Are Entrepreneurs Born or Made? – Business – Small business – Entrepreneur.com

It’s an age-old question: Are entrepreneurs a special breed, born into this world with a drive and need to succeed that most of humanity lacks, or can they can be created through education, experience and mentorship? We spoke to two academics who have strong opinions on the matter. […]

It’s an age-old question: Are entrepreneurs a special breed, born
into this world with a drive and need to succeed that most of
humanity lacks, or can they can be created through education,
experience and mentorship? We spoke to two academics who have
strong opinions on the matter.

That question has taken on urgency recently. In the past five
years, multiple studies have indicated that there may be an
“entrepreneur gene”–or at least that people with certain genetic
characteristics and personality traits are more likely to be
successful entrepreneurs than others. In his 2010 book Born
Entrepreneurs, Born Leaders
, Scott Shane,
professor of entrepreneurial studies at Cleveland’s Case Western
Reserve University, suggests that genes don’t just influence
whether a person will start a business; they may even determine
how much money a person will earn. In other words, some people
are born to be alpha wolves, and the rest will work in the
mailroom.

It’s a divisive thought–especially for Americans bred on the
idea that with education and drive they can be anything they
choose. Such ideas call to question entrepreneurial education as
an institution and put forth the specter of business schools
taking DNA cheek swabs along with application packets. While it’s
unlikely we’ll see a Brave New World version of business
education anytime soon, such concepts do put the idea of
entrepreneurial education under the microscope. Does it work for
everybody? If people are born entrepreneurs, do they need to read
endless case studies, or would a few accounting and ethics
classes be enough?

We asked two prominent and opinionated researchers to weigh in on
the question. James V. Koch is a board of visitors professor of
economics and president emeritus at Old Dominion University in
Norfolk, Va. He’s also co-author with James L. Fisher of the 2008
book Born, Not Made: The Entrepreneurial Personality,
which argues that many entrepreneurs are simply wired that way,
giving them a natural advantage in the business world. Julian
Lange is a senior professor of entrepreneurship at Babson College
in Wellesley, Mass. His research in the past five years indicates
that exposure to the ideas and lessons of entrepreneurship can
have lasting effects on students, even if they are not “natural”
entrepreneurs.

We asked each of them to make their case.

What did you think about entrepreneurship education vs.
natural ability before doing research for your
book?


I think my view, being an academic, was that we can teach
[entrepreneurship] and do it well. I was a bit surprised at the
scientific literature that suggested heredity has a good deal to
do with personality and behavior. When I began to look at the
literature, virtually every reputable scientist sees it as
interaction of heredity and environment.

Some personalities are much more favorable for entrepreneurship.
It is an important thing, and it really constrains and influences
outcomes. As a consequence, if you want to know who’s most likely
to be an entrepreneur, don’t go to a business school and see who
has taken entrepreneurship courses. The more important thing is
to look at someone’s personality and ability to bear risks. I
would stress that I’m not saying genetics is the whole thing–I
do think experience and knowledge and observation and environment
count. But I’m not sure you can teach somebody to love to take
risks. It seems hard-wired in the individual.

If entrepreneurship comes from an interaction of heredity
and environment, how much of it do you think is truly
genetic?


Let me use a metaphor. Short people don’t make it often in the
NBA, just like certain kinds of genetically hard-wired
individuals don’t make it as entrepreneurs, and others do. In
reading the genetic literature, we found that up to 60 percent of
critical personality characteristics are heritable. Significant
portions of personality traits critical to entrepreneurs, like
the willingness to take risks and the ability to tolerate
ambiguity and uncertainty, are heritable.

I was particularly impressed by twin studies and what happens
when you observe their behavior when they’re raised together vs.
being raised apart. It’s pretty persuasive stuff. A good deal of
entrepreneurial behavior is genetically determined.

Have you done your own research?

We went out and looked at a very large number of entrepreneurs to
get a handle on their environments, characteristics and
personalities. Then we had a control group of non-entrepreneurial
businesspeople and another group that was not involved in
business at all, like nuns and government workers. We saw
significant differences among these groups.

What are the characteristics of
entrepreneurs?


The first sentence of my book says, “Entrepreneurs are
different.” They have the ability to deal with uncertainty, to
take risks and tolerate ambiguity. They usually have a
personality that is mercurial, and they have highs that are
really high and lows that are really low. There’s good evidence
that they have strong self-confidence but also tend to be
overoptimistic. They rely extensively on their own intuition.

All these things aren’t positive. A very large proportion of
entrepreneurs fail. They tend not to be as devoted to consensus
decision-making. They violate the status quo more often. Many
don’t accept defeat or losses gracefully. They are energetic, and
a higher percentage tend to be loners and work long hours. All of
these things appear in other segments of the population, but they
appear more commonly among entrepreneurs. Research shows there’s
heritability in these traits, and some genetic determinants of
these personality characteristics.

Is business school valuable for
entrepreneurs?


Since I teach MBA students, I believe that knowing more about
economics and accounting is always valuable to an entrepre-neur.
But I don’t know whether we can bring someone into the classroom
and change their appetite for risk. Maybe in very small doses.
But you’re really running uphill to change someone’s personality.

So is entrepreneurship education
worthwhile?


I think [co-author] Jim Fisher and I would argue that a lot of
entrepreneurship programs are superfluous and can’t deliver what
they say. Education can make people better accountants,
economists and better at tax law, but it can’t effectively change
risk preferences, and it can’t change genetics.

Has the research changed since your book came
out?


The evidence has become stronger in the genetic realm. Now that
more people are doing fundamental genetic research into
personality traits, this lends more credibility and credence to
what we’re saying. Recent research clearly indicates that in some
cases, environment triggers genetic tendencies, that certain
situations trigger genes that would otherwise lie dormant. These
are interesting findings that give our particular conclusion
added weight.

Can we learn to trigger dormant entrepreneurship
genes?


The truth is we don’t know what triggers genes. Right now
biologists and geneticists are working on things like how
temperature affects the genes of fruit flies. We don’t have any
direct evidence on entrepreneurs. But basic biological evidence
suggests that there are things that can trigger someone to be an
entrepreneur. In the next 10, 20 or 30 years, people will really
drill down into what makes some people actively become
entrepreneurs and go off and take risks. All you have to do is
look around. The types of people who become elementary-school
teachers are not the same people who join the Marines and go to
Afghanistan. Research over the next decades will isolate
personality types and isolate the triggers that cause their
genetics to come into play.

Some say education can be one of those
triggers.


I regard as dubious claims that going into a college classroom is
one of the things that triggers entrepreneur genes. Those who go
into entrepreneurship programs are self-selected to begin with in
terms of traits and genetics. It would be interesting to have a
control group and see if there are things in that environment
that alter their risk-taking behavior. I think these are exciting
avenues of research.

Is there a place for people who are interested in
entrepreneurship but don’t have the right
personality?


Yes, of course. Take myself: I am a consultant, advisor and
investor, but not an individual who typically puts it all on the
line. We need accountants, economists and marketing people. There
are all kinds of roles to be filled in entrepreneurial
enterprises, but someone has to lay it on the line, be the
risk-taker and say, “I’m going to take this chance.” People
usually sort themselves out in society into occupations they
choose based on personality. They tend to do things that make
them most comfortable. The notion that I can add 6 inches to
someone’s height and that will make them an NBA player is
bankrupt. So why do we think we can send someone to a business
school and change their risk-taking preference?

What makes you think entrepreneurship can be
taught?


I think much of the recent research shows that entrepreneurship
can be taught. The thing that some people talking about genetics
are getting at is that people have different proclivities toward
entrepreneurship and different sets of skills or endowments
intellectually. Maybe, simply put, you can’t teach someone to be
passionate about entrepreneurship. On the other hand, I’ve been
teaching for 20 years, and in my experience people can definitely
discover their passion for entrepreneurship in the classroom. And
in terms of general skills, if they start out with interests or
endowments that make them more likely to be entrepreneurs or less
likely, you can enhance their ability to be entrepreneurs through
teaching. In some ways we can say there is a certain element of
entrepreneurs that are born, not made. But some entrepreneurs can
be made better.

Is there any evidence that education can increase one’s
likelihood of becoming an entrepreneur?


There’s a study I did along with professors William Bygrave and
Edward Marram at Babson, along with two grad students,
investigating whether entrepreneurial education has a lasting
influence. It’s one of several papers in the past few years
looking at that question. What we found is that education does
have a lasting influence over whether people became
entrepreneurs.

We had a database put together of over 4,000 Babson alumni from
between 1985 and 2009, two-thirds of whom had taken at least one
of our core elective courses on entrepreneurship. What we found
was that taking two or more entrepreneurship elective courses
positively affected their intention to become and their becoming
an entrepreneur. The effect was there at the time they graduated
and long after that.

What about risk-taking? Isn’t that a core entrepreneurial
skill that can’t be taught?


There’s a continuum, from people who don’t want to take risks to
daredevils and everything in between. I’ve observed many
entrepreneurs over time, and it’s on a spectrum. I’m an
entrepreneur myself; I was CEO of Software Arts, the startup that
created VisiCalc, the first electronic spreadsheet, and I’m no
daredevil. Sure, entrepreneurs are better if they’re willing to
take risks, but they also have to respect that risk.

Some people don’t want any risk, and some are always looking for
risk. Most entrepreneurs I know and observe are people in the
middle. They’re not willing to take risk for risk’s sake, but
they’ll take it if it’s necessary to start or advance or keep
their business going.

If risk-taking isn’t the key, what skills are important
to entrepreneurs?


One of the things we teach in entrepreneurship and give exposure
to is opportunity recognition. Some people may go through life
and don’t quite see the opportunities. Once they look at the
world through a slightly different lens, they start to see what
may have potential. Opportunities in general don’t jump out and
you say “Ahh!”–they have to be shaped, they have to be created,
and once people understand that process, they will never look at
the world the same way again. It doesn’t mean they will act on
the opportunity–that’s a different part of the process. But if
people are more sensitive to seeing opportunities, they are more
likely to act on them.

There’s one course I teach that’s more of a survey of
entrepreneurship. I always tell the students the objective is not
to make them say “I want to be an entrepreneur!” at the end of
the course. I want them to understand what it means. Sometimes
people romanticize entrepreneurship and look at successful
entrepreneurs and think it happened overnight. At the end of the
course people say, “I enjoyed it, but I don’t think I want to be
an entrepreneur. I want to be something else.” But periodically
I’ll get communications saying, “Remember me? I was someone who
said I didn’t want to be an entrepreneur. Check out the website
my partners and I just started.” I’m not sure if they would have
been sensitized to the opportunity if they hadn’t taken the
course.

Education helps people to change at different points in their
business and personal lives. It helps them become more receptive
to entrepreneurship.

Is there any type of person or personality type that
should avoid entrepreneurship?


I would put it in a more positive way. I have seen many different
people become entrepreneurs with very different skill sets and at
different points in their careers. I think it would be hard to
make a bet that someone is not going to be an entrepreneur based
on their skills and proclivities or at a particular point in
their life. The exceptions prove the rule again and again. If we
eliminate the extremes, we find a very wide continuum of people
who become successful. No one person has all the skills necessary
to handle everything him or herself. You get a team to cover your
bases. Even if one person has everything going for them, there
are only 24 hours a day in a seven-day week. You need other
people to work with you and make up for additional skills you
don’t have.

In no way are we saying that certain people don’t have the
characteristics to be entrepreneurs. I’ve observed many, many
combinations of characteristics that have been successful. Not
everyone is cookie-cutter.

What do entrepreneurship programs offer
students?


I think there are a lot of advantages of entrepreneurship
programs. One of them is to develop skills they may already have
to be more useful–technical skills or leadership skills. Also,
being in an environment where other people are interested helps
in networking, getting feedback and determining what is necessary
at different stages of an idea. One course for MBA students I
teach puts them together with successful entrepreneurs. That
one-on-one experience can be very helpful to them.

Babson takes a very practical approach. We give students a wide
experience in learning, then doing. We talk about
entrepreneurship through thought and action, both of which are
necessary.

What if it turns out entrepreneurship is primarily
genetic? Would that change the way you teach?


What you want to do when you’re a professor is to develop and
present students with the best possible tools for becoming
entrepreneurs. I’m interested in any and all evidence to do this.
I think these studies are interesting, and there are
characteristics that anecdotally you can observe that can be
associated with successful entrepreneurs. But one of the issues I
have has to do with association and correlation and causality.
There may be characteristics that correspond to entrepreneurs,
but it reminds me of what Thomas Edison said [about] “1 percent
inspiration and 99 percent perspiration.” You have to work at it
and shape it.

People have different skill sets and natural talents. Look at
other analogies. People in sports or music might have great
talent or physical strength, but the people who are the most
outstanding might not be the people with the most physical
strength. Often they are people who work hard, try to overcome
deficiencies and put things together in a package that works for
them. In no way am I saying people can’t have characteristics
that make entrepreneurship easier, but there’s a combo there, and
learning skills is an extremely important part of the process.


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