I’m often asked to list the characteristics that can be used to identify entrepreneurs from the rest of the population. Many people have a belief that entrepreneurs are very different from the rest of us. They are thought to be more passionate, creative, innovative, risk taking, driven, optimistic, and so on, than other people.
The conventional wisdom is that the key attributes that predict whether or not a person becomes an entrepreneur lie in his or her psychology and mindset.
There’s only one problem, a person’s psychology and mindset are not very good predictors of who becomes an entrepreneur and who doesn’t. When researchers have examined the differences between entrepreneurs and non-entrepreneurs on a number of psychological characteristics in carefully conducted studies, they have found that psychological traits are far down the list in terms of what characteristics have the most predictive power.
Much more predictive than psychological traits are demographics like age, race and gender. This leads me to the title of this post.
If you want to predict who is an entrepreneur and who is not, the best test I know of is to go to the nearest mall and stand in front of the rest rooms. If you say that everyone going into the men’s room is an entrepreneur and everyone who goes into the ladies room is not, you will have a more accurate prediction than any psychological test available.
I’m not saying that no women become entrepreneurs and that all men do. But the fact that men are twice as likely as women to start businesses means that gender is a better predictor of who becomes an entrepreneur than any psychological attribute.
Maybe this just means that we’re not very good at predicting who will become an entrepreneur. Or maybe it means that we have a societal problem of too few women starting businesses. Probably both. But it also means that we need to think about things other than psychological traits we try to explain whether or not people start businesses.
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About the Author: Scott Shane is A. Malachi Mixon III, Professor of Entrepreneurial Studies at Case Western Reserve University. He is the author of eight books, including Illusions of Entrepreneurship: The Costly Myths that Entrepreneurs, Investors, and Policy Makers Live By; Finding Fertile Ground: Identifying Extraordinary Opportunities for New Ventures; Technology Strategy for Managers and Entrepreneurs; and From Ice Cream to the Internet: Using Franchising to Drive the Growth and Profits of Your Company.