Look what I made, daddy!

Donkey’s years ago, when everything was sunny and happy, I found myself investigating something called ‘Business Link’.  It was the government of the day’s attempt to provide support to businesses.  You know, businesses.  Groups of people gathered together inside legally-defined and self-branded envelopes that get on with something and try to sell their something for a bit more than it costs to make the something.

Apparently it would be good if there were more businesses, or if businesses were better, or bigger, or faster or something more than they are – were – at the moment.  Helps with, um, productivity, and jobs, and growth, stuff like that.

So let’s offer support and advice to businesses, they’re bound to like it, and they’ll get bigger and faster and all that kind of thing and everything will be better (even though it was already happy and sunny).

(Oh yes, I remember now: it was happy and sunny because the Berlin Wall had recently been breached and brutal communist regimes across Eastern Europe were tumbling like nine-pins and the Soviet Union was collapsing.  The end of the Cold War.  Before it all went tits up. That sort of happy and sunny.)

Anyway, there were lots of problems with this kind of business support stuff, of which the more entertaining included the oxymoronic aspect that the very people government was trying to help were also the very people that were constitutionally most likely not to want any help (read “interference”) from government; and the fact that the people providing the ‘help’ were (very often) utterly clueless about ‘business’.

It does beg the question, mind, of precisely who one means by ‘the very people government were trying to help’.  And what was meant, surprise surprise, were the owners and managers of these businesses, the people in charge, the bosses.  More especially, it meant entrepreneurs, the people who start businesses in the first place.

(I’ve written elsewhere how I think this definition is way too narrow – see here – but that was that then, and this then was another then.) (Eh?)

Lots of money was spent on providing all this support and whatnot, and pretty much nothing at all happened as a result, and someone somewhere wondered if, maybe, the reason that nothing much at all had happened was because, maybe, all the support and help and stuff had gone to, maybe, the wrong people.

The wrong people?

Well, let’s imagine there are two types of entrepreneur.  One type sets up their business with the intention simply of having their own business, of having the freedom to do their own thing, and that’s it.  Let’s call these ‘lifestyle businesses’.

The second type sets up a business with the intention of becoming the next Richard Branson.  Let’s call these ‘growth-oriented businesses’.

If you wanted lots of productivity and growth and fasterness and stuff like that, it would probably be a waste of time (and lots of money) to provide help and support to the former group, no?  They’re not interested in any of that kind of thing.  Better, surely – and thus ran the argument – to target your efforts at the second group.  Help growth-oriented businesses with your carefully tailored support package, and you’ll get all the growth and investment and fasterness even more fasterly!

Logical inference from all this?  We need to identify the ‘growth-oriented businesses’!

And that’s where I came in.  What kind of people set up Type 1 businesses, and what sort of people set up Type 2 businesses?  What are they like?  What are their traits, their characteristics, their personalities?  Are they the same as or different from the rest of us?  Are they the same as or different from each other?

I don’t remember much about it, to be fair.  It was a long time ago and, as I said, thems were heady days of sunshine and happiness, so my mind may well have been a little elsewhere.  But I do remember a few things.

The first one was that almost nothing was known about the answer to this question.  The whys and wherefores of the entrepreneurial  personality were strikingly absent from the knowledge bank.  Maybe it was a hangover from the corporatism that had dominated the majority of the post-war period.  Maybe it was because business schools were still pretty new kids on the block.  Maybe it was because everyone was focused on the big and exciting things rather than all the small stuff.

So I thought it strange, but not inexplicable.

What is inexplicable – to my mind, at least – is the conclusion of a paper published recently by the august National Bureau of Economic Research in the US.  The paper reports on a review of the ‘extensive literature’ published since 2000 that investigates this very question: what are the personality traits of entrepreneurs?

They asked a further question, too: how do those traits relate to the performance of the businesses started by these entrepreneurs?  (This is a good question, no?)

And here’s what they found out:

“There are many areas, like how firm performance connects to entrepreneurial personality, that are woefully understudied and ripe for major advances if the appropriate cross-disciplinary ingredients are assembled.”

Eh?  You mean – WE STILL DON’T KNOW?!  Jesus Christ.  I told you it had all gone tits up.

The second thing I remember is the quiz question:

What is the main reason (cited by entrepreneurs) for starting up a new business?

Go on, have a guess.

The answer is:

because they hated having a boss

As far as I can tell, this is still true (see here, for example) (or, for a more in-depth and at times dense source, with the opportunity also to challenge the basic questions used to derive their findings, try here).

Which is kind of funny, really.  All those skills you might need to be a successful entrepreneur; and having any of them is irrelevant to the initial decision...

Anyway, the third thing I remember, and the best one, is the finding from one research enquiry I dug up which suggested that one of the key distinguishing factors between growth-oriented and lifestyle business entrepreneurs was the relationship the entrepreneur had had with their father.

Eh?

Well, it turned out that if your father had died when you were young (or if he had been exceptionally distant for some reason or other) you were much more likely to set up a growth-oriented business.

I don’t recall whether the research investigated mothers, nor what sort of degree of distance might have been necessary to produce the effect, but the finding resolved into a very clear conclusion in my mind: that setting up a growth-oriented business was actually a project of lost love.  You never received the love you needed as a child; daddy had never praised you; and now, in adulthood, to prove you were worthy of this love – this inaccessible love, this praise and affirmation that would forever elude you – you needed to create something big, something amazing, something that would prove you were indeed worthy of that love.

But the affirmation cannot come.  And so you run faster, bigger, more. Endlessly.

Business as a psychological compensation exercise: “Daddy, daddy, look what I made!”

It sort of makes sense.  A deep-down drive, of the kind that is surely required to propel a business from nothing to enormity, must surely have a deep-down cause.

It is never about 'the money', really; it's about trying to feel valued.

And it lends itself to a fabulous reconfiguring of the kind of government support services intended to support businesses that want to become bigger and fasterer and shinier:

“Hello,” the entrepreneur begins on ringing the Helpline, “I’m ringing for some help and support with my new business.”

“Great,” replies the screen-guided operator, “you’ve come to the right place.  Now: tell me about your childhood…”

As I said, everything was happier and sunnier back then.