Why Do People Start a Business?
Author: Gary Whitehill
A survey from a pool of Columbia Business School alumni entrepreneurs was recently conducted to understand the overall pattern of our graduates’ entrepreneurial experiences and what factors predict success. One of the questions posed was: Why did you start a business?
The results showed the various reasons people first became entrepreneurs and how these motivations are linked to success. Interestingly, one of the least cited reasons is the only one that is linked to success.
| Great business idea |
41%
|
| Autonomy |
30%
|
| Frustration with corporate opportunities |
25%
|
| Lifestyle |
23%
|
| Potential for greater financial success |
16%
|
| Life goal |
6%
|
| Challenges/excitement |
6%
|
| Desire to build |
5%
|
| Exercise creativity |
2%
|
| Other |
11%
|
*Based on 1,497 Columbia Business School alumni
Some of our survey highlights from this question revealed:
- “The desire to build something” is the single motivator that predicts ultimate success. Only 5 percent of entrepreneurs cite this motivation.
- Two commonly cited reasons for becoming an entrepreneur are actually associated with lesser performance or profitability. “Frustration with a corporate career” and “motivation based on lifestyle” are associated with less success. Both are understandable. People driven to entrepreneurship through lack of other attractive alternatives or people whose prime motivation is lifestyle might well be expected to build smaller, less profitable businesses.
-
Several other common motivations have no link to performance. Being “motivated by financial gain” was not a predictor of success. Neither was “the desire for autonomy, challenge and excitement”, “creativity”, “having a great business idea”, or “entrepreneurship as a life goal.” There are many myths about entrepreneurship being glamorous. The truth is entrepreneurship is 1 percent inspiration and 99 percent perspiration. Those who start for glamorous reasons may find themselves in for a surprise.
What is your motivation for starting a business now?
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