One of my earlier blogs (24 January 2008) introduced a new line of research into the links between entrepreneurship and dyslexia. In the following TV interview Richard Branson talks openly about his dyslexia, which he attributes in part to his success.
Studies carried out at CASS Business School indicate that dyslexics make up 19% or 600,000 of the 3.5 million population of entrepreneurs in the UK whereas in America 35% of entrepreneurs are dyslexic. The fundermental difference between the two groups seems to be their level of self-confidence.
New research conducted by Cass Business School’s Centre for New Technologies, Innovation and Entrepreneurship (CENTIVE) sponsored by Microsoft, has revealed that a latent pool of hidden innovators could potentially add a staggering £15 Billion to the UK economy by 2012 if the right conditions were created according to the latest government figures.
The report, Unlocking the potential of UK’s Hidden Innovators, which combined in depth statistical research with qualitative case study analysis, was conducted over a six month period. It examined how we might unlock the barriers and pathways to entrepreneurial innovation in three important groups, recognised for their entrepreneurial potential:
“Olderpreneurs” (those aged over 50)
Black Minority and Ethnic (BME)
People with a disability (including dyslexia)
Older entrepreneurs, ‘olderpreneurs’ could contribute an increased 17% of the potential uplift to the UK economy by 2012 and will be key to capitalising on this innovation opportunity as the size of this group expands over the next four years. With a wealth of experience and insight built up over their careers, this group has the highest rate of business success and longevity, with over 70% of start-ups lasting more than three years, compared with 28% for younger entrepreneurs. Moreover, with those over 55 set to account for a third of the UK population by 2025, older entrepreneurs are well placed to tap into the fast-growing potential marketplace through their shared experiences and understanding, the report reveals.
One of the report’s key findings is that entrepreneurial self-confidence is a critical issue for all the hidden innovator groups and a major barrier in pursuing an entrepreneurial path. However, it also reveals that this self-confidence can be nurtured if there is a culture of entrepreneurship to support it.
A new avenue of exploratory research has set out to understand more fully the long running nature versus nurture debate on whether entrepreneurs are born or can be taught the appropriate skills. The high growth in entrepreneurship education over recent years in schools, further education colleges and universities would suggest the latter. However, a UK exploratory study [1], which compared the self-employment activity of 609 pairs of identical twins and 657 pairs of same sex non-identical twins, found that identical twins had a much higher incidence of self-employment activity. This seems to suggest a genetic link to entrepreneurial orientation, although the specific genes have yet to be identified.
A second exploratory study on the same theme based on evolutionary biology [2] found the level of testosterone in individuals with entrepreneurial experience to be measurably higher than those with no entrepreneurial experience, suggesting a possible link between testosterone and venture success.
Should this line of exploratory research prove fruitful, what might be the potential implications for private or institutional investors wanting to incorporate tests of this nature within their investment due diligence process? Would it be socially acceptable to deny someone access to financial resources based upon biological factors that they can’t control?
References
[1] Niclaou, N. et al., (2006). Is the tendancy to engage in self-employment genetic? http://wsomfaculty.cwru.edu/shane/ge/GE1.pdf
[2] White, R. E., et al. (2006). Entrepreneurs and Evolutionary Biology: the relationship between testosterone and new venture creation. Organisation Behaviour and Human Decision Processes
Europe remains challenged to develop its high-growth entrepreneurs. According to the recent GEM Global report on High Growth Entrepreneurship, Europe in the main lags behind North America, Oceania, and China in terms of high-expectation entrepreneurship (defined as the prevalence of nascent and new entrepreneurs who expect to create 20 or more jobs in 5 years’ time). Broadly speaking, high-growth entrepreneurs are only half as numerous in Europe as they are in the US and in China.
Subsequently a select group of leaders in European academia, industry and policy met to discuss the fundamental problem: How to encourage more high-growth entrepreneurs in Europe? These are men and women driven, not merely to seek self-employment, but to create world-class companies in technology, biopharma and other R&D intensive fields. Read more in the report on this roundtable discussion, which outlines the dilemma facing policy-makers.
Professor Julie Logan from the CASS Business School has completed a new study of entrepreneurs in the United States (The New York Times 06 Dec 07) which suggests that dyslexia is much more common among small-business owners than even the experts had thought, with 35% of entrepreneurs surveyed identifying themselves as dyslexic. These finding support an earlier study carried out in the U.K. by Logan [1] which found that the incidence of dyslexia in entrepreneurs was five times higher than that in the corporate manager population. This is due in part to dyslexics higher degree of creativity, increased need for achievement and enhanced communication skills.
The full extent of dyslexia among the general population is still being discovered, but it is reported to be between 4-10%, depending on its severity [2]. Public opinion of this condition, which is classified as a ‘learning disability’, may well need to be reassessed as a ‘gift’ to nascent entrepreneurs that potential investors should become more aware of. Famous entrepreneurs such as Bill Gates (Microsoft), Steve Jobs (Apple), Richard Branson (Virgin), Alan Sugar (Amstrad), John Cambers (Cisco) and the late Anita Roddick (Body Shop) are all reported to be dyslexic.
As a dyslexic entrepreneur myself I’m pleased to see that some of the more positive aspects of dyslexia are now being studied by academics and covered in leading international business journals such as BusinessWeek (12 Dec 07, Why Dyslexics make Great Entrepreneurs). Hopefully this will encourage many more successful ’closet dyslexics’ in the business community to openly admit their situation, and become positive role models for young dyslexics who might be struggling to decide on the future direction of their careers?
References
[1] Logan, J. (2002). The incidence of dyslexia in business managers and its relationship with entrepreneurial success. The Small Business and Entrepreneurship Development Conference. Nottingham
[2] Harris, A. and Ross, C. (2005). Dyslexia in the workplace. Occupational Health, 57, (3) pp25-32
You could be forgiven for thinking that the title of this article referred to a horror movie, a 70’s rock band or an adolescent teenager recovering from a night on the town. However, in this context the phenomenon of “living dead” investments [1] represents the middle ground of venture capital investing outcomes, lying between “winners” that produce adequate multiples of return on investment and “losers” that result in loss of invested funds. Living dead investments are typically mid- to later-stage ventures that are economically self-sustaining, but fail to achieve levels of sales growth or profitability necessary to produce attractive final rates of return or exit opportunities for their venture capital investors.
Whilst living dead problems caused by internal management and operational issues can potentially be fixed by VC managers, those caused by too small or too slow markets, industry oversupply, or cut throat competition are largely out of their control or influence. Of the various actions taken by VC managers in dealing with living dead companies, the most common response is to sell or merge the investee firm so they can devote their time to star performers.
References
[1] Ruhnka, J. Feldman, H. D. and Dean, T.J. (1992). The “Living Dead” Phenomenon in Venture Capital Investments, Journal of Business Venturing, 7,pp 137-155.
There are a number of different types of venture that could be considered when discussing entrepreneurship in general. However, like most venture capitalists and business angels, my particular area of interest is in high growth ventures that are capable of achieving at least a 20% increase in revenue for each of five consecutive years. These ventures are sometimes referred to as Gazelles and account for only about 3% of businesses, whereas slow and steady competitors in the market are referred to as Mice.
In comparison Mice are companies that have learnt how to survive, establishing a market presence in the long run and usually growing at less than 10% annually. Mice seek to provide personal income without working for someone else, whereas Gazelles seek to create wealth in the marketplace often foregoing their own immediate income. A Mouse can however transform itself into a Bullfrog [1] by retaining the Gazelle mindset, but taking strong leaps forward for limited spurts of growth. By taking this approach the Bullfrog gathers itself, poised on a lily pad to reassess, plan, and time the next leap forward allowing more control of the growth process.
Ask ten people to describe the characteristics of an entrepreneur and you’ll probably end up with at least ten different answers. Apart from perhaps the stereotypical response of “someone driven by money”, which is actually not true. Quite suprisingly, most of the venture capitalists and seasoned entrepreneurs that I have posed this question to over the years seem to think that entrepreneurs are a special breed of people, more akin to mongrels whose makeup can’t be easily identified. The thought of trying to sort these animals into different sub species seems by many to be an absolute waste of time. Even academic researchers initially found the task problematic when they first embarked on this exercise back in late 70’s. One academic attempted to define the entrepreneur by using the analogy of Winnie the Pooh’s favourite animal the Heffalump, which “comes in every shape and size and colour”.
“The entrepreneurial Heffalump is a variegated sort of animal, which appears in different habitats and in different forms. It also appears to have undergone some evolutionary changes or mutations since the first reports of its existence were made public by Heffalump hunters in the past. So it is not surprising that there is disagreement about the nature of the beast”[1].
Fortunately things have moved on for Heffalump hunters and academic researchers alike, who are now in a much better position to define the characteristics of entrepreneurs in their various forms.
Reference
[1] Wilken, P. (1979) Entrepreneurship: A Comparative and Historical Study. Ablex Publishing
Posted by johncavill 
Posted by johncavill 
Posted by johncavill 