How economists can be more involved in the start-up world

Sarah Lacroix graduated from the ERNA master in 2016 and moved to Australia. She had experience in event management while at TSE (she was a TSE student ambassador before TSE started recruiting them!) and started working in a company organising conferences about energy. She is now the community and events manager for EnergyLab in Sydney, the leading start-up accelerator in Australia for CleanTech and Clean Energy which run programs in Sydney, Melbourne, Brisbane, Canberra, Cambodia and India.

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Sarah Lacroix

Start-ups are all over the news and seem to be the new thing everyone wants to do. I just finished a short course on entrepreneurship at the University of Technology in Sydney, and one of the first things the facilitator told us was: “Start-ups are everywhere and now everyone wants to be an entrepreneur. 10 years ago, people wanted to become investment bankers or traders, now they think founding a startup will make them a millionaire.” Start-ups are young companies growing rapidly. We tend to associate start-ups with smartphone applications or technology (tech), but there is much more than that. Basically, for every problem, there is a start-up trying to solve it. There are social enterprises such as start-ups selling you subscription boxes, startups making processes more efficient in the medical or legal sector, and so on.

The list of sectors that put “tech” at the end of their names keeps growing, and it has been a privilege for me to work in one of these sectors: CleanTech. CleanTech stands for Clean Technologies (not technologies that clean things). While there is no strict definition of CleanTech, the technologies that belong to this sector include but are not limited to clean energy generation, batteries, smart energy, energy efficiency, clean transportation, sustainable farming technologies, waste technologies, and biofuels. I really love working in CleanTech, where our main motivation is technical progress to lead the way to a 100% carbon free planet. Working with CleanTech startups taught me a lot about entrepreneurship.

One cliché about tech start-ups is that you need to be an engineer to be a start-up founder, like Mark Zuckerberg. This is wrong: most engineers can build products but will struggle when it comes to selling it. I know CleanTech entrepreneurs who previously worked as lawyers and marketing, or as finance executives. Some of them learned how to code to build their products, while some hired a developer and used their skills in another area of the business.

TSE does not have an entrepreneurship path, but we learn very valuable things that can help us become successful entrepreneurs. As economists, we understand what competition means and what a price is. Entrepreneurs do not really derive production functions every morning to define the prices, but understanding that the price is the point where supply equals demand is really important. I see too many people defining the price solely base the cost of the product without thinking about the demand side.

Economists also understand markets really well. Finding the differentiation point and understanding competition through a game theoretical perspective can be very handy when you start a business. While a lot of what we learn is very theoretical, the way economists think about problems is very valuable. Economics is probably the discipline in social sciences that uses the word “optimise” the most, and that’s a very unique (and useful) way to think about problems.

So how can you learn more about startups and entrepreneurship?

It is a very hot topic, and it is easy to find books, podcasts or workshops about it. My favourite podcasts are “How I built this” from NPR and “Masters of Scale” with Reid Hoffman (co-founder of LinkedIn). The Freakonomics radio also has good episodes. If, like me, you are interested in Clean Energy, I would definitely recommend listening  to “The Interchange” and “Energy Gang” from Greentech media. They are really good to listen to on your daily commute, while you’re cooking or on a road-trip! Among the books on entrepreneurship, I read She Means Business by Carrie Green and #Girlboss by Sophia Amoruso. If you see a trend there, that’s because I’m very passionate about getting more women into entrepreneurship (one other great book about women in leadership is Lean In by Sheryl Sandberg). I co-founded a program at EnergyLab called CleanTech Women to support more women on their entrepreneurship journey: Our free pilot program is currently running with ten passionate women learning how they can make a startup out of their green ideas.

One last thing I would recommend for aspiring entrepreneurs is to participate in Hackathons and start-up weekends. These are great ways to test your business ideas. Moreover, the workshops run by the organisers are always fantastic. Special mention goes to Climathon by Climate KIC, which  was organized over 100 cities around the world in 2017! You can also meet passionate people and maybe potential co-founders in these events. I organise about five hackathons per year for my work and I also attended three in my free time. They were always very valuable, and I learned something new every time.

by Sarah Lacroix

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