25 April 2024

How to Recognize a Budding Entrepreneur

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Most research on youth entrepreneurship relies on the memories of adult entrepreneurs recalling what they were like when they were younger. But these memories may not be accurate and are prone to bias. So we tried a different approach. The Young Entrepreneurs Study, funded by the John Templeton Foundation, brought together researchers from Tufts and Stanford universities to study more than 5,000 college-age people’s career goals, characteristics and life experiences across three years. We asked the young people to describe themselves, and then looked at what traits were most common among those who were seeking to become entrepreneurs.

Our findings suggest that aspiring entrepreneurs typically display four key attributes: innovative thinking, self-control, an inclination to take initiative and the presence of entrepreneurial mentors who can both model and support young people’s entrepreneurial interests.

To be sure, those aren’t necessarily the characteristics that mark successful young entrepreneurs, but too few participants had created successful businesses to justify such an investigation. We instead aimed to understand which processes lead young people to engage in entrepreneurship and the ways in which those processes can be fostered. Here’s a closer look at those common attributes.

The creative edge: Innovative thinking was one of the strongest characteristics for predicting entrepreneurial intent. Seventy-six percent of the aspiring entrepreneurs in our study displayed high levels of innovative thinking, compared with only 47% of participants who did not display a strong interest in entrepreneurship.

These creative thinkers found novel ways to accomplish everyday tasks, choosing to build a better mousetrap rather than taking a tried-and-true approach to problems.

Drive and control: Aspiring entrepreneurs showed high levels of self-control and related strengths such as persistence and initiative. For instance, participants in our study who described themselves as “self-starters” were 1½ times as likely to be aspiring entrepreneurs than participants who did not.

One aspiring entrepreneur described winning an online business competition by repeatedly trying different strategies until he found a profitable approach to reselling used electronics online. Others described their ability to push through failures and persevere until they reached their goals.

An eye for business: An early interest in business also marks aspiring entrepreneurs. They reported engaging in proto-entrepreneurial tasks as children (such as mowing neighbors’ lawns for pay) and seeking ways to build their business skills as college students.

What’s more, aspiring entrepreneurs were twice as likely to have a high level of financial awareness, such as being on the lookout for investment opportunities and being aware of the tax implications related to financial decisions. As college students, many were enrolled in business courses even if they were not business majors.

Proximity to pros: Finally, a family history of entrepreneurship, or some other contact with entrepreneurs at an early age, is crucial. Forty-five percent of the aspiring entrepreneurs in our study had a parent who had started a business, compared with 29% of other participants. Follow-up interviews suggested that many other aspiring entrepreneurs knew family members, family friends or mentors who were entrepreneurs and served as role models and inspirations. Aspiring entrepreneurs relied on these people for emotional support and learned valuable skills from them.

One important thing to remember is that entrepreneurs are made, not born. All of the skills we discuss are learned, not inborn, and they can be nurtured by parents and educators. And as things stand, we’re missing a big chance to do so. Entrepreneurship training programs typically target high-school or college-age youth. Yet research from developmental science shows that an individual’s development is much more flexible in childhood and adolescence than it is during adulthood. By the time we start teaching young people entrepreneurship, it may already be far too late for the lessons to take hold.

Click here to access the full article on The Wall Street Journal.

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