Starting a business used to be like putting all your chips on red. You won big or you went home empty-handed. With dreams of taking on the world, entrepreneurs had more in common with those who pack their bags for Las Vegas than serious business people. It meant quitting the day job and gambling hard-earned savings on little more than a hunch. Shunning the security of a pay cheque was a daunting – impossible – choice for most. Few tried, and even fewer succeeded.
Thankfully, this high-stakes perception of entrepreneurialism has had its day. Launching a business is still a risk, but it’s not a crapshoot, and it certainly isn’t all or nothing. The story of Alice Holden and Fleurette Mulcahy, the 500th and 501st members of the IoD 99 – the Institute of Directors’ network of entrepreneurs under the age of 40 – is typical. The pair were studying at King’s College and working in the lingerie departments of big high street stores. Frustrated at not being able to find the underwear they wanted, they decided to create it for themselves. Attollo Lingerie was born.
This is how businesses are founded these days – not by risk-seekers, but by problem-solvers. People with a little industry background spot a gap in the market. They spend a few evenings and weekends assessing the odds of success – researching the sector, testing ideas on family and friends. Spare time is dedicated to drawing up plans, making prototypes and building websites. Before people even realise it, a product has been launched, meetings with investors have become a weekly fixture, and what was born as an idea in a lingerie department grows into a genuine business. Success is hard-won and well-deserved, not a lucky roll of the dice.
The rise of portfolio careers, where people hop between employers and projects, has underpinned this shift. Initiatives like the Enterprise and Seed Enterprise Investment Schemes have also played a role, by removing some of the risk for investors and helping to channel much-needed capital to startups.
But campaigners and unions are worried about the portfolio economy, asking what role regulation should play, and even questioning the definition of employment. Before we start drawing up new rules, we must consider what they would mean for today’s and tomorrow’s entrepreneurs.
A survey of IoD 99 members, published today, shows that more than nine in ten were either in work or a student when they launched their business. Sixty-one per cent were employed full-time, one in ten was employed part-time, and a sizeable chunk were already working for themselves or as freelancers.
They weren’t forced into self-employment, and didn’t start their own business because they lacked opportunities or fancied backing the long shot. Picking up work when and where they wanted gave them the flexibility to explore launching their business without having to stake their career on it. Like Attollo’s founders, more than half of entrepreneurs stay with their previous employer while they get their business off the ground. Without a steady income and the chance to gain experience and new contacts, who knows whether they would have even bothered to take a shot?
There are millions of business ideas being dreamt up across the country, in department stores, coffee shops, investment banks and lecture halls. The success and vibrancy of Britain’s portfolio economy means more of them than ever before will hit the jackpot.