Danish government and industry groups keep writing about how the country needs more entrepreneurs to create jobs in Denmark. What do they really ask for?
I have run into so many definitions of entrepreneurship lately. One was this LinkedIN article that contains quite a few and very varied definitions and this blog contrasting entrepreneur and innovator.
A disturbing definition of entrepreneurship came when a connection introduced the condescending concept lifestyle entrepreneur. According to his investors, a lifestyle entrepreneur was anybody without a vision for how his or her start up could reach a market cap of $1 Billion within 10 years of establishment.
What does a $1B market cap mean in practical terms?
To put this number into perspective, the combined market cap of all listed Danish companies was as of the end of 2012 $225B according to The Worldbank. (End 2014 it is probably slightly but not significantly more.)
In Silicon Valley, within the tech industry a $1B market cap would as a rule of thumb be assumed for a nicely growing privately held company that has reached a yearly revenue of $100 mill.
That is +/- 600 Mill DKK in sales. Around 500 Danish companies are that big or bigger. And they are generally much more than 10 years old.
In USA it may still be considered a start up. If you search for definitions of Small or Medium sized Enterprises (SME) for the U.S. and for Denmark and you will find that the official definitions of a SME is up to 500 people in the U.S. but only up to 200 in the EU (and supposedly just up to 100 employees according to Denmark's own statistics that also lists 99.2% of companies being SME by that definition.) We are talking about different size companies by magnitudes - partly facilitated by USA being the world's largest market.
Does this mean that I think people should "go big or go home"?
It means that perhaps we should not just look to - or try to recreate - the Silicon Valley VC-model but find other models for growing businesses organically or through collaboration. David Heinemeier Hansson, an icon in tech for creating open source Ruby on Rails, spoke nicely about how to succeed without taking VC funding in this talk to a Stanford audience. In the company where he is partner they are five - 5 - very wealthy people who don't even work in the same geographical place.
It doesn't have to be BIG. Big is not a guaranty for creating a lot of jobs in tech. And Silicon Valley tech is certainly no guaranty for creating jobs in Denmark even if the founders are Danish. Going to California has been a success for some companies, but can't we by now help each other grow in Scandinavia without having to move the whole company to USA?
Could small, collaborating units be the new way forward?
Just down the street, a German/English couple facilitates sales of German high quality mechanical items directly to almost any university laboratory in the U.S. The exporting companies only have to ship directly to the customer without the hassle of having a sales operation abroad; they don't even need to speak English! And everything is done online. My neighbors don't create much work in the U.S. but they are creating work for SMEs in Germany. Perhaps they are contributing to the statistic finding that relatively more German SMEs than Danish SMEs export to anywhere at all?
Could Danish companies collaborate to find similar niche markets abroad that create more employment at home? Engaging more Danes who live or have lived abroad and/or foreigners already living in Denmark could be one way to proceed for gaining insights into new markets.
Just look at the theme for this year's International Symposium in St. Gallen: "Proudly Small". People don't really like working for organizations where you are just one out of tens of thousands of anonymous employees.
If an entrepreneur is "...someone who, rather than working 8 hours a day for someone else, would prefer to work 18 hours a day for [him or herself]..." (Rory MccGwire), perhaps a lifestyle entrepreneur shouldn't work for the VCs neither?
Now, that would be disruptive...in true Schrumpeter tradition.