurs,” says Julia Prats, professor of entrepreneurship at IESE. “In the past, we had to convert them.”

In the pilot course that took place between January and March, 20 students from the two schools joined six companies, where they worked closely with the CEO-founder on projects such as designing a business plan for a second round of venture financing.

“The impact is that in a very limited period of time, students get a fairly honest picture of what starting a company is all about — matching the business school theory with the mad, passionate act of creating and running a company,” says Peter Zabouji, INSEAD entrepreneur-in-residence, who got the idea for the Accelerator while teaching a course on writing business plans. Forty students will participate in September.

RICH IN RESOURCES. Mathieu Carenzo, an IESE graduate who took the accelerator course in January, certainly experienced the harsh reality of managing a fast-growth company. He and three fellow students landed at an Internet-related company that failed three weeks later when a fresh round of financing collapsed. Carenzo and his teammates then joined an information technology company specializing in data storage and helped the CEO write the business plan to help secure a loan from a U.S. bank.

“One thing you learn is that you can’t do everything yourself,” says the 30-year-old Frenchman, who aims to start his own company some day. “You need contacts, and you need a team.”

He should have plenty of people to pick from. At IESE, some 30% to 35% of graduates now begin their own company within five years. Creating European startups may remain tough, but today there’s more capital and talent available than ever before. The years of laying the foundation for a new industry are starting to pay off.