Posted on Wednesday 11 April 2012 by Ulster Business
Dr Stephen Spinelli with Ulster Business School’s Mark Durhan
The current economic malaise should not deter those with strong business ideas from pursuing their dreams.
That was the key message delivered by Dr Stephen Spinelli, a successful entrepreneurial educator and president of Philadelphia University, when he visited Belfast last month.
Speaking to Ulster Business ahead of an event hosted by the Federation of Small Businesses he said there is a lot of money waiting on the sidelines globally for good deals, but because the recession has been so long there is a scarcity of good companies for private equity investors to put that cash into.
“Private Equity abhors lack of use and capital abhors idleness. PE funds have an incredible amount of cash and they are feeling the pressure to invest,” he said.
“So it is starting to look like the perfect storm for private companies to get launched and grow. I always recommend people start a company with an idea of who they are going to sell it to, at what value and in what way. It doesn’t mean you have to but if you build it for that value you can keep growing it or choose to harvest it on your own terms.”
A regular visitor to Northern Ireland, Dr Spinelli said he sees no shortage of entrepreneurial spirit here, but says the province probably has some catching up to do to take advantage of these opportunities.
“The difference I see in the US and in some other places – parts of Brazil, Chile and China that I’ve been to – is that there is a more mature ecosystem than here.
“The capital food chain is more highly developed, so you get seed money, early stage money, growth money, public money, institutional money and there are multiple robust players around the food chain. When that happens it spawns even more entrepreneurship. Many of the people that then cash out become part of that food chain, and it is a self perpetuating ecosystem,” he said.
Dr Spinelli added: “In the US this has been around for more than a couple of generations so there is a cultural support system that allows for entrepreneurs to do more exploration with less social angst than I find here. The idea of “I’ve failed but I’ve gained a lot of experience” versus “I’ve failed so I’m a bum”. That makes a big difference.
“I think there is a great opportunity in Northern Ireland to have a less hierarchical and more collaborative ecosystem. The grantrepreneur mentality is not the right way to go. When I was in business if the government had given me money I would have taken it, so I don’t blame someone for doing that, but I think the development of the capital food chain is what’s most important.”
The US professor does see a role for Government in fostering innovation both in policy making and the infrastructure to help it work – to be a guide through the process for first time entrepreneurs, rather than the first port of call for wannabe start-ups seeking finance.
“I didn’t start my business because the government didn’t give me a grant is not something you hear in the US. I might say I’m pissed off they didn’t give me the grant, but it wouldn’t be the deciding variable,” he adds.
“I am not sure the government is suited to the role of angel investor or board member or mentor. But I think they are very well suited to being the guide and the tiller of the soil.”
Unsurprisingly, given his background, Dr Spinelli believes you can teach people to be entrepreneurs, and that it can be injected into large or long established companies.
“If people ask me about entrepreneurship I say it is all about opportunity recognition. If you understand the nature of the opportunity and how it can create value, and you understand growth or scale in that context, you have the basis of an entrepreneurial organisation,” he said.
He also thinks that being an entrepreneur is a more natural fit for many people than the more regimented process of working as an executive or a manager.
“We beat entrepreneurship out of people because we are generally risk averse. We punish mistakes. We should be teaching people what the nature of risk is,” he notes.
“I used to think entrepreneurship was an important component of how we talked and how we behaved. I now believe it is an essential component. My thesis is that the rate of change is so much more rapid that if you aren’t entrepreneurial and you aren’t looking at the nature of opportunity, the dislocation that you will experience in your life will be traumatic. In essence, if you aren’t entrepreneurial you are taking incredibly stupid risks.”
Dr Stephen Spinelli is president of Philadelphia University and previously held a number of senior leadership positions in Babson College, Boston. He was instrumental in growing important initiatives including the Global Entrepreneurship Monitor. He has consulted for major corporations such as Fidelity Investments, Intel Corporation, IBM Corporation and Allied Domecq and was the co-founder of Jiffy Lube International and CEO of the American Oil Change Corporation.