What Went Wrong: The Demise of Toys R Us.

In the end, nostalgia couldn’t save Toys R Us. The once mighty retailer, which has struggled to keep up with changing trends in consumer behavior and childhood play, told a U.S. bankruptcy court on Thursday that it must liquidate its operations, meaning the likely closure of hundreds of stores.

The former leader of the toy industry, Toys R Us filed for Chapter 11 bankruptcy in September after years of slipping sales and mounting debt. While intense price competition from mass retailers Walmart, Amazon and Target has contributed to the company’s woes, experts place the blame squarely on the shoulders of management. They said Toys R Us has failed to innovate its business model, incorporate technology or adapt to changing consumer behavior.

The day of reckoning may have been delayed through a $7.5 billion leveraged buyout in 2005 by private investors Bain Capital Partners, Kohlberg Kravis Roberts and Vornado Realty Trust. But the debt payments proved to be too much for the company, which hoped robust holiday sales would buoy its bottom line and keep it afloat a while longer. The company announced in January it would close 180 of its roughly 800 stores in the U.S. No buyers have stepped up to take over the chain, and the end seems to be in sight. Prior to the liquidation announcement, Toys R Us had announced that it would shutter all 100 of its stores in the United Kingdom.

Wharton marketing professor Barbara Kahn, Denise Dahlhoff, research director at Wharton’s Jay H. Baker Retailing Center, and Mark Cohen, a former retail executive who is director of retail studies at Columbia University’s Graduate School of Business, talked to Knowledge@Wharton about where Toys R Us went wrong. Dahlhoff and Cohen made their comments during a segment on the Knowledge@Wharton show, which airs on Wharton Business Radio on SiriusXM channel 111.

The following are key points from the conversations. (Listen to the full podcast with Dahlhoff and Cohen using the player at the top of this page.)

The End Comes as No Surprise

The dissolution of New Jersey-based Toys R Us, which traces its roots to a baby-furniture store opened in 1948, comes as no surprise to industry watchers. That’s because Toys R Us hasn’t been able to tread water as the tides have shifted in the vast retail ocean.

Cohen described the chain as “guilty of serial mismanagement.”

“Retailers today, especially in any kind of fashion or trend segment, have to progress,” he said. “They have to morph, they have to modify. They have to represent the changes in the marketplace and their customers’ behavior. Toys R Us has never been able to wrap their arms around the changes necessary, and this is the inevitable outcome.”

He said the stores were too big, jammed full of inventory, poorly merchandised, and customer service was virtually nonexistent. A poor shopping experience won’t entice busy consumers who would rather grab a toy from Target while they fill their carts with groceries, school supplies and the rest of life’s necessities.

“Toys R Us never made a concerted effort to bring that experiential opportunity into the stores,” Cohen said. “I think once they went private, they could have cleaned up their act a little bit. But there was no consequential effort to re-imagine themselves, to present themselves in a more engaging and attractive way.”

Instead, he said, the company was still trading on the view that it was “the center of the universe for the toy industry,” which was no longer true. “This failure began before they went private,” Cohen noted. “The company was doing poorly. That’s why the private equity trio swooped in … thinking they could fundamentally improve their performance. Frankly, they put someone in the job who had no capacity to do that and didn’t do that.”

Dahlhoff agreed with Cohen’s assessment, adding that Toys R Us didn’t defend itself against a number of external threats.

“The competition has changed so much. Also, the consumer has changed so much,” she said. “Kids spend way more time playing online video games. You don’t have to go to a Toys R Us store for those. In addition, the shopping experience has moved online, and Toys R Us hasn’t been the strongest in that area. Competitors like Amazon, Walmart and Target have been very strong online, so that also added to the difficulties.”

….Meanwhile, Cohen said, Toys R Us “did nothing but load the shelves with goods, and that isn’t good enough.”

Dahlhoff wondered about the future of play. She predicted that old-fashioned toys will come back into vogue as a sort of backlash to technology. That could be just the opening an innovative toy seller needs to carve out a new niche in the marketplace.

“It could also force them to cut costs and cut their assortments to just focus on the bestsellers and sell them to your big retail partners. However, that reduces variety and price competition between retailers,” she said. “Maybe the off-price channel will benefit from that. Maybe that’s a new channel to explore because that’s been a growing sector.”

Courtesy of Knowledge at Wharton 3/14/2018; listen to the podcast – http://knowledge.wharton.upenn.edu/article/the-demise-of-toys-r-us/


Entrepreneurship and the US Economy: Concerns and Implications

Newswise — Why has the rate of U.S. entrepreneurship been on a steady decline for the past decade, and what does it mean for the U.S. economy? Sean Carr, Ph.D., executive director of Darden’s Batten Institute for Entrepreneurship and Innovation speaks with Professor John Haltiwanger from the University of Maryland and the National Bureau of Economic Research (NBER), whose research has played a major role in our understanding the determinants of firm-level job creation, job destruction, firm dynamics and economic performance. Following are excerpts from their recent conversation at UVA Darden School of Business:

Entrepreneurship and the Economy: A Symbiotic Relationship

SEAN CARR: We often hear that entrepreneurs are the engines of job creation and economic growth, but recent data suggest that the rate of entrepreneurship in the U.S. has been on a steady decline. What’s going on here?

JOHN HALTIWANGER: The argument that entrepreneurs are key to job creation and innovation and productivity growth is exactly right. But it’s also important to remember that in the post-2000 period, the U.S. economy has actually been quite sluggish. What we find in our evidence is that entrepreneurs play an outsize role in terms of productivity growth, job creation and innovation, but unfortunately that process has slowed down. We would argue that part of the reason the U.S. economy has had anemic productivity growth in the post-2000 period is this slow down in entrepreneurship.

SC: While entrepreneurship overall in the U.S. has been declining, what about startup activity in the high-tech, high-growth sector?

JH: When we look in the data, we see post-2000, there’s been a decline, one, in startups in high tech and, two, a decline in high-growth startups in high tech. We’re just not seeing businesses in the post-2000 period that enter high tech take off in the same way that the 1990s cohort, in particular, did.

Rates of Growth and the Techno-Optimist View

SC: Your recent talk at UVA was titled “Declining Business Dynamism of Entrepreneurship in the United States: Cause for Concern.” Is it a cause for concern?

JH: I would say yes, precisely because of what we see in high tech. We’re still seeing businesses out in the right tail of the productivity distribution, but they’re not growing in the same way as before. I’m not saying they’re not growing at all, they’re just not growing as rapidly, and that’s kind of what you need for the high-tech, high-impact entrepreneurs. We’ve even looked regionally: Is a Silicon Valley doing what it was doing back in the 1990s? The answer is no, it’s just not. We’re just not seeing it in the jobs and the productivity data.

SC: Do you think there could be a lag? Could it be that the impact of today’s innovations and new technologies are not yet apparent in the productivity data, for instance?

JH: Sure. There could be potentially a lag. The diffusion process for new technologies can be a slow one. If you talk to the techno-optimists, they’ll tell you, “Look, driverless cars are right around the corner. … AI is going to completely change the way we organize businesses.” But it’s still going take somebody to figure out how to bring this into the market. So, are we in that phase where this is about to happen? Here’s the thing: Entry tends to be a leading indicator for innovation, and we’re just not seeing it.

Next Steps: Implications for Policy and Study

SC: What would you recommend that a policy maker or legislator take away from these observations?

JH: I think it’s good to start by asking: Why has the U.S. become a less attractive place for entrepreneurs, particularly in these key innovative sectors like high tech, to start up a new business? I do worry about the regulatory environment. And I think we ought to be asking ourselves what happened to the financial markets. [But] I don’t think that’s the whole story.

The U.S. is the magnet around the world for graduate education. We don’t make it easy for all these doctoral students that we’ve trained or MBAs that we’ve trained, who come from around the world, to stay in the United States. Is there evidence that this group plays a critical role for high-growth entrepreneurship? The answer is absolutely. Yes. So, if you’re trying to stimulate or keep up the pace of high-impact entrepreneurship, the pool that you want to attract and retain are exactly the people we’re bringing into the United States right now to our doctoral programs and our master’s programs — but we’re not retaining [them].

SC: One last question to wrap up. What’s the next phase of work that you feel really needs to be done in entrepreneurship?

JH: We don’t understand very well the career paths of entrepreneurs. Why might it be for the person who’s thinking about creating the next big thing, why aren’t they doing these [things]? We’ve got to remember, much of what I talked about is entrepreneurs as businesses, but actually entrepreneurs are individuals. And we don’t know nearly as much as you’d like about the individuals.

How to Succeed in the Gig Economy.

When you work on your own, how do you know if you’re progressing? Without a manager guiding your workplace development, how can you be sure you’re learning the right new skills? These questions fascinate Sarah Hinawi, and in this talk she describes a new model of leadership and suggests how we educate and support today’s independent workers.

Sarah Hinawi is the co-founder and director of Purpl, a small business incubator that focuses on the individual rather than the business. Using her master’s degree of education in counseling, she has built a career in program design and management, and offers consulting services on all of these issues.

Learn more about Sarah’s work at sarahhinawi.com and purpl.org.  Learn more about the Gig Economy and how entrepreneurship is the best solution on http://clintoneday.com/eri-education/.

A Pure Startup, Stella & Chewy’s Success.









14 years ago…

…Marie met Chewy, a sweet slightly destructive pup looking for his forever home. Marie and Chewy instantly fell for each other and there was nothing Marie wouldn’t do for Chewy. Soon after rescuing Chewy, Marie found out he was sick with distemper and began to prepare and feed him a raw diet. Chewy’s health quickly and dramatically improved and Marie was determined to bring raw food to the masses.  Inspired by her own dogs, she has created a movement that has inspired the overall health and happiness of hundreds of thousands of pets and pet parents all over the world.

Marie Moody, Founder and President of Stella & Chewy’s, a multi-million dollar pet food company, reflected on her company’s history as we were sitting in a café in New YorkCity. In 2002, she had just been given the boot at her third fashion industry job. But this serendipitous event launched her career as a raw, natural pet food advocate and manufacturer.

While living in Los Angeles, Marie adopted Chewy, a rescue dog who was seriously ill. Following her veterinarian’s advice, she fed Chewy a homemade diet of raw meats and vegetables. Chewy’s rapid return to health inspired Marie to learn more about the benefits of feeding less processed, grain-free foods to animals. The more she learned, the more convinced she was that there were other pet parents like her who would want to feed their animals high-quality meals. After relocating back to New York City and finding herself between jobs, she started preparing raw pet food in her Manhattanapartment. Her two dogs, Stella and Chewy, were early product testers. Now, nearly 10 years later, Stella & Chewy’s frozen and freeze-dried raw, natural dog and cat food is available in more than 3,000 retail stores nationwide.

But how did a young, single woman living on the Upper West Side, who didn’t even cook her own meals, start to tackle that project? Marie took it on with single-minded determination – and no shortage of obstacles. She purchased huge quantities of organic ingredients and several industrial freezers, which took up residence in her living room. Then she had to market, sell and deliver the food to retailers in New York – all without owning a car. During our meeting, she described hailing taxis with her boxes of frozen food stashed behind parked cars (because no taxi driver wants to pick up a fare hauling that sort of baggage). In the process, Marie attracted the interest of a young Wall Street trader who helped her in her delivery efforts as a part-time job on the side.

“I guess I thought he needed the extra money.” He eventually became her husband, and despite no longer being married, works closely with Marie as Director of Sales for Stella & Chewy’s.

Expanding the Business

As her operation grew, Marie outsourced the manufacturing to a production facility. That worked well for a while (and liberated her living room from the freezers), but it brought on additional challenges.

“Imagine a semi pulling up at 4 a.m. and having to unload it using the residential elevator!” Furthermore, the lack of control over the process irked her. “The equipment broke down; and the manufacturer wasn’t able to do more flavors. Then I wanted organic fruits and vegetables; I wanted statements where the meat was sourced from; I wanted proof. So it became apparent to me that if I wanted to grow the business, I was going to have to figure out the manufacturing piece of it.”

In 2007, Marie relocated her family and opened a small manufacturing plant in Muskego, Wisconsin – a suburb of Milwaukee and her hometown, an area well known for food and beverage manufacturing.  Her timing was impeccable. Suddenly, many pet food manufacturers were facing product recalls because of contaminated ingredients sourced from China. People were paying much more attention to where and how their pet food was manufactured. Health and safety – for people and animals – became the primary focus.

The ability to control all phases of her raw pet food operation led Marie, working with a leading food safety scientist, to develop an exclusive, patent-pending, food safety procedure called Hydrostatic High Pressure Process (HPP). HPP kills pathogens, such as E. coli and salmonella, using high pressure without diminishing the health benefits of raw ingredients. “Nobody had ever considered using HPP on a pet food product before it was further processed.” In addition, Stella & Chewy’s has an independent lab test each batch to check for pathogens and they post the results on their website. You’d be hard pressed to find a human food manufacturer that’s using such stringent food safety processes.

Non-Traditional Leadership

Marie Moody

Marie has implemented some other “non-traditional” activities in her female-dominated manufacturing operation. Of 155 employees, 98 are women – or 63 percent. And just over half of her senior management team is female, which is typical for a woman-created enterprise. “Our first banker was a woman, and presently our accountant, attorney, and CEO are all women. We really have a lot of women in management positions and that’s just part of our culture.”

“I find that the types of people who thrive in the Stella & Chewy’s environment are really good at what they do, and self-starters. They wouldn’t work well if they were being micromanaged. They tend to need room in order to fly and they need the right tools. I feel like that is our job – management’s job – to give people what they need in order to best do their jobs.”

“We went through a couple of plant managers. The first one had a military background, which is great and can really be an asset. But he used to not let the guys on the line take a bathroom break. They could only use the bathroom on their break. When I heard this, I said, ‘No, that’s not okay. I’m not comfortable with that.’ He just didn’t know how to manage. Then we had another plant manager and he was very political. It was all about his ego. He forbade people to come and talk to me. They had to go through him and that’s just not the culture of our Company. I’m always available.”

Traditionally, the command-and-control manager tends to be associated more often with men. Marie seems to embody a type of management philosophy that is more “female,” and certainly at odds with many of today’s alpha-driven entrepreneurs.


Communities Helped by College Ecosystem Mapping.





Entrepreneurship is so closely linked with Silicon Valley it may seem preposterous California is learning how to build entrepreneurial ecosystems from Appalachia, but it is. Eleven community colleges in Appalachia have been creating ecosystem maps — an effort that has led to a larger ecosystem building project in California. Both efforts can inform communities nationwide.

Looking toward local assets to promote entrepreneurship

The 11 community colleges in rural Kentucky, North Carolina, Tennessee, Virginia, and West Virginia began working with the National Association for Community College Entrepreneurship(NACCE) to map their local assets for entrepreneurship. Many of the communities, especially in Kentucky and West Virginia, are impacted by the decline of the coal industry and the need to replace its jobs with new ones.

The assets include strengths and attributes of the communities, local industries and businesses, resident talent and skills, nearby community colleges and other institutions. Mapping those assets compiles — on a community or ecosystem basis — what Dr. Saras Sarasvathy, Professor at the University of Virginia’s Darden School of Business, calls the “Bird in Hand Principle” for entrepreneurs. Those entrepreneurs must start with their means, which can be grouped into three categories: Who I am – my traits, tastes, and abilities; What I know – my education, training, expertise, and experience; and Who I know – my social and professional networks.

In mapping those means or assets across an ecosystem, communities have not just assembled them but discovered new ones. Certain skills essential to traditional industries, for instance, have application to new technology. In West Virginia skilled labor in old-school manufacturing has proven to be an advantage for advanced manufacturing. Eastern West Virginia Community and Technical College has transformed agricultural expertise into AgTech proficiency.

Sharing best ecosystem mapping practices across the nation

NACCE shared best practices in ecosystem mapping from its work in Appalachia, and it inspired the California Community Colleges Maker Initiative to incorporate ecosystem mapping into the development of its makerspaces (collaborative workspaces with high-tech equipment for prototyping and fabricating). Thirty colleges went through the ecosystem mapping process with NACCE, which provided a focus to individual makerspaces such as one at Cabrillo College in Santa Cruz, focusing on arts and creativity. The mapping also provided direction in creating makerspace communities beyond the college, placing students in internships, and developing curricula that prepare students with appropriate skills.

Twenty-eight community colleges submitted grant proposals to the state, and 24 received a total of $6 million in grants, renewable for a second year, to create or strengthen inclusive makerspaces that will foster innovation and entrepreneurial skills that prepare students for impactful careers. The 28 colleges that submitted grant proposals documented more than 1000 ecosystem partners, 1,000 student and community activity participants, and 200 engaged faculty. The colleges proposed 1,400 student internships and leveraged more than $10 million in matched resources.

Helping institutions yield greater benefits to society

That’s an extraordinary outcome already for ecosystem mapping – and one with national implications. New businesses create almost all net new jobs in America, and ecosystem mapping and development are vital to generating those businesses and jobs on the scale that is needed.

Fortunately, ecosystems are evolving across the nation, as evidenced by the first-ever ESHIP Summit convened last summer by the Kauffman Foundation. It brought together more than 400 ecosystem builders from 48 states, Puerto Rico, and the District of Columbia, plus nine other countries. The resulting digital playbooknow makes the ideas, insights, and solutions that emerged available free to all.

Every community in the nation can benefit from ecosystem mapping, and the nation’s 1,462 community colleges can be a vital resource. But other institutions can benefit as well. Public libraries are starting to host makerspaces, for instance, as their missions evolve and relate increasingly to job readiness.

Silicon Valley may be world-renowned for its entrepreneurship, but even California community colleges looked to Appalachia for help with ecosystem mapping. That’s an important lesson for the nation, because the answers to our national challenges will not come from any one place. They will come from talent throughout the country and an openness to embrace solutions wherever they arise.


Rethink Entrepreneurship, Solution to the Gig Economy.

Our labor force is on the verge of a massive displacement.  Take truckers as one example.  There are 3.5 million professional truckers in the U. S., all facing unemployment because of the driverless automation of their industry.  Robotics and computers are mechanizing all facets of the workforce.  Only entrepreneurship training holds the promise of helping at least 40-50% of the force by giving them the tools to create their own jobs.  Entrepreneurship is teachable, and, thanks to Silicon Valley’s evidenced-based (aka lean startup) entrepreneurship method, startups are less risky and twice as successful.  Go to http://clintoneday.com for more.

Entrepreneurship Is the Answer to Workforce Displacement.

FreshBooks, the #1 accounting and invoicing software in the cloud designed exclusively for self-employed professionals and their teams, today announced results from 2nd annual “SelfEmployment Report

The data suggest a dramatic shift in the American workforce, whereby the number of Americans working for themselves could triple, bringing the total population of self-employed professionals to 42 million by 2020. For this year’s report FreshBooks, in conjunction with Research Now, surveyed more than 2,700 people in the U.S. who work full time – either as traditional employees, independent professionals, or small business owners.

A Paradigm Shift in Real Time

“The data suggest that over the next two years, the number of self-employed professionals in the U.S. could triple,” said Mike McDerment, co-founder and CEO at FreshBooks. “Whether or not change occurs at this pace, it’s clear the mindset of the American worker has shifted. With significantly more people aspiring to work for themselves versus holding a traditional job, it’s critical that we build a world to support them. To do that well we need all the data we can get.”

Millennials Continue to Change Everything

Now the largest generational cohort in the United States, it’s no wonder millennials are setting and bucking trends with every activity they do and every philosophy they subscribe to en masse. Their opinions about workplace culture are no different.

  1. Of the next 27 million independent workers, 42 percent will be millennials. This finding bucks Bureau of Labor Statistics figures that suggest most self-employed workers of the past have been older. This number also represents growth upon the current self-employed population, of which just 18 percent are millennials.
  2. The next wave of independent workers will also be more ethnically diverse than the existing contingent of self-employed professionals. The 27 million new independent workers will exhibit a higher percentage of African American, Asian, and Hispanic workers than that of the existing independent cohort.
  3. Newcomers to the independent workforce are also slightly more educated than the existing self-employed group. The next 27 million will have a slightly higher rate of bachelor’s degrees and master’s degrees, while the rate of self-employed professionals with no college will fall.

Autonomy Is the Greatest Motivator

Americans are choosing to move away from traditional 9-to-5 jobs because they feel independent employment allows for more freedom.

  1. Twenty percent of those entering the independent workforce plan to change their careers once they begin working for themselves, suggesting the ability to change their career trajectory is a strong motivator.
  2. Forty-three percent of respondents feel becoming self-employed will give them more control over their career. Nearly one-third of respondents also selected “Family reasons” as a motivating factor, while 55 percent expect to have better health after becoming self-employed, lending credence to the idea a stronger work/life balance is part of gaining more control over their careers.

Incoming Independent Workers Are Preparing for Satisfying, Yet Difficult Work

While increased freedom is a major benefit of self-employment, most who are either currently self-employed or plan to be soon understand with great freedom comes great responsibility.

  1. Fifty-nine percent of professionals who plan to switch to self-employment expect they will have to work harder once they move to independent work.
  2. A higher proportion (71 percent) of existing self-employed professionals report enjoying overall career satisfaction, compared to 61 percent of traditionally employed individuals.
  3. Nearly 65 percent of currently self-employed professionals between the ages of 50 and 65 report wanting to work longer, as opposed to retiring. Millennials seem to understand this is now commonplace behavior, as 62 percent of self-employed people in that generational cohort plan to work beyond the age of 65.

Despite Increased Control, Self-Employed Professionals Still Have Needs

Self-employment may offer greater autonomy over one’s life and work, but independent workers must still contend with challenges as they start and build their new careers.

  1. Ninety-seven percent – up 10 percent from 2016 – of current self-employed professionals have no desire to return to traditional work, and 70 percent are actively trying to grow their businesses. This growth does not come without challenges.
  2. Self-employed professionals report that finding talented staff or contractors and acquiring new customers are the most difficult challenges they face as they attempt to grow their businesses (27 percent and 23 percent respectively).
  3. Just nine percent of self-employed individuals feel the federal government represents their business needs well, down from 17 percent in 2016.
  4. Very few (10 percent) of independent workers “strongly agree” they take advantage of data to make business decisions, and 20 percent either disagree or strongly disagree they leverage data to help their businesses.

Survey Methodology

FreshBooks conducted this study in collaboration with Research Now. More than 2,700 people who work full time – either as traditional employees, independent professionals, or small business owners – were surveyed online in November of 2017. Samples have been weighted (as required) to reflect various characteristics of their target populations (e.g., age, gender and industry) leveraging data from the U.S. Census, U.S. Small Business Administration, the NAICS Association and other sources. The study’s margin of error is +/- 2.3% at 95% confidence.

Why Entrepreneurship Is So Important

A Gig Economy* has been slowly created by the rise of software and the internet.  Many USA jobs are going overseas or being replaced by machines.  As an example, Watson, IBM’s cognitive computer that uses artificial intelligence, can make business decisions.  Its ability to research legal precedent better than humans is replacing entry jobs for new lawyers.  The work of understanding and replacing both simple and complex jobs, is making entrepreneurship increasingly in demand.  Because it is the primary solution to job displacement, the knowledge revolution, which supplanted the industrial revolution, is shifting to an entrepreneurial period. In this transition from knowledge to entrepreneurship, it is the individuals who invest early and heavily in entrepreneurship who will gain the most.  Fortunately, entrepreneurship is a skill set which can be taught, and this blog and ERI, Entrepreneurship Resources, Inc. strive to spread the empowerment and job of self-employment far and wide -http://clintoneday.com/eri-education/.

*Automation is already all around us. Cities are seeing front-end automated restaurants like Eatsa gaining popularity, while in factories automation has already arguably been a part of life for years (if not decades) in the form of heavy industrial and agricultural robots.  Analyzing the automation landscape, we found that 10 million service and warehouse jobs are at high risk of displacement within the next 5 – 10 years in the US alone. This includes jobs like cooks and servers, cleaners and janitors, as well as warehouse workers.

Meanwhile, nearly 5 million retail workers are at a medium risk of automation within 10 years. To put these numbers into perspective, estimates are that over a few years the Great Recession of 2007 – 2010 destroyed 8.7 million jobs in the US.

The Gig Economy is Giving Entrepreneurship a New Face

The Gig Economy is Giving Entrepreneurship a New Face. Here’s How


Millennials are known for their entrepreneurial chops; most of them even say they want to start a business. Yet, the Wall Street Journal reports that millennials are the least entrepreneurial generation of the last 25 years.

Twenty years ago, more than a third of new businesses were started by people the same age that millennials are now. Today, less than a quarter of startups are owned by people under 35 years old — meaning that of the 540,000 adults starting businesses each month, 75 percent are gen X or older. And for the first time ever, businesses are dying faster than they’re being born.

This begs the question: if millennials want to be entrepreneurs, how come so few of them are making it happen? Maybe it’s because they don’t have the same opportunity as older generations. They grew up during the Recession, and watched their parents’ financial struggles first hand. In many cases, they carry student debt and lack the experience required to secure a business loan. This makes them less inclined (and in some cases, literally unable) to take the financial risk associated with entrepreneurship. In short, millennials may want to start businesses, but they can’t do it on their own.

Fortunately, millennials haven’t abandoned their dreams of working for themselves — they’ve found opportunities in unexpected places. By doing so, they have changed the concept of entrepreneurship. Instead of settling for a job working for someone else, many have leveraged the gig economy and made a business of themselves as independent contractors. This used to refer to blue collar jobs, but now it applies to everyone from construction workers to coders.

Rethinking what entrepreneurship means has even extended to franchising. Our system is built on the entrepreneurial strength of people who had the drive to be their own boss. They prove that there’s more to entrepreneurship than simply starting a business or inventing a new product. It’s the ability to innovate, take risks, and seize opportunity — which is exactly what our business (and the gig economy) is all about. For us, it’s not about being the one with the big idea; it’s about building something bigger and better than any one of us could do alone.

You don’t need to be an entrepreneur in the traditional sense to be entrepreneurial. In fact, the gig economy demands the same constant grind as building a business from the ground up. Unlike their ancestors who became entrepreneurs by default, this generation are entrepreneurs by design.

Artificial Intelligence, New Educator’s Toolkit.

Why This Matters Now

Movie buffs have been hearing about artificial intelligence for years – from Steven Spielberg’s 2001 science fiction drama AI to the 2015 robotic police force in Chappieand beyond. AI is no longer the stuff of science fiction. This essential part of the technology sector aims to create intelligent machines of all kinds that think, work and react like humans. Just as electricity transformed the way industries functioned in the past century, artificial intelligence — the science of programming cognitive abilities into machines — has the power to substantially change society in the next 100 years. AI is being harnessed to enable such things as home robots, robo-taxis and mental health chatbots to make you feel better. The growth in this industry suggests great opportunity for Generation Z (today’s high school students) as they prepare for life after high school and college. Computer scientists tell us that the AI field requires strong foundations in math, technology, logic and engineering. Careers in AI use automation, robotics and sophisticated computer software and programs. Giving students a deeper understanding of AI and its business dimensions will inspire them to think about their potential place in this exciting, high-tech market.


The Allure of Artificial Intelligence
Get the conversation about AI started with this introduction to the industry and all its moving parts, from machine learning and RoboBees, to Cortana and computer science. Then use the conversation starters accompanying the article to do a deeper dive into the topic. For example: “What do you see as the greatest reward of AI? What about the greatest risk? Using the article and the toolbar to the right, find out what people are saying on both sides of the argument. Use what you learn to reflect on where you stand on the future of Artificial Intelligence. Log in to KWHS and share your insights in the comment section of this article.” Once you’ve discussed the article, assign this follow-on KWHS piece for a fascinating perspective on the AI start-up culture: A Teen App Developer Embraces a World Where ‘AI Is Going to Get into Everything.’

Lesson Plan
Management: ‘The Power of Impossible Thinking’
Students interested in the business of AI will need to embrace their innovative spirits. Many of them may someday manage businesses on the cutting-edge of technology. This lesson provides students access to some of the ideas presented in Colin Crook and Jerry Wind’s book The Power of Impossible Thinking: Transform the Business of Your Life and the Life of Your Business. Through a guided discussion, students will address thought-provoking concepts like: “We think the barriers are in the world, but often they are in our own minds,” and then apply their new knowledge through the development of a strategic plan for a business, product or service in the local community. We encourage you to add an AI twist to their innovation exercise by incorporating intelligent machines into their strategic plans, thus exploring the power of their own thinking with that of manmade minds.

Hands-on Learning
It can be difficult to grasp the depth and scope of artificial intelligence. It is literally transforming the business landscape as we know it. Specific jobs held by AI professionals include surgical technicians working with robotics, manufacturing and electrical engineers, software analysts and developers, mechanical engineers and algorithm specialists. Seeing is believing – and understanding. Plan a series of “AI Adventures” for your students that involve guest speakers working in the field, trips (either physical or virtual) to AI start-ups, companies or college classrooms developing technology, and even movie and YouTube viewings that will get students thinking in new ways about how artificial intelligence is developed and applied. Millennial entrepreneurs tell us that they love to share their knowledge and advice with the next generation. Why not Skype with the CEO of an AI startup in Silicon Valley? Be sure to read A Teen App Developer Embraces a World Where ‘AI Is Going to Get into Everything’ for a list of cool startups. Honda is also a great place to explore the latest applications of AI. Or watch an AI movie and then discuss this article. The Association for the Advancement of Artificial Intelligence may also spark ideas for your next “AI Adventure.”

Video Glossary
Provide an extra layer of learning for your students with our video glossary. Here, Wharton professors define terms: Computer Science, Startup, Venture Capital and Innovator

Courtesy Knowledge at Wharton Feb. 21, 2018

New Rise of the Rest Road Trip Revealed

Today, Feb. 14th we announced the first round of investments from the Rise of the Rest Seed fund and the next five cities on our seventh Rise of the Rest road trip!  The first startups to receive an investment from the Rise of the Rest Seed fund represent cities across the country from Pikeville, KY to Columbus, OH to Salt Lake City, UT. These companies are further proof that there are compelling startups starting and scaling outside of Silicon Valley, New York City, and Boston.  This spring, the bus tour will make stops in Birmingham, AL, Chattanooga, TN, Dallas, TX, Louisville, KY, and Memphis, TN to showcase emerging startup ecosystems and invest $500,000 from the Rise of the Rest Seed fund ($100,000 will be invested in a local startup at each stop).

Case founded his Washington, DC-based venture capital firm Revolution in 2005 with what he called a “Rise of the Rest” ethos: the idea that there are more places to invest in than California, New York, and Massachusetts. These three locations — essentially Silicon Valley, Manhattan, and Cambridge — have been the country’s startup centers for decades, and they have taken an increasing share of investments in the last decade, according to CB Insights. The firm reported that the states accounted for roughly 75% of all US venture capital funding from 2014-2016.

Case saw this trend in 2014 and decided to double down on one of his investing principles, resulting in the first Rise of the Rest bus tour, a four-day investing trip through the Rust Belt cities of Pittsburgh, Detroit, and Cincinnati, and then ending in Nashville, which had emerged as one of the nation’s fastest-growing cities. Each day, he’d meet with local entrepreneurs and city leaders and host a startup pitch competition in which the winner received $100,000 of his personal wealth toward a seed round.

Significant change wasn’t going to come from one day in each city, but the idea was to start ongoing relationships in these communities and put a media spotlight on their business scenes.  Case and members of his Revolution team have gone on six more bus tours, establishing a network across 33 American cities. So far, Case has invested more than $3 million of his personal money during the tours, and to date, Revolution has invested more than $1 billion across its funds in companies outside of the Bay Area.