Big Ideas TXST podcast episode 44 transcript
Dan Seed (00:00):
Hello and welcome to Big Ideas, a podcast from Texas State University. I'm your host, Dan Seed from the School of Journalism and Mass Communication. This month we're joined by Dr. Jake Waddingham, an assistant professor of management in the McCoy College of Business who studies entrepreneurship. Dr. Waddingham recently published a study along with a colleague from Auburn University that found for business owners returning to a nine to five job, things can be more challenging than many expect. Dr. Waddingham, thanks for joining us.
Jake Waddingham (00:29):
Thank you, Dan. Excited to be here.
Dan Seed (00:31):
And before we get to the study, I noticed you and I have something in common beyond working at Texas State, and that is you were at one time a journalist, an editor at a paper in Iowa. Was journalism your first passion?
Jake Waddingham (00:44):
Yes, it was. I ran cross country in high school and after our home meets, I had the opportunity to get interviewed by the sports editor and I was hooked. I was like, I want to tell those stories too. So I went to community college and was able to work as an intern at our local newspaper. That sparked my interest in pursuing that as a potential career. So I studied journalism and political science at University of Texas at Tyler, and then went back as the associate editor of the Creston News Advertiser and worked there for just over two years.
Dan Seed (01:16):
And what did you like about that job? What was exciting about it? What appealed to you in there?
Jake Waddingham (01:20):
So I was fortunate with a small newspaper, you kind of get to do everything. So I was covering the county supervisors on Monday mornings and then breaking news would happen and I'd be driving across the county to cover something else. Any chance that I got, I would jump in and help the sports guys when they needed it to design pages or go out and cover games. And then anytime a new business came to town, I was there with the entrepreneur getting to talk about how excited they were to be in downtown Creston, the value they were going to bring to the community. And I just loved getting to tell those stories and share them with the Creston area and the southwest Iowa area.
Dan Seed (01:58):
Is that what sparked your interest in entrepreneurship, being around these people and getting to know it? How did you make that transition from journalism to business? As we know, journalists were not exactly known for our numbers, acumen and things of that nature.
Jake Waddingham (02:13):
No, that is very true. I avoided math as much as I could throughout my undergrad and came to regret it during my PhD, so I had to catch up with that very quickly. But yes, that is how I got interested in entrepreneurship in general. I didn't necessarily have the entrepreneurship bug of starting my own business, but I was always drawn to the people that had that passion or had that ability to see a need within a market. And so being able to just talk with how they see the world, how they build out the products and the services that they provide, that was just something that was always really exciting for me to just learn more about. And so the PhD provided an avenue for me to really explore and dig into that.
Dan Seed (02:55):
Was it unexpected that you would have that kind of interest after talking to these folks, or was there a light bulb moment that made you go, aha, I think this might be?
Jake Waddingham (03:04):
For me, it was a little bit of a light bulb moment. And so what really happened was I was working as the editor of the newspaper and I was telling these stories of entrepreneurs and they were so excited and they were talking about their business plan and how they were going to set up shop and all the things they would do for the community. And then a year or two would pass and that shop would be gone. And I would tell the story again of the next entrepreneur that was coming in. And so when I started my PhD program, I went to one of the faculty members there, Miles Zachary, who's on the paper with me, and I said, I think I've got this interesting question of just what happens to entrepreneurs after the business is done? Not necessarily a success or failure, but just what do they do next? And he kind of looked at me and he said, “Well, that's exactly what my dad went through. He was an entrepreneur, he was somebody that lived this experience.” And so that really kicked off the research side of it of being able to come with that question from journalism and apply it to a more management entrepreneurship practice.
Dan Seed (04:07):
And before we get into the study, which you touched on, I'm always fascinated by these folks too, because there's always a personality about them or a drive that you kind of look at and go, man, I wish I had that. What makes a good entrepreneur? Are there certain skills or attitudes that you've found are common among those who follow this path to kind of venture out and do their own thing, which is very, very risky to do?
Jake Waddingham (04:31):
Yes, there's research side that has some specific characteristics and then just getting to talk with them. You can almost just see the excitement that they have for entrepreneurship in their business. So passion is a really big component. Them being able to work really long, hard hours, being able to bootstrap things together, find sources for funding, all takes a lot of time and commitment, and having that passion can really help them carry through being coachable. Having that idea is one step of it, but also putting together a business plan, a marketing campaign, those all may be things that the individual hasn't been trained in. They might've been an engineer, they might've been somebody that just stumbled upon an idea that the community needed. And so they don't have the formal business training. So passion being coachable, finding ways to be innovative, those are all key characteristics of successful entrepreneurs.
Dan Seed (05:23):
So for the study, which you touched on, you and your mentor colleague from Auburn surveyed more than 700 hiring professionals, seven former entrepreneurs, to find out if business founders can easily transition back into the traditional workforce. And the results are pretty surprising in my mind, but I guess maybe not. So after hearing what you just said about that maybe lack of business or learning things as they go.
Jake Waddingham (05:47):
Yes, and that was one of my favorite parts of the study was that we really got to tell both sides of the story. We talked to entrepreneurs who had successfully made that transition, and we talked to recruiting managers and hiring professionals that were saying, here's what we're looking for on these application packets. Here's what we're looking for on these resumes. And sometimes entrepreneurs are just tough to understand and assess their skillsets. And for businesses, it costs a lot of money to recruit. It costs a lot of money to go through the hiring process. And so sometimes it's just more beneficial for them to lean on what is known with those applicants that have more traditional backgrounds.
Dan Seed (06:24):
And the study and the written article that came out from that, it begins with the pandemic, right? And the idea that the pandemic pushed a record number of Americans into filing paperwork to start their new ventures. What was it about the pandemic that pushed people into that? If you can answer that, did they see it as an opportunity to make a new change, take a risk? Maybe they were laid off a combination of those, some other factors.
Jake Waddingham (06:49):
Absolutely. Both sides of that are going to be big contributors to that surge in entrepreneurship. Some of them being at home. It was an opportunity for them to sit down and really think about maybe they'd always wanted to try something and now they had the time to actually put it into motion. For others, it was out of necessity. They couldn't go into work or they couldn't get back to their normal schedules. Some jobs were completely shut down. And so entrepreneurship was the easiest path that they had to try to make a living. And so some of it was out of just desire and some of it was out of necessity. But unfortunately, entrepreneurship is very hard. The statistics tell us that about 20% of those businesses will fail after the first two years. About 45% of them fail after the first five years. And so understanding what's next is an important part of that entrepreneurial process.
Dan Seed (07:39):
And I think too, that's what makes this study really interesting is the timing of it. That you had all these people go into this line of work that they previously hadn't done, and so now you've got people that are maybe in that transition period now. And so that's why I think our audience probably does why this study is so interesting. Now, one of the key findings is that it's difficult for these entrepreneurs to end up getting hired. I mean, I would think hiring someone who's founded their own business would be a big plus, but why are employers hesitating on hiring these people?
Jake Waddingham (08:13):
So we had discovered three key characteristics that recruiters were questionable on and some of the reasons why they were getting screened out of that early application process. The first was that there was just a concern that if this person has been an entrepreneur before, they might go do it again. And so again, with organizations spending money, taking time and resources to go through this hiring process, they didn't want to do it again in six months. And so those individuals who showed an interest and enthusiasm for entrepreneurship started to raise some red flags that they might not stick around the organization for very long. The second thing that recruiters mentioned is that they were worried about the individual's behavior. This is somebody who's been their own boss for a while, they've got to make the key decisions, and now they're coming into an organizational setting where they might have to have a direct report.
They have maybe some red tape that they have to get through where normally they would just go do it. And so being in that organizational setting may be difficult for them to be a team player or to be following somebody that is their boss. And then finally, as an entrepreneur, especially if it's a small organization, there's not really a reference point. And so it's really hard to assess their skills and being able to understand what they were really good at. I remember one story that really stood out when we were going through this process, and it was from one of the entrepreneurs I got to meet while I was in Creston. She had opened up a bakery on Main Street, and through that process, not only was she a great baker, but she had done all of the financials, she had taken care of all of the hiring, she had done all of the training. And so she had really experienced and had a hands-on training with all the parts of a business. And when she would go try to tell that story to recruiters, they were so fixated on her owning a bakery and that, oh, we are not hiring for a baker. We're hiring somebody to run our front office. And she's like, I've done all of that in more. And so it just was hard for them to translate and to really get the recruiters to understand, here's what I can do.
Dan Seed (10:16):
And so what does that say? That was a story that stuck out to me as well. What does that say to you based on your experience about maybe corporate America will say it's attitudes and maybe some ways it can change, or how those attitudes may end up being detrimental to a company where you pass somebody over like that, you can't see the whole picture? What needs to change there?
Jake Waddingham (10:37):
The goal of the study on the recruiter side is that we need to have the best applicant pool possible and that applicant pool, if we're screening out entrepreneurs may not be the most efficient for the organization and their needs. And so what the study tries to really highlight is that we have laws on the book that help us from discriminating against individuals. We have spots on applications that help us recognize veterans and make sure that there are groups that aren't disparaged from the recruiting process, but there are lesser known or maybe parts of individuals that we are unknowingly screening out. And entrepreneurship may be one of those factors where there's nothing necessarily wrong with the applicant. There's nothing that doesn't provide them the skill sets that they could be successful in the career, but they're still not advancing through the application pool at the same rate that others are.
(11:30):
And so as far as what can help or fix corporate America for this issue, attention I think is one. So shows like this, the research getting published in both the academic outlets and in the conversation, I think are just helping drive the conversation. And one other thing is that when this paper came out, there were several other studies within that six 12 month window that has very similar results. And as a scientist, that's really encouraging that we're finding consistent results and hopefully bringing attention to an issue that can at least be on recruiting team's minds when they go to evaluate applicants.
Dan Seed (12:06):
And again, we're joined by Dr. Jake Waddingham from the McCoy College of Business. And so was there any one answer or group of responses that you found common from these entrepreneurs that cut across different business types, different experiences where there's kind of running into the same thing when it comes to getting hired?
Jake Waddingham (12:27):
Yeah, a lot of them mentioned the issue with being a team player or being their own boss. One of them had successfully exited their business, and so they were able to sell it. And as he was describing that success in the interview process, the interviewer basically said, so you could be my boss, and I'm really not looking for that. And so trying to be able to tell the story in a way that as an entrepreneur, you're the CEO, the founder, you still have other skill sets that could be valuable to a more established organization. Other stories that really resonated is that there were people within organizations that really understood and valued the entrepreneurship experience, but then again, when they got to the recruiters, they were looking for what was on the job application, what was on the recruiting needs of the organization. And so getting those two to speak to each other I think was a frustration for some of the entrepreneurs.
Dan Seed (13:20):
And that has to be frustrating, I would think for the entrepreneurs where these are people that typically think outside the box or they've got different views on things, and then all of a sudden they're put into a sheet and you don't fit in the box and you've got to check the boxes in the box.
Jake Waddingham (13:38):
And that was one of the outcomes that we found as one of the takeaways for our study for entrepreneurs. Our first study in that paper really looks at just a generic management level job. And so we find that whether you sold or closed the business, recruiters are going to lean more towards those traditional applicants. But if you start to really target your search looking for jobs that may be a little bit more entrepreneurial, like a new business development officer or something that really emphasizes innovative practices, then the entrepreneurship side might start to become more of a benefit or at least something that differentiates you in that applicant pool that can help them secure that interview.
Dan Seed (14:18):
As with any good study, this one doesn't just report, but it aims to find solutions. And in this case, the study does offer insights into how both organizations can improve their applicant pools and how former entrepreneurs can boost their odds of landing a job. What are some of those key takeaways that you found that you would pass on through the study or through programs like this to people that are making that transition back into the workforce?
Jake Waddingham (14:43):
For entrepreneurs? One thing is really focusing on your network. When you are deciding to make that transition back into the workforce, you may have had suppliers or people that you've met at conferences and other professional events who have gone through this. Leaning on the network to find those job opportunities is probably going to be much more beneficial than just applying to random jobs. Also, making sure, like I mentioned before, that it's not just a generic job posting. Finding something that emphasizes that innovation, creativity, entrepreneurial spirit can be really helpful for at least getting you through the screening process. And then for recruiters, it's an evolving landscape for them. They've got a lot of opportunities to incorporate things like AI to help with the screening process to reduce those costs. They've got businesses are engaging in more innovative practices and having centers where employees get a chance to just try things. And so just learning more about the entrepreneurial process and making sure recruiters understand what these individuals can do can hopefully alleviate some of those biases that creep in during that interview screening process.
Dan Seed (15:51):
And I would imagine for these entrepreneurs, it's got to be very frustrating because we're always told we reward people who take risks. We reward people who do things on their own, and here they are again, not being rewarded for those skill sets. Was that a frustration that they voiced?
Jake Waddingham (16:06):
Absolutely. And one of the key sources of that frustration is just maybe a misunderstanding in the vocabulary that is used. So entrepreneurial exit, when you leave your venture, that can happen for so many reasons. Sometimes they've got a family and they have to drive kids to ball games, and they need a more nine to five schedule. And so the entrepreneurship lifestyle just doesn't quite fit with their other life anymore. And so they need to make a transition. So there's that type of exit that's more voluntary. Sometimes things just don't go well. And unfortunately the business has to close. And so that's another reason why entrepreneurs exit. And then there's the successful side where they sell it to a partner or they sell it to an employee and they leave with maybe some financial return as well. And so yeah, they've done all the right things. They've tried the entrepreneurial experience, and now when they tried to go back to that supposed safety net of a 9-to-5 job, it's not as easy as what was previously expected.
Dan Seed (17:04):
And it's very interesting, and I would strongly suggest anybody that is interested in entrepreneurship or is currently an entrepreneur themselves, take a look at this study to be able to get some of these ideas, tips, figures to better navigate their course as they move back into the traditional nine to five. So this research here, you're relatively new in this field, in this position, so obviously there's going to be more building. What's next for you in terms of research? Is there anything that you're working on?
Jake Waddingham (17:34):
Yeah, lots of exciting stuff coming up. And one of the key projects that we have going on right now, I'm working with a couple of colleagues over at the University of North Texas. Jeff Chandler is leading that study, but we're looking at the different languages that entrepreneurs use when they're looking for talking with consumers and seeking funding. So in that specific study, we're looking at virtue signaling and how that resonates with consumers. And the key takeaway is that a little bit helps sowing your consumers. What your virtues are can lead to some price premiums in those Airbnb contexts. But overdoing it can seem false or inauthentic. And so that can really hurt your ability to demand a price premium from consumers. And then in addition to that, I'm wrapping up my dissertation, and that's also looking at playfulness rhetoric while fundraising, those individuals that can incorporate things like humor can do a great job of releasing tension or just making something seem really colloquial in that conversation. But when you are trying to recruit money from people that you don't necessarily know, humor and playfulness might be something that you maybe keep in the communication toolbox for later on down the road.
Dan Seed (18:43):
Yeah, I was going to say, that's going to be a really delicate balance. You've got to come across as a regular person or regular entity while at the same time maintaining those traditional more conservative business standards.
Jake Waddingham (18:54):
Definitely. And I think that's kind of been my avenue for research is kind of finding those thin lines of entrepreneurs in the workplace and the challenges they navigate the different language styles like playfulness and humor that we know we enjoy and people can execute really well, but there are some settings where it might not work as efficiently.
Dan Seed (19:14):
One of the things I was thinking of when we were talking about the use of humor and communication through corporations or entrepreneurs like the Wendy's Twitter feed is famous for its irreverence. And so Wendy's is an established brand. If you're just starting out, don't go the Wendy's route. Save that for later, basically is what we're getting at here.
Jake Waddingham (19:34):
Exactly.
Dan Seed (19:35):
Being at the university and being in this position now where you're not only conducting research into things that you truly enjoy and find fascinating, teaching is a part of that. What's that experience been like for you? Working with students?
Jake Waddingham (19:47):
Working with students is one of the most exciting parts of my week. I get to work with these seniors and the senior capstone for the College of business. And so they are going through one of the most exciting times in their life where they are accepting job interviews and job offers. We're taking all of the courses that they had over their time here at Texas State and kind of just bringing it all back together and helping them kind of see the big picture again. And here's how you'll use these skill sets as you go off and represent Texas State and do your own thing in your career. So that part has been really rewarding. It's been really exciting. Some of them are interested in starting their own business, either right out of school or someday. And so we've had conversations about my research and some of the things they need to start to consider if they want to pursue that opportunity. And for others, we talk about the entrepreneurial mindset. I know you had Josh Daspit on and talking about how even if you're not going to start your own business, there are still some skillset from this research and from being entrepreneurial that you can bring to your everyday life and your everyday workplace, that can be extremely beneficial. So those conversations with students have just been an amazing experience during my first year at Texas State.
Dan Seed (20:58):
Each generation of students, of course, is different year to year, five years, 10 years. Right. You get a sense of a shift or a change in attitude or an ethos. What do you see from these students now in terms of their ethos or their desire or their dreams when it does come to business? Is it something that may look different from what we traditionally expect from business students or very similar to it?
Jake Waddingham (21:22):
Comparing the students that I taught at Auburn to the students here at Texas State, one of the things that I'm noticing is that the students here at Texas State, they're so hardworking. A lot of them have part-time jobs while they're going through their studies, they have clear visions of what they want to do next. And some of that brings some anxiety of trying to go through that process and next step. A lot of our students are also first generation, and so they're kind of navigating this whole world of being a college graduate and then going on and starting their lives with a blank page of not necessarily knowing what to expect. And so that's been another part of the process that I've been really excited about getting to know the students better and understanding what their process has been like. So it may spark another research idea, or it may at least just give me some experience when, like you said, the next cohort comes in, I can say, here's some things that have worked for others in the past. And so that's been another really exciting part to learn about the students here at Texas State.
Dan Seed (22:20):
Well, Dr. Jake Waddingham, thanks for taking the time to talk to us. I know you're really busy with that dissertation, all the research, the teaching, so we won't keep you for much longer. But thank you so much for being here.
Jake Waddingham (22:30):
Of course. Really enjoyed our conversation today,
Dan Seed (22:33):
As did I, and thank you for the privilege of your time and downloading and listening to this month's episode. We'll be back next month. And until then, stay well and stay informed.