The making of an entrepreneur

Startup fever is sweeping its way across Sri Lanka. Inspired by the Silicon Valley culture, many young graduates and executives are leaving the comfort of their jobs to pursue their own ventures. The Zuckerbergs and Musks are the new heroes and icons. The idea specifically appeals to the millennial generation who unlike their predecessors are resistant to the 9-5 routine, and crave for freedom and empowerment. Corporations, incubators, investors, and venture capital firms are playing a positive role in developing Sri Lanka’s startup ecosystem and nurturing these young entrepreneurs. While it is encouraging to see the emergence of so many new startups, it is worthwhile evaluating how many of these firms go on to survive beyond their nascent stage. Globally, it is well established that only one out of every five startups survives past their first year in operation. Out of those, which do, another half ceases to exist after five years, while only a third makes it past their 10th year anniversary. Although there are no conclusive studies on business failures in Sri Lanka, it is fair to assume the picture is equally gloomy, exacerbated by Sri Lanka’s challenging business environment. 

Startup failures are not only brought about by lack of funds or market situation, it is also attributable to personal shortcomings of an entrepreneur. Successful entrepreneurs possess certain personality characteristics or traits, which differentiates them from non-entrepreneurs. Some of these traits are inborn, while some are shaped by culture and upbringing. A few traits also happen to be products of education and life experiences. Extensive research has shed evidence that entrepreneurs possessing such traits are more likely to succeed with their businesses. The bottom line is – not everyone is cut out to be an entrepreneur. This article explores a few key traits that contribute to the making of an entrepreneur.

 Are entrepreneurs born or made?

When we think of individuals like Usain Bolt, Sachin Tendulkar or Lionel Messi we are willing to accept that they are born with god-gifted talent. We agree to the notion that no amount of training, coaching and preparation can elevate an ordinary person to such feats. Similarly, we also concur that entertainers such as actors or musicians may also be born with special abilities. We apply this thinking in our ordinary lives as well; when we identify individuals around us who possesses a special skill in say art or music or sports. We tend to label or tag such people as being ‘gifted’. 

Unfortunately, this logic escapes from our thinking, when we consider entrepreneurs. The inimitable and immortal perception that we have built around the capabilities of sport stars, entertainers and talented individuals is not so pertinent to entrepreneurs. One reason why this happens is that athletes and celebrities have clearly visible or identifiable traits that we can associate with. In contrast, the characteristics that make an entrepreneur different are less discernable. 

Another reason is the influence and impact of the world we live in. For instance, self-help and business books are marketed promising to teach us to think like Steve Jobs or Warren Buffet. Movies, autobiographies and memoirs portray the graceful and exciting lives of entrepreneurs, often downplaying the hardships they have endured and sacrifices made. We have all grown up with the advice that “if we work hard and put in all our energies, our heart and soul” we can achieve anything we want. But have we been misled with this age old maxim? Present day researchers may tend to agree – at least when it comes to the idea of becoming an entrepreneur. 

Researchers from Kings College London and Case Western Reserve University have provided evidence that entrepreneurial tendencies are partly genetic. In a long term cross border project, this unit examined the career choices and behaviours of more than 1,200 pairs of identical and non-identical twins. Identical twins possess the same genes, thus there is a greater likelihood for them to have similar pattern in preferences and decisions. Whereas non identical twins share about half of the genes in average, similar to normal siblings. The researchers identified a strong correlation in the entrepreneurial intentions of the identical twins in comparison to their non-identical counterparts. They concluded 37-48% of an individual’s tendency to become an entrepreneur is genetic. The researchers also attributed an individual’s ability to sense business opportunities and succeed in them to their genes. 

It was also established that, 60% of the behavioural traits key to entrepreneurship are hereditary. These, they believe are hardwired into individuals. For example, consider the traits “risk taking propensity” and “tolerance for ambiguity” fundamental to the success of entrepreneurs. Academics have often confessed that it is impossible to teach somebody to take risks. Individuals are usually born with these abilities; they have it or they do not. The Sri Lankan economy like many developing nations is in a state of constant flux creating unforeseen challenges for businesses. A young entrepreneur who can cope well with uncertainty will be able to navigate past these obstacles, accepting the peaks and troughs of business. In contrast, entrepreneurs with low tolerance will deem any hurdle an ominous setback. 

Innovativeness is another key distinguishable trait of entrepreneurs. Some individuals can foresee market needs and opportunities, which others cannot envision. When it comes to problem solving, they are able to come up with solutions by abandoning traditional thinking and preconceptions. Colloquially, we refer to this as out of the box thinking. To some individuals, the ability to think innovatively comes naturally, and can be seen early from their school days. While some of us are predominantly right brained, and some left; entrepreneurs seem to possess a blend of both right and left-brain thinking enabling them to produce ideas, which are creative yet practical. 

The impact of culture 

Not all entrepreneurial qualities are innate. Some of the traits are moulded by our culture, upbringing, religion, societal values and education. Most Sri Lankans are need for affiliation oriented-meaning they are more likely to prioritise interpersonal relationships, harmony, and comfort over success and individual achievement. Our tendency of procrastinating, taking the easy way out is clear evidence of this trait. Meanwhile successful entrepreneurs exhibit strong need for achievement characteristics. To them, success, accomplishing goals supersedes comfort, familiarity and peace. They set high standards for themselves and are willing to struggle through adversity to achieve their goals. Such individuals are fiercely competitive demanding perfection of themselves and others even if it has to come at the cost of relationships. Business is prioritised above all else often at the expense of family and social life. Putting theory into context, any young to-be Sri Lankan entrepreneur must then ask-whether they will be able to maintain singular focus on their venture and sacrifice everything else. This means putting aside the long weekend plans, spending long hours at work, living frugally to re-invest profit, delayed gratification. Founder of India’s leading taxi services provider Ola, Bhavish Aggarwal works 16 hours a day with his schedule stretching into the weekend. The work ethic of Aggarwal is analogous to that of his counterparts in the west – it is all about dedication, hard work and immense sacrifice. All entrepreneurs demonstrate a strong need to achieve. 

Sri Lankans are also in general very collectivist in nature. Every idea is conferred with superiors, peers, family members before execution. This too is largely the result of upbringing, where parents often exert a great deal of influence on the decisions of their children. Meanwhile entrepreneurs are very independent, using their own judgement and gut feel in making decisions. This not only speeds up idea to market time, the ideas are more authentic and radical.

Locus of control is another essential attribute influenced by culture. Entrepreneurs tend to have strong internal locus of control. They believe they are in control of their future and any success is determined by the choices they make. In Sri Lanka, we tend to possess external locus of control, whereby we proclaim ourselves victims of external forces such as government or economy. South Asian businesspersons are well known to resort to the house of worship than the boardroom in times of hardship. There is nothing wrong in being superstitious. However, it is always a good indication, when an entrepreneur is willing to look at the mirror when the going gets tough. 

Entrepreneurs are also an optimistic group with the tendency of viewing the glass half full. They are willing to persevere in the face of multiple failures. A loss or a setback does not deter them. They believe the more times they step up to bat, the higher their likelihood of striking a homerun. Most of us are not wired to think like that. Non-entrepreneurs often fail once and lose optimism and faith in their abilities. Thereafter they solemnly renounce that business is not right for them. Some researchers have found optimism to be partly influenced by genetics, while others state it can be influenced by upbringing. Either way, this is a trait entrepreneurs cannot do without. Yet, it is difficult to cultivate such a characteristic in a society where failure is frowned up.

 The role of education

Media has often portrayed entrepreneurs as college dropouts. In fact, in US, many youngsters shun college education and MBAs, due to their belief that education impairs the natural inclinations of potential entrepreneurs. It is important to keep in mind; many of the well-acclaimed ‘dropout’ entrepreneurs are often outliers. There is adequate research positively linking education with entrepreneurship. Perhaps the greatest contribution of education to a young entrepreneur would be positively influencing their self-efficacy. Self-efficacy is an individual’s belief and confidence in their own abilities to achieve the desired results. Entrepreneurs typically possess a whole lot of self-efficacy. The lack of it creates doubt and pessimism both of which are cancerous for startups. Education and training have both been linked to self-efficacy-as they can equip an individual with the right knowledge and tools.

 Should I become an entrepreneur? 

The purpose of this article was not to dissuade anyone interested in starting their own business. Rather, it was to educate and inform on what it takes to be an entrepreneur. Does it mean there is no hope for those of us who are not genetically predisposed for entrepreneurship? Unfortunately, research reveals such individuals are greater contributors to the failure statistics. While it is possible to learn new skills, knowledge, it may be too much of a stretch to reprogram some of the most essential characteristics associated with entrepreneurship. For those of us not willing to face failure, ambiguity, and stress, it is often better for us to hold on to our day jobs – which at least gives us a guaranteed paycheck, and a good night’s sleep! After all, it is someone else’s money. However, the same heritable traits that make individuals inclined to entrepreneurship have also often caused their downfall. Simply inheriting the right traits is no guarantee for success. Finally, entrepreneurship is all about defying odds – so the lack of traits should not stop anyone from pursuing their dreams. And there is nothing stopping us from teaming up with a co-partner who may be more of natural than us. It worked out well for Steve Wozniak! 

(The writer is a researcher on entrepreneurship and small business development. He welcomes feedback, comments at [email protected].)