How does an entrepreneur gain the knowledge necessary to achieve success?  Is experience and education the most important factor, or is an apprenticeship under a mentor perhaps more valuable?

In forthcoming research related to the author’s doctoral dissertation, some fascinating findings emerged pertaining to this question.  These findings emerged from a study of entrepreneurial heuristics, which are the mental rules or concepts around which entrepreneurs base the important decisions related to the management of their businesses.  An example heuristic might be “only hire a secretary who types above 50 words per minute.”

Perhaps the most important and interesting finding of this study was the suggestion that  most types of actual work and entrepreneurial experience do not result in the increased use of heuristics.  Generally, heuristics use is signaled by greater decision making speed.  The implication is when entrepreneurs employ heuristics, they are able to quickly process routine decisions.  This study found that even as entrepreneurs amass greater years of experience, they do not necessarily grow in their ability to abstract useful principles of management that result in quicker decisions.In contrast, it was found that having apprenticed for some time under a mentor did result in increased use of entrepreneurial related heuristics.  This result suggests that somehow, mentoring is a more effective conduit for entrepreneurial learning than is simple years of work experience.

It is not perhaps surprising that the mentoring process is a highly effective way of transferring heuristics.  What seems surprising is that greater experience does not seem to result in a learning process that confers usable heuristics to entrepreneurs.  This finding requires an explanation.

Theorists distinguish between different types of knowledge, including tacit knowledge, which is particularly hard to transfer, and explicit knowledge, which is easier to teach and exchange between individuals.  Perhaps mentoring succeeds in exchanging both tacit and explicit knowledge in a way that is not possible through simply participating in the business environment.  One might sit in an office next to the CEO of a company for many years, and observe the CEO writing reports, making phone calls, etc., but never learn how to be a CEO oneself since this type of knowledge demands direct explanation from the CEO.  It cannot be picked up simply by being in the same business environment with the CEO.  Also, many entrepreneurs may find themselves having “one year’s experience ten times instead of ten years’ experience”.  A master chef, for instance, will learn the fundamentals in a concentrated period of time while in school.  Then, during the actual period of working, a chef will spend most of the time preparing recipes and learning relatively little new about the art of cooking.

Further exploration into the sources of entrepreneurial learning in this study examined the role of typical classroom education in entrepreneurial learning.  Data was collected for educational attainment of the entrepreneurs in the study.  The results suggest, at least for the sample considered in this study that more years of educational attainment in general, like entrepreneurial experience, does not seem to lead to a more heuristic thinking process or greater use of heuristics.

Mentoring, then, seems to play a valuable and unique role for the entrepreneurs in this study in relation to amassing and using useful heuristics that help in their management practices.  The results suggest that it is a role that is not filled alternatively by experience or education.  This finding implies that prospective entrepreneurs should attempt to apprentice with more experienced or knowledgeable entrepreneurs who can teach the principles of a given business in a time-effective and concentrated manner, rather than depending on experience alone to teach “the ropes”.