Keywords

1 From Inspiring Students to Actual Startups

This chapter acknowledges that a broader perspective on entrepreneurship education regards it as a key personal skill, with aspects such as creativity, employability, and aptitude for business model innovation (Halbfas & Liszt-Rohlf, 2019). Several European Union publications describe the “sense of initiative and entrepreneurship” as a key competence (Bacigalupo et al., 2016). Furthermore, this chapter focuses on entrepreneurship educators’ primary goals: providing students with entrepreneurial skills and supporting them in becoming entrepreneurs. A focus on these concrete, measurable outcomes is also explained by the expectations of policymakers (Rideout & Gray, 2013). There is also a link to the third mission of universities’ contributions to their entrepreneurial ecosystem and implementing innovation, as well as generating employment (Kuckertz, 2021). A study by the Massachusetts Institute of Technology (MIT) estimates that MIT alumni have founded at least 30,000 (active as of 2014) companies, employing 4.6 million individuals and generating annual global revenues of $1.9 trillion (Roberts et al., 2019). Similar data are presented in a study at Stanford, with an estimated 5.4 million jobs created (Eesley & Miller, 2018). Using this as a benchmark, how do we even get close to that when looking at much smaller and younger German universities like Stuttgart Media University? What are the gaps and how can we bridge them?

1.1 Starting Point

The 2016 GUESSS study attributed Stuttgart Media University the strongest entrepreneurial spirit of all German universities surveyed (Bergmann & Golla, 2016). While these data were promising, further analysis revealed areas for improvement in terms of visibility, support in taking the next step, and gender distribution. An internal survey in 2015 disclosed that only 22% of the students had ever thought about starting a business and that only 49% knew that support was provided by the university (Zepf, 2016). In addition, few students actually move forward with the startup ideas they do have. This is especially true at the undergraduate level, as shared by other educators (Say & Schramm, 2013). The evaluation of a bachelor’s entrepreneurship course by the authors over 12 semesters showed that of a total of 107 generated startup ideas, only four were taken to the next level. This rate is not any higher for research projects or other student projects. Further data show that young women in particular shy away from the idea of starting a business (Schneider et al., 2021). Only 18% of the recipients of Exist (a startup grant by the Federal German government for university graduates) are female (Bundesministerium für Wirtschaft und Energie, 2021), compared to 49% of the student body in Germany (Statista, 2021).

1.2 Funnel Logic of Entrepreneurship Education and Support

Good entrepreneurship classes and a well-run startup center alone will not leverage the full potential of a university to generate startup activity since a few important aspects are still missing. Studies show that students who have been exposed to entrepreneurship education programs are more interested in entrepreneurial careers and more inclined to create a business (Schneider et al., 2021). In addition, the belief that one can be successful as an entrepreneur is stronger among students who have taken entrepreneurship classes (Giacomin et al., 2011). The previously quoted MIT study suggests that entrepreneurial activity can be actively encouraged. While approximately 3.5 active companies were founded per 100 MIT alumni during the 1960s, by the 1980s, this figure had jumped to 10.7; it rose to 13.4 in the 2000s and was expected to rise to 18 companies in the 2010s (Roberts et al., 2019).

The hypothesis underlying the approach presented here is that entrepreneurship education is a continuous process, beginning with the inspiration and eventually leading to actual support for founders. Entrepreneurship as such can be considered a process chain (Fueglistaller et al., 2016); the goal is to address students during their studies and match their entrepreneurial journeys with the student lifecycle. We suggest that transitions from one step (e.g., generating and later validating an idea) are predetermined breaking points that cause promising projects to be discontinued. Figure 1 outlines this process, with the two goals of reaching more students and closing the gap during the pre-foundation phase in the validation of ideas by encouraging more students to continue and eventually directing them to existing funding and support programs. This “funnel logic” was derived with key performance indicators from Stuttgart Media University (total of 5000 students) within a single year and throughout the process, from introducing students to the ideas of entrepreneurship to actual startup support. A similar model was found in a study by Jansen, with a three-stage student entrepreneurship encouragement model (Jansen et al., 2015).

Fig. 1
A funnel model of the indicators at the university level. Phase 1 - expose more students. Phase 2 - encourage to continue. Phase 3 - mediate to funding and support programs.

Entrepreneurship education funnel with targeted annual entrepreneurial success indicators from Stuttgart Media University (total of 5000 students) within a single year at the university level

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1.3 Approaches to Widening the Entrepreneurship Education and Support Funnel

The question, then, is how to “widen” this funnel and avoid the loss of so many students during the educational process. Reflecting on the measures taken at Stuttgart Media University, lectures and classes and the actual support for students actively ready to start a company were sufficient, and two areas for improvement were identified:

  1. 1.

    Expose more students to entrepreneurship early in their studies.

  2. 2.

    Encourage more students to continue to work on their ideas.

Two initiatives were created to pursue those goals: Spinnovation, together with two other universities, and the statewide Academic Seed Accelerator Program Baden-Württemberg (ASAP BW). The Spinnovation project formulated—among other goals—the “Vision 100%,” with the goal of exposing every student to entrepreneurship and innovation early in their studies. Several workshop formats were created for first-year bachelor’s students, and 220 workshops occurred, the majority as ideation workshops using design thinking approaches during the onboarding phase. Other formats included open idea competitions, founder talks, and startup nights. Approximately 10,000 students were exposed to entrepreneurship, and close to 3000 students completed a survey Spinnovation (2020). Outcomes are shared in Braukmann et al. (2023), focusing on motivators and fears among students in starting a business, as well as the impact of certain measures on attitudes and perceptions about entrepreneurship.

ASAP BW, which encourages students to actively take their ideas forward and turn them into validated business models (ASAP BW, 2021), was designed to bridge the gap between students’ developing startup ideas and actively seeking support programs and funding for these ideas. Cohen first used the term “seed accelerator,” defining it as “a fixed-term, cohort-based program, including mentorship and educational components, that culminates in a public pitch event or demo-day” (Cohen & Hochberg, 2014). In comparison, incubators support startups primarily as service centers in the early phases of their foundation (Kollmann, 2011), with a focus on the realization of business ideas (Högsdal et al., 2018). They typically provide services such as financing, legal support, physical facilities, goals, and structure (Barbero et al., 2014). Classical accelerators support the growth of startups with functioning business models (Högsdal et al., 2018). The authors’ view is that seed accelerator programs support the initial discovery and validation of a business model and are designed in line with customer discovery and the lean startup approach of “validated learning” and “fail faster,” with the opportunity for rapid iterations.

ASAP BW is designed as a cohort-based, decentralized, and statewide seed accelerator program in the form of a competition with a standardized, well-established set of tools and methods specifically adapted to colleges and universities. It uses the modern approaches of the agile startup world, such as design thinking, customer validation, and business model generation, with the goal of quickly validating the viability of an idea and the associated business models, built up in five validation challenges. All students and recent alumni from Baden-Württemberg can access the program anytime at a low threshold with the aim of the successive validation of the idea and business model.

2 What Motivates Students Toward Entrepreneurship

As part of the Spinnovation project run from 2016 to 2020, a comprehensive survey was designed. At the end of the second semester of their bachelor’s program, every student was invited to complete the survey. Incomplete questionnaires and answers from students in other semesters were excluded. The final sample comprised 2698 bachelor’s students from the polytechnic universities Aalen, Reutlingen, and Stuttgart Media University, 1181 of whom had benefited from one of the Spinnovation formats. The other 1517 served as a control group. The sample came close to the overall demographics of the universities, traditionally having an engineering focus: 53% were male and 47% female, while 44% were enrolled in engineering or IT programs and 37% in business or law programs (Schneider et al., 2021).

The first aspect of the survey was entrepreneurial intent and attitude. Seventy-five percent of the students exposed to entrepreneurship during the first year of the study program responded that they agreed or strongly agreed that their university encouraged students to become entrepreneurially active. For the control group, only 48% gave this answer Spinnovation (2020). Students were asked if they knew a contact point, person, or place for entrepreneurship at their university, and 70% of students who had been exposed answered yes, compared to 30% of the control group. At the same time, 78% of the students with a contact point strongly agreed or agreed that they felt encouraged Spinnovation (2020).

The other two aspects of the study were possible reasons or motivators for and possible obstacles or reasons against entrepreneurial activity, in the sense of willingness to start a venture (Schneider et al., 2021). Figure 2 presents the detailed results from a gender perspective. The top reasons stated were the “possibility to realize one’s own ideas,” “freedom to decide for myself/to be my own boss,” and “prospect of financial success.” “Financial success” displayed a strong gender difference, with 58% of the males but only 31% of the females choosing this option, followed by “solving a problem, e.g., designing a product” and “proactively changing the world” (Schneider et al., 2021). A similar study by Giacomin et al. interviewed 2093 students from five countries (the United States, China, India, Spain, and Belgium) and various fields of study about their motivations and barriers to starting a business. They similarly discovered that the five strongest motives for starting a business are “the chance to implement my own ideas,” “creating something of my own,” “personal independence,” “being at the head of an organization,” and “the opportunity to be financially independent.” The study further identifies differences between students from different nations, with independence being particularly important for students from the United States and India, compared to other motives and other nations (Giacomin et al., 2011).

Fig. 2
A double-bar graph of percentages of men and women. 1, Possibility to realize own ideas 78, 80.2. freedom to decide 60, 78. 3. Prospect of financial success 57, 31. 4. To solve problems - 35, 38. 5. Proactively changing the world 22, 24. 6. To advance my career 18, 22. 7. Engaging for society 10, 14. 8. Recognition 8, 13.

Insights into students’ attitudes toward starting their own business

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The five most significant perceived barriers to starting a business among the students examined by Giacomin et al. were “excessively risky,” “lack of initial capital,” “lack of entrepreneurial competence,” “current economic situation,” and “fear of failure” (Giacomin et al., 2011). Further possible barriers discovered by Pruett et al. can also include tradition and history; for example, Chinese students whose intentions to pursue entrepreneurial careers were often impacted by their families (Pruett et al., 2009). The Spinnovation study similarly stated “high financial risk/no funds” and “high Insecurity/fear of failure” as the top reasons, as shown in Fig. 3 (Schneider et al., 2021). A strong gender difference was identified in “fear of failure,” with young women scoring 57% higher on this dimension (25 percentage points, 69% vs. 44%). A similar observation in regard to gender differences was made in a 2015 study about attitudes toward failure (Kuckertz et al., 2015). Further reasons included “lack of ideas,” “lack of qualifications” (comparable to lack of entrepreneurial competence), and alternative attractive job options (Schneider et al., 2021). The final reason might be specific to the strong labor market in the state, which has one of the highest shares of “opportunity-driven” versus “necessity-driven” entrepreneurs (Metzger, 2015).

Fig. 3
A double-bar graph of the percentages of men and women. The maximum values are high financial risk or no funds 69, 78 followed by High insecurity or fear of failure 44, 64. The minimum values are Lack of co-founders or team 15, 14 followed by Missing coaches or mentors 14, 11.

Insights into students’ reasons and attitudes toward not starting their own business

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Recommendations include elaborating on the opportunities considering the gender differences and holding a differentiated discussion on startup failures, while also sharing success stories. The lack of ideas as well as of qualifications and cofounders can easily be mitigated during students’ entrepreneurial journeys.

3 What Ideas Students Really Care About

This section analyzes and provides insights from the first 506 teams who participated in ASAP BW, introduced in the first chapter. It reviews the participating teams and members in regard to the ideas, motivations, and demographics of more than 1300 program participants.

3.1 Participants and Teams

From the beginning of the first ASAP BW round in October 2018 until the end of the seventh in February 2022, a total of 1319 participants were registered. These include students or recent alumni from universities of applied sciences, universities, state-approved private universities or colleges, and universities of cooperative education and some art, movie, and pop academies.

Concerning the diversity of the participants, the share of 32% female participants was considerably higher than the 10% female founders in Baden-Württemberg (Sonnenmoser & Seifert, 2021) and 18% in Germany as a whole (Kollmann et al., 2022). We hypothesize that this high participation rate among women occurs because ASAP BW is often integrated into the curriculum or at least awarded with a certificate and ECTS encourages more females to join. The focus of validated learning is promoted, thereby mitigating the aspect of actually failing with an idea. Data suggest that young women are more goal-oriented in their studies and graduate earlier (Bundesministerium für Bildung und Forschung, 2021). Also, the overall diversity seems to be higher, compared to 22% of migrant founders in Germany, but this evidence is mostly anecdotal based on interaction with the teams (Kollmann et al., 2022).

A total of 506 teams were formed, with an average team size of 2.6. Three-hundred and ninety teams submitted ideas that could be analyzed and thus were considered in this sample. The gap is due to data privacy issues, with not all teams applying for the final pitches; in the end, some teams decide against applying for the opportunity to pitch in the finals. Failing to reach problem–solution fit or product–market fit during the program is the number one reason for this, followed by teams finding similar products or services already on the market. Some teams simply need more time for validation and often (re-)apply later. Resolving intellectual property concerns is a typical explanation. A few teams do not meet the competition criteria (no affiliation to a university) or “only” joined the program for the learning part.

3.2 What Ideas Students Are Working on

The basis for the analysis is the 77% of the teams who submitted evaluable business ideas. Half also applied for the final pitches. All ideas were categorized by the authors based on classifications from the German Startup Monitor 2021 and Startup Atlas Baden-Württemberg. Limitations exist in the categorization; the students’ ideas in such an early stage still lack focus, as they include very different market opportunities. Frequently, the teams moving on with their ideas (20% of all teams) will experience major pivots.

  1. 1.

    Figure 4 provides an overview of the addressed customers by students. Half of the Students Have a B2C Bias: 52% of the students’ ideas address the end customers (B2C) with a bias for target groups being students like themselves. The remaining customers addressed were split into 28% targeting business customers (B2B), 16% addressing both (e.g., platforms for businesses and end consumers), and only 4% addressing the public sector (schools, universities, or the government/B2G). The challenge was to differentiate direct versus indirect relationships, with only businesses being partners versus actual customers. Compared to existing startups in Baden-Württemberg, where 67% are B2B and only 33% in the B2C customer segment, it becomes even clearer that students focus more on ideas targeting end consumers (Sonnenmoser & Seifert, 2021).

  2. 2.

    Figure 5 provides an overview of the types of solutions. Students Love Apps and Platforms: Concerning the kind of solution they are working on, apps were first, with a total of 39%, and the majority (20% of the overall sample) actually being platforms. Physical products are next, at 23%, followed by services at 11%. Ten percent of the ideas are software solutions, while 9% are hybrid solutions involving products and software or services. Only 5% qualify as high-tech, and 2% are games. When compared to actual startups in Baden-Württemberg, the differences were significant, with 43% pursuing software solutions, 32% being product oriented, and only 12% being platforms and 8% service solutions (Sonnenmoser & Seifert, 2021).

  3. 3.

    Figure 6 provides an overview of the chosen Business Model: Student solutions tended to be less digital than in the real world. In terms of the business model students preferably apply, half of all ideas can be classified as digital business models (53%)—with the challenge of differentiating a digital component in the product from an actual digital business model. Thirty-one percent are classified as analog business models, and 16% are hybrid. Compared to existing startups in Germany, the percentage of digital business models is higher at 67%; analog business models comprise only 10%, and hybrid business models 17%, being mostly high-tech solutions (Kollmann et al., 2022).

  4. 4.

    Sectors and Industries: The search begins in students’ backyards; the classification of ideas into different sectors is quite challenging due to a high number of potential market opportunities. Yet, the results, as displayed in Fig. 7, show a strong bias toward ideas in students’ everyday life sectors, such as food and consumer goods at 18% and leisure, sports, and gaming at 14.2%, followed by health and medicine at 9% and information and communication at 8.5%. This correlates with students’ bias toward ideas developed for students as customers, an observation shared with other educators (Say & Schramm, 2013). The predominant sector for startups in Germany is information and communication, at 30.5%, followed by health and medicine at 10.6%, food and consumer goods at 9.8%, and mobility and logistics at 6.6% (Kollmann et al., 2022). The comparison indicates that both students and actual founders target everyday life solutions, with founders more focused on work-related solutions (such as information and communication) and students more on leisure and free time. An analysis of the ideas and teams actually qualifying for the final pitches and moving to the next step in incubation programs shows a stronger B2B focus, with sectors being closer to the overall startup teams (Gründermotor, 2021).

  5. 5.

    Impacts Aligned with Overall Startup Activity: 38% claim a social or green impact, which is very similar to German startups overall, with 43% categorizing themselves as having a sustainable impact and being part of a “green economy” and 38% having a social impact (Kollmann et al., 2022).

Fig. 4
A horizontal stacked bar chart titled, customers addressed. The values in percent for B 2 C, B 2 B, Combine, and B 2 G are as follows. 1. Students teams in B W. 52, 28, 16, 4. 2. Startup teams in B W, 33, 67, 0, and 0.

Customers addressed by student teams participating in ASAP BW (N = 390) compared to existing startups in Baden-Württemberg (N = 777)

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Fig. 5
A horizontal stacked column chart labeled, types of solutions. The values in percent for product, app or platform, service, hybrid or sonstiges, software, high-tech, and game are as follows. 1. Student teams in B W. 29, 39, 14, 12, 12, 7, and 2. 2. Startup teams in Germany. 32, 12, 8, 5, 43, 0, and 0.

Types of solutions by student teams participating at ASAP BW (N = 390) compared to existing startup teams in Baden-Württemberg (N = 777)

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Fig. 6
A horizontal stacked bar chart titled, business model. The values in percent for digital, analog, and hybrid or high-tech are as follows. 1. Student teams in B W. 53, 31, and 16. 2. Startup teams in Germany. 65, 9, and 26.

Business models by student teams participating in ASAP BW (N = 390) compared to existing startup teams in Germany (N = 1962)

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Fig. 7
A horizontal double-bar graph indicates the students in B W teams and startup teams in Germany. Information and communication are high in startup teams in Germany. Food and consumer goods are high in student teams in B W.

Classification into sectors of student teams participating in ASAP BW (N = 390) and startup teams from Germany (N = 1962)

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4 Conclusion

The data clearly indicate that exposing students to entrepreneurship early in their studies increases awareness and also positively changes perceptions about their university as an institution supporting entrepreneurial activities. At the same time, opportunities for self-realization in the sense of working on one’s own ideas and being one’s own boss are the strongest motivators. Financial success is a dominantly male motivator but should not be underestimated. The impact seems to resonate with a minority; still, we suggest that those students may not be reached otherwise in regard to entrepreneurship education. All of these aspects deserve to be shared in an entrepreneurship class by sharing data, other empirical evidence, or role models.

The strongest demotivators are the fear (and stigmatization) of failure and financial losses, followed by the lack of an idea, competencies, and cofounders. Attractive job offers increase opportunity costs by decreasing the number of necessity-driven entrepreneurs. We argue that all other aspects can be mitigated by providing safe spaces within the university to work on ideas, turning perceived failures into documented learning. This will be an area for future research about the role of credits and certificates in promoting entrepreneurship education.

A major aspect of this is the introduction of (academic) seed accelerator programs bridging the world of learning with credits as a reward and financial success to motivate students and recent alumni to take the next step. Even if only one idea out of 10 turns into a startup, this is a considerably higher number than in the current situation. The data show that students begin with a strong bias toward things they know and understand. Yet the teams moving on have ideas resembling more actual startup activities. One area for further research is to validate whether those teams with the right sectors and industries are more successful or if the approach and the support will help them to achieve product–market fits in areas beyond their initial thinking.