Why do people choose to become entrepreneurs?
Some become entrepreneurs because of the independence and freedom it brings. Others are looking for a way to be creative. Some people seek out leadership. Others are in it for the money. People have long debated whether entrepreneurs are made or are born. I am firmly of the opinion that entrepreneurs are born and not made.
I have a bizarre theory (not tested or proven) that you can tell what type of entrepreneur someone is by what he or she did in high school. If you have ever seen the television series 7UP you’ll understand what I mean. This series started in 1964 and it produces one show every 7 years. The producers began with the old saying; “Give me a boy till he’s seven and I’ll show you the man.” The series interviewed a number of seven year olds in 1964 about their lives. Every seven years they interview the same people and have done so seven times showing these kids at 7, 14, 21, 28, 35, 42, and finally in the most recent version which aired last week on TV, at 49. At 49, I was struck by how their adulthood had been so clearly forecast by their childhood. I could see how their current state was fed by what they were doing when they were 14.
Back to my bizarre theory in a second. I am reading Sam Walton’s autobiography right now “Made in America.” The book goes into excellent detail about what Sam did in early life. Starting before he was seven, Walton was delivering milk, selling magazine subscriptions and delivering newspapers. In fact at the end of the Depression, while still in university, he was earning $4,000 to $5,000 per year by delivering papers, life guarding, and waiting tables. To put this in perspective, in his first full-time job after university at JC Penney’s, his salary was only $900 per year.
In fact, if you look at the biographies of other very successful entrepreneurs, you’ll find a similar story. Richard Branson started his first successful business at the age of 16. By the age of 14, Bill Gates had already gone into business with Paul Allen. There are countless examples of highly successful entrepreneurs who showed their promise as entrepreneurs at a very early age.
So my bizarre theory is that you can tell what kind of entrepreneur someone will be by looking at what they did at a young age. High school is the last chance people have to truly express themselves without worrying about money.
Right now you might be wondering what the point is. If you’re an investor, it’s very important to understand the motivation of an entrepreneur you’re interested in backing. Since your only objective as a passive investor in an entrepreneurial business will be to make money, it’s worthwhile to find out whether the entrepreneur you’re backing has the same objectives.
Is your prospective investee in it for the money or are they interested in the creative, leadership, or independence benefits of entrepreneurship? If your goals aren’t aligned, your investment may not be entirely fruitful. To figure out their the type of entrepreneur you’re backing, look to what they did in high school —it’s a tremendous indicator as to their true motivation.
Charles Plant is the CFO at MaRS. Before that, he was the CEO or CFO of several successful software companies. He's also been a management consultant, an investment banker, an auditor and an advisor at MaRS.
