The Study Where information becomes wisdom. - Autonomy – Freedom, Self-Rule, Self-Determination, Uncontrolled
- Circumstance – Layoff, Pregnancy, Fired, Crisis, Single-Parent
- Nurture – Role-Models, Thought-Leaders, Parents, Mentors (Influenced By)
- Self-Confidence – Able, Capable, Competent, Adaptable, Resilient
- Risk-Perspective – Risk-tolerance, Optimism, Self-Efficacy, Faith & Hope
- Opportunity – Ideas, Demand, Well-Resourced, Inherited, Partnered
- Curiosity – Adventurism, Interest, Inquisitiveness, Questioning
- Legacy – Generational-Wealth, Succession, Be-Remembered
- Leadership – Influence, Authority, Direction, Guide, Inspire
- Competition – Playfulness, sport, compared to others.
- Altruism – Charity, Nationalism, Social Conscience, Humanitarianism
- Change-Agent – Innovator, Transformation, Revolutionary
- Identity – Individualism, Status, Prestige, Prominence, Reputation
- Money – Financial-Security, Income-loss Replacement & Opulence
- Creativity – Self-expression, Ideas, creative-problem-solving,
We have asked over 100 entrepreneurs why they started their business. We believe there are two types of reasons of course. The business’s reason and the individual’s. We focused mostly on understanding the individual why. Character traits, emotional triggers and life events. What makes someone start a business? What makes someone an entrepreneur?
The 15 reasons in the slideshow above were the most common reasons why people start businesses. Furthermore, many other reasons shared a strong similarity to the above reasons. Please note that this study was conducted using open-ended questions and interrogative fact-finding.
We wanted to know why people start businesses without limiting entrepreneurs’ opportunities to express themselves.
For a full list of entrepreneurs, we interviewed please visit The Study: Why do people start businesses – Contributors page.
Personality is also a core reason why people start businesses.
The above outlines 15 motivations for starting a business but it is important to note that certain personality types are more likely to start a business. Also important; certain personality types are more likely to succeed and remain in business longer. The below image provides a snapshot of a very in-depth study with 600,000 participants.
Entrepreneurs generally score higher in openness to experience, extraversion and conscientiousness while scoring lower on agreeableness and neuroticism.
Why do people start businesses? – Motivations.
People start businesses in search of autonomy.
We found a mix of reasons why entrepreneurs sought autonomy; the two that stood out were:
- Not wanting to be controlled
- Wanting to be in control
The distinction is important. Those wishing not to be controlled were driven by an aversion whereas those that wanted to be in control were driven by a desire. This should not be confused with leadership, sometimes manifested as a desire to control others.
More information can be found on the People start businesses in search of autonomy, page.
People start businesses due to their circumstances.
Another common reason why people start businesses is due to circumstance. From ex-con unable to get a job to pregnancy and corporate layoffs the circumstantial reasons people start businesses are endless. Unlike the intentional entrepreneur, the circumstantial entrepreneur rises to the occasion.
We take a more in-depth dive into the subject in the People start businesses due to circumstances, page.
Nurture often increases the likelihood that people will open a business.
Definition of Nurture: care for and encourage the growth or development of.
As it pertains to this study we are focused on the nurturing of entrepreneurial spirit; often by a parent but also by mentors, coaches, and influencers.
From the 20 something inspired by Gary Vaynerchuck to the entrepreneurs inspired by a mentor that saw their potential, as well as the entrepreneurial parent. Nurture, is a key reason why people start businesses.
Check out the video below featuring some of the entrepreneurs that attribute opening a business to nurture.
For a more in-depth look into this, visit the People start businesses due to nurture. (Mentors, Parents, Influencers, etc) page.
Self-confidence drives people to start businesses.
Self-confidence is a key motivator that drives people to start businesses. It was always clear that people need self-confidence to start a business but the research showed us that it caused people to do so!
Nearly all entrepreneurs have some self-confidence but there are some that were specifically driven by it. The distinction is important. Are you a self-confident entrepreneur (or aspiring entrepreneur) or are you an entrepreneur that is driven by self-confidence. Will your self-confidence drive you to start a business? Are you the type that knows you can do it better than your boss? You may be a self-confidence driven entrepreneur.
Visit the page to get a better understanding of how Self-Confidence drives people to open new businesses.
People that open businesses just don’t see risk the same way others do.
We wanted to say that entrepreneurs are risk-takers. We really wanted the research to point towards this. People that start businesses have a different risk-perspective. What do we mean by this? Well, it is complicated. People that start businesses just don’t see the risk.
Perspective is everything in this case. Entrepreneurs aren’t completely blind to risk but where others see a risk they see an opportunity. Think of it this way, a Fire-Fighter rushes into a burning building, their risk is not the same as it is for an untrained civilian. The risk is still calculated but the perspective is different. Many of the people we interviewed shared with us that they found employment to be equally (sometimes more) risky.
Visit this page Risk-Perspective is a determining factor for why people start businesses; to get a better understanding.
People start businesses because the opportunity presents itself.
Opportunity is defined as “a set of circumstances that makes it possible to do something.” There are many ways opportunity presents itself and sometimes it is very hard to pass up. Partnership opportunities are a common way people wind up starting a business but so is an inheritance or a brilliant idea. Sure they could have sold or licensed the patent but there was a clear opportunity and they took it.
Check out the Opportunity is a big reason why people start businesses. page for more information and examples of people that started businesses because of opportunity.
Curiosity seems to be a strong driver for many entrepreneurs. We interviewed over 100 entrepreneurs and a large percentage stated they were driven by curiosity.
It is immediately clear that curiosity is not enough but plays an important role in motivating people to start businesses.
Curiosity is also pointed inwards, entrepreneurs want to know if they have what it takes to build a business. When curiosity outweighs the individual’s risk tolerance a business idea is more likely to be fully explored.
Visit the following page to better understand how Curiosity motivates people to start businesses.
Not as common as one might think but building generational wealth, having something to pass down and leaving their mark were all ways in which entrepreneurs indicated that legacy was an important motivator.
We did find that older entrepreneurs were more likely to care about legacy. This may be in-line with the current trend of enabling children to follow their own dreams but if you ask me, legacy is a beautiful thing.
For a deeper dive into legacy driven entrepreneurship visit this page: Many people start businesses to create a legacy.
There are many ways to feed the motivation to lead; politics, public service, corporate ladders and even volunteer organizations to name a few. However, people that start businesses due to leadership are generally also driven by autonomy or circumstances.
“Everybody wants to be led. Except for me. I want to lead.” Tilman J. Fertitta
Leadership is a very important trait especially for those seeking to build large organizations, it is, therefore, no surprise that a number of the entrepreneurs we interview were driven to start a business by their need to lead. In a sense opening a business was a natural and sometimes inevitable course of events.
For a more in-depth explanation be sure to visit: Leadership often results in people starting businesses, especially when paired with autonomy.
Mark Cuban probably said it best when he said. “
“To me business is a sport. I love knowing that 24x7x365xforever I’m competing with people I don’t know. To build my businesses. To come up with new ideas. To come up with better ideas. That motivates me.”
— Mark Cuban
For a number of the entrepreneurs we interviewed their competitive spirit led them to start businesses. This seemed to occur more frequently when people had a social circle mostly made up of existing entrepreneurs.
For a deeper dive and to read, hear and watch what our contributors had to say visit the Competitiveness is often a reason why someone may start a business page.
From wanting to provide employment opportunities in their community to setting up non-profit organizations and wanting to save the planet altruism showed up as a driving force in a number of the entrepreneurs we interviewed.
People that start businesses because they are driven by altruism tend to have clearly defined goals, they know who their business is for and that can range from wanting to build their mother a house to eradicating world hunger. To be clear, not all altruistic entrepreneurs forego the monetary benefits of owning a successful business; doing good for others just sits much higher up on their priority list.
For more information visit this page: Some people start businesses because they are altruistic.
Even starting a me-too business creates change but natural change-agents are disruptors. People like Steve Jobs embody the think differently movement that Apple brought to the forefront.
From wanting to change an industry to simply wanting the control to change a business process change-agent entrepreneurs can be found everywhere. The people driven to start businesses by their motivation to truly be a change-agent tended to also have a strong desire for autonomy and the opportunity to lead.
For a more in-depth explanation visit: Change-Agents have a natural affinity for starting businesses.
I am what I am and that’s all that I am. – Popeye the sailor man. Identity can be a core driver and if someone sees themselves as an entrepreneur or a business owner they are extremely likely to do their utmost to live up to their identity.
Identity drove people to start businesses in two ways. Some people saw themselves as entrepreneurs while others coveted the identity. In a similar way to someone wanting to be an actor, a writer or a singer.
Read more here: Some people start businesses because it aligns with their identity.
What we found out by interviewing over a hundred entrepreneurs was quite interesting. Money featured in one way or another in pretty much every conversation we had but only 2% of the entrepreneurs we interviewed put money at the top of their list. What this tells us is that money is an extremely relevant motivator for starting a business but it is generally a means to an end.
Money, money, money, it’s a rich man’s world. For more information on money-driven entrepreneurs click here: People do start businesses to make money but for most, it is not the main reason.
Creativity featured frequently in two very different ways.
1. A way to monetize their creativity. (Artists, Designers, Writers …)
2. People driven to solve problems in a creative way, very similar to change-agents but not quite the same. (From packaging an existing product differently to re-imagining an entire industry.)
For a more in-depth look at people that started businesses due to their drive to create read more here: Many people start businesses as an outlet for their creativity.
Who we interviewed to find out why people start businesses.
We wanted a broad spectrum, lifestyle entrepreneurs, solo-preneurs, collaborative entrepreneurs and of course the lifeblood of the economy small business owners. Since the study is focused on finding out why people start businesses we focused on interviewing the most common type of business owner as opposed to founders of large corporations. We did cross-reference with other studies and quoted a few of the most successful entrepreneurs in the world.
Click the following link for a full list of contributors.
