Interview. Education for entrepreneurs.

Do entrepreneurs need an education?

At the end of July, right after the trip to Orekhovo, we decided with Dan Reshanov to discuss the topic of education for entrepreneurs. He was going to speak at the summit ARES-2012 and, as a warm-up before the summit, we decided to do an interview.

23.07.2012

A: What do you think about whether entrepreneurs need an education or not.

D: I think they do, but whether the need for education is primary - that remains an open question.

Personally I think that education is needed already in the process of activity, it broadens your horizons, it gives you some applied knowledge that you need in the process of entrepreneurial activity. But entrepreneurial education itself is not what you should start with.

A: That is, you think that first you need to decide on the field in which you want to work - by trial and error, say - and only then get an education in that field?

STUDY BUSINESS

D: My point of view is this: if you want to do business in science - study business, not science; if you want to do business in construction - study business, not construction, roughly speaking - right in the process of work. Here the same laws apply in any field.

How does a business start - initially there is some topic, you start moving in it, doing something, something starts to work out for you, you start making some profit, but to reach the next level you need to have certain knowledge: to understand the tax system and so on, how these connections work. A lot of new opportunities open up, your horizons expand.

And not like this: first you studied at a business school, at one, then at another, understood something and went into business - that does not mean that anything will work out for you.

Business is not only a set of knowledge and some information that you possess, but also personal qualities: charisma, passionarity, the ability to negotiate with people, to communicate - a lot of qualities.

At first it shows as talent - what is already in a person, you realise it, and then you lay knowledge on top of that foundation. But I do not hold the view that one should drop out of university, basic education should be there.

A: At what level should one stop when getting a basic education? It turns out that there is no point in tying basic education to the type of business, since you will have to study business first of all anyway - you can choose the one that is closer to you in order to develop as a person.

D: Yes, systems thinking plus general erudition. When the topic takes off - we build up education and develop our personal skills.

These are master classes, trainings, including personal trainings, this is communication with fellow entrepreneurs of your level, of a higher level, with top managers, these are business schools.

When you do business and study at a business school in parallel, then you try the knowledge you gain right away. Some of it sticks very well.

And lastly I would single out mentorship, there should be a mentor.

Any novice entrepreneur, and not only a novice, should have a mentor of a higher level, who understands business better and can give a recommendation or advice, on the whole, this shapes the view of an entrepreneur's education.

A: Your idea of education differs from the generally accepted one in the direction of personal connections. The base, for example in the form of a bachelor's degree, is standard, you can choose any specialty, and then develop through business and through the personal connections that you get along the way.

That is, one should no longer stick to the system but show initiative in the area of creating one's own education?

D: You teach yourself, that is a very important point - you choose, for example, you realised that you lack knowledge of business, it turned out that there are many areas in which you are «at sea», say you have a stall selling «shawarma» and you understand nothing about it, then you need to go to a business school where they will tell you clearly about all the points: about marketing, about management, about macro- and microeconomics, accounting, they will put it all in order.

Then you will have the first foundation of an economic education. Further, when the foundation is already there, you choose what you specifically need most: to train your personality, the ability to negotiate, to take part in management duels, or to attend master classes on the topic of marketing - here you choose everything yourself for your needs.

A: Marketing is a hyped topic, to the point that you can convince yourself that you can make any nonsense and, with good advertising or simply a «correct» set of words, sell it. Someone is surely selling it.

Let us talk about more tangible things: accounting, which you mentioned - how deeply does an entrepreneur need to go into it?

There is always the risk of diving too deep, getting stuck there and missing something elsewhere. How much time should be spent on these details - how much did you spend yourself?

D: I got a second degree in accounting. I believe that an entrepreneur must understand bookkeeping. He should, not exactly be able to draw up accounting reports, but understand the general specifics, that is, how a firm looks in the language of an accountant: assets, liabilities, short-term obligations, equity, distribution of assets. You have to be able to talk to your accountant as an equal. You should not be an accountant, but you should understand what he does. So that he has no opportunity to go somewhere ... you understand, a very problematic place - when in your firm there is some grey area that you do not understand yourself. Precisely at the early stage of development this is a big problem, because it causes anxiety about what can be happening in that grey place. You need to understand jurisprudence a little, be able to draw up contracts, know what delicate points there can be, you need to understand this and not sign whatever a lawyer sends you, but read it carefully, spend time on it.

And so on in all areas, you need to know the basics, including the basics of marketing - it is huge, a heap of different specialists, but you must know the basics. Even the basics of web programming: html, for example, you should understand it at least somehow, so that if something happens you can react yourself, because there will not always be an opportunity to find other people who will do it for you. And so on in all matters, you learn and work until you reach a certain level and attract top specialists.

A: When did you acquire your basic knowledge - while getting your second degree? I mean everything concerning accounting and jurisprudence.

D: I studied for a year at the economics faculty of a business school. There were many subjects that created the overall picture.

A: Since you were already doing business then, you already had the opportunity to choose for yourself the most suitable things, the ones that could come in handy.

D: Yes, of course, although everything came in handy. I was doing my own thing and studying in parallel, so I could immediately think over how logical what I was being taught was, and whether it fitted with my business. Most of the things were indeed logical.

A: That is, you rate the effect of business schools on entrepreneurs as very positive?

D: Of course.

A: And for managers, for example, will it be useful, do they need it or not?

D: Insanely needed, even more needed than for entrepreneurs, who advance more due to charisma, they have some inner energy and due to it many rise. That is the problematic nature of the question "needed or not?": on the one hand, if you look into it - of course it is needed, it will not get worse. But on the other hand, many drop out of school, drop out of university, go to work, become successful each up to a certain level. For example Bill Gates, who dropped out and only finished his degree later, there are many such examples. On their basis people say that education is not needed. But on the whole they do study, just on their own, they start to understand, and the topic carries them. But further, in order to manage your firm, hiring some people - you must be able to communicate with them. And that is education, understanding of specifics and trends. Because the entrepreneur sets the vector of growth. He must understand this, because without it you cannot move anywhere. By inertia you will ride only a certain distance - the topic will carry you if it is very cool, but in the long run you still need education. The conversation is about when you get it. I believe it should be obtained already in the process of work.

A: The option of evening education suggests itself. In your model it looks more suitable for development.

D: That is possible too, although I studied at a second full-time programme. I skipped some classes, but on the whole there is no rigid binding in time when you are engaged in entrepreneurship. If you have scheduled meetings, you can spread them out somehow. If we consider a second education, classes do not take place every day, on those days you can free yourself. It is not fundamental which specific type of education, full-time or evening, it is important to understand how much free time you have that you need to spend on it, because it is moving forward.

There is another important point here - to define what entrepreneurship is. How it is usually spoken of: it is both leadership and knowledge, and the ability to use that knowledge in time and make decisions. How can one teach entrepreneurship? That is anybody's guess: you can teach skills, train the personality, but initially you must have your own vector, you must look in that direction. It is a way of life, you must like it. If you get pleasure from it, when it is there, then you start to grow muscles on that skeleton. And to grow muscles on a skeleton that is not there is stupid. You can grow a lot of muscles and realise that you have no skeleton.

A: Can that be understood in advance? How to test yourself. They say that the percentage of people with entrepreneurial abilities is small. Someone lacks passionarity, something else, self-confidence, and the right mosaic has to come together. What would you advise those in doubt - to try, or can you test yourself in another way?

D: You need to look at yourself evaluatively. Let us single out two categories of entrepreneurs at this stage: the first are those who from the start loved to organise everything, were not afraid of risk, of making decisions. The second are those who at a more conscious age chose entrepreneurship as a model of life. We will now talk about the second group, because with the first everything is clear. First of all you need to understand: are you ready to trade a stable income and your small but quite comfortable habitat for an unclear risk. Everything will depend on you and the risk connected with whether you succeed or not is quite big. A new life can become more interesting, of course, there will be many new risks, but new interest will be connected with them too. You will have to work twenty-four hours a day. Are you ready to start such a life, when everything is at stake, or is it better to build your building gradually: got an education, found a job, then a girlfriend, had children, and so the building grows gradually. Or plant yourself an apple orchard that you will water, grow day and night and live with it, but which will give you a harvest and your life will be full of surprises and unexpected things, but it will be insanely interesting.

A: Is there some age threshold connected with those social phenomena that you mentioned? Usually a person is ready to take a risk when there are no children and family yet, that is, some upper limit emerges.

D: Theoretically that is hard to describe, because there is a mass of different examples. You cannot say that an entrepreneur usually starts at such and such an age, because there will be someone who at fifty decided to start, it took off and it turned out that he had lived fifty years not the life he should have lived - he found himself. Here there is no binding either to age, or to social position, or to anything. You can be a cool manager, everything works out, and then you tried entrepreneurship and there it really took off and you understand - well, this management - it is all nonsense, not mine, and entrepreneurship is mine. Or the other way round, when a cool manager goes into entrepreneurship, thinks how clever he is, how much he knows, and nothing worked out and he is straight back to work and everything is great again.

A: In that case entrepreneurship looks more like a talent - you have to try, either it wakes up or not.

D: It is in you, maybe it is deeply hidden, you do not know about it. But if it is there, then it can develop. First, you have to think about the questions we mentioned, second, try, then it can develop, if it was never there, if you have some other interests in life, then I would not count on becoming a successful entrepreneur.

A: If a person has other interests, he probably does not even think about it.

D: Everyone thinks about it now. There is a tendency now, master classes are held, motivated people travel around telling how cool it is.

A: I understand what you are talking about, this tendency, as it seems to me, is connected with the fact that people think about how to make money, the main thing is quickly.

D: Yes, many believe that entrepreneurship is primarily about money. But in fact money is a consequence of your way of life. Given the set of your qualities and your activity, money should come, because you organise something, do something, then sell it to other people. Money is in this chain. It is logical that an entrepreneur will accumulate it. Each time the entrepreneur does something new, uses money as a resource and increases his possibilities, constantly expands his garden. Of course most want to earn money and invent something for that. Later many understand that they like entrepreneurship itself and they want to live that way. There is no single path, but I believe that education is necessary, for example communication with a mentor and with colleagues allows you to take their experience, their knowledge, you analyse yourself and this gives, besides strong motivation, a set of applied skills that you want to try, which in turn gives the opportunity to gain knowledge in some other topic. You constantly learn something.

A: As for our education, I think you assess the transition to the Bologna system positively. I will now assume that in your system of views the meaning of the division into bachelor's and master's degrees is quite high, because there appears the opportunity to try yourself in one area, and then, if a talent or desire has awakened in you, you can, as you demonstrated by your example, get an education in another area and become a rather versatile person without any complicated manipulations within one education, getting a bachelor's in one place and a master's in another.

D: Yes, I consider this system quite sensible. I did not see the point in studying at the physics faculty for at least another year. If I had been a specialist-programme student, I could have left before finishing and left the faculty. But as it was I finished four years, rested for a year and went on to study further.

A: What can you say about the length of study. Lately I have come to the thought that our educational process is somewhat drawn out. One could divide the bachelor's and master's within a specialist programme, for example three and a half years and one and a half. Did you not have a feeling of it being drawn out?

D: Five years would have been too much for me, and six and a half even more so. Four years is just right, less is too little, plus two years in the master's. In the master's, I think, they should give more than in the specialist programme. A person should go deeper into the topic, that is why it is longer. They do not give the same thing there as in the specialist programme, do they? And there is the opportunity to change specialty.

A: I see that as the main plus of the system. As an entrepreneur, has an economic education been more useful to you than a physics one or not?

D: I have not yet understood what helps me more - physics or economics. Economics in specific places.

A: That is, economics is your workhorse now?

D: Yes, and physics is the structure of thinking, looking at the root, analysing the cause of a problem rather than the problem itself, physics is the foundation.

A: I think we can come back to this when the analysis can be done from the height of the years lived. Did you not have a feeling that, getting an education in one of them, you took less than you could have? Although it is probably hard to assess.

D: Yes, one must go one's own way, and not be afraid to take risks.