Entrepreneurs may be made rather than born, but research has found that entrepreneurs will typically exhibit a combination of behaviours and attitudes.
With entrepreneurship seen as a major source of economic growth and job creation, the question remains: what makes up an entrepreneurial mindset? This question is echoed in major corporate boardrooms, with many chief executives keen to encourage internal entrepreneurial thinking and innovation as a way to reinvent their businesses and stay ahead of the competition.
Key findings of Ernst & Young’s “Nature or nurture? Decoding the DNA of the entrepreneur” report:
1. Entrepreneurial leaders are made, not born. The concept of the young, dynamic entrepreneurial leader who starts a venture fresh out of college is one that persists. But although many entrepreneurial leaders start at a reasonably young age, the experience they gain through education and time spent in a more traditional corporate environment is vital to their future success. Indeed, more than half of respondents describe themselves as “transitioned” entrepreneurs — in other words, they have previously spent time in traditional employment before setting out on their own.
2. Entrepreneurship is rarely a one-off decision. The majority of survey respondents are “serial entrepreneurs” who have launched at least two companies. Entrepreneurial leaders who embark on more than one venture gain valuable insight and lessons into how to make a new business successful. As such, they perform a vital role in the economy and, among them, start a significant proportion of all new ventures.
3. Funding, people and know-how are the biggest barriers to entrepreneurial success. Among the 6 out of 10 respondents who experienced obstacles in their ventures, the most common barrier is lack of funding or finance. This is particularly pertinent in the current environment, when many entrepreneurs continue to experience problems with accessing finance, despite a gradual easing of credit conditions in many countries. The two other most-cited obstacles are people and expertise. As a result, entrepreneurial leaders are well-advised to build “ecosystems” — networks of resources — to address these three areas.
4. Entrepreneurs share common traits. Entrepreneurs may be made rather than born, but our research has found that entrepreneurs typically will exhibit a combination of behaviors and attitudes. At the heart of this model is a strong internal locus of control — a belief that events result directly from an individual’s own actions or behavior. This is complemented by a mindset that sees opportunity where others see disruption, along with an acceptance of calculated risk and a tolerance of failure.
5. Traditional companies can learn from entrepreneurial leaders. Employee incentives and fostering innovation are good places to start. It is no coincidence that fast-growing entrepreneurial companies tend to place larger amounts of share ownership in the hands of employees. And in terms of innovation, traditional companies have few incentives to disrupt their own business models with game‑changing innovations. But companies that can are richly rewarded.