Is it possible to teach entrepreneurship and how a technology entrepreneur can be characterized from the point of competence — here is an answer given by the specialists of the TechnoSpark group of companies (RUSNANO Fund for Infrastructure and Educational Programs).
Access to be given
There are obvious reasons for entering the technology business by young people, students and schoolchildren, in particular, to be complicated, if not to say impossible. They do not have adequate skills, causing enormous risks for the business process.
Nevertheless, in 2018, the TechnoSpark group opened a long-term partner program in cooperation with universities, called #StartupDiplom. Students, qualified on the basis of the diagnostics results, undergo entrepreneur internship in TechnoSpark companies, being exposed to the real technology entrepreneurship. Becoming technology startup leaders, they make key business decisions and work alongside experienced entrepreneurs. By 2020, more than ten universities from different regions of Russia have been already participating in the program developed by the TechnoSpark group together with Tomsk State University and the University of Tyumen.
The business efforts to solve its own personnel issues have led to creation of a universal educational product
This became possible thanks to the TechnoSpark specialists who had found a way to identify entrepreneurial competencies in an efficient way, selecting the most promising participants into the program with the help of the business game called Build a Company. Sell the Company appeared. Diagnostic methods, originally developed for the internal corporate needs, have been successfully applied in a broad youth audience of students and children. The game’s adapted version, called Build a company. Sell the company — Junior, provides 5−11th grade schoolchildren with learning the basic principles of technology entrepreneurship. Thus, in an attempt to solve its own personnel issues, the business has created a universal educational product aimed at entrepreneurial skills assessment and development.
Between Burundi and Uruguay
TechnoSpark faced the problem of assessing entrepreneurial competencies as early as in 2012, almost immediately after the start of work. Organized as a startup studio, TechnoSpark does not select projects or run competitions, but establishes dozens of new technology companies all by itself annually. Having dealt with the first hundred startups, it can predict the further demand without any difficulties. It is only necessary to analyze the performance of already operating companies and see which niches in new industries are not filled. There was another problem: no effective and inexpensive diagnostic methods existed to evaluate the entrepreneurial competencies of those who would implement these startups. Where to find new business builders?
The TechnoSpark group of companies provides a full cycle of venture building — from the startup development to its selling. The scope of the companies’ activity in the hardware industry includes logistic robotics, energy storage systems, medical high tech equipment, diamond optics, composite braiding, optical and industrial coatings, genomics, industrial microbiology, thin-film integrated photovoltaics, additive technologies and flexible electronics. The group holds the top position in the national ranking of the most effective technology parks; it has been included into National Ranking of Russian Fast-Growing Companies called TechUp 2019; it is also a part of the Global Startup Studio Network (GSSN). Moreover, it is a part of the investment network of the Fund for Infrastructure and Educational Programs of the RUSNANO Group.
This issue is relevant not only for TechnoSpark, but also for all economic agents who make investments in new businesses. After all, in addition to the market idea, there should be a person who implements it, produces a product, achieves business self-sufficiency and return on investment. The problem of the entrepreneurial competencies assessment exists for everyone — development institutions, corporations that encourage incorporative entrepreneurship or universities that want to support student startups.
Those being involved in this sphere are aware of a small number of technology entrepreneurs in Russia. According to the Global Entrepreneurship and Development Institute, Russia is somewhere between Burundi and Uruguay in the ranking of the entrepreneurship index. However, this fact could be perceived not as a sentence, but as the basis for setting the task to create an educational technology and to develop a diagnostic tool.
Diagnostics in the course of business game
Since 2012, TechnoSpark specialists have tried various ways to evaluate and develop entrepreneurial skills, including in-depth interviews, lectures, seminars and project sessions. The results of such examinations have been low relevant, the failure to develop an entrepreneurial attitude has been observed; everything was limited to endless discussions. The types of activity, mentioned above, have the communication in focus along with the creation of speculative structures, not referring to the practical experience. The acquirement of specific technology knowledge in action did not happen, people did not get experience of financial responsibility.
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Only the method of learning by doing, known since the Soviet times, has worked well. Thus, the same goes for diagnostics by doing. Working in business for one or two years made a person either show himself qualified for the difficult role of the startup leader, or chose another sphere of life. The only thing is the cost of such diagnostic and educational technology being unacceptably high. For the company, a year of work means that investments are made and a lot of business decisions are taken. Therefore, to train and examine an entrepreneur right in the process of work means to create considerable financial and reputation risks.
A solution was found. In 2016, the TechnoSpark group developed and tested a game-based diagnostic technology for selecting and training the leaders of their new startups. Today it seems natural that the problem of reducing the diagnostics time with no loss in quality can be solved by a business role-playing game. There are well-known western examples of a candidate computer game-based diagnostics, conducted when hiring for a job. But then, in 2016, it was absolutely not obvious that the game approach would work.
The task for game development was formulated as follows: to place a person in the fictitious circumstances that imply all the significant features of standard technology startup situations, and to learn how to register his or her successful and failing actions objectively. In addition to this, the process had to be standardized for a large number of participants. As a result, a business game called Build a Company. Sell the Company appeared. Since 2016, more than 60 game sessions have been held across the country, attended by more than five thousand people — schoolchildren, students, entrepreneurs and corporate employees. The experience gained during this time allows generalizing and drawing conclusions.
Three preconditions for quality
What are the preconditions for a business role-playing game to be effective? Firstly, it is required to make an accurate determination of the object of modeling which is a simulated reality in terms of organizational and activity game terminology. This should be a business area that developers have a lot of data about. In our case, the object of modeling is the activity of a series manufacturing technology entrepreneur. Simulating the game situation, the experience of building more than 500 technology startups in Russia was used as well as the multi-year research conducted by the Cambridge and Leuven innovation clusters.
The game reflects the basic principles of startup economics
Its main feature is that being in a gaming situation, the participants enter into real business relations. The players have personal money accounts, serving as indicators of their business success. They create a physical product, fulfill the customer requirements, conclude bargains with one another and with large economic entities, proceed from trial samples to batches, lose the existing market and form a new one, receive investments. Finally, they sell the company to a large corporation at a profit, and then decide whether to build a new business as an entrepreneur or switch to the role of a manager and lead a ready-made company. In other words, players do everything that the startup leader does in the first 7−10 years of the company’s operating.
The second precondition for quality is the absence of presenters and moderators. The secret of a good immersive game is the drama, not the presenter’s actions.
The developers relied on their own experience in creating organizational and activity games, but designed the content in the form of the scripted role-playing game that is understandable and interesting to young people. Introductory information is given to the participant not from the presenters, but from other players in certain roles. The profound game content is provided not by the presenter’s reflection, but the player immersion in the role and the business communication with other participants having other economic interests and plans. Participants interpret and evaluate the actions of other players all by themselves, being absolutely responsible for economic losses.
Digitalization is required as the third essential precondition for the modern business game. It greatly reduces time expenditure and is absolutely necessary for the objective diagnostics. A private account at the game online bank is assigned to each player. The norms of economic interaction are designated via the bank interface. In-game economic activity is regulated in accordance with the real economic interaction laws. The participant has about 50 options for economic action. All business transactions are carried out via the interface, so the digital trace is recorded and automatically analyzed in the database. This is how the digital profile of each participant is formed from the point of his or her entrepreneurial competencies.
Currently, the game design is sufficiently developed in regard to all these aspects. There were so many difficulties on the way that their full description would go beyond publication. The game is a technological product represented by the 10-hour long workshop simultaneously attended by 50 to 200 people, which extremely raises the experience requirements for the organizers. This fact was clear even at the design stage, but reality exceeded all expectations. Mobile quality requirements have strongly restricted the selection of appropriate sites. Everything must meet the highest standards including the acoustics, the screen and sound quality in the hall. In order to arrange materials delivery on time, it was necessary to establish an extensive network of supply and logistics partner companies. The ergonomics issue arose especially acute when the game had to be held completely online under the quarantine restrictions. The fee paid for the technification is a high price for a technical or organizational error. Intensity fee is seen as investment into the site ergonomics.
Main types of players
Based on standardized data processing for all games conducted, generalizations can be made. In particular, it is possible to determine the main types of players as the future business builders. Let’s say at once that the education and specialization are almost insignificant. The game does not reveal a level of knowledge, but a player’s competence, self-skills. A successful player demonstrates the common economic sense in every situation together with the ability for efficient actions and the high level of self-organization. Establishing a company and hiring employees, this person is guided by constructive considerations, not emotions or social ties. He or she easy enters the partnership with a professional investor, sharing the company in exchange for investments and actually inclining another person to decision-making. The successful player changes the mode of operation in time, breaking his own stereotypes and those developed in the course of the game, successfully fits into cooperation and finds his place in processing chains. The company sold by the successful player by the end of the game is not only a reproducible product, but also a replicable activity that does not depend on the presence of its creator.
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The unsuccessful player demonstrates one of three types of inefficient strategies, which excludes him from the list of possible business partners. Firstly, lots of people cannot proceed to action unless they have received comprehensive information and have reached a full understanding of the situation. As you can guess, this is not feasible neither in the game nor in real life. The entrepreneur knowledge is mostly a result of his or her trying behavior, and is not related to preliminary ‘desk’ analysis. The analytical deadlock observed among players in a difficult and unclarified situation, is known to be a predefined inability to entrepreneurship. This definition should not be considered as a negative assessment. We are talking only about the fact that this candidate is incapable of taking the position of technology entrepreneur in modern industries.
Secondly, being unable to cope with the high requirements for their startup, some participants move into the position of defenders of the oppressed and fighters for justice. Instead of following the examples of successful comrades, trying to achieve results, they are looking for someone to listen to their complaints. For example, they can require of a large corporation to provide failing startups with a convenient order. In every difficult situation of real life, such a player will fight for justice, but not for a high-quality product.
Thirdly, trying to meet the requirements of investors and buyers, some players commit fictitious actions, exaggerating the company’s operational indicators. This is also found in real life. The Internet is full of stories about fake startups. The game provides for an objective test of the company feasibility, so that a dishonest entrepreneur can be imposed a significant fine. Actually, the technology entrepreneur does not create a false perception of the company’s capabilities, since objectiveness is the most important tool of business cooperation.
If the candidate adheres to the first strategy, this only suggests that he or she has a different professional orientation that does not meet the requirements of the modern industry of technology companies. Unfortunately, the two other strategies (fictitious actions and the struggle for justice), are at the edge of violating fundamental business ethics.
Three out of a hundred
The question remains whether the Build a Company. Sell the Company game has training potential or it is just a diagnostic method? According to participants, much of their theoretical knowledge got practical expression in the business game. Those who already had experience in entrepreneurship say that they have got rid of many harmful illusions about technology startups. This is as it should be: the game incorporated the experience of many entrepreneurs, therefore it reflects the basic principles of the startup economy. The children’s version of the game is mainly training-oriented, it introduces schoolchildren to the basics of economic interaction in an interactive format.
According to our statistics, out of 100 participants of diagnostic games, it is possible to select no more than three persons, objectively ready to build a technology startup under the #StartupDiplom program. Thus, we get an indicator similar to the real index of entrepreneurial activity. This is taking into account the fact that the program is attended by the motivated people. However, even these low indicator values are a sign of positive changes in the future. Young people, undertaking internship at TechnoSpark companies today, will tomorrow lead independent startups and create hundreds of new high-tech jobs.