Nurture not nature shapes entrepreneurs: Report
Friday, June 3, 2011/
Nearly two thirds of entrepreneurs have worked in a corporate environment while almost half started their business after the age of 30, according to a new global survey.
An Ernst & Young report, titled Nature or nurture: Decoding the entrepreneur, is based on the responses of 685 entrepreneurs throughout the world, in addition to interviews with the winners of the Entrepreneur of the Year award.
According to the survey, 54% of respondents say they did not start their business until they were at least 30, contradicting the widespread claim that 25 is the peak age to start a business.
Meanwhile, nearly 60% described themselves as “transitioned” entrepreneurs who have previously worked in a corporate environment before branching out on their own.
When asked to identify the most important source of learning within their career, a third of respondents said it was their experience as an employee, suggesting a corporate background can prove useful for an entrepreneur.
Meanwhile, 31% nominated higher education as the most important source of learning, while 26% identified mentors.
This last statistic backs up the findings of another report by US seed accelerator Blackbox, which found start-ups who learn from mentors are more likely to be successful.
The report, titled the Startup Genome Project, provided an in-depth analysis of what makes internet start-ups successful based on data from more than 650 early stage start-ups.
According to the report, start-ups that have helpful mentors, and learn from start-up thought leaders, raise seven times more money and have 3.5 times better user growth.
“The right mentors significantly influence a company’s performance and ability to make money,” the report says.
Maria Pinelli of Ernst & Young says nurture, rather than nature, appears to be more important in shaping the entrepreneurial mindset.
“Entrepreneurial leaders are defined as much by their early business experience, cultural background and external environment as they are by any innate personal characteristics,” Pinelli says.
The Ernst & Young report also reveals that most entrepreneurs have launched more than one business venture; 60% have started three or more companies.
A fifth of the survey respondents have started six or more companies, while 10% say they have founded more than 10 companies.
The survey also reveals that entrepreneurs do not automatically cut their ties with previous business ventures – 45% have retained some ownership of previous ventures while 28% have retained a stake in some of them.
Of the six out of 10 respondents who experienced obstacles in their ventures, 33% citied a lack of funding or finance as the most common barrier to future growth.
According to Ernst & Young, this figure reflects the current economic climate, in which many businesses continue to experience problems accessing finance.
While the report suggests entrepreneurs are made rather than born, it does show that entrepreneurs typically exhibit a set of behaviors and attitudes.
When asked what the top three most important qualities of an entrepreneurial leader are, more than three quarters of respondents identified “having a vision” as the most important.
This was closely followed by passion at 73%, while 64% nominated drive as the most important quality.
Only 33% of respondents said flexibility was the most important quality, while 18% said a “relentless focus on quality” was the most important, and 14% said loyalty.
Pinelli says the survey findings highlight the fact that most successful entrepreneurs share a “unique combination of seeing opportunity where others only see risk.”
“They tend to be optimists and believe they can succeed despite the fact that everyone else is telling them they cannot,” she says.