When I taught entrepreneurship at Massachusetts Institute of Technology, I was completely blown away by the intelligence, confidence, and resiliency of my students. I taught at MIT’s Launch Program, an intensive summer entrepreneurship program that teaches students from all over the world how to start companies.
I had the wonderful privilege of working with over 200 students from all across globe – and they were the most creative, driven, and fearless teenagers I have ever met. They were go-getters – so much so that during my time at MIT, I was able to advise and oversee the development of over 50 new ventures.
Image above: Entrepreneurship at MIT
Like many educators, my students inspired me. Truthfully, when I was their age, I was nothing like them. Sure, I was a driven person with big dreams. But dreaming is completely different from doing. I would like say that I had the confidence to bring my dreams to life when I was their age - but I didn’t. It definitely took me some time.
All I knew is that I loved psychology and education. I wanted to help people learn new things - and I wanted to build something around that. But paving your own unique path in the world is an extremely terrifying thing to do. So I settled for safer and more comfortable decisions.
As someone who was born and raised in the Philippines, this made me wonder: Are there other Filipino students out there who felt the same way that I did back then? Are some of them fearful and scared of taking the road less traveled? Do they want to start new ventures but are afraid to do so?
My professor at Harvard Business School once told me that entrepreneurship is one way to pave your own unique career path. Entrepreneurship can allow you to merge all your different interests, skills, and passions.
Many students can sometimes feel lost since they are unable to find a job that suits their special and idiosyncratic needs. Though entrepreneurship is a tough road to travel, it can also be a fantastic way for a person to create their own dream job that suits their unique needs.
Incidentally, my obsession with entrepreneurship as a career path led me to conduct one of the largest youth entrepreneurship studies to be done in the Philippines in recent memory. With over 1,100+ student responses, my research aimed to answer the following questions:
- Are Filipino college students thinking about starting their own entrepreneurial ventures?
- What barriers and challenges are they facing, if any?
- What can we learn from their insights?
The answers to these questions matter because they have profound consequences.
The Philippines is the 2nd fastest-growing economy in the world. Yet, 80% of GDP growth is captured by the richest families. Entrepreneurship is one of the means to ensure that growth is inclusive and widely shared.
Technology startups in particular are becoming attractive options for young Filipinos, given the presence of many Silicon Valley startups in the country. Though the startup scene is still nascent compared to Singapore or Shanghai, there are now more venture and angel-backed startups in the Philippines than ever. And this will only grow in the next five years.
The results of the study were very surprising. So let’s dive in.
I. DEMOGRAPHICS:
1,100+ Filipino college students were surveyed
78% were current college students, while 22% were recent graduates
22 different universities in the Philippines
19 years old was the average age of respondents
Why focus on college students specifically? The main reason is an institutional one. Though entrepreneurship is better established in graduate programs and some undergraduate programs, my interviews with college students specifically suggested that many of them were dissatisfied with their learning experiences at the university level. Many found that entrepreneurship education in their schools were still inadequate and poorly designed. I wondered if that had any effect on the way they thought about entrepreneurship. I considered reaching out to a younger demographic, such as high school students, but since entrepreneurship education is not yet prevalent there, it wouldn’t make sense to assess their thoughts on an education they aren’t receiving yet.
2. KEY FINDINGS
So, how many college students do you think have started entrepreneurial ventures?
The most important and surprising finding in this study is that 1 out of 4 students has started an entrepreneurial venture. And surprisingly, majority of these student companies were founded by non-business majors! For something whose background is in psychology, this was a wonderful surprise.
Note that “ventures” in the study was defined broadly - either they are operating a for-profit activity that generates revenue via a product or a service, or mission-driven activities in non-profit ventures. Given that these are students, these ventures don’t have to be registered yet to qualify for this study.
Image above: College students who have started entrepreneurial ventures
Now, that’s a lot of students who have done something entrepreneurial. So what’s motivating them?
As it turns out, the main reason students started ventures was they had the self-confidence to do so. In the study, 68% of those who started ventures mentioned “self-confidence” as the main reason they started.These students believed in themselves and what they can do. As an example, one of my respondents, a student from UP, told me that she started a venture because she believes that she has “what it takes to build a company”. It is clear that self-confidence is crucial to starting your own venture.
The second reason (58%) was that they had the opportunity to learn entrepreneurship, whether through school, courses, or experience. Some schools have incubators and other entrepreneurship initiatives, which is great. Some students make use of those, but definitely not all who want to (more on that later). Also, many students who have family businesses say that their experience there helped them start their own ventures. So learning through both formal and informal channels definitely helps.
The third reason (50%) was that they had a lower fear of failure. Starting a company is risky, but these students saw failures as opportunities to learn, rather than as reasons to quit. One of my respondents even told me that, “I’ve failed many times. And it’s tough to fail. But hey, at least I’ll know what not to do next time!” It is unequivocal that one’s view and tolerance of failure, as well as their resiliency from it, plays a really big role in entrepreneurship.
Lastly, access to funding is definitely an issue for all young entrepreneurs. But interestingly, it was not one of the top reasons (20%). This suggests that having the money to start a business is necessary but not sufficient to start a company. Many of the respondents told me that though they didn’t have enough money to start something, they were confident in their abilities to raise that money somehow – whether it is through a great product or service, asking family or friends, or through sheer determination (even cold-calling and tapping into far acquaintances). But again, access to funding in the Philippines is really tough and is a big barrier for many (more on that later).
The main takeaway from the responses above is that to promote and spread entrepreneurship, we should first focus on internal psychological drivers: self-confidence, self-awareness, and managing fear. These, combined with external drivers such as opportunities to learn and practice business, can be a powerful tool to build young entrepreneurs.
Image above: Reasons why college students start entrepreneurial ventures
Now, what about the other students who have not started ventures? What do they think?
As it turns out, 60% of students have not started entrepreneurial ventures actually WANT to start one, but are HESITANT to. This is in line with my own personal experiences as a college student.
So why are these students hesitant to start entrepreneurial ventures?
Apparently, the main reason students are hesitant to start ventures was that they had low access to funding (76%). These students say that they either don’t have the money to start a company, or they don’t know where or how to get funding.. Earlier, I mentioned that access to funding is necessary but not sufficient to start a venture. So, as it turns out, the “necessary” component of starting a venture (funding) is not available to many students. Obviously, something has to be done here. But again, note that even if they do have funding, there may still be other more prevalent psychological barriers that these students need to overcome.
The second reason (63%) was that they lack quality business knowledge. These students told me that don’t start businesses because they don’t know how to start one. To quote one of my respondents, “We need more information on how to start a company. We don’t really know what to do, or how to make their ideas come to life.” Another respondent, an engineering student in UP, mentioned the issue of accessibility, by saying that “There are business courses in our school. But not everyone is given access… I think that they should give this chance to all students.” Then there’s a whole other set of students who touched on the idea of quality – that even if there are courses in entrepreneurship, they aren’t effective in actually teaching it. A respondent from ADMU said, “Most professors just teach by the book… so we have a hard time learning.” Another respondent said, “They should teach more about the real world, rather than just the theoretical stuff… we need to actually experience it.”
The third reason (49%) was that they have lower self-confidence in their abilities to succeed as a leader. . Students told me that probably won’t be able to survive the pressures of building a company, and that they would ultimately fail. This is in line with the fourth reason why students don’t start companies – 48% of respondents said that they didn’t start companies because they had a high fear of failure. A respondent from DLSU said, “I am sure I cannot do it on my own”. Another said, “I’ve always wanted to start my own company…but what happens if I fail?” Again, powerful psychological barriers come into play.
Interestingly, I thought that pressures from family and friends would play a big role in one’s decision (or hesitation) to become a founder. And indeed family plays a role – although not as big as I thought it would be. For those who have not started ventures, only 8% said that they were hesitant to start one because their family wanted a different job or career from them. In general, pressures from family did not seem to override the bigger problems of funding, education, and self-confidence.
Image above: Reasons why college students hesitate to start entrepreneurial ventures
III. MOVING FORWARD
So what can we learn from this study? There are a few points that we can take-away:
First, psychology plays a huge role in entrepreneurship. Psychological constructs such as self-confidence, self-efficacy, fear tolerance, and resiliency all play a significant role in one’s decision to become an entrepreneur. But more importantly, these will also play a significant role how young founders manage and cope with future entrepreneurial challenges. Thus, any initiative that wants to build young entrepreneurs must have a firm understanding of the psychology of entrepreneurs.
Second, providing quality business education that is open for all types of students is key. Whether it is because teachers focus too much on theories and books, or because there is a lack of experiential learning in those classes, quality is a big issue. But it is also equally important to increase access for all types of students, especially those in non-business majors. Again, though there are business courses available in school, not everyone is always provided equal access. As a whole, students in the physical sciences, social sciences, and arts do not have the same access to opportunities as business students do. As psychology student, I couldn’t agree more.
Third, access to funding is definitely a concern that must be addressed. “Low access to funding” can be a result of two things. First, it could be a result of powerful institutional barriers that hinder access to funding in the Philippines. This could issues related to government, access to loans, or an underdeveloped funding ecosystem in the Philippines (think presence of sufficient venture capitalists, angels, and so forth). Second, this issue of low access to funding could also be a result of a knowledge gap – specifically, do young students know where and how they can secure funding? Are students knowledgeable of the different ways to fund a venture (think bootstrapping, private and angel investors, venture capitalists)? Do students know how to negotiate investments and equity splits? These are definitely points to consider if one wants to build young entrepreneurs.
Image above: University of the Philippines, one of the Philippines' top universities
In summary, I believe that in order to build the next generation of entrepreneurs, it is important to tackle the three points above which I call the “Entrepreneurial Triad”: Self-Confidence, Quality Education, and Access to Funding. To encourage young entrepreneurs, I feel that it is imperative to address the domains of psychology, quality business education, and funding. I hope that both present and future initiatives focus on these issues. I imagine it would take many different initiatives to hit all points of the triad.
There's a still a big opportunity to conduct more research on youth entrepreneurship in the Philippines. Though my study has brought about some insights, it too has its own limitations. Because most respondents came from urban schools in the Philippines, I’d be cautious to generalize this to all Filipino college students. There need to be more studies on this - such as those done on aspiring entrepreneurs in other parts and regions of the Philippines.
Since this study defines “venture” more broadly, it will be interesting to see how the numbers change if we define “venture” more strictly (ex. a venture must be registered as a company to qualify). Other key variables, such as socioeconomic status and educational background, should also be explored further. That said - it would also be interesting to see how young Filipino entrepreneurs compare to other young entrepreneurs in Asia. What are the similarities and differences across cultures and regions in Asia? And perhaps more importantly, how can we help each other build more entrepreneurs not just in the Philippines, but also across Asia as a whole? There is still a lot to be learned.
Reimagining how entrepreneurship is taught is a fascinating challenge. If we were to start from scratch with all the new knowledge that we know about entrepreneurial psychology and the latest pedagogical approaches, how would we design practical business education for teenages and young adults of the 21st century? It's an incredibly exciting time for entrepreneurship education because doing so allows us to start with a clean slate, and not face the barriers to innovation that hinder traditional colleges and universities. If you have any ideas, or are interested to learn more about the study, feel free to drop me a message. I’d love to hear from you.
