- 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 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. We feel that multiple-choice surveys are simply not as effective.
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. We selected autonomy intentionally as it deals with the self. The best way to highlight the distinction is, one escapes oppression and the other desires to shape their own destiny. “I was sick of being told what to do.” “No one told me what to do, so I decided to go it alone and figure it out myself.”
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.
Some call themselves accidental entrepreneurs while others believe it was fate. What we know for sure is that it wasn’t planned.
Circumstance alone is rarely enough for someone to start a business but it was often the nudge aspiring entrepreneurs needed. In some cases, people had no intention of ever starting a business but did so anyway due to circumstance.
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.
Self-confidence drives people to start businesses.
Self-confidence is a key motivator that drives people to start businesses. It was always clear that needed self-confidence to start a business but the research showed us that it caused people to do so! “I could do it better,” said one entrepreneur, “I always knew I was better I interviewed, “I always knew I was better than most with numbers,” said another. “My empathy is through the roof” or my favorite “I could sell Ice to Eskimos, I just needed some ice”. As we dug deeper it became clear that their self-confidence made them start businesses. They felt as though they weren’t living up to their full potential, they believed in themselves and that pushed them from employee to employer. 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.
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 the risk they see 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.
So while we did want to throw a John Wayne quote about courage in here. “Courage is being scared to death… and saddling up anyway.” We just can’t mislead you that way. Some do see a high risk and jump in headfirst anyway but most are a lot more levelheaded.
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. Their curiosity drives them to be creative problem-solvers, exploring multiple possible solutions.
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.
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.
Why do people start businesses?
Video of some of the people we interviewed to find out why people start businesses.
People start businesses in search of autonomy.
Freedom, Self-control, independence, self-rule and self-determination have all been grouped under autonomy.
As they say, 100 people, 100 opinions, however, we are definitely seeing some strong patterns emerge in our research.
We know we kind of made Risk-Perspective up but we haven’t quite found a better term. If you have, leave it in the comments.