Student entrepreneurs speak out: #3 in a series
by João Nuno Vasco Henriques, CMU-Portugal program student
As a nation with many successful entrepreneurs, both in the past and in the present, Portugal should have the right conditions and support for entrepreneurs. As a Portuguese student, having worked in a Portuguese start-up, and knowing a Portuguese entrepreneur and entrepreneurship professor, Mário Valente, who believes that we can make it happen and that we can bet big and win big, I want to share my beliefs about the entrepreneurship environment in Portugal.
In Portugal things change slowly, it’s true. In Portugal we don’t have the right taxes, legal or labor conditions to favor an entrepreneurial environment. Still, these are not the main obstacles for students who wish to pursue entrepreneurship in Portugal. There’s a systemic problem affecting young people trying to pursue the entrepreneurship track. The problem is our risk aversion, which is one of the highest in the world according to the Geert Hofstede’s study. Yet, this not consistent with the fact that Portugal is in thetop 25 most entrepreneurial countries in the world, according to CNN Money’s report on the Global Entrepreneurship Monitor. When analyzing this conundrum at the university level, one can understand that there is a twist in the student’s ideology that blurs the “bet big win big” ideology.
There’s an embedded stigma in the Portuguese society: don’t challenge the status quo. I was once told that we have everything in Portugal – good food, great weather, and a laid-back lifestyle – so why bother? This may be why we as a society tend to be so risk averse and why we keep things as they are, not challenging the status quo. Despite this attitude, we have an entrepreneurial spirit and capabilities, but they don’t translate into high growth ventures most of the time. Instead, they translate into small lifestyle businesses because the perceived risk is lower and the acceptance from friends and society is higher.
Even in college we are encouraged from day one to focus on safe, corporate careers by both the university’s environment and our parents – so that we can get a house, car, and support a family. As students, when the perceived risk of initiating a venture is the lowest – we don’t have family to support or mortgages to pay – we are afraid to leave our comfort zone and spread our wings to the “unknown.” The biggest problem that Portuguese students face is not the lack of legal or tax incentives, but an ideological problem related to risk aversion and social approval. The lack of entrepreneurial values and support from parents, professors and friends translates into low risk tolerance throughout college.
Another setback affecting university entrepreneurship in Portugal is the fact that it is highly fragmented; three key areas do not intersect: investors, business students, and technology students/researchers. While we have very good science universities with a lot of good projects and research, technical students are not prepared for a venture; on top of that, they are not taught to value the contribution from business students. They are afraid of having their idea stolen, and they don’t understand that implementation is what counts, sometimes more than the idea. For business students, it is hard to start a venture without a base of technology. Finally, seed stage capital is scarce in Portugal, supported by the “get some revenues and we can talk later” philosophy. The weak relation between these three areas makes it hard to make entrepreneurship happen in Portuguese universities. I’ve seen really interesting technical skills and good projects postponed for lack of financial support, and I’ve seen some of the best business ideas sidelined due to the lack of technical personnel.
Having the opportunity to come to CMU, I now see the differences in university entrepreneurship between the US and Portugal. In Portugal we don’t have a campus where it all happens, where all fields of study come together. A business student generally takes only business-related courses and a CS student doesn’t study business. Another important difference is the passion for entrepreneurship that is really strong in the US, whereas in Portugal students are not seen as drivers for innovation, or instigators of high growth ventures. This is supported by the fact that in the US there are real examples of companies created by young students like Facebook, eBay and Microsoft.
All these arguments make it sound like entrepreneurship in Portugal is not the way out of the current crisis, but that is not the truth. We do have entrepreneurial spirit. We do have successful entrepreneurs who believe in Portugal and have the capabilities to be disruptive. We do have entrepreneurs like Mário who makes students believe we can make it happen. We do come in the top 25 most entrepreneurial countries in the world. We really were one of the first entrepreneurs when we discovered the “new world” more than 500 years ago. All we need as students is to believe that is possible; we need someone who has “been there, done that”, because sometimes that’s all we need to jump start ourselves.
As a country we are waking up, and the university entrepreneurship environment in Portugal is changing, with associations like Acredita Portugal (Believe Portugal), NOVA Entrepreneurship Society, which has an objective to foster entrepreneurship among non-business related individuals and students, and with access to seed stage funds/incubators backed by real entrepreneurs, like SeedCapital. By observing Portuguese students, one can see that things are changing.
We are better prepared than ever to face the real world, we are more willing to take risks and to do it in our way – even if it’s a different way, challenging the status quo – and we want to do it because we want to help our country, to create value for our community, and we want to jump start Portugal. The lack of entrepreneurship values and weak entrepreneurial environment is changing with a new generation of high-growth Portuguese entrepreneurs and young people willing to bet big, willing to expand beyond their comfort zone, who are ready to think with a worldwide focus and compete with companies from all over the world, and who will lead Portugal to be the “West Coast of Europe”, like 500 years ago!
João Nuno Vasco Henriques is an exchange student from Católica-Lisbon, Portugal, currently studying at Carnegie Mellon University. He will graduate with a masters in finance in 2012. João has worked for a Portuguese startup and is a rugby national championship winner.