Entrepreneurship: A Risky Economic Pillar or an Economic Pillar at Risk?

Originally published on Triple Pundit

Amway Chairman Steve Van Andel recently shared a story about a trip he took to Mexico. There, a woman greeted him in a very memorable way. She kept saying something in Spanish – a phrase he hadn’t heard before – and then pointed to her bright yellow dress. She repeated the action several times, almost frantically, until the interpreter made his way through the crowd.

The woman was trying to say, “This is the first new dress I’ve ever owned, and it’s because I now own my own business. Thank you.”

Her conviction. Her story. Her. All of this is not a piece of folklore. It’s a microcosm of something we hold dear at Amway: that spreading the entrepreneurial spirit and giving others a chance they may not have otherwise, makes all the difference. For this woman, and for many, one chance is all it takes.

So why don’t more people strike off on their own, or start a business through with an established direct selling model like Amway?

Three years ago, Amway leaders in Germany and academics at the University of Munich Centre for Entrepreneurship began to think about this question. Their discussions led a formal survey, and an academic study called the Amway European Entrepreneurship Report. The goals were simple:

• Facilitate discussion about overcoming challenges all entrepreneurs, or would-be entrepreneurs, face and what brings their ideas and plans to a halt
• Provide fodder for thought-provoking socio-political debate about what can be done to spark entrepreneurship during times of economic crises
• Bring legislative bodies, educational institutions and media together to set an agenda that fosters global entrepreneurship of all kinds

The research both affirmed our concerns of a “gap” between those who could see themselves starting a business, and those who actually did. It also provided insights on some of the fears that kept people from setting off on a new venture.

The gap was around 31 percent globally, but varied somewhat across countries. This set off a series of news articles and public policy forums to better understand the findings. But was this just reflective of European economies and cultures? To really understand the issue, we had to take the research global.

In 2013, we worked with universities in the United States, Japan, Australia, Colombia and Mexico. The first Amway Global Entrepreneurship Report not only echoed the European research, it revealed some incredible insights related to the “fear of failure” of would-be entrepreneurs.

Of the 26,000 people we surveyed, 70 percent cited fear of failure as the biggest obstacle they faced in starting their own businesses. Some feared financial burdens (up to and including bankruptcy), which did not surprise us.

Still, many others feared that failure would have social and psychological consequences, such as loss of self-esteem or declining respect from peers. In the United States, we have a high tolerance for failure, and in fact, we see it simply as a step in most people’s journeys.

It’s easy to find out how many times Thomas Edison, Steven Spielberg or Colonel Sanders failed. However, in many other countries, this acceptance is scarcer, so we’re asking ourselves: How do we export that tolerance if we truly believe (and Amway does believe) that it’s a mindset that needs to exist for entrepreneurship to thrive?

When thinking of factors to encourage entrepreneurship and the foundation of businesses, respondents stated that professional support is fundamental. For example, established and successful entrepreneurs may function as role models for potential and new entrepreneurs. Through mentoring programs and business networks, potential and existing entrepreneurs may obtain crucial first-hand information on the startup phase.

We have not answered all of our questions, or found all of the solutions. But the journey is helping to create new conversations about the role of entrepreneurship in our changing world.

The research is now being discussed by everyone from the World Federation of Direct Selling Associations, to the U.S. Chamber of Commerce, to Cosmo Magazine, as well as with media and policy makers in countries around the world.

In 2014, the study will take place in 38 countries, and results will be shared during Global Entrepreneurship Week in November.

The biggest question is one that will not be answered by us, but by people like the woman in Mexico: Will the future be an uncertain cloud, or like a yellow dress, as bright as the sun?

Jesse Hertstein is Corporate Social Responsibility Lead at Amway, and author of the Amway One by One Campaign for Children blog, which provides thought leadership around grassroots cause activation and captures stories of successful partnerships around the world. He has traveled extensively documenting Amway CSR programs, and serves as a leader in his own community around issues of literacy.