Posted: Tue 9th Jun 2015
University of Cambridge researchers claim they have debunked popular culture's identikit image that all entrepreneurs are fearless, independent disruptors like Mark Zuckerberg.
In a study supported by Barclays, academics profiled more than 2,000 entrepreneurs and employees in the UK, Germany, Singapore and the US. "‹
While business owners scored higher when measured on the character traits most prevalent in creating companies such as achievement, motivation and the need for autonomy, there were "striking differences" between the entrepreneurs themselves.
The researchers identified two distinct types; one group who were artistic, well-organised, highly competitive and emotionally stable, and the other who were traditional, conservative, disorganised, spontaneous and focused on team-working. "‹
Vesselin Popov from the University of Cambridge said: "These psychometric results debunk the myth of the CEO superhero. Entrepreneurs do differ from employees but as a group, they are still incredibly diverse and often misunderstood.""‹
Barclays' Greg B Davies added: "Entrepreneurs have an important role in supporting economic growth and social progress. Yet they are often incorrectly viewed as one homogeneous group. This study directly challenges that misperception with a much more varied picture of success. Indeed, some of the characteristics we found, such as introspection, actively counter society's popular stereotypes."
The study also focused on three particular groups; females, entrepreneurs aged over 50 and migrant business owners.
Although women were more modest to men when it came to reporting that their business is prospering, female-run businesses enjoyed higher pre-tax profits on average.
They also had stronger entrepreneurial ambitions than their male counterparts with 47% claiming they were very interested in starting another business in the next three years compared to only 18% of men.
The females in the study were also shown to be striving for business expansion and preferring to re-invest profits than take equity investment. Male entrepreneurs on the other hand were more likely to take risks to achieve fast growth and a quick exit.
Senior entrepreneurs viewed 'freedom to make decisions' as the main incentive for starting a business, with 70% citing this reason compared to just over half of those aged under 50. Older business owners exhibited the same propensity for risk, innovation, initiative, self-efficacy and autonomy as younger entrepreneurs, but were more motivated by the prospect of personal success.
When it came to migrants running businesses the university said they had a similar psychological profile to native entrepreneurs but tended to be more conservative with a lesser need for personal autonomy.
They were also more likely to believe in luck or fate, and act spontaneously as a result, while they perceived income and financial stability as more significant barriers to business creation than nationals.
Jay Patel, migrant entrepreneur and founder of start-up networking business Intros.at, said: "For many foreign entrepreneurs, starting a business is about taking control of their own destiny, which can bring a bigger fear of failure too.
"But as a migrant, you're also more likely to be more spontaneous because it often requires that kind of mind-set to relocate to a new country in the first place."