Successful entrepreneurs are viewed as go-getters, motivated people who know exactly what they want and how they’re going to get it. They are the superheroes of the business world, and when you picture what they went through, you create this story based around the theme “from rags to riches” where an epic montage of hard, ultra-focused work is inserted about three quarters of the way through.
Ross Levine of Haas School of Business, University of California at Berkeley, and Yona Rubinstein of the London School of Economics Department of Management that studied the traits associated with successful entrepreneurs. The study used longitudinal data that included individuals responses in their teenage years. It was concluded that “aggressive/illicit/risk-taking tendencies”, when combined with intelligence and other factors, helped to predict the long-term success of individuals who became entrepreneurs.
The study also found that most successful entrepreneurs are characterized by being white, male, educated with a college degree, privileged, rebellious and smart. 84% of the incorporate self-employed survey users were white, while 46% reported having a college degree. $100,000 increase in family income directly corresponded to the 60% increase in probability of forming a company from the ground-up, and most users who were successful scored above average in the “Illicit Activity Index”, which contained a battery of questions about drug and alcohol use, delinquency and criminal behavior.
So what does this mean? If you are the bad kid in your teen years, you’ll be more likely to be a successful business owner who has paved his own way to success?
Recently, the news has made an exaggerated connection between entrepreneurs and illicit behavior, and in particular, smoking pot. The Washington Post glorified the “bad-boy entrepreneur” as “very much a real thing”, and pointed to the example of Bill Gates, the pot-smoking college student who dropped out of Harvard to start his own company and become one of the richest men in the world.
Levine said that the main finding in the study is that successful entrepreneurs possess the ability to learn quickly and know how to bend or break rules that will give them an advantage; this was measured through the “Illicit Activity Index” they created.
The index contained a plethora of different questions, some being:
- Have you ever stolen anything $50 or less?
- Have you ever stolen anything $50 or more?
- Have you ever been arrested?
- Have you ever been stopped by the police?
- Have you ever been convicted?
- Have you ever been suspended from school?
- Have you ever done marijuana?
This is just a smidget of the questions asked to gather an overall score of the entrepreneurs’ risk-taking tendencies. And since such specific questions were asked in the test, the person’s self-perception was taking out of the picture. This means questions like “do you think your a ‘bad boy’ or ‘rebel’?” were avoided. These types of questions would allow the participant to judge themselves based on their self-perception, rather than their actual actions.
Levine also clarifies that it’s not just this Illicit Activity Index that can predict successful entrepreneurs. It’s a combination of their tendency to challenge and break rules while maintaining their intellect and growing it.
So what level of risky behavior is necessary for entrepreneurs to be successful?
Rubinstein and Levine say that you can see from the details that it’s more about bending rules, rather than being a criminal. It’s not that entrepreneurs are more likely to be arrested or put in jail for 30 days. Instead, as youths, they tend to engage in activities like stealing less than $50. It’s a combination of breaking the rules a little bit, but not making the criminal life a profession. But it was proven that strictly following the rules in high school is not the best predictor of future success as an entrepreneur.
It was also clarified that being caucasian or rich doesn’t mean you’ll be a successful entrepreneur. Levine and Rubinstein stated that it’s a combination of all these factors that makes them successful. Most of the entrepreneurs that were successful tended to be white, male, come from higher-income families with well-educated moms, and they all have higher than average levels of self-esteem. They also tended to be smarter than the average cookie. Rubinstein also pointed out that its the home environment that is the most important factor, and that it doesn’t hinge on just one or two traits, such as race or income.
So when you read in the media that “Entrepreneurs tend to be privileged, white, males who smoked pot, that is hardly the case. Of course, the media loves to twist things around until the stories braided into the prettiest, most attractive story the worlds ever scene. It’s important to clarify these research findings so the younger generation who does come from privileged families doesn’t think “Wow, I guess the more rules I break now, the more successful I’ll be later”. Instead, they should understand that these successful entrepreneurs have all combined their intellect with their innate nature to challenge authority and think independently.
Trevor Micklow is a business writer and content curator based out of Chicago, IL. US. He specializes in digital strategies, social media, psychology, executive education and business school related topics. He has been working and coordinating the general content of IntelligentHQ’s business school directory, which gives key information and programme details on the top business schools in the world. He has a BS, Psychology from Central Michigan University.