Entrepreneurial Success Depends More on Privilege Than Personality
Most entrepreneurs are charismatic risk-takers who work very hard. They also have access to money and connections.
With the advancement of technology and the accessibility of the internet, it seems like these days anyone can become a successful entrepreneur and launch the next big start-up. But is that really true? According to Quartz, what often gets overlooked in the story of this new American dream, is that the entrepreneurs who are most successful are those who have access to financial capital.
It might seem as though people like Mark Zuckerberg,Jonah Peretti, and Evan Spiegel just have a certain type of personality that makes them comfortable taking risks, but many of them also have family money and connections that allow for financial stability. This makes it easier for them to take the financial risks required to start a business because they have a safety net to fall back on.
Economists Ross Levine and Rona Rubenstein from the University of California, Berkeley, conducted a study in 2013 on the shared traits of entrepreneurs. Levine told Quartz "If one does not have money in the form of a family with money, the chances of becoming an entrepreneur drop quite a bit." Similarly, a study conducted on risk-taking in the stock market, found that risks were influenced more by environmental factors than by the genetic traits of the investor.
The cost of launching your own business is high, around $30,000 according to the Kaufmann Foundation. Many start-up CEO's do not take a salary for the first few years, and according to the Global Entrepreneurship Monitor, 80% of funding for new businesses comes from the owner's family and friends or from personal savings.
There is certainly a lot of hard work that goes into building a business from the ground up, but what is left out of many entrepreneur success stories is that a lot of these companies are successful because of their founder's privilege in addition to hard work. One woman involved in social entrepreneurship in New York told Quartz, "This whole bulk of the population is being seduced into thinking that they can just go out and pursue their dream anytime, but it's not true."
Above Photo: Evan Spiegel at TechCrunch in 2013