The Secret to Entrepreneurship?

I recently read a paper written by Saras D. Sarasvathy called, “What Makes Entrepreneurs Entrepreneurial?”.  The paper proposes to answer the question posed in the title by conducting a series of interviews and tests with entrepreneurs to identify specific, consistent personality traits.  Although I believe neither this paper (nor any academic work) can answer such a broad, difficult question, it did raise some interesting points that I felt were worth passing along.  The paper also brought out some interesting questions for me about what I believe to be the definition of an entrepreneur (see post titled “Defining Entrepreneurship”, 8/24/08). Has Mr. Sarasvathy revealed the ultimate secret to entrepreneurship?… you be the judge.

The author proposes that entrepreneurs are entrepreneurial primarily because they think effectually rather than causally.  That is, rather than starting with a pre-conceived goal and established means and then determining the optimal solution (causal reasoning), entrepreneurs often start with a given set of means and then allow goals to emerge from the imagination of the founders and the guidance of the market (effectual reasoning).  The author puts forth that “…effectual reasoning demands…imagination, spontaneity, risk-taking and salesmanship.”  Therefore, it appears the author is saying that these specific traits are pre-requisites to being a successful entrepreneur (i.e. entrepreneurs prefer effectual reasoning; effectual reasoning demands those traits; therefore, entrepreneurs must possess those traits).  The author uses the rest of the paper to more thoroughly define effectual reasoning (which is pretty interesting and I might dedicate a post to it in the future), however, the above point is worth pausing on…Are “imagination, spontaneity, risk-taking and salesmanship” ALL required to be an entrepreneur?

While I believe it is obvious that the large majority of entrepreneurs possess most, if not all of these traits, I think it is a stretch to say that each of these is absolutely required.  Risk-taking is a given…if you are not taking risks you are not innovating.  I also think imagination is one that is all but required.  You must possess some form of imagination in order to innovate.  The other two, while great traits that would benefit every entrepreneur (and business man in general), are far from required in order to achieve success.  Spontaneity is a trait that has its advantages, however, can often lead to half-baked plans.  Preparation and strategic thinking will often outperform spontaneous guesses, even in early stage ventures.  This does not necessarily mean expensive and exhaustive marketing studies, etc., it just means better thought out plans than spontaneous decisions produce.  With that being said, having the ability to adjust on the fly (and thus act spontaneously) will usually improve results as nothing goes exactly as planned.  Salesmanship is another attribute that would help any entrepreneur, however, I believe calling it a necessity is a stretch.  Someone with a great idea and leadership ability can surround themselves with partners or employees who can handle the selling (including raising money, convincing customers or suppliers and hiring staff).  The key here is recognizing the weakness and augmenting that skill set.