It’s no big surprise that on the European side of the Atlantic you can find many government backed programmes and initiatives that offer start-ups and entrepreneurs various forms of financial assistance.
Call up your local chamber of commerce, ask for entrepreneurial assistance, wait about fifteen minutes on hold and then you’ll receive the info you need to search for, apply and learn more about the different help initiatives coming from your European capital of choice. Do some research, pitch them an idea the way they want to hear it, put a new spin on it, and lo and behold you’ve got €20.000 to run wild with and start your enterprise
On paper, it all sounds grand, and I don’t believe anyone would sneeze at a free 20 thousand, but unlike a market such as say the States, where pretty much the only government aid you’ll get is well… none. You have non for profit initiatives such as SCORE and a handful of others, but you’ll be hard pressed to find anyone giving out free cash.
EU hand holding vs’ U.S. hard love
While 20k is undeniably nice it does cause a problem withing the European entrepreneurship community that we’re calling the softening of the socialist entrepreneur. Meaning, the European entrepreneur that “knows” he / she will receive state aid is not as hard pressed and driven to succeed as his/her American counterpart, the pressure is simply not there to achieve as much with as little as there is in the Sates.
This lack of pressure on the part of the entrepreneur establishes a more lackadaisical approach towards work output that trickles down to the employees of the start up, and creates inefficiency – this need for milestones and successes before money runs out – is simply not there, the living on the edge, or the one foot in the grave the other on a banana peel mentality does not exist to the same degree as it does in the U.S.
Meaning, that the American entrepreneur is more driven to succeed, because he/she knows that once the money runs out, that’s game. In the EU, these disbursements can take place over time, a pre-market concept can go on hold until c grant is received, or assistance is given from a local governing body. There’s a general lack of that type of “pressure” that is so needed to go the extra mile.
Striking a Balance or Changing Mindsets?
This socialist entrepreneurship is a result of the European mindset. In the U.S., business angel and venture capital activity is much more prolific than it ever was in Europe, and especially so now in 2010. As such, finding capital financing, and even bank financing for a new idea and concept has always been easier in the U.S. than in European markets, be it for cultural reasons – or whatever. As such, governments have stepped in to try and fill that gap that is otherwise lacking in the EU. However, lacking a profit motive, the government initiative inherently fails as it’s purpose is to support enterprise, create jobs, etc… and not to turn a buck.
What needs to happen is a balance, where instead of offering grants, those government backed initiatives in the EU, need to function as totally autonomous investment bodies without any political influence – investing in companies that they see the same high growth potential in as an experienced BA, or VC, but taking on a higher risk than your typical early stage European investor, because those mindsets that have led to Europe trailing the U.S. in terms of investment activity will not change for at least another 40-60 years.
While there are days of the entrepreneur, various government backed incubators initiatives and some absurdly difficult to find money from the EU, the one thing – and possibly the most important thing that is missing Europe-side, are readily accessible mentors. Those seasoned entrepreneurs who are willing to donate their free time to help the future generations of younger ones who lack that experience which sometimes means the difference between success and failure. Well and to keep them away from the failure.
In the U.S., that is SCORE or known by its longer name the Senior Corps of Retied Executives who typically council America’s small businesses, and set them on the road to success and profitability. On average retired individuals who have a passion for entrepreneurship and years upon years of experience in setting up companies. More so, this is probably the most prevalent of all U.S. entrepreneurship initiatives – and is non-for-profit.
On the other hand, Europe has what sometimes seems like countless initiatives dedicated to helping the entrepreneur. Information sessions, workshops conducted in conference halls, packets, subsidized space, financial assistance, etc… etc… etc… and best of all they are all typically backed by taxpayer money.
But the rub is that there is no necessity to subsidize businesses, in fact subsidized companies will be more likely to fail due to the preconceived conception that access to capital is easier to acquire, or simply that to gain that capital one needs to adhere to a set of absurd government guidelines.
What the business needs is contacts, clients and a strategy on how to acquire them – this capital does not provide, nor do information sessions on why it’s great to be an entrepreneur or institutions whose “vision” is to help the entrepreneur focusing more on their own prevalence in any geographic area.
There’s just too much mess out there, too many signals, not enough simple guidance and “proper & effective” entrepreneurial education. Academia is great and teaching people how to be entrepreneurs is fantastic, but there are no better ways to learn that to just do it.
For all the people in the EU, SCORE is accessible form outside the U.S. and the information in there, i.e. business toolbox can be helpful to non business oriented entrepreneurs, and even some business oriented ones.
We’ve got some start up capital, we’ve got a management team and we’ve got an idea. Great, we’re ready to go.
Wrong. You’re missing what could possibly be one of the most integral parts of your start-up – a mentor, and here’s why.
Mentors are like the wise old man, who can tell you when you’re veering off your path, or if you’re about to make a bad decision, hold a wealth of knowledge and typically know people that can help give you the edge. Mentors are pivotal to you and your business.
As such here’s some best practice advice on how to get yourself a mentor that will help you get your company to the next level.
Networking is key – Networking is by far the best way meet people that may be able to help you in your entrepreneurial venture. Talk to colleagues, friends, anyone and everyone, don’t be shy, ask.
Call up old university professors; they tend to have strong networks, ask your former bosses. Everyone may have a potential contact that can help you, so dig deep and ask.
Meet potential mentors. – Set up talks. Discuss your business, your situation, and what you want to achieve, as well as obstacles your encountering, and how you’re dealing with those obstacles.
A good mentor should tell you what he/she thinks of your business, they should make recommendations, and see where you can be now, in 6 months, in a year, and have experience in the sector that you’re entering. If your entrepreneurial idea is a Plant Nursery, a mentor who’s launched a weblog network is probably not the best one to have.
Stick to similar sectors – For simple synergies, it’s best that your mentor be in the same sector, if you’re in an Internet startup, your mentor should be an experienced online entrepreneur. For telecom, ideally someone who’s had a senior role at a National Carrier, MVNO, or other industry affiliated company.
Now that you’ve managed to get a mentor there are a few things to note.
Most are helping you out for free – and most are very busy individuals, so don’t badger them over every little thing.
If a mentor asks you for compensation from the onset, they’re not a mentor, they’re a consultant, and while on occasion a consultant may be needed a mentor should not outright ask for compensation.
Compensate your mentor, ff they’ve helped you and your success can in part be attributed to their help, give them something for their hard work. If they enjoy wine, a few hundred € bottle is a nice gesture, an even nicer gesture is a 1% stake in your company. 1% may seem like nothing, but when you convert, it’s always nice to get a kickback for your hard work.