Yale has a vibrant ecosystem for innovation: from pioneering arts productions to scientific breakthroughs, students, faculty, and community members are reimagining the status quo in diverse fields. But what does innovation look like when we zoom in on one of these fields? How are people thinking about innovation in different contexts and communities, and what can we learn from each other? To explore these questions, we’ll be sharing stories and perspectives from across Yale’s campus in the coming months, seeking out new vantage points for on-the-ground views of innovation.
To kick off this series, we talked to Dr. Henrietta Onwuegbuzie, visiting senior lecturer at the Yale School of Management and a faculty member at Lagos Business School in Lagos, Nigeria. Onwuegbuzie’s work focuses on entrepreneurship, impact investing, and more; she has particular research interests in strategies for sustainable growth and development in emerging economies, as well as low-cost business models that can create impact in businesses at all scales. As she explores these topics, Onwuegbuzie is looking beyond what she terms “mainstream” entrepreneurship, considering how aspiring entrepreneurs might learn from traditional practices or incorporate more long-term thinking into their work. “We need to learn from the past to improve the present and create a better future,” she explains. We talked to Onwuegbuzie to learn more.
You’ve talked about how entrepreneurship is more effective when it’s driven by impact, rather than simply making money. Why is this?
Problem-driven or impact-driven entrepreneurship seeks to solve problems through business. A problem means people are looking for a solution — therefore, if you can provide the solution on a commercial basis, the way people want it and at an appropriate price, people will be willing to pay. You have a ready market when you build your business around an identified problem. Every problem can therefore be considered a potential business opportunity. On the other hand, when you are in business only to make money, this drives an exploitative mindset that seeks to take advantage of customers. Such businesses may survive in the short term but are not sustainable, as customers quickly move on once they find better value elsewhere.
Your research work has included studying successful entrepreneurship practices among rural, indigenous communities in Nigeria, such as apprenticeship models, and how lessons from these models can be applied in mainstream entrepreneurship. Can you tell us more about this?
The failure rate of venture backed start-ups has been rising for decades, from 75–80% to a more recent high of 90%. This reveals a problem with the usual way of preparing entrepreneurs, which usually goes from idea generation to writing a business plan, pitching, funding, and implementation. In spite of the extremely high failure rates from this process, it continues to be followed, rather than questioned. The rational thing to do would be to seek a more effective alternative way to achieve lower failure rates or higher success rates.
My PhD research among rural indigenous entrepreneurs revealed that the traditional way of preparing entrepreneurs in Africa was through apprenticeship. This is a model that involves learning by watching and doing for a set period of about 3–6 years, before the apprentice sets off on his or her own while continuing to be mentored by the person they apprenticed with. Empirical evidence shows that apprenticed entrepreneurs tend to have an almost 100% success rate. The closest practice to apprenticeship in the conventional academic system is a 3–6 month internship. However, my research has also shown that there is a positive correlation between the duration of the apprenticeship period and the level of success achieved. This suggests that significantly longer internships may help prepare students better for both entrepreneurship and the corporate world.
While incubators and accelerators approximate the apprenticeship model, they are still not as effective, as the entrepreneur is not working as closely with his mentor or advisor as an apprentice who is immersed in the business daily and has the opportunity to observe and practice things that may not be mentioned in a coaching conversation.
I believe we need to modify the current mainstream way of preparing entrepreneurs by incorporating apprenticeship into the academic curriculum, perhaps through a significantly longer internship period than what is typical today. Apprenticeship ensures that by the time young entrepreneurs receive funding, they are better prepared to deploy it, because they have a deeper understanding of the business and market in which they are operating. We need to learn from the past to improve the present and create a better future.
Much of your work focuses on entrepreneurship education. What’s one piece of advice you would give aspiring entrepreneurs?
Funding is not the most important thing. The fundamental thing you need is to birth an idea that solves a problem or meets a need. Then start small, while thinking big. Start with whatever you have — once you get a bit of traction from the market, it’s easier to attract funding. None of the wealthiest entrepreneurs in the world today set out to be so wealthy. They each created a solution that was so useful that it was demanded by people all over the world and they became wealthy as a result. So, be a solution provider and start small! Then, as you grow and need to engage people, care for them and communicate with them. Talk with them, not only to them. Look after your staff and they will take care of your business. Finally, continuous improvement should be in your DNA. What worked yesterday will not always work, so constantly find ways to improve your offering or to solve new or related problems.
What’s one of your favorite examples of a high-impact innovation, in any field?
I love the reverse innovations in healthcare that allow affordable, high-quality healthcare for all. It doesn’t make sense to me that such a fundamental human need as healthcare should be generally expensive. Any entrepreneur who can significantly lower the cost of treatments, especially for cancer or traditionally expensive treatments like surgery, will be a super billionaire. We need entrepreneurs who are game-changers, who transform society from what it is to what it should be.