Is Entrepreneurialism Innate?


by
Elias Shams

The Next Entrepreneurs

As we are getting one day closer to the George Washington University SEAS Seminars on Entrepreneurship tomorrow evening, here is another interesting  survey on the subject I just finished reviewing which gave me more thoughts to talk about. You can download the report by clicking on link on top of the page.

This post is a little bit long. So, here is a little bit of inspiration before you continue 🙂

The survey with 549 successful entrepreneurs was conducted by Kauffman Foundation Small Research Projects Research last year about Anatomy of an Entrepreneur: Family Background and Motivation. It shows that the majority of them didn’t have entrepreneurial parents. They didn’t even have entrepreneurial aspirations while going to school. They simply got tired of working for others, had a great idea they wanted to commercialize, or woke up one day with an urgent desire to build wealth before they retired. So they took the big leap.

The study shows that 52% of the successful entrepreneurs were the first in their immediate families to start a business – people like Bill Gates and Larry Page. Their parents were academics, lawyers, factory workers, priests, bureaucrats, etc. About 39% had an entrepreneurial father, and 7% had an entrepreneurial mother. Some had both.

Only a quarter caught the entrepreneurial bug when in college. Half didn’t even think about entrepreneurship, and they had little interest in it when in school. There was no significant difference between the success factors or hurdles faced by entrepreneurs who were extremely interested in entrepreneurship in school (and who likely set up the lemonade stands) and the ones who lacked interest. But entrepreneurs with extreme interest started more companies and did it sooner. Of the 24.5% who indicated that they were “extremely interested” in becoming entrepreneurs during college, 47.1% went on to start more than two companies (as compared with 32.9% of the overall sample). Sixty-nine percent started their companies within 10 years of working for someone else (as compared to 46.8% of the rest of the sample population).

What did affect their successes?  Education — but not the college they graduate from. In a different study of the 652 CEOs and CTOs of 502 tech companies, it shows the correlation between education and the sales and headcount of companies. The study indicates there was a significant difference between companies started by founders with just high-school diplomas and the rest. Education provided a huge advantage. But there wasn’t a big difference between firms founded by Ivy-league graduates and the graduates of other universities.

One of the findings of Kauffman research is that of the appx. 600,000 businesses that are started every year, less than a fraction of 1% become high-growth “scale” businesses. These new firms, especially the “scale” firms, have added all of the net incremental jobs to U.S. economy since 1980 (about 40 million), and probably account for about 1/3 of GDP growth since then. So the key to boosting economic growth is to increase the number of successful high-growth startups. After all, the growth rate of our economy is nothing more than the aggregation of the growth of our firms.

The Future Entrepreneur of GWU

I personally think it also depends on how one defines “an entrepreneur” and entrepreneurship. With Shumpeter’s “creative destruction” for an “innovator/opportunity spotter”: exposure to lateral thinking (Eg. Edward de Bono) could enhance entrepreneurial characteristics. However, it could be argued that there is self selection, which means that, those “born” to be entrepreneurs are more likely to be drawn to these thinking styles. In contrast, there is evidence of significantly more entrepreneurial activity in certain geographical areas (Silicon Valley, Washington, DC metro) which means that, the socio-cultural environment could enhance entrepreneurial characteristics and; therefore, create entrepreneurs. Furthermore, some argue that mothers have a significant influence on the enhancement of entrepreneurial traits in their male children and that those who have/had entrepreneurial fathers and parental separation when young are more likely to be entrepreneurs themselves. As a result entrepreneurs can be made depending on their upbringing and socio-cultural environment at start-up.

Web Entrepreneurship

The thing I did not see in the study is the social media factors. Given the rise of social networking and social media since early 2000 when I launched Telezoo, I need to say the city you live in, certainly matters in your entrepreneurial success if you plan to lunch a business in social media space. It is very important to have easy access to high speed and reliable internet, and the ability to do skyping, tweeting. Not to mention the network of people you need to know and network with in the city including:

• Entrepreneurial support communities.
• Talent pools around location.
• In-person meetings
• Partnerships with the local companies with easier access to meet up.

Conclusion

History has shown difficult moments trigger your entrepreneurship spirit and you have to be the type of person that sees opportunities, execute and fight any difficulty to succeed.

– Everyone can create art, but not everyone can be an awesome artist – Me vs. Leo Davinci 🙂
– Everyone can lead, but not everyone is an excellent leader – Bush vs. Obama

Entrepreneurs have something else: something in them that is different to others. You can train to be an actor and even make it to Hollywood, but the genuinely brilliant actors have an innate skill and usually get training and are not always found in Hollywood.

– Everyone has ideas, and some may innovate, but not everyone is an entrepreneur.

Being entrepreneurial has three key elements: the idea, the solution, and I guess the execution:

– ‘Idea-ing’ is identifying the problem.
– Innovation is the creative solution to the problem.
– Entrepreneurial-ism, is the execution of the solution that was identified- through guts, vision and leadership. Being entrepreneurial is about continual innovation, which is how great companies stay great. ie. Apple.

Being an entrepreneur comes from a need.  A critical element driving IT/Web innovation over the past 40 years is that it has been mostly driven by geeks who solved problems for things they wanted themselves. Schooling, training and experience will help in developing skills to execute and will help in identifying the problems.

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About Elias Shams
I have been a serial entrepreneur in telecom and social media space for past 12 years or so. I hold a M.S. degree in Telecommunication Engineering from the George Washington University and a B.S. degree in Electrical Engineering from the University of Maryland. I’ve lived and worked in many countries and cities including London England, Tehran Iran, Bonn Germany, Paris France, Alicante Spain, Delhi India, and my favorite of all Washington, DC of great US of A. Two of the greatest Washington, DC based companies I worked for and very proud of are Yurie Systems which was sold to Lucent in 1998 for $1.23 B and telezoo.com that I founded in 1999. I am currently the founder and awesomizer @ awesomize.me

6 Responses to Is Entrepreneurialism Innate?

  1. GeorgeB says:

    At our basic core we are all ‘entrepreneurial’ by seeking to make things better (even if only for ourselves). The degree to which our up-bringing and education and life experiences influence our optimism and enable our work ethic will then determine our degree of progress toward that success.

    We are also influenced regarding whether our success diminishes that of others or whether we are somehow entitled to some of the results of the success of others. The biggest hurdle we face may be our misplaced (or misguided) beliefs.

    The challenge of society is to equip everyone with: 1) the beliefs that encourage our effort and 2) the opportunities and systems that enable equitable representation in the decisions that affect us and 3) an equitable remuneration from the results (altruistic or financial). When our core value is affirmed, we can and will thrive.

    With that as our moral and social and (a)vocational compass – we can more easily aspire to and move toward our mutual benefit, globally.

    We can also empathize and support each other as we may (all) stumble – somewhere along that same shared path.

    This challenge prevails: “What are the key questions – that will direct our cooperative thinking – so we can discover the sustainable solutions – to our most pressing individual and collective needs ?”

  2. Matt Lindsay says:

    Very interesting, I hope the event went well and that you and others can join us April 15-16 for the GW Summit on Entrepreneurship
    http://alumni.gwu.edu/entrepreneurship

  3. Elias Shams says:

    In deed, it went well. Yes, I will attend this one too. Is this part of the same series I have been working with GW?

    • Matt Lindsay says:

      It is an amalgamation of several ongoing event series under the “Summit on Entrepreneurship” umbrella.

      So there is SEAS Seminar on Entrepreneurship (Product vs. Service Entrepreneurship on Thursday, 10:30am), GW Business Plan Competition (Thursday 1-6pm, Friday 9am-12pm), and GW Entrepreneurs Roundtable luncheon (Thursday, 11:45am), as well as networking event Thursday evening and some other speakers thrown in there!

  4. Mike Rosner says:

    Ya know…I don’t know if I was born with a drive to invent? but I think it has been since early on that I have had that same drive or an eye for just a bussiness opportunity, most times I’m looking for any and all bussiness opportunities. I’ve even suffered severe tbi and kept the same/similar attitudes. I don’t know though, I’m curious now on whether or not there are others who have had similar experiences

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