New Kellogg Study Reveals Common Entrepreneurial Traits
When most people think of the “ideal” entrepreneur, they picture someone like Mark Zuckerberg, an individual who is young, ambitious, and nonconformist. They imagine someone who is eager to change the status quo. We tend to mythologize these young disrupters as the consummate startup founder with these common entrepreneurial traits.
However, a recent research study from Northwestern University Kellogg School of Management has revealed that’s not the case at all. The reality is that most successful entrepreneurs are actually middle-aged, have extensive experience in their industry or sector, and their serious innovation arises from the result of their deep experience.
Entrepreneurs Are Knowledgeable
“Those with industry experience are much more likely to hit a home run than those who come from outside the sector,” explains co-author Benjamin F. Jones, Professor of Strategy and Entrepreneurship. He goes on to say, “If you’re familiar with the ins and outs of an industry, having worked in it, and you have a strong professional network, your odds of success are greater.”
Most successful entrepreneurs have to know the products, customers, suppliers, competitors, and channels of distribution well. They have to know what works and what doesn’t.
For example, Ray Kroc gained years of experience in the restaurant industry before he experienced his breakthrough success with McDonald’s. The same goes for David Duffield, the founder of PeopleSoft. He began his career understanding the nitty-gritty details of the software industry before he made his innovations.
Entrepreneurial breakthroughs mostly happen to people in their 40s, like David Duffield, founder of PeopleSoft, according to new Northwestern Kellogg entrepreneurship research.
“I’ve studied age and creativity for a while, and there’s a pattern of Nobel Prize winners, inventors, artists, and innovative minds making breakthroughs in their 40s,” Jones says. “I don’t think it’s an accident that we see the same pattern in business. These are people who have been around for a while and seen what works.”
Entrepreneurs Learn from Every Experience
However, it’s just working knowledge of their industry that leads to entrepreneurial success; it’s the ability to learn from every experience. Successful startup founders need a combination of education, experience, and specific market knowledge to get their innovations off the ground.
There’s also a need for entrepreneurs to have access to an extensive network so that they can learn from those around them. Most founders work within their social networks to facilitate creation and to get their ventures up and running.
Entrepreneurs Try Again and Again
Finally, there’s the law of batting averages. The more chances an experienced entrepreneur takes, the greater the odds are that one of their opportunities will be successful. Not everyone is willing to keep trying even after a list of failed ventures. For example, Ray Krock was in his fifties before McDonald’s became a success. Before that, he struggled to get any of his ideas to take off.
“It’s a matter of probabilities,” Jones explains. “Those who study their industry and pay close attention have either learned some things through trial and error themselves, or learned by watching others. Maybe failure itself is a useful instructor. Or maybe it’s just about having more swings of the bat.”
You can read the full article on Kellogg Insight.
This article has been edited and published with permissions from its original source, Clear Admit.
Business and Climate Change, and More – Boston News
Let’s explore some of the most interesting stories that have emerged from Boston business schools this week.
Is It Up To Business To Save the Planet? – MIT Sloan Ideas Made to Matter
The MIT Sloan Management Review recently hosted a debate between engineering professor and Center for Transportation and Logistics director Yossi Sheffi and Winston Eco-Strategies founder Andrew Winston. In which, the two discussed whether for-profit companies should have any obligations to reverse climate change.
Winston says, “There’s always been the easy wins: cutting energy, lighting, retrofits, manufacturing efficiencies, everything under ‘lean is green.’ But now you’ve got the entire clean economy, renewable energy area where it is now cheaper fundamentally to buy renewable energy than fossil fuels pretty much everywhere in the world.”
Sheffi counters that many businesses are doing the bare minimum because the cost in jobs, standard of living, and dislocation don’t “justify the means.” He argued that fast food chains, for instance, need to adopt firmer moral stances like banning burgers, but for major company’s like McDonald’s, it would be economic suicide.
You can read more from the interview here and check out the full video below.
Pushing Back on Hacks – Sawyer Business School Blog
Data breaches among American corporations (see: Equifax) have become so ubiquitous that they hardly make compelling news anymore. According to Sawyer Business School, “inadequate in-house expertise is the top reason [companies] are likely to have a data breach.”
Sawyer’s Information Systems and Operations Management (ISOM) department was developed in response to the emerging opportunities for cybersecurity professionals. ISOM Professor Benjamin Ngugi helped assemble a Cybersecurity Beanpot hackathon this past October to give students a chance to experience the challenges for themselves firsthand by earning $10,000 in scholarship money to hack a website called ShadowBank.
Ngugi says, “For students to be good, they need to really think like hackers. They need to understand some of the tools and techniques that cybercriminals use to really be good in protection. The piece that is missing is a real website that they can go and hack.”
Security Innovation CEO and President Ed Adams, whose software security company sponsored the hackathon, writes, “ShadowBank is a safe playground where people can come and practice offensive and defensive cybersecurity skills. The point is to make the site as real as possible so that people can become familiar with how to protect a site in the real world.”
With the career opportunities in cybersecurity projected to explode in the coming years, Ngugi wants every Sawyer student to have a foundation in the subject.
“Whether you’re in marketing, accounting, taxation, finance, or healthcare, you need to understand cybersecurity fundamentals, data privacy, and required compliance laws and regulations.”
You can read the full article here.
Insurers’ Nearly Invisible Negotiated Rates Can Dramatically Affect Health Care Prices – Questrom School of Business News
Questrom School of Business Professor Keith Ericson co-authored a new working paper that finds that the “rates that insurers negotiate with hospitals for specific procedures” has led to “significant variation in prices at different health care providers” for procedures like MRIs and hip replacements.
Ericson says, “[Until now] we didn’t know that there was a lot of variation between insurers’ [negotiated prices] at the same hospital. Many are concerned about hospitals being high priced versus low priced. But people should also be concerned about insurers being high-priced versus low-priced. We should think about price transparency options.”
Read the complete working paper “How Important is Price Variation Between Health Insurers?“ co-authored with Penn’s Stuart V. Craig and Northwestern’s Amanda Starc.
You can read more from the Questrom article here.
Were B-School Researchers Wrong About Seattle’s Minimum Wage Laws?
Last year, researchers from the University of Washington Foster School of Business found that the Seattle Minimum Wage Ordinance may have been hurting workers. However, just over a year later, those findings have come into question—according to the same researchers.
Stanford GSB Study Finds Attitudes Can Predict Results
The Stanford Graduate School of Business recently revealed new research that explores the conflict between how you feel, how you want to feel and how your desire to close the gap between the two are more predictive of the outcome.
How An MBA Helped A Kellstadt Alum Make It At McDonald’s
A recent post on the Kellstadt Graduate School of Business website highlights the achievement of alum Michael Friedrich (MBA ’95). Friedrich is one example of a graduate who has benefited from the business school’s relationship with the business community. Continue reading…
Alumni Spotlight: Michael Quinlan, MBA ‘70
Whenever we do an alumni spotlight here at MetroMBA, we make sure to pick a prominent alumni to profile. In this instance the alumni is so prominent, that the graduate school he attended ultimately ended up re-naming their school after him. Sure, Michael Quinlan donated $40 million to Loyola University which undoubtedly played a part, but Quinlan’s impact on the school and each company he worked for revolves around more than just dollars and cents.
Continue reading…
