Risky Business

The odds are against you: Why entrepreneurs are unlikely to succeed.

Risky Business

Start your own company. Become rich and famous. Live the American dream. Happens all the time, right? That’s the impression one gets from reading Fast Company, Inc., Entrepreneur, and any number of other business magazines. Tempted by the allure of being one’s own boss and the potential for achieving spectacular success, every year millions of Americans launch new businesses, only to discover that being an entrepreneur is less glamorous and more difficult than they expected.

Enter Scott A. Shane, professor of entrepreneurial studies at Case Western Reserve University, who penned “The Illusions of Entrepreneurship: The Costly Myths that Entrepreneurs, Investors and Policy Makers Live By” (Yale University Press) to give would-be entrepreneurs an accurate picture of the realities of starting a new business. For those self-assured individuals who believe they know it all, Shane also developed an online quiz designed to test one’s knowledge of entrepreneurship. “If you score 100 percent there is no reason to read the book,” contends Shane, “but if you score 40 percent … the information in the book may keep you from making decisions you’ll regret later.”

Shane spoke with Failure about the myths of entrepreneurship and why it’s so important to make well-informed decisions when contemplating a new venture.

How do you define entrepreneurship?
An entrepreneur is defined as someone who starts and runs his or her own business. So entrepreneurship is the act of starting and running one’s own business.

Who is the typical entrepreneur?
The typical American entrepreneur is white and male, lives in a small city where he has lived his entire life, and starts a business with $25,000 of his own money. More often than not, the business is in a run-of-the-mill industry like retail or construction or involves providing a personal service to individuals. Typically he has worked for many years in that same industry.

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