2/12/13

Founder Institute: Best entrepreneurs are older, have less ego


A global start-up program the Founder Institute published results of their follow-up survey. More than an ordinary survey they tracked over 15.000 of application during their new venture creation process.
 
And this is what they found about the best ones (those who succeed in the NVC process)
  • They start their businesses in the field they are familiar with (experience for a decade or more
  • Thus, they are closer to their 40s
  • They are open-minded
  • They are flexible
  • They are able to pivot in a blink of an eye
  • They are agreedable
  • They are not narcisists

From researcher's perspective some objective facts would be really valuable (if not necessary):

  • How was the potential selection bias of applicants (age, gender, industry, earlier experiences) handled?
  • How much an effect the attrition might have on these results, i.e. biased is the successful sample of founders? Are they voluntarily leaving the process or is it based on other aspects?
  •  In addition to the personality related aspects, how much other similar factors (industry, size and type of start-up team) influence the exits from the NVC process or vice versa their success?
And what comes to the results, only the ways of behavior (ability to pivot and agreeability) are something new. The rest of the story is widely acknowledged, which on the other hand provides support for the FI’s findings. Previous research shows that the middle-aged people much more likely to become entrepreneurs than their younger peers. In the US the most common age group for the founders has been 35–44-years (Reynolds, 2008). Similarly, the earlier experiences in industry, entrepreneurship and managerial positions have been associated with the engagement in entrepreneurship as well as with succeeding in the new venture creation (Bates, 1995; Evans and Leighton, 1989; Reynolds, 1997). The role of personality issues i.e. is there psychological characteristics that differs entrepreneurs from the rest of us, have only a little effect in entrepreneurial engagement and success (Reynolds et al., 2004; Van Praag and Cramer, 2001).

Thus, if the FI’s results are sold as new, it is an unfortunate overlooking of what we already know. As interesting as they sound like a more robust assessment of the findings would make a better justice. Still, read Mashable's story here.
References mentioned:

Bates, T., 1995. Self-Employment Entry across Industry Groups. Journal of Business Venturing, 10 (2), 143-156.
Evans, D. S. and Leighton, L. S., 1989. Some Empirical Aspects of Entrepreneurship. American Economic Review, 79 (3), 519-535.
Reynolds, P. D., 1997. Who Starts New Firms? Preliminary Explorations of Firms-in-Gestation. Small Business Economics, 9 (5), 449-462.
Reynolds, P. D., 2008. New Firm Creation in the United States: A Psed I Overview. Foundations and Trends in Entrepreneurship, 3 (1).
Van Praag, C. M. and Cramer, J. S., 2001. The Roots of Entrepreneurship and Labour Demand: Individual Ability and Low Risk Aversion. Economica, 68 (269), 45-62.

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