- Even though nearly half of kids and adolescents in America have entrepreneurial dreams, only 14% follow through with those dreams in adulthood.
- Researchers at Tufts, Stanford, and elsewhere have identified factors that entrepreneurs have in common.
- They include personality, family, and culture.
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So what differentiates the 14% of adults in the US that are engaged in entrepreneurial activities from the rest?
Psychologists, economists, and management scholars have been trying to identify what makes entrepreneurs different for decades.
We’ve collected a rundown of that research below.
1. You’ve got a high level of self-control.
A Tufts and Stanford research team looked into the life experiences and entrepreneurial habits of 5,000 college-age people in what’s become known as the Young Entrepreneurs Study, or YES. According to data The Wall Street Journal reported, self-control — related to other qualities such as drive and initiative — was a predictor of entrepreneurship in the cohort.
College students who described themselves as “self-starters” were 1 1/2 times more likely to be aspiring entrepreneurs than those who didn’t. And students who had already launched a new club or rallied people around a specific cause were almost twice as likely to have entrepreneurial intentions.
One important component of self-control is persistence in the face of failure. For example, one student interviewed won an online business competition in high school by trying out different strategies for selling used electronics until he found one that stuck.
2. People around you support your business goals.
As many as 45% of aspiring entrepreneurs in YES had a parent who had started a business, compared with just 29% of other students. Others had family members, friends, or mentors who had started their own businesses and encouraged them to pursue their entrepreneurial ambitions.
For instance, the researchers interviewed one woman who said her father’s friend had launched a successful restaurant business without any relevant knowledge or experience. From him, she learned to push on despite seeming resistance.
3. You think creatively.
More than three-quarters of aspiring entrepreneurs exhibited high levels of innovative thinking in the YES cohort, compared with just 47% of everyone else. “These creative thinkers found novel ways to accomplish everyday tasks, choosing to build a better mousetrap rather than taking a tried-and-true approach to problems,” the researchers wrote.
4. You have a strong interest in business.
Many aspiring entrepreneurs were already looking to develop their business skills as students. Others were taking business courses even if they weren’t majoring in business.
Having an interest in business is also strongly linked to financial awareness. The YES study found that aspiring entrepreneurs were twice as likely to have a high level of financial awareness; for example, they might actively seek out opportunities to invest.
5. Your societal culture supported you.
Marc Cowling, an innovation researcher at the University of Derby in England, sought to find how the profiles of the standard entrepreneur vary across countries in Europe.
It really does vary from country to country, he found.
“If country profiles of the defining characteristics of entrepreneurs were drawn it might look something like this; in the UK and Sweden entrepreneurs are more likely to be older and male; in Greece and Spain they are more likely to be older and poorly educated; in Italy old, male and educated; in Germany, old, married and educated; in Belgium just better educated and in Austria just older,” he wrote.
This implies that the culture within each country encourages different types of people to become entrepreneurs and imposes different constraints, he reasoned.
6. Your relationship with your father could shape whether you choose the manager or entrepreneur route.
Four Israeli researchers looked at the unconscious forces that shape how people choose careers. They wanted to know why some people become entrepreneurs or managers.
They found that managers viewed their fathers positively, while entrepreneurs tended to view their fathers negatively. This relates to clinical studies that suggest that the family dynamics that shape entrepreneurs involve an absent, remote father and a strong, controlling mother.
“The early experiences of rejection, parental inconsistencies and control are assumed to result in considerable controlled rage, hostility, guilt, and suspicious ness of people in position of authority,” the researchers wrote.
Entrepreneurs placed more of their identity in their work than their managerial counterparts, becoming more personally invested in their companies’ successes.
7. You come from money.
Romanticizing entrepreneurship is a common malady — yes, a malady — because successful entrepreneurs are few and far between, and the ones that succeed spectacularly are often set up for it from the start.
Most entrepreneurs are white, male, and highly educated, according to a study from economists at the University of California, Berkeley, and the London School of Economics. They have to have the financial grounding to forgo a salary for a period of time and enough capital to launch a startup (the average cost is in the tens of thousands).
According to the Global Entrepreneurship Monitor, more than 80% of funding for new businesses comes out of the personal savings of founders and the contributions of family and friends.
Entrepreneurship: It’s a privilege.