WHO ARE ENTREPRENEURS AND WHAT MAKES THEM TICK?
July 30, 2009
In 2004 small companies employed about half of the private-sector work force and generated about half of the nonfarm private gross domestic product in the United States, according to the Small Business Administration. Despite their enormous impact on the economy, little is known about entrepreneurs' backgrounds or motivations, beyond myths that cast them as privileged young workaholics chasing fame and fortune, says BusinessWeek.
A study released by the Kauffman Foundation earlier this month, titled "The Anatomy of an Entrepreneur," led by co-authors Vivek Wadhwa, Raj Aggarwal, Krisztina "Z" Holly, and former BusinessWeek tech editor Alex Salkever aims to discover who American entrepreneurs are and what makes them tick. To do so, the team surveyed 549 successful business founders from high-growth industries between August 2008 and March 2009.
According to Wadhwa:
- Entrepreneurs tend to be highly educated; among the study, 95 percent had earned bachelor's degrees and 47 percent held advanced degrees.
- Their parents weren't nearly as well-educated; only half the company founders' fathers and only 34 percent of the founders' mothers held bachelor's or advanced degrees.
- Seventy-five percent ranked their academic performance among the top 30 percent of the high school class, with a majority (about 52 percent) ranking their performance among the top 10 percent.
- They didn't do as well in college, however; 67 percent ranked their academic performance among the top 30 percent of their undergraduate class, and 37.5 percent ranked their performance among the top 10 percent.
Most of the company founders came from middle-class backgrounds, says Wadhwa:
- Some 35 percent described themselves as upper-middle class and 40 percent as lower-middle class. Additionally, 22 percent said their parents were blue-collar workers engaged in some form of manual labor.
- Less than 1 percent came from extremely rich or extremely poor backgrounds.
Becoming an entrepreneur wasn't their only career path, says Wadwha:
- Over 80 percent of company founders said that inability to find traditional employment was not a factor in starting their own businesses.
- Only 4.5 percent said it was an important factor.
Source: Vivek Wadhwa, "The Anatomy of an Entrepreneur: Who Entrepreneurs Are and What Makes Them Tick," BusinessWeek, July 24, 2009.
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