What Key Ingredients Go Into Making of an Entrepreneur?

“What’s the best religion for encouraging entrepreneurial activity?”

That question, posed at a “New Economy” conference in Hong Kong, threw our panel of speakers for a loop. It’s not a question most of us had ever considered.

But wherever I travel, the same question comes up in some form or other: How can you encourage entrepreneurship? The people asking it range from government officials to development officers, from venture capitalists to entrepreneurs in search of employees.

What actually makes an entrepreneur? Unfortunately, it’s not a simple question, and widespread access to the Internet isn’t the magic answer. Producing entrepreneurs requires a combination of character, training, culture and environment.

I won’t argue whether character is made or inherent, but regardless, it operates in context. An entrepreneur may be born with entrepreneurial instincts, but the ability to fulfill them depends on other factors.

Is there opportunity and capital available? That’s a whole essay in itself, and includes everything from a working banking system to encouraging treatment of share options and tax issues.

Will the culture allow it? Many women never have a chance to exercise their entrepreneurial instincts.

Can a small company get services from the local phone company, or is the market controlled by a few big players? Can a business even be started without months of negotiations with lawyers and bureaucrats?

These are all questions governments should ask themselves, instead of giving money to a few carefully certified entrepreneurs who in some countries often end up being related to the bureaucrats.

Perhaps the most important factor is simply the presence of role models.

Entrepreneurship is inherently risky: starting something new that may or may not work out. Some people will take risks no matter what. Others will not take risks, no matter what. But for many, taking risks is easier if they have a clear vision of what they are trying to achieve. That does not mean reading about Bill Gates.

Gates is not relevant to most people in the world: He’s American, he went to Harvard (even though he didn’t graduate). He’s far from most individuals’ experience--as are people such as Steve Jobs of Apple and Jeff Bezos of Amazon.com.

And they’re really not the right models. Most entrepreneurs do not grow up to be Bill Gates, and they will never be happy if that’s their only goal.

What’s more relevant is someone closer--a local hero, or better yet, an uncle or aunt or a friend’s parents. Those are relevant models. If you have someone to emulate, it’s easier to believe you can do it. If you have a model of success, you can understand viscerally what success can be. It’s a lot easier to take a risk if you know what the rewards could be.

I remember when I first considered buying the business I now own. It published a technology newsletter, among other things. I had never run anything, but I knew and admired my boss. On the other hand, as I looked at him, I figured I could do what he was doing. I already knew the business.

Those are the advantages I had. In many parts of the world, few people have had that kind of experience. Obviously, it’s impossible to create entrepreneurial aunts and uncles for everyone, but any culture can celebrate those entrepreneurs that it does have.

Governments need to understand that more is needed than just tax policies and markets. Just as they give access and visibility to important established businessmen, they should also be listening to less-established entrepreneurs, taking them seriously and listening to their points of view. They should remove unnecessary obstacles; this doesn’t mean eliminating regulation, but it does mean reducing tedious paperwork that has no bearing on a company’s fitness.

Venture capitalists, especially outside the U.S., need to understand that their job is not just to select companies but to build them and promote them. Some venture capitalists run contests; a few companies get funded, but others at least get a chance at visibility and receive useful feedback. Often the entrepreneurs get funded elsewhere, or they meet other entrepreneurs and form partnerships or even just informal support networks. Sometimes they hire one another.

In fact, the world needs not just entrepreneurs but also chief financial officers, marketing managers, product developers. So to foster an entrepreneurial culture, we need to encourage not just the born entrepreneurs, but also people who will work with them.

Now, back to that question about religion: Put on the spot, we on the panel didn’t know how to answer.

Religions tend to be conservative, they offer one true way, whereas entrepreneurship is about risk-taking, trying new things and learning.

“Perhaps,” I ventured, “any religion is good because it teaches humility. It encourages people to have the humility not to think that this is already the best of all possible worlds. It gives them the humility to change their minds, to accept failure, and to learn from it.”

Does the Net help them do this? Not really. Though I am very optimistic about the Net as a tool for entrepreneurs, it doesn’t provide motivation and experience.

Would-be entrepreneurs can use the Internet to reach out to customers and suppliers. But first they need to be motivated.

A very few will have their own built-in vision, but most people need a relevant example to give them the courage and the borrowed vision to start.

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Esther Dyson edits the technology newsletter Release 1.0 and is the author of the best-selling book “Release 2.0.” She is also chairwoman of ICANN, the Internet Corporation for Assigned Names and Numbers. Comments should be directed to Esther Dyson at edyson@edventure.com. Recent Release 3.0 columns are available at: http://161.35.110.226/release.