The entrepreneur’s DNA

The 5 qualities that make an entrepreneur. 

30 January 2017, 10:39am
From prime ministers to top civil servants to captains of industry around the world, the word is one: entrepreneurship and innovation are the key sources of economic growth and job creation. Which, of course, raises a key question - what makes an entrepreneur’s mindset tick?

We generally believe that entrepreneurs embrace a high level of freedom and flexibility which traditional managers do not, and are thought of as operating in a world which is far more vibrant than the staid corporate life we have been used to. This idealistic vision of entrepreneurship is as convincing. The problem is that it is wrong. Entrepreneurs and traditional managers are more similar to each other than they appear at first glance.

Decades of academic research has attempted to zone in on the particular traits of successful entrepreneurial leaders. This research has indeed revealed that successful entrepreneurs do share common characteristics. It also shows that building a successful enterprise does not depend exclusively on some ‘mastermind’ behind it. It also needs to be nurtured in a mixture of internal and external factors, including timing, geography, culture and, frequently, luck.

As the founders of the World Entrepreneur Of The Year Program, EY has contributed a number of surveys aiding the compilation of the ‘Nature or Nurture: Decoding the DNA of the Entrepreneur’ report. This report features an analysis of a survey of 685 entrepreneurial business leaders from around the world and is informed by a series of in-depth interviews with EY Entrepreneur Of The Year Award winners. Below are its key findings.

1. Entrepreneurship is mostly a product of nurture not nature

Many path breaking entrepreneurs start at a relatively young age. Yet the studies show that both the experience acquired through education as well as paying their dues in traditional corporate environments is vital towards their future success. Indeed, more than half of respondents describe themselves as “transitioned” entrepreneurs — in other words, they have previously spent time in traditional business cultures before creating their own.

2. Entrepreneurship is a chain, not an occurrence

Most survey respondents are “serial entrepreneurs” who have created a minimum of two companies. Such entrepreneurial leaders gain new valuable insight and lessons into how to make a new business successful. Consequently, they perform a crucial role in the economy and are walking catalysts of new ventures.

3. Entrepreneurial success comes mostly from funding, people and know-how

60 percent of the entrepreneurs surveyed say that the barrier they most frequently encounter is lack of funding. In the current environment this is particularly significant, even in Malta. The two other most-cited obstacles are people and expertise.

4. Entrepreneurs are ‘brothers’ (and sisters)

True, entrepreneurs may be made, rather than born. But our research has found that they will typically exhibit a combination of behavioral traits and attitudes. The key to this model is a belief that events result directly from an individual’s own actions or behavior. This is aided by a mindset that sees opportunity where others see disruption, along with an acceptance of calculated risk and a tolerance of failure.

5. Entrepreneurial leaders can help traditional companies

Employee incentives and the nurturing of innovation are good places from where to start. It is not accidental that rapid growth enterprises tend to place larger chunks of share ownership in the hands of their staff. In addition, while traditional companies have few incentives to disrupt their own business models with gamechanging innovations, those who do take the plunge are richly rewarded.