Entrepreneurs may be made rather than born, but our research has found that entrepreneurs will typically exhibit a combination of behaviors and attitudes.
Few roles in business attract as much interest and attention as entrepreneurship. Often characterized as the “rock stars” of the business world, entrepreneurial leaders enjoy a reputation as freewheeling, innovative mavericks.
Decades of academic research has sought to identify the particular characteristics of successful entrepreneurial leaders. This work may not have identified a simple formula or “entrepreneurship gene” that can be nurtured and replicated, but it reveals certain characteristics and habits typically shared by successful entrepreneurial leaders.
But these characteristics alone are not enough to create the conditions for business success. Building a successful entrepreneurial venture also depends on a complex interaction of internal and external factors, including timing, geography, culture and sometimes luck.
With many major governments and industries around the world extolling entrepreneurship and innovation as a source of economic growth and job creation, the question remains, what makes up an entrepreneurial mindset?
As the founders of the World Entrepreneur Of The Year Program, Ernst & Young is uniquely positioned to share these insights.
The report features perspective from a survey of 685 entrepreneurial business leaders from around the world and is informed by a series of in-depth interviews with Ernst & Young Entrepreneur Of The Year Award winners.
Key findings of the report
- Entrepreneurial leaders are made, not born
The concept of the young, dynamic entrepreneurial leader who starts a venture fresh out of college is one that persists. But although many entrepreneurial leaders start at a reasonably young age, the experience they gain through education and time spent in a more traditional corporate environment is vital to their future success.
Indeed, more than half of respondents describe themselves as “transitioned” entrepreneurs — in other words, they have previously spent time in traditional employment before setting out on their own.
- Entrepreneurship is rarely a one-off decision
The majority of respondents to this survey are “serial entrepreneurs” who have launched at least two companies. Entrepreneurial leaders who embark on more than one venture gain valuable insight and lessons into how to make a new business successful. As such, they perform a vital role in the economy and, among them, start a significant proportion of all new ventures.
- Funding, people and know-how are the biggest barriers to entrepreneurial success
Among the 6 out of 10 respondents who experienced obstacles in their ventures, the most common barrier is lack of funding or finance. This is particularly pertinent in the current environment, when many entrepreneurs continue to experience problems with accessing finance, despite a gradual easing of credit conditions in many countries.
The two other most-cited obstacles are people and expertise. As a result, entrepreneurial leaders are well–advised to build “ecosystems” — networks of resources — to address these three areas.
- Entrepreneurs share core traits
Entrepreneurs may be made rather than born, but our research has found that entrepreneurs will typically exhibit a combination of behaviors and attitudes. At the heart of this model is a strong internal locus of control — a belief that events result directly from an individual’s own actions or behavior. This is complemented by a mindset that sees opportunity where others see disruption, along with an acceptance of calculated risk and a tolerance of failure.
- Traditional companies can learn from entrepreneurial leaders
Employee incentives and fostering innovation are good places to start. It is no coincidence that fast-growing entrepreneurial companies tend to place larger amounts of share ownership in the hands of employees. And in terms of innovation, traditional companies have few incentives to disrupt their own business models with game-changing innovations. But companies that can are richly rewarded.