The age of aquarius to the age of the Entrepreneur

Are you an entrepreneur?

If so, what twist of fate has made you this way?

How do you recognize one?

I got thinking recently which is generally a bad thing.

I recently witness an ex colleague and friend Max Pepe launch his new venture “Rebelhead Entrepreneurs” which at this stage is an online magazine and podcasts from famous entrepreneurs. This hub is for entrepreneurs to share their thoughts and learnings. I will provide a link at the bottom of this article and I urge you to take a look because it’s amazing!

But that wasn’t what got me thinking. What got me thinking was the fact of meeting Max many years ago, where I was interviewing him for a role he was subsequently appointed to and thrived in.

My thinking was around that first meeting with this young man and how something about him stood out like a shining beacon that said this guy has unlimited potential and he doesn’t even fully realise it himself yet.

Which brings to neatly to my questions. What makes an entrepreneur? And in determining that, how do you recognise one? What traits if any do they demonstrate either on a conscious or subconscious level?

Being in part-time ameature psychologist of absolutely no noteworthy accomplishments, I started to do some research in to this area and I will share some of my findings here and include some of the sources of the research at the bottom of the article. Including but not limited to Wikipedia, Elsevier Science Inc, Institute of CFS, Barclays Bank and the British Psychological Society.

Questions I asked myself. Does our childhood form who we later become and to what extent?

If this is the case, can you encourage a person to be entrepreneurial during their formative years?

Let’s Go.

In the beginning ….

There are many models of the human psyche and just to give us a base for discussion and get the ball rolling I will use Sigmund Freud’s framework to establish how we are perhaps at an young age made into what we later become.

Don't judge me for using this framework - Yes, I am aware that sometimes a sausage is just a sausage.

Wikipedian description of the basic framework: Id, ego, and super-ego are the three parts of the psychic apparatus defined in Sigmund Freud's structural model of the psyche; they are the three theoretical constructs in terms of whose activity and interaction our mental life is described. According to this model of the psyche, the id is the set of uncoordinated instinctual trends; the super-ego plays the critical and moralizing role; and the ego is the organized, realistic part that mediates between the desires of the id and the super-ego. The super-ego can stop one from doing certain things that one's id may want to do.

Although the model is structural and makes reference to an apparatus, the id, ego and super-ego are purely psychological concepts and do not correspond to somatic structures of the brain such as the kind dealt with by neuroscience.

The super-ego is observable in how someone can view themselves as guilty, bad, pathetic, shameful, weak, and feel compelled to do certain things.

Freud hypothesizes different levels of ego ideal or superego development at the time at which the Oedipus complex gives place to the super-ego they are something quite magnificent; but later they lose much of this. Identifications then come about with these later parents as well, and indeed they regularly make important contributions to the formation of character; but in that case they only affect the ego, they no longer influence the super-ego, which has been determined by the earliest parental images and teachings.

The earlier in development, the greater the estimate of parental power. When one defuses into rivalry with the parental imago, then one feels the 'dictatorial thou shalt' to manifest the power the imago represents. Four general levels are found in Freud's work: the auto-erotic, the narcissistic, the anal, and the phallic. These different levels of development and the relations to parental imagos correspond to specific id forms of aggression and affection. For example, aggressive desires to decapitate, to dismember, to cannibalize, to swallow whole, to suck dry, to make disappear, to blow away, etc. animate myths, are enjoyed in fantasy and horror movies, and are observable in the fantasies and repressions of patients across cultures.

The id (Latin for "it") is the unorganized part of the personality structure that contains a human's basic, instinctual drives. Id is the only component of personality that is present from birth. It is the source of our bodily needs, wants, desires, and impulses, particularly our sexual and aggressive drives. The id contains the libido, which is the primary source of instinctual force that is unresponsive to the demands of reality. The id acts according to the "pleasure principle"—the psychic force that motivates the tendency to seek immediate gratification of any impulse —defined as seeking to avoid pain or unpleasure (not 'displeasure') aroused by increases in instinctual tension. According to Freud the id is unconscious by definition.

The ego (Latin "I") acts according to the reality principle; i.e. it seeks to please the id's drive in realistic ways that will benefit in the long term rather than bring grief. At the same time, Freud concedes that as the ego "attempts to mediate between id and reality, it is often obliged to cloak the Unconscious commands of the id with its own Preconscious rationalizations, to conceal the id's conflicts with reality, to profess ... to be taking notice of reality even when the id has remained rigid and unyielding. The reality principle that operates the ego is a regulating mechanism that enables the individual to delay gratifying immediate needs and function effectively in the real world. An example would be to resist the urge to grab other people's belongings, but instead to purchase those items.

The ego is the organized part of the personality structure that includes defensive, perceptual, intellectual-cognitive, and executive functions. Conscious awareness resides in the ego, although not all of the operations of the ego are conscious.

The ego is that part of the id which has been modified by the direct influence of the external world. The ego represents what may be called reason and common sense, in contrast to the id, which contains the passions.

The superego (German: Über-Ich) reflects the internalization of cultural rules, mainly taught by parents applying their guidance and influence.

Freud developed his concept of the super-ego from an earlier combination of the ego ideal and the "special psychical agency which performs the task of seeing that narcissistic satisfaction from the ego ideal is ensured ... what we call our 'conscience'." For him "the installation of the super-ego can be described as a successful instance of identification with the parental agency," while as development proceeds "the super-ego also takes on the influence of those who have stepped into the place of parents — educators, teachers, people chosen as ideal models such as entrepreneurs.

So to consider what are the key factors that formed during these formative years let’s take a look at what indicators of the super-ego development may lead to an entrepreneurial mind-set.

The perceived psychology of entrepreneurs is often founded in media rhetoric rather than data-driven scientific enquiry. This can lead to a disconnect between the potential of entrepreneurship and often the rigid political, financial and regulatory conditions in which it is often exercised. Starting a business is about much more than simply making money. The motivations are multi-dimensional and can vary widely among different groups of people. Entrepreneurs should not be treated as a homogeneous group and understanding individual differences in entrepreneurial behaviour provides an opportunity to support meaningful progress for entrepreneurs today.

In a paper published by Elsevier Science Inc., (human resource management review). The following conclusions were made.

Person–organization fit research suggests that the closer the match between individuals’ attitudes, values, knowledge, skills, abilities, and personality, the better their job satisfaction and performance.

We suggest that the closer the match between entrepreneurs’ personal characteristics and the requirements of being an entrepreneur (e.g., creating new companies by transforming discoveries into marketable items), the more successful they will be.

Specifically, we argue that to the extent entrepreneurs are high on a number of distinct individual-difference dimensions (e.g., self-efficacy, ability to recognize opportunities, personal perseverance, human and social capital, superior social skills) the closer will be the person–entrepreneurship fit and, consequently, the greater the likelihood or magnitude of their success. This framework offers potentially valuable new avenues for assisting entrepreneurs in their efforts to exploit opportunities through the founding of new ventures because the dimensions of individual differences we identify are readily open to modification (e.g., through appropriate, short-term training).

The findings of such research indicate that individuals choose work environments as a result of many different factors, including their attitudes, values, abilities, personality, and various job dimensions, as well as factors relating to organizational structure and culture.

It is understood that entrepreneurial success takes many forms, but since entrepreneurs often create new companies, we explicitly conceptualize such success in these terms, primarily as success in launching a new company into the marketplace.

Finally, we recognize that entrepreneurship is multidimensional, but since technological innovation is a key source of economic growth and prosperity, we cast our discussion to fit particularly well with such contexts.

The following variables are regarded as the clear factors that determine entrepreneur’s and their success.

Self-efficacy

Self-efficacy refers to the extent to which persons believe that they can organize and effectively execute actions to produce given attainments.

Entrepreneurs high in self-efficacy will outperform those who are lower on this dimension. This rationale is based on social cognitive theory and a rich body of research in applied psychology showing that adaptive human functioning is motivated, regulated, and directed by the ongoing exercise of self-efficacy.

Since self-efficacy positively affects diverse human functioning, we suggest that it will have similar consequences in the context of entrepreneurship. For example, individuals high in self-efficacy not only prefer challenging activities; they also display higher staying power in those pursuits.

Thus, it stands to reason that entrepreneurs who have high self-efficacy will outperform entrepreneurs with lower levels of self-efficacy. Similarly, because the incentive to act is highest when entrepreneurs believe that their actions (e.g.,starting a new company) lead to attainable outcomes (e.g., successful venture), high self-efficacy is an important determinant of successful entrepreneurial behaviors. Interestingly, empirical research shows that self-efficacy successfully differentiates entrepreneurs from non-entrepreneurs.

Opportunity recognition

Individuals differ greatly in their abilities to capture, recognize, and make effective use of abstract, implicit, and changing information.

Notions of opportunity recognition suggest that the ability to identify high-potential from low-potential opportunities and to spot obstacles before they become insurmountable would lead to the creation of superior ventures. Because newness and ambiguity of emerging markets create a powerful incentive for entrepreneurs to obtain superior information, we suggest that those who are more alert and better at monitoring and processing information would stand a better chance than those who are less adept on these dimensions.

The better understanding of abstract information was also a key element of Max Pepe’s concept of creativity in the work place and in the entrepreneurial mind and I think and feel this is possible a key indicator that stood out in the aforementioned interview.

I suspect that although most individuals scan their environment, successful entrepreneurs may be better at discovering opportunities embedded in that environment.

Let’s crudely summarize this for the sake of time and sanity as “Thinking outside the box”.

Perseverance

Creating a new company entails doing more with less; entrepreneurs suffer from limited resources, unfamiliar brand name, limited product offerings, and questionable access to markets.

Inherent in such undertaking is a constant vulnerability to failure, precipitated by ambiguous conditions under which new firms are created. Thus, until success is achieved, entrepreneurs bear numerous disincentives, including unpredictable markets and unknown competitive rivals.

Success often comes at a price of high financial, technological, and legal liabilities.

Inseparable from risk of failure are the ambiguous conditions under which new firms are created; conditions precipitated by the nature of entrepreneurial work and technological innovation. This suggests that individuals who engage in venture formation incur, sometimes personally, substantial amount of financial and social adversity.

Research indicates that under challenging circumstances, individuals high in perseverance perform more adeptly, whereas individuals who fail to persevere not only perform inadequately, but also experience increased anxiety and negative affect.

It’s noted above that to be successful, entrepreneurs must rise above numerous obstacles including working intensively despite very uncertain outcomes, establishing market foothold with frail economic power, fending off retaliatory actions from established and resourceful rivals, and overcoming liabilities of newness, smallness, and legitimacy.

Entrepreneurs also endure very harsh private difficulties, such as personal and financial liabilities and periods of social isolation.

Since entrepreneurs encounter repeated obstacles with many uncertain outcomes, the ability to withstand and quickly overcome adversity would be an important personal advantage.

While more research is certainly necessary, such studies suggest that perseverance in the face of business and technological difficulties may be more important than the idea or the opportunity itself.

Human and social skills

Baron and Markman (2000), who conducted a study with entrepreneurs from two very different industries (cosmetics and high-tech), obtained support for the hypothesis that the higher the entrepreneurs’ social skills, the greater their financial success. Their study reported that high accuracy in perceiving others (i.e., skill in social perception) was a significant predictor of financial success for both groups of entrepreneurs and that social adaptability (the ability to adapt to a wide range of social situations and to interact with individuals from many different backgrounds) was a significant predictor of financial success for entrepreneurs in the cosmetics industry.

Their study implies that while high levels of human and social capital may be particularly crucial in facilitating access to resources, social skills might be particularly important once such access is attained—that is, during the building stages of a new venture. The success or failure of new organizations hinges in part, on entrepreneurs’ ability to work together to commercialize their discoveries and ideas.

Given the wide and positive impact social skills have on diverse human functioning, it is surprising that entrepreneurs, researchers, and investors have, until recently, been somewhat reluctant to recognize it as an important factor’s in such contexts.

So research tells us that entrepreneurs are high on a number of distinct individual-difference dimensions relevant to the entrepreneurial life, (e.g., self-efficacy, opportunities recognition, perseverance, human social skills).

However, this is not the whole picture because in fact, successful entrepreneurs come in all shapes, sizes and from all the corners of the globe.

All individuals are just that individuals. Even if they have similar traits developed from their younger ego development period. That does not mean they are all equal in skill. If equipped with similar knowledge, skills, and abilities and equally adept in recognizing opportunities and in harvesting them, you could still see very different results.

Other key factors I feel are critical to all entrepreneurs but not limited to are:

Confidence - You've got to have confidence to be able to get through the hard times. And there will be hard times: when you're working 14-hour days, it looks like you've just lost your life savings, and you're still not getting any customers. You need deep emotional reserves and inner confidence in yourself and your business idea to get through that

Action-orientated - Ideas are absolutely worthless unless you do something about them. You need to be a go-getter to make any aspect of your business happen.

Passion - Being passionate in business doesn't mean that you're a fiery, emotional, romantic hot-head - it means that you truly believe in the business you're building, that the idea behind it excites you, and that when you talk to people about what you're doing, it's obvious you're really into your new business and determined to make it work.

Risk-taker - Only a fraction of business owners become full-blown entrepreneurs - the type who run hundreds of businesses all across the world. But you can take inspiration from them, by trying to always remember to push yourself and your ideas that little bit further.

Not afraid of failure - You need to try to banish fear not just of your business failing, but also of an important contact turning you down or a client deciding not to do business with you. If you're always worried about this, it will stress you out far too much and make you seem much less confident.

Financial thinker - Entrepreneurs always think of profits and the bottom line. If you're not focused on making money or at least breaking even, you're not going to have a business for very long – cashflow kills business’s.

This article is just a round-up of the most common entrepreneurial traits from several research studies. But some very successful business people are painfully shy, some are extroverts and some perfectly competent business owners who never take risks and aren't too hot in the maths department either.

Barclays Bank commissioned a study of entrepreneurs and found the following traits from each geographical location.

German entrepreneur: Artistic; very introverted, competitive and stable; needs personal autonomy at work but also values management; extremely high tolerance of and propensity for financial risk.

Singaporean entrepreneur: Very traditional or conservative, cooperative and in touch with emotions; less able to cope with adversity; less concerned with manner of work; less of a self-starter; not motivated by personal success; believes in fate or luck;extremely high tolerance of and propensity for financial risk.

UK entrepreneur: Extraverted; calm; sticks to goals; needs to set working style; believes in non-prescriptive management; take sinitiative; innovative; motivated by personal success;extremely risk averse.

USA entrepreneur: Introverted; competitive; strong belief in personal autonomy; needs to set working style; believes in non-prescriptive management; takes initiative; highly innovative; motivated by personal success; extremely confident in control of external environment; risk-taker.

This study outlines that there is more than one type of entrepreneurial profile.

The first type could be seen as the type A entrepreneur profile. In terms of personality, entrepreneurs that fit this profile tend to be artistic, well-organised, highly competitive, and emotionally stable.

This BIG personality profile is commonly observed among individuals in a variety of leadership positions. It is notable that these entrepreneurs scored only slightly above average on risk propensity and on attitude towards autonomy. The last of these scales relates to whether participants believe that employees should have autonomy at work (low score) or rather that leaders should be in charge (high score).

Type A is a more robust and coherent cluster than type B. The latter group could be broken down more easily into further constituent profiles, whereas type A entrepreneurs were all very similar to each other. This cluster therefore remained very stable through out the analysis. According to their study, Western entrepreneurs were significantly more likely than Singaporeans to fit the type A profile. 53% of USA entrepreneurs and 48% of UK entrepreneurs displayed the rather extreme characteristics associated with that cluster.

While these probabilities are high, they also highlight the fact that, in the West, only around half of the entrepreneurs conform to what might be described as the stereotypical business owner profile. German entrepreneurs were slightly more likely to fall in the type B cluster than type A, with 41% matching the latter profile.

The ratio of type A to type B entrepreneurs was more similar across sectors than across countries.Unexpectedly, the proportion of entrepreneurs matching the type B profile was in fact slightly greater than those matching type A.

The average entrepreneur was therefore more likely than not to debunk the stereotype. Where it was observed, the type A profile was found to be more.

We can derive from some of these findings that not only can our early learning's influence a persons journey to become an entrepreneur, but also the cultural background and geographical location also plays a key role in this process.

So back to the questions I found myself asking:

Are you an entrepreneur?

This is only really determined my how you consider yourself. This article may give clear insight and guidance into such matters but there is an exception to every rule. No matter how deep the study or how complex and far reaching the statistics.

Your family background may have given you a lack of confidence that another business person has naturally through a different parental upbringing. That does not mean that you cannot become more confident or learn to project confidence. Self-development via books, podcasts or mentors can be invaluable.

If so, what twist of fate has made you this way?

This debate within psychology is concerned with the extent to which particular aspects of behaviour are a product of either inherited (i.e. genetic) or acquired (i.e. learned) characteristics. For my part I believe your formative years at least set the direction of your boat.

That direction could certainly make you someone destined to be an entrepreneur or at least feel they have a yearning to be so but it could also give you the yearning to be a chef.

The boat may start with a direction but it needs steering and constant focus to develop into a career and passion. No amount of parental training can prepare you for all the challenges ahead but it could be argued that key skills help during your business life.

Whilst my mind is now wondering on to boats. Perhaps a simple over-used phrase sums up an entrepreneur simply: Don't wait for your ship to come in swim out to meet it.

How do you recognize an entrepreneur?

Well, in all honesty you can’t. If I have been fortunate to be right on occasion I have been wrong more often.

With the aforementioned Mr Max Pepe it was easy to see some key traits that make a successful entrepreneur; Intelligence, determination and self-efficacy. But on reflection the key element to me was the passion that he has for anything he is working on. I admire and respect that. But I doubt it is something you can manufacture easily and if you could it would lose its genuine qualities.

If you do find such a person – keep in mind that by their very nature. One day they will fly the nest. It’s as inevitable as the sun going down each day.

An entrepreneur first comes in to existence in someone’s mind, it is created there. If this is during the early formation of your ego as a youngster or by someone developing a dream or aspiration later in life, I think we destroy its very nature by trying to label it – by trying to bottle and duplicate it.

This is what makes us all unique:

Self-expression of who we are and who we desire to be.

Go check out Max at : Rebelhead Entrepreneurs

Sources of research included but not limited to:

Wikipedia, Elsevier Science Inc, Institute of CFS and the British Psychological Society and Barclays Bank.

Grant Saxon Rowe

General Manager – Submission Technology Ltd

General Manager – Clickwork7.com

Email: grant@submissiontechnology.co.uk