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Exclusive insights, actionable strategies, and ideas that ignite change. You're listening to the Ivey Impact Podcast, from Ivey Business School.
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Hello, I am Julian Birkinshaw, Dean of the Ivey Business School, and I'm delighted to welcome you to our new podcast series, Dialogue with the Dean, where I'll be sitting down with Ivey faculty for conversations about their research and their thoughts on the biggest challenges facing business and society today.
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On today's episode, are entrepreneurs born or can the skills of entrepreneurship be taught and learned? To explore this, I'm joined by Eric Morse, Executive Director of the Western Morrissette Institute for Entrepreneurship, Powered by Ivey. Eric is also a professor of entrepreneurship, the Morrissette Chair in Entrepreneurship, and special adviser to Western's President on Entrepreneurship. In short, he's one of the country's foremost authorities on entrepreneurship.
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Welcome to Dialogue with the Dean, Eric. Yeah, it's great to be here. Thanks, Julian.
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Thanks. So we know entrepreneurship is a key driver of economic growth in Canada, around the world. And the data I gathered suggests there's about 3.5 million entrepreneurs in Canada, and small and medium sized businesses employ some 63% of the workforce. We are going to come back fairly quickly to the practical challenges and opportunities around making entrepreneurship in Canada work even better.
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But, I want to start with your research because you're an academic like me. And you have been researching the topic of entrepreneurship for 20 odd years. Yeah. So go back to your earlier work. You studied entrepreneurial cognition. Right. What are you. What do we mean by that? What did you discover? What are some of the bigger insights from your research?
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Sure. And by "entrepreneurship cognition," what we really mean is how do entrepreneurs process information perhaps differently than the general business person? And so that's what we were really looking at and trying to figure out. If you remember, I mean you're an entrepreneurship scholar yourself, there was a lot of personality kind of work going on at the time.
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And we just didn't buy into that. Partly because leadership had gone down that road and never found traction with it. In fact, debunked it. So why was entrepreneurship doing the same thing? But we needed an alternative. And we thought, well, maybe entrepreneurs see the world differently? Maybe they process information differently? We weren't sure at the outset, but what we wanted to really determine was could we figure that out?
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And we really went to a lot of the information on information processing: how do humans do that? And expertise. How do you become an expert at something? And that's where we really found some traction. Was okay, well, do successful entrepreneurs, those that have started maybe more than one business successfully or operated one for some time, see the world a little bit differently or see information differently?
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Yeah. And, not to get into the research end of it too much, but we were looking at the venture creation decision as our outcome. And, so what we looked at were what we call "script cues," just like in a script for a play. You know, it's like stage right now. And we would give the participants in the study two scripts to look at, or two cues, sorry.
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One was something that an entrepreneur would recognize. One was something that was kind of a, you know, societal response that a business person might have. It was okay, but it wasn't really the entrepreneur response. So we give them a series of these across three areas. You know, do you have the resources you need to start? Are you, do you have that commitment, that willingness to do it?
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And, do you have the ability? And we used script cues from all three of those. And what we found was, yeah, those successful entrepreneurs really picked out those entrepreneurial cues much more often
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than the general business person. And these are just things like
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they are more decisive? They're less risk averse? What sort of, what sort of things are we we're looking at?
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Yeah. It was really more around, okay, I see the opportunity and I see the resources that I have access to. And I think given these resources, I know - being the ability - how to operate towards that opportunity.
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So one of the definitions of entrepreneurship that I like is: the pursuit of opportunity without regard to the resources that you control.
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Right. And so I think that's the concept you're getting at here. Because it's all about people essentially figuring out things they can do, even if they don't necessarily control the resources they need. Yeah.
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I guess that goes back to the Howard Stevenson definition.
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And I think, absolutely some entrepreneurship happens that way. But I think where I came from, all that research was, it also and maybe more often happens in a, Sarah, Sarah Vare way, which is effectuation, which is... I think you'll have to explain what effectuation means. Yeah, fair enough. Yeah. So rather than without regard to resources that I currently control, it actually is dependent upon the resources that I see around me, that I can control and that limits the opportunity set that I actually go after.
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And so it's two sides. One's kind of causal and one is more, you know, resource dependent. But, what is it that the non-entrepreneur gets wrong, if you see what I mean? Are they just... they don't see the linkages between opportunity and resources? Or, they're just a bit too kind of cautious about knowing what they've got? Yeah a little bit on the cautious side.
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So, when we looked at some of the cultural things that we, we studied, obviously some countries had much more of a, you know, continents to entrepreneurship than other countries. But we did see patterns that were similar in every country. But, willingness was where the business people tended to not have those same cues. So they could recognize resources,
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they had the ability to move things around, but they didn't really have a desire to go out on their own. So ultimately, the entrepreneur is the person who is prepared to say, I can see this, obviously, and I'm prepared to act. It's not just the what we called entry cues, it's also the doing part. Right. Yeah, yeah.
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And again, just to go a bit deeper into what you discovered, what gives people that willingness? Is it, and perhaps it gets to born versus made, I mean are some people just naturally a little bit more prepared to go out on a limb than others? Well, what we found was it really came down to practice. And, so that goes back to our expert kind of modeling that we used was how do you become an expert in anything?
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Well, you tend to practice it a lot with a mentor or a coach who's kind of been there and done it before. And what we found was it's not just chess masters and basketball players and physicians, but also entrepreneurs tended to very often grow up in an entrepreneurial family. And so they heard about it at the dinner table.
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Just like more lawyers come from families whose parents were lawyers, more entrepreneurs come from families who were entrepreneurial.
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Because a lot of entrepreneurs, and this is now lay thinking rather than research based, you know, have a slightly overoptimistic view of their own capabilities.
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Right. And is that proven in the research? Yeah. It tends to be true that it's an optimistic lot. For sure. And some of it comes from "I've been there, I've seen it. I know how this works." And it's overestimation that it's the same thing they saw last time. Right. So it's not so much that they're overoptimistic.
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They're just wrong. It's a bias
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Let's just zoom out to the big picture to Canada.
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There are rankings of countries, in terms of how effective they are or how perhaps how prevalent entrepreneurship is. One is called the Global Entrepreneurship Monitor. And I was just checking it out before we came on air. And in that one Canada came in about 15th in the world. I don't know if that feels right to you, but
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what are the things that Canada does well, in terms of entrepreneurship? And what are the areas where we need to improve?
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I think that's great. I think we should talk about the differences a little bit. So up until Covid, Canada had the same startup rate as kind of the top G7. Okay. The US included, what we didn't do very well was scale. And so that was the problem. But post-Covid, our startup rate is quite a bit lower than the G7.
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We haven't recovered in the way some of the other countries have. And that's what's really worrisome to me. And I think it should be worrisome to us as Canadians because we know GDP, quality of life, all those things depend on a really thriving entrepreneurial class. And right now that's hurting in Canada, for sure. And so if we can drill down a bit. and put our public policy hat on for a second, what are some of the specific things that are holding back the potential entrepreneurs from, from starting businesses, from scaling their businesses?
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Yeah, it's interesting. And one I think is education. But I think we need to continue to do a better job of saying opportunity is global. It's not just here in Canada because Canada is a tough place. We're spread across one of the largest countries in the world. We have a very small population. And so if you want a business to scale, right, that's expensive under those conditions.
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And yet we have a very populous country just south of us. And we know if we would start to look at that and other parts of the world, we would do better. And our companies that scale, frankly, do that.
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And what about funding? Because obviously there's lots of big banks and private equity money, pension fund money. And in Canada, it's actually quite well-known for some of these things around the world. But when we talk about venture money, in other words, money for startups, you know, angel investors, seed investors, scale up investors, is there enough in those earlier stages of a venture or life cycle?
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Right. You know, I think Canada is doing much better than we used to. For sure. It's going in the right direction. I'd love to see some of those big funds you mentioned get more involved in the venture space.
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So I think we're doing much better. Still room for improvement, of course. I think we have more general funds here in Canada, and that's just given the number of opportunities.
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Whereas in the States they can be more niche-focused. And if you're niche focused, you're looking for more and more of the people in those niches. So you tend to get more funding. People understand it really, really well. We need more of that. And that comes with more money. Yeah. And of course it is. It is well known that the US, I mean, not just Silicon Valley, I mean New York, Boston, San Francisco, I mean, there's lots of centres where they've got just this huge critical mass of venture capital firms and, not surprisingly, entrepreneurs go to those places. And, success breeds success.
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So yeah, there is I can see the challenge in Canada. I recently moved here from the UK, we might think the UK is quite successful in this regard, but it's nowhere near as successful as the US. So I can see that additional sources of funding, particularly, as you say, these early-ish stages will be useful. And you need more of those big, successful companies to stick around and, you know, break up and fund the next 20 companies.
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And we saw that in Toronto a little bit with BlackBerry. Yeah. That's right. You know, it hurt, but it spawned so many more businesses and money into this ecosystem there. And I think, you know, AI is probably a direct result of that. Yeah. And so Canada has some spots where we can do quite well. I think the other thing, you know, back to your earlier question where we're hurting, is there's a lot of consolidation in a lot of industries in Canada.
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And that does tend to squelch startup. It's just very difficult.
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You head up Western's Morrissette Institute. This is named after Pierre Morrissette, indeed, who is the creator of Pelmorex Corporation, which is a leader in weather information systems.
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And, you know, Pierre has been a great sort of benefactor, I think, to Ivey and to Western and I met with him just recently. Great. And he's still very visionary about what we need to do. Tell us what you're currently doing through this Institute in terms of trying to provide some of that support to early stage entrepreneurial thinking and entrepreneurial action.
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Yeah. Thanks, Julien. It still stems from my original research on how do we create experts. You know, and so this is about entrepreneurship. And so the more that we can get rid of the fear, because oh I see these pieces, what the steps should be, you know that's an easy education, actually taking the leap is hard.
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So how do we give people practice in doing that? The university is a great place to practice that in a safe way.
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Now the fact is that most of these ventures fail. Most of these, you know, students who are coming through incubators and accelerators, they have what they think of as cool ideas. And, at some point, they either run out of interest or they never get the funding.
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Or, it turns out, that the idea wasn't actually that great in the first place. I mean, I know that that is the natural order of things, but what can we do to help to increase the odds? What can we do to make sure that that 1 in 100 idea that's really cool, actually kind of makes it? I mean, what are the leverage points we have to help?
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Yeah. You know, failure is a great teacher, as you know. And what we try and do, we know the odds, we never tell a student "that's a bad idea," but we ask tough questions. Right. We assign them mentors who ask them even tougher questions very often. But it's okay that they go through that process a number of times.
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Right. And this one didn't work, and that one didn't work, because each chance, each of those opportunities is a chance to learn. And so we really work hard on that and make sure that they're connected to mentors as they go through this process. And we have, you know, just a great alumni. They're mostly Ivey, but many Western as well, who give up their time to come back and work with the students.
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It's fantastic.
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I shouldn't lose the opportunity to mention the Ronald Schmeichel Building, which literally just opened a couple of weeks ago.
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That's right at the heart of Weston. And you said that this is a space where you can see this as a sort of an incubator.
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Is that right? What do we do in that space? Yeah. Great question. And you know, this goes back to Pierre's vision is that, you know, entrepreneurs come from wherever, they need, you know, a bit of Ivey in them. They need a bit of that business sense and acumen. And, you know, we can provide that to them.
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But good ideas come from the music faculty, the science faculty, the engineering faculty, you know, everywhere. And so how do we help them get that business acumen, go through the process, meet other like minded student? Because, as you know, teams tend to outperform individuals in this regard. And so it's really a meeting place for like minded people across campus.
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And then we give them opportunities once they're there.
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But we also have these two makerspaces. We've got, you know, what I call our analog space. It's really the woodshop. Right. And we've got a digital space with 3D printers and laser cutters and things like that. It's open to any student on campus, and that's the differentiator, in Canada anyways. Where any student can come in, do a little bit of training, and then create. And we hope eventually it'll totally be run by students.
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So get that culture going of a maker culture where students are meeting, coming up with ideas. Let's go try this. Can we make this? What can I not do?
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I like this. Because at business school there's a tendency to, you know, come up with lots of ideas but to not really know what to do with them. And this is actually giving them the chance to take it to the next step.
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It is. And the other beautiful part about the building is we have the accelerator. So we have companies that are out there getting into the marketplace, and they really serve as role models to those students who are coming up with ideas, and they get to see them and interact with them. And, you know, it's all about demystifying and giving people a sense of how do you get to that next step and meeting the people that do.
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And it becomes much more likely for you to, to go down that road.
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Tell us a little bit about the Quantum Shift program. I know that's something that you've been very involved in, indeed. I think you created it.
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Going way back,
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it was actually linked to a legitimacy problem, if you will. So I was brought to Ivey 20 years ago to build an entrepreneurship program. But, we did consulting and finance. And, we happened to be doing an executive education program for KPMG who wanted to start a private enterprise practice. No one believed that they worked with entrepreneurs. And so, we got to talking and we said, we should do something for entrepreneurs in this space.
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Because in Canada, we have a problem back then and still today, we don't scale. How can we help entrepreneurs scale? So these aren't startups, but they're 30 to 50 million. How do we help them get to 500 to 1 billion? And so we became partners with KPMG enterprise, built this executive education program, been running 22 years. We just won an award with EFMD on really building an ecosystem.
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And that's what we've really tried to do across Canada. And we knew if we did it well, it would help our brands and people would start to think about us. But the follow on effect is that we have 900 entrepreneurs across Canada that make up a significant portion of employment and GDP that are Ivey alum through this program.
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And so many of them give back as mentors and to our students, which is amazing.
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I want to now dig specifically into how you teach entrepreneurship, literally in the classroom. If you see what I mean? Because there's a worldview out there that says entrepreneurs are born not made, you can't teach it. They look at the Bill Gates and the Steve Jobs and the Richard Branson's, the college dropouts.
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Right. And, because they dropped out and were successful, somehow the logic goes, that means that you shouldn't teach entrepreneurship. I suspect you disagree with that point of view. As you might imagine. Yeah. Indeed. So how what is the mechanism by which you actually get people doing this? Yeah. You know, it's a great question.
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And I usually answer this way: if you're pushing me to say, can you make somebody a successful entrepreneur? My answer is no. I can't give someone an elixir to drink. And then they're suddenly going to go off and be, you know, tremendously successful. We're really good at pinpointing why something failed. Like, we're really good at that. And so if I can help you avoid these top 100 mistakes, I'm going to increase your chance of success.
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So I can do that, for sure. We're really good at that. The other things I can do is I can say the typical venture goes through this process. Right. And don't skip any of the steps, because if you skip, you're more likely to fail. Got it.
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So essentially we are structuring their thinking. We're giving them frameworks. We're giving them ways of making sure that they, as you say, avoid the worst types of mistakes. Yeah. That spark of kind of genius I mean yeah, that where does that come from anyway? Nobody really knows.
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And there's so many myths we try and overcome. You know, one is you go away in a garage, you work really hard, and then you bring something to the world and you're an instant success. And it just doesn't work that way. And so how do you get in front of customers more quickly and more often? Are you talking to industry experts that really understand the space?
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And we push our students to go do interviews and do that legwork.
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When I was talking with Pierre Morrissette recently he said, you know, when he was a student and this is a while back, but, you know, entrepreneurship was a kind of a dirty word, right?
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No business school used to teach entrepreneurship. Right. But gradually, bit by bit, we and other schools are starting to take it very seriously as a big part of the training.
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22 years ago, when I first arrived to, you know, kind of build an entrepreneurship program here, that was my task at the by the then dean, Larry Tapp. We often had to teach at night. So, we'd be doing night courses. Some of them were, you know, extra credit. They weren't really curriculum-based, but we had a real demand that was bubbling up and not part of the core programing of our different programs.
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And so, you know, we'd be teaching at night, we'd be doing contests on the weekends and wherever we could find the time. But it was fun because those were very entrepreneurial days in many ways, to find ways to make it happen.
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I want to wrap up shortly, a couple of questions.
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I mean, obviously, you work a lot with entrepreneurs all the time. You've sent me on to this, but let me ask it again. What's your advice? What are your two or three top tips for somebody who joins one of our programs, and says, I really want to become an entrepreneur. What's the best advice?
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My, you know, two things I would say: start doing it and find a mentor. And the mentor could be a faculty member. There's a lot of our faculty in entrepreneurship that have run their own businesses. But, you know, you have access to them anyways. Utilize our network, which is amazing, and get a mentor from the outside.
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And then you have faculty plus mentors, you know, helping you through and helping you evaluate decisions and opportunities and moves forward. And I think those would be the two big things I would say is, is get in there and work at it. And it's okay if you fail. Especially in a university setting where you have a soft landing. It's okay, you know? Try.
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So, finally just tell us about what's your next project. What are you up to now? What's the next big plan? Yeah. You know, I mean, I'm kind of energized. I haven't been regularly putting out research
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like, I'd like to be. But I have a book in mind, and it really kind of comes from that work I did with Quantum Shift companies and those 900 companies, and really seeing them grow through the stages and, and hit those 20 to 30% growth rates. And how do you deal with that? How do you survive it and what are the issues they're dealing with?
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And so it'll really be a book around growth. We don't have very many of those. It's more usually around the startups at this stage. And it's all sketched out now. So I guess the harder work on, you know, some of the research and more interviews and, the writing. But, you know, as an author yourself, it's exciting to do the ideas.
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Now the work comes and, yeah, I'm excited about it. Yeah. Good. Well, I look forward to reading it when it comes out in a year or two.
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Well, we will wrap up there.
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Thank you. Eric, it's been fascinating to get your insights and your experiences. Clearly, Ivey is in a good place, as indeed is Western as a whole around entrepreneurship. And I wish you all the best as you continue to grow the Morrissette Institute.
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This has been Dialogue with the Dean from Ivey Business School. Thank you to my guest, Eric Morse, Executive Director of the Western Morrissette Institute for Entrepreneurship, Powered by Ivey.
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And of course, thank you, our listeners, for tuning in. On our next episode: Can sustainable practices drive profit? Ivey Professor, and notable voice on a sustainability, Tima Bansel, joins me in the studio to explore how sustainability can fuel success. Until next time, goodbye.
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This was Dialogue with the Dean, an Ivey Impact Podcast series. For more insights from Ivey, including thought leadership on critical issues and additional podcast episodes, visit IveyImpact.ca or subscribe on your preferred podcast platform. Thanks for tuning in!