I enjoyed this thoroughly and I’ve been meaning to post about since Scott Shane first posted Entrepreneurs’ Job Creation: Expectations Versus Reality on Small Business Trends last March. His chart, shown here below, compares what entrepreneurs said were their hiring expectations to the actual hiring:
You can read the details on Scott’s post. I don’t really care about the research specifics. I think it’s wonderfully eloquent as is, a picture worth at least 1,000 words.
Once again, research based on asking people what they are going to do is inherently flawed because most people don’t know and most people say what they feel good hearing themselves say, not what they really think.
Entrepreneurs are optimistic about hiring.
Entrepreneurs are most optimistic about hiring when asked by a pollster how many people they are going to hire.
If you could invest in the difference between what entrepreneurs say will happen and what actually happens, you’d be very rich.
What a relief. Entrepreneurship is genetic. That’s great news. Here I’ve spent all this time (since 1974) thinking it was ideas, plans, teams, taking steps, getting things done, doing things well, paying the damned bills, solving problems, and all that hard stuff. What a waste!
Roughly one third to 40 percent of the tendency to be an entrepreneur is innate rather than taught. Independence, tolerance for risk, ability to recognize opportunity, and leadership are all affected by your genes.
He goes from there to a well-written, thoughtful, sensitive tribute to his father, an excellent post. But I still had that 40 percent ringing in my ears when it reappeared yesterday in Dyan Machan’s Is Start-Up Savvy in Your DNA on WSJ.com. He poses that education question I see a lot lately, which usually suggests that since entrepreneurship can’t be taught, you should just wing it:
We’ve always had a hunch that entrepreneurs are a different breed, but some academics are taking that idea quite literally. Turns out … 40 percent of the variation in the tendency to be an entrepreneur is inherited. [T]his work puts a new spin on an age-old question: Can classroom learning really teach you how to succeed?
Very interesting, that 40 percent number. So if nobody in either my background or my wife’s was an entrepreneur, and we started a company, does that mean we have only 60 percent chance of success, even 20-some years later? And we have five grown-up children, so does that mean they’re 40 percent entrepreneurs, or that two of the five are entrepreneurs? Is it a dominant or recessive trait? And my dad, the ophthalmologist, he doesn’t have independence or risk tolerance, or ability to recognize opportunity? One of our five children runs our company now, so does that mean one of the other four – all duly employed – needs to start a company quickly? I wonder which one it will be?
So all those good entrepreneurial traits, those are just inherited traits now, with or without schooling? How could book learning help? Damn, I liked school too, I wouldn’t have missed it, but apparently it was wasted. But then I don’t have entrepreneurial DNA, apparently, so maybe that’s why I needed an education.
And what about work? Doing it? Getting into the office, returning phone calls, solving problems, hiring and firing people as needed, finding credit, doing prototypes, getting the right vendors? They say that 90 percent of success is just showing up. I wonder if that’s including or excluding the 40 percent that comes at birth. If our grown-up children have all 40 percent of the genetic part, do they have to show up just half of the time, to be successful?
While all of this is fun, sort of like the nature/nurture argument when done as an impromptu party game, it’s just about as useful as comedian Jeff Foxworthy’s “you know you’re a redneck when” stand-up routine. It doesn’t get to any meaningful conclusions about who and when and what makes startups.
Clearly, just like the redneck routines, lists of entrepreneurial traits are fun — I posted a list of my own here and another here and a third here on this blog. But don’t take them seriously.
For the record, this whole idea comes directly from Scott Shane’s Born Entrepreneurs, Born Leaders, which I bought and read and liked. It has none of the simplicity you’d think from the summary here. Actually Scott examines a lot of interesting research around the nature vs. nurture question as it relates to careers, and he jumps to no over-simplified conclusions. He’s exploring. He’s got table after table of background information about career choices and traits, characteristics, and genetic research. It’s a good book. But not a great one to be summarized in a headline.
Generalizations about startups almost always fail. People start companies for as many different reasons as there are companies. And those companies fail or fly for an entirely different set of reasons. Like I said in my opening paragraph on this post: It’s also what you’ve done, what you do, what you want, what you like, who you love (try to start a business without family support, and you’ll see), what bores you, what you did for your first job, where you live, where you’d like to live, what people want from you… as many traits as there are entrepreneurs.