Young entrepreneurs, particularly those still in education, are generally associated with bright ideas, an indomitable spirit to succeed, and crucially, an open attitude towards taking risks. A new study from the UCL School of Management reveals that there’s more to this generalisation that you may think.
In a new National Bureau of Economic Research (NBER) working paper, assistant professor of Strategy and Entrepreneurship Kenny Ching and his and co-authors found that student entrepreneurs are less likely to patent their ideas or protect their innovations compared to faculty entrepreneurs.
At the same time, faculty entrepreneurs dedicate more time to acquiring formal intellectual property protection and protecting their assets but are less agile in their commercialisation activities.
“Our analysis suggests that student entrepreneurs, with less time and with less access to university intellectual property institutions, are more likely to choose an execution-oriented strategy,” says Ching.
University faculty entrepreneurs are more likely to be patient, wait for delayed market entry and pursue a control-oriented strategy with formal protection, he adds.
The research suggests that there is often a trade-off that entrepreneurs have to consider in commercialising their inventions.
The dilemma between a control or an execution-based strategy also impacts other entrepreneurial strategic choices such as targeting mass or niche markets.
At a time when entrepreneurship is at its peak in coolness, a separate Santander study shows that one in four university students in the UK are either already running or plan to run a business while studying.
These young entrepreneurs have an average turnover of £11,408 per annum, and collectively, have a turnover of £1 billion. This figure is up this year by 32% from £913 million in 2016, suggesting a strong impetus to inform and engage with this enterprising demographic.
The Santander study found that 60% of students were in it for the money, under the impression that being an entrepreneur means big bucks. This could explain the general trend of younger entrepreneurs rushing to market.
Fifty-nine per cent said the desire to pursue a hobby led them to start a business and 32% cited the intention to gain work experience as a reason for opening a new venture.
The majority of student ventures are tech-based businesses (27%), followed by arts (17%) and textiles (9%).
What if all of these millions of young entrepreneurs were quick to commercialise on their inventions? This could result in entering the market too soon, not protecting themselves and their intellectual property, as well as other market risks that could finish their entrepreneurial journey before it truly takes off. On the other hand, holding out for the right time might lead to missed opportunities.
Although there is not a one size fits all for startup strategy, the researchers suggest that entrepreneurs need to be aware of the different strategic options that are available, for the best performance.