ENTREPRENEURSHIP SPECIAL ................Think scale-up, not just startup

Think scale-up, not just startup   Most new ventures that survive their first couple of years struggle to find resourcesIf the world has come to be ruled by multi-national corporations, it is because they embrace scale In one of Austin Powers' movies, the mad scientist Doctor Evil, back from  a long hiatus in deep space, is shown conferenc ing with his team about  new opportunities to take over the world. His No. 2 informs him that in his  absence, the corporation had invested in a little known coffee company  called Starbucks, and with a shift in focus away from evil empires, profits  could be increased fivefold. Doctor Evil categorically rejects the scaleup  opportunity, preferring instead to rely on his own evil invention, a time  machine, and his own evil plan, namely, stealing Austin Powers' “mojo“. But we can make trillions, says his No. 2. “Why make trillions,“ rebuts  Doctor Evil, with a knowing little smile, “when we can make billions?“  Evil's quip typifies something I have been puzzling  over -the seemingly endless fascination with startups. All around the  world, governments and educators and others want to encourage  entrepreneurship. Entrepreneurship is beginning to be seen as the panacea for a variety  of economic and social problems. I am not unhappy with that. Quite the contrary, in fact. But I worry about entrepreneurship being  automatically equated with startups. On the one hand, entrepreneurs see themselves as “founders,“ probably because they are fed up with working for others and want to be their own bosses or because they are inspired by legends such as Steve Jobs and Narayana Murthy.  On the other hand, people who choose not to start ventures see  entrepreneurship as something those “entrepreneurs“ do. Together, this obsession with startups blinds us to important ways in  which each one of us can use entrepreneurship for solving economic  and social problems that we care about. Consider the landscape of firms in most countries. Most firms in an  economy are small, with just one or two people employed (including the founders). Very few firms grow to employ hundreds  or thousands of people. All our investments, financial, educational and otherwise are focused on these two ends of the distribution. Most public resources are targeted toward getting more people to start new ventures and most private investments target so-called  “gazelles“or ventures with high growth potential. Yet most new ventures  that do get started and survive their first couple of years, struggle to find  resources and humantalent to grow. There are several reasons for their struggle.Financial resources form only a very small part of the story. The real problem has to do with talent  and trust.  Most students coming out of good schools want to work for large corporations, preferably multi-national giants that provide huge salaries  and “professional“ (read “impersonal“) systems of operations. Add to this the fact that most small business owners don't trust new hires,  especially the ones who want to take initiative and show a zeal for growing  the venture in exciting ways. Yet, if we could scale up even a tiny fraction of existing small firms, we could generate more employment and income than all the large firms combined.  When I did a quick calculation using US data, I found that growing 10% of $200K firms into $2M and about 3% of $2M firms into $20M would completely wipe out unemployment. I suspect the ratios are even smaller in developing countries like India that needs to grow  about a billion jobs over the next 20 years or so. I have had a lot of discussions about this with Madan Padaki, founder of Head Held High in Bangalore, an organization that trains  rural youth for urban employment and now focuses on creating  employment in rural India.  In addition to business plan competitions for startups, we think we  should be creating opportunities for scale-ups.For example, why not  send out college students interested in entrepreneurship  to find excellent  local businesses that can and should be franchised nationally and have them “pitch“ the owners on a plan to scale up? Or encourage experienced  professionals to seek out promising small businesses that could use their  skills to grow? Imagine a digital marketing professional who convinces a local theater  group she loves to be promoted on social media. Or a supplychain  professional who figures out a way to bring her favorite meal to the mass market. I have always wondered why I cannot get Indian fast food at every airport and mall around the world. Someone, please hurry up  and get it done. In short, you don't need to be a startup entrepreneur to put entrepreneurship to work for the economy and society you live in. Become a stakeholder in your favorite venture. And even if you actually want to become a startup entrepreneur, I urge you to consider becoming a scale-up  entrepreneur instead. This is even truer if you want to be a social entrepreneur. India is a fountainhead of social entrepreneurship and  always has been, even before the term was invented. Lijjat Papad is a case in point. That's why it is frustrating to see thousands of new entrepreneurs starting  their own little thing, while all around them are existing ventures struggling  to scale-up.  If the world has come to be ruled by multi-national corporations, it is because they embrace scale. They have no problem buying, merging,  partnering, colluding, joint venturing and a dozen other ways of leveraging the innovative minds and ventures of entrepreneurs outside their walls So if you are think ing of starting your own venture, pause a moment to  consider existing ventures who could use your time and talent to grow  and scale. Go “pitch“ them and convince them to let you in. And if you are a social venture struggling to survive and grow, reach out to your extant “competitors“ to merge with and welcome new entrepreneurs who think they may have a better way than yours  to solve the social problem you care about. Chances are, they have. In our zest to embrace the lone, heroic, risk-seeking, creative, passionate entrepreneur whose glory lies in starting new ventures, let us not ignore the amazing scale-up opportunities already embodied in existing new  ventures.  Of course, it's not what Doctor Evil would do. But that itself may bereason  enough for us to do it. By Saras Sarasvathy (The author is Isidore Horween Research Professor, The Darden Graduate School of Business, University of Virginia) CDET4SEP15