Many successful entrepreneurs were competitive athletes as young people.
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In order to better understand entrepreneurship development, the German psychologist Eva Schmitt-Rodermund analyzed long-term data in a secondary investigation of the Terman Longitudinal Study. Her analysis was based on the Terman Study, which monitored 1,600 individuals in and around Berkeley, California, over a period of 60 years. The boys and girls, selected as children, all had IQs of 130 or more and were born in the years around 1910. The first survey took place in 1922, the final survey in 1982. On the basis of interviews carried out with the young male participants, in combination with impressions provided by their parents, the author compared the boys who exhibited an entrepreneurial personality profile with the rest of their peers.
Personality Traits of Entrepreneurs
“The boys classified as demonstrating entrepreneurial traits were those who scored highly for conscientiousness and hard work, extraversion and openness to experience, while scoring low for agreeableness and mental instability.” This profile corresponds with the personality profiles of entrepreneurs. The findings: “The more a boy identifies with entrepreneurial personality traits, the greater the likelihood that he will engage in entrepreneurial activities in adulthood, or join the executive or supervisory boards of commercial enterprises.” The boys who were described by their parents as possessing the traits associated with entrepreneurial personalities were later twice as likely to become entrepreneurs or CEOs as those with different personality profiles. In a cross-sectional study of adult entrepreneurs who were asked to retrospectively report on their childhoods and teenage years, the same correlations were reported.
Leadership Roles—Taking Responsibility Early In Life
Furthermore, the study showed that individuals who went on to become entrepreneurs were more likely to have taken on leadership roles during their adolescence (student body president, official positions within sports clubs, boy scouts, etc.) and were more likely to have invented something (such as new recipes or even their own assemblies and devices) than other children and adolescents. In addition, the study revealed that individuals who proceeded along an entrepreneurial path in later life were more likely to have read books on economic subjects during their earlier years, and more frequently expressed a desire to engage in independent entrepreneurship when asked about their future career plans.
Entrepreneurs Tend To Have Entrepreneurial Parents
Other psychological studies have also confirmed that the children of entrepreneurial parents are far more likely than their peers to go on to become entrepreneurs themselves. In one study, researchers examined whether high parental income or parental entrepreneurship is more likely to increase the likelihood of an individual becoming an entrepreneur in later life. The empirical study showed unequivocally that having an entrepreneurial parent has a far greater impact on the probability of a child becoming an entrepreneur than having rich parents.
A further study in the United States compared 102 individuals who had seriously considered the idea of setting up a business (but had subsequently not done so) with 208 entrepreneurs. The findings were interesting: Individuals classed as “nonstarts,” i.e. those who had not set up a business, were asked whether their mothers or fathers were entrepreneurs, and if they had other “entrepreneurial role models.” Some 44% had entrepreneurial fathers, 12% had entrepreneurial mothers and 40% replied that they had an entrepreneurial role model. In comparison, 76% of active entrepreneurs had an entrepreneurial father and 25% had an entrepreneurial mother. Other studies carried out in the United States reported that some 60% of the sons of entrepreneurs have gone on to become entrepreneurs in their own right.
School And University Grades Are By No Means Decisive
The recent qualitative study The Wealth Elite was based on in-depth interviews with 45 extremely wealthy Germans (mostly self-made entrepreneurs) and found that although a majority of the study’s participants had benefited from high-quality school and university educations, in this respect they were no different from many of their peers. What’s more, their performance throughout their formal education tended to be average. There was no correlation between how well they did at school or university and the level of wealth they ultimately achieved. In fact, those with the best school or university grades did not go on to join the highest ranks of the wealthy.
Many Entrepreneurs Were Successful Athletes
Having analyzed the early lives of the 45 interviewees, the study concluded that it was extracurricular activities that forged their entrepreneurial personalities and proved the most accurate early indicators of their later successes. With very few exceptions, all of the interviewees pursued either competitive sports or earned money in an atypical, entrepreneurial manner. More than half of the interviewees were involved in competitive sports while they were at school. In many cases, sports were actually far more important to them than school. As athletes they learned how to handle victories and defeats and how to beat their opponents; they learned to tolerate frustration and developed self-confidence in their own abilities. Some played team sports and developed valuable teamwork skills, but a vast majority of the interviewees were not involved in team sports; they were individual competitors: track and field athletes, skiers, equestrians, swimmers, tennis players and judoka. They delivered impressive athletic performances, won district and state titles and even competed in national championships. Nevertheless, they all acknowledged at some point that they lacked the genes that would enable them to compete at the very highest levels.
Early Experiences Of Entrepreneurship
The Wealth Elite study also examined how the 45 interviewees earned money alongside school and university. Typical jobs for teenagers and students, i.e. the kind that pay an hourly wage, were the clear exception. A look at the interviewees’ unbridled ideas and initiatives reveals a tremendous amount of creativity. They sold everything, from cosmetic products to home winter gardens, from second-choice wheel rims to automated car washes, from used cars and motorbikes to insurance products and closed-end funds, from animals they had bred themselves to jewelry, from handmade radios to second-hand car radios.
There can be no doubt that these experiences shaped the young people who would later become entrepreneurs. They learned to organize, to sell, to think like entrepreneurs. They learned—often unconsciously—and acquired the implicit knowledge that is of such great importance for any entrepreneur or investor. And their early entrepreneurial experiences were the ideal preparation for setting up their own businesses later in life.
