Personality and Entrepreneurship: Why are some people more entrepreneurial than others, and why should you care?
Do you have what it takes to be the next Richard Branson?
Posted Oct 06, 2010
Imagine a world without Starbucks, Google, and Amazon. Surely it's not that difficult: all you need is to remember your life 10 or 15 years ago. But can you imagine going back to those days of bad filter coffee, lack of information, and wasted hours in department stores? Moreover, do you remember life before the internet, cell-phones and computers? And yet, before these products transformed our lives, they existed only in the mind of a few visionary individuals - proactive people with an appetite for progress and innovation, and an eye for opportunity: entrepreneurial people.
So far, psychologists have failed to explain why some people are more entrepreneurial than others, but the answer is straightforward: personality. Indeed, individual differences in creativity, ambition, and risk-taking explain why some people have much more potential for entrepreneurship than others, and valid personality measures can help us identify who the entrepreneurs of tomorrow will be. Of course, there are also socio-political factors contributing to entrepreneurship, which is why it is a lot harder to be entrepreneurial in North than in South Korea, or why unemployment may actually foster entrepreneurship. Still, in any country at any given point of time there will be more and less entrepreneurial people and a country's economic and social development is much more dependent on the former.
Interestingly, people with the same ability profile (equally smart, competent and educated individuals) can show dramatic differences in entrepreneurial potential: some may be motivated only by their personal career success and "sell their souls" to big corporations, whilst others will do whatever they can to work for themselves and "be their own boss". This difference highlights the rebellious, impulsive and risk-prone nature of entrepreneurial people compared to their less entrepreneurial counterparts, but there is also a difference in ability: entrepreneurial individuals see more opportunities, make more connections, and produce more novel ideas, than their less entrepreneurial peers, and this ability is not measured by typical IQ tests. It would seem, then, that the essential force underlying entrepreneurship is the desire and ability to invent something new, something that has the potential to improve the lives of many others (not just one's own) and add value to society.
Although when we think of entrepreneurial people we tend to think of successful businessmen, creating a business is neither necessary nor sufficient for entrepreneurship, just as being a manager or politician by no means a sign of good leadership. In fact, most managers and politicians are terrible leaders, and most businesspeople lack any talent for entrepreneurship. Likewise - and perhaps more importantly - you may have great potential for entrepreneurship even if you never set up a business. You only need to read the biography of any great entrepreneur to realise that the decisive factor is not the specific business they created (that is almost anecdotal), but the personality of the entrepreneur: his/her ambition, creativity, and opportunism. Without these personality traits, you would still be drinking bad coffee, going to the library, and posting letters. This is why you should care about entrepreneurship, and why that implies caring about personality: Personality rules the world, and the more power a person has, the more important is personality. Social psychology has shown us how our lives are affected by others, but personality psychology explains why some people are much more likely than others to affect our lives. Entrepreneurship is just another process by which this influence occurs; it is (like leadership) the natural consequence of differences in personality and yet another proof that the personality of some is much more influential than others'.
So, how entrepreneurial are you? To find out whether you may be the Richard Branson or Oprah Winfrey of tomorrow, or whether you should just stick to a 9-to-5 job, just take our test!