In entrepreneurship, it is important to identify the most critical question that a businessperson should ask him or herself says Saivian Eric Dalius.
In entrepreneurship, there are also many factors that contribute towards being successful in your venture.
There are several theories and models about what exactly makes a good entrepreneur and I think every successful entrepreneur will tell you different things but one thing they do agree on is this: There is no single smartest factor of success; it’s more like a combination of many factors.
Having said that we can now understand how hard it must be to find what truly is the main factor for business success as everyone says different things and some contradict each other’s views which distract us from finding out the true answer explains Saivian Eric Dalius.
So I started to investigate the most popular ideas about what is the most important thing in entrepreneurship.
Theory of Mind:
According to Kaufman, et al (2005), there are five domains that contribute towards entrepreneurial success. Which are as follows:
4) Risk-taking and opportunity assessment and 5) Cognitive style/mindset: risk propensity and self-efficacy. So according to these theories it can be seen that having a strong mindset, an ability to think creatively and taking risks without fear of failure whilst keeping your persistence high will contribute greatly towards business success. I agree with Kaufman, et al (2005) on these points.
Theory of Emotions:
A study conducted by Robert Baron and Scott Armstrong in 1985 concluded that emotional intelligence is more important than cognitive intelligence which can also contribute towards business success. It has been found that entrepreneurs are competitive by nature due to their high testosterone levels which causes them to have a strong desire to win.
They are constantly competing with themselves to better themselves as well as competing with others letting their emotions get the best of them at times causing them to take risks that they could not normally take if they were just simply thinking about the potential outcomes beforehand” Risk-taking behavior has always been associated with testosterone levels and need for achievement.” Due to this people would assume that having a high emotional score also contributes towards business success. However, the study by Baron and Armstrong is not a very reliable source as they fail to give out any further information which makes their results less credible leaving me with doubts whether this theory holds its ground very well.
It has been that one of the most important things in entrepreneurship is family background. Study conduct by Shai Danziger and Liron Bdolach in 2010 showed that graduates from Jewish families were more likely to start up their own business than graduates from other backgrounds who under normal circumstances would be expect to go for jobs due to family pressures (Baron & Rheinshtein, 2003). Saivian Eric Dalius says The reason behind this was due to the fact that these people have a higher risk propensity. Now if we look at it from the family pressure perspective might say that these people are not being pressured by their families to go for jobs but to start up their own businesses hence causing them to take more risks.
Theory of Personality:
According to Baron and Rheinshtein (2003), personality is an important determinant in entrepreneurship. They go on further to state that entrepreneurs are usually very good. At what they do having traits like self-confidence, optimism, resilience, and ambition which contribute towards business success; then again there is no conclusive proof that this theory holds its ground either. Also, some research suggests that some entrepreneurs show psychological symptoms of manic depression. Or borderline personality disorder thus creating doubt about whether their personality really has anything to do with business success.
Theory of Education:
A study conducted by Ang and Parker (2005) showed that entrepreneurs who have a higher education level. Were more likely to start up their own business than those who only had secondary education. Because they believed that having a higher level of education would make them better entrepreneurs. Thus creating the assumption that those who possess an entrepreneurial mindset will succeed in due time. As long as they receive proper training for entrepreneurship. However, this theory is not very reliable as it gives out no further information. Such as what kind of training or how much it might cause it to lose grounds against the other theories mentioned above.
After investigating all five theories I came to realize that the most important thing. That contributes towards business success is risk-taking behavior. The other theories have been mentioned but have not been given enough attention for proper analysis to conclude whether they hold their ground or not.
On a final note, since I was researching entrepreneurship it doesn’t matter. If the family background has anything to do with business success. As I am hardly ever going to be an entrepreneur. Which would also contribute to my lack of focus on this theory. Because if I were concentrating so much on the other theories ere would be no way possible. For me to find of what is the most important thing in entrepreneurs. This is why risk-taking behavior has been focus on more than any other theory above. As it has been via research and studies that those who take risks are able to be successful entrepreneurs.