Editor’s note: This article was first published in November 2011, as an opinion piece written in the middle of Spain’s economic crisis. The author’s prediction of no job creation in Spain over the following 12 months has long since played out, and the Wiseri 120,000-euro funding round was a recent case in 2011.
Spaniards are afraid of starting a business. We could look for culprits to explain why the entrepreneurial spirit in Spain is so weak, but it’s really a combination of factors. Every day I meet people who have been unemployed for 3 years, who are about to run out of their family assistance benefit (a Spanish unemployment subsidy) and who have no prospect of a job in sight. In those 3 years it hasn’t even crossed their minds to start a business of their own, when in that situation fear makes no sense at all: they have little to lose, and if they do nothing, most of them could even lose their homes.
The truth is that for years Spain’s mindset has been to become a civil servant. “Why give myself headaches when passing the oposiciones (the competitive civil service exams) will set me up for life?” The problem is that today passing the oposiciones is almost mission impossible, not for any particular reason, but simply because there won’t be calls for them in the coming years, at least not on the scale there used to be.
But yes, if we’re looking for culprits, we could say that Spanish universities don’t prepare business owners either, but future employees. I’ve often heard that the motto of the most prestigious universities in the United States is “We don’t prepare workers for companies here, we prepare business owners”. And it’s not just the United States: Italy is a country of born entrepreneurs. Talking with some Italian business owners, I’ve been told that in Italy a civil servant is considered a professional failure, whereas in Spain they’re the luckiest people around, especially in times of crisis.
What would you do with €20,000?
If we gave a Spaniard €20,000 and asked what they’d use it for, they would tell us it would come in very handy to pay the mortgage, take a trip, buy clothes, and so on.
An Italian, an American and even, more and more, a Latin American, on the other hand, would tell us without hesitation that they would use that money to pursue their dream, which is starting their own business. It’s not that we hold back the entrepreneurial spirit; it’s simply that a large majority lack it.
That said, two positive factors are currently in place for a change of mindset. One of them is the crisis. Yes, you read that right. The crisis is encouraging the entrepreneurial spirit, because if you sit waiting for a job, in a few more months you could have serious trouble buying a loaf of bread after the 25th of the month. Whatever faith you place in politicians, not a single job will be created in the next 12 months. Quite the opposite: jobs will be destroyed, and the situation could drag on for another two years.
“You can copy and save this article to throw it back in my face in 12 months if I turn out to be wrong”
The other positive factor encouraging an entrepreneurial mindset in Spain is foreign tech companies. Today, when a young entrepreneur looks at Zuckerberg (Facebook) or Larry Page and Sergey Brin (Google), they know it’s possible to succeed in the startup business. The truth is that interest in everything to do with entrepreneurship has grown. Now that interest just needs to be channelled, trying to avoid some of the mistakes people make when starting a business.
On the other hand, as we’ve reported before, startup failure statistics aren’t very encouraging: we’re talking about 8 out of 10 failing.
Some experts say the high failure rate is mainly due to looking for shortcuts. It’s very striking to hear about an entrepreneur making billions two years after founding a startup, when honestly that isn’t what usually happens.
Perhaps focusing on an overly ambitious goal from the outset can end up discouraging the entrepreneur. In the early days, goals should be realistic and short-term. It’s better to split our goal into 5 stages or levels. That way it will be easier to reach the first targets, and we won’t get discouraged too soon.
Another reason that can lead to failure is starting a business out of necessity, because desperation over a bad financial situation can make our finances seriously worse.
We know that the number of entrepreneurs and companies in Spain is going to grow considerably, because it will be the only viable way out for a high percentage of Spaniards.
These days it isn’t true that there’s a lack of support for entrepreneurs: every week we receive all kinds of information about help for entrepreneurs, and it’s simply a matter of finding out who in your city can help you get started. As for startups, fortunately the Silicon Valley way of financing is catching on more and more. To name a recent case, the platform Wiseri raised 120,000 euros in investment by email alone.
In other words, good business ideas get funded quickly. For the rest, it’s not that the door is closed; they’ll simply have to put a little more effort into the search.
And finally, one fact that caught our attention about the new entrepreneurs in the United States was that 96% of them were not unemployed: they chose to leave their jobs to start their own business. Do you know many Spaniards willing to leave their jobs to set up their own business?
Further reading
Featured image: Carlos Reusser, CC0 1.0, via Flickr.
