Anatomy of An Entrepreneur

Entrepreneurship and motivation
ENTREPRENEURSHIP AND MOTIVATION
1. Introduction
From history we have heard of Thomas Edison, Graham bell and Marconi. These inventors made
items like the Electric bulb, telephone and the radio. Inventors create something that did not exist
before. Entrepreneurs create something as well. By combining resources and ideas, some of which
may be new inventions, entrepreneurs create markets for products where none existed before. The
computer industry today has an amazing number of entrepreneurs, with Steven Jobs of Apple and Bill
Gates of Microsoft being two of the more prominent entrepreneurs. Oxford dictionary defines an
“entrepreneur as a person who sets up a business or businesses, taking on financial risk in the hope of
profit”. Being an entrepreneur, one who is self-employed and who starts, organizes, manages, and
assumes responsibility for a business, offers a personal challenge that many individuals prefer over
being an employee working for someone else. Entrepreneurs accept the personal financial risks that
go with owning a business but also benefit directly from the potential success of the business. Being
an entrepreneur is often viewed as an aversive career choice where one is faced with everyday life and
work situations that are fraught with increased uncertainty, impediments, failures, and frustrations
associated with the process of new firm creation. Not surprisingly, many researchers have investigated
the motivation to become self-employed. What is it about certain people that drive them to take on the
risk, the uncertainty and the independent structure of business ownership? In this report we examine
key components of motivation that may contribute to the decision to become self-employed.
1.1 History of Entrepreneurship
The entrepreneur is a factor in microeconomics, and the study of entrepreneurship reaches back to the
work of Richard Cantillon and Adam Smith in the late 17th and early 18th centuries, but was largely
ignored theoretically until the late 19th and early 20th centuries and empirically until a profound
resurgence in business and economics in the last 40 years.
In the 20th century, the understanding of entrepreneurship owes much to the work of
economist Joseph Schumpeter , Arjay Nieva, Shannen Yap, Royce Salva, and Donna Alegado in the
1930s and other Austrian economists such as Carl Menger, Ludwig von Mises and Friedrich von
Hayek. In Schumpeter, an entrepreneur is a person who is willing and able to convert a new idea
or inventioninto a successful innovation. [4] Entrepreneurship employs what Schumpeter called "the
gale of creative destruction" to replace in whole or in part inferior innovations across markets and
industries, simultaneously creating new products including new business models. In this way, creative
destruction is largely responsible for the dynamism of industries and long-run economic growth. The
Amrita School of Business 1

supposition that entrepreneurship leads to economic growth is an interpretation of the residual

in endogenous growth theory and as such is hotly debated in academic economics. An alternate,
description posited by Israel Kirzner suggests that the majority of innovations may be much more
incremental improvements such as the replacement of paper with plastic in the construction of a
drinking straw.
For Schumpeter, entrepreneurship resulted in new industries but also in new combinations of
currently existing inputs. Schumpeter's initial example of this was the combination of a steam engine
and then current wagon making technologies to produce the horseless carriage. In this case the
innovation, the car, was transformational but did not require the development of a new technology,
merely the application of existing technologies in a novel manner. It did not immediately replace the
horsedrawn carriage, but in time, incremental improvements which reduced the cost and improved the
technology led to the complete practical replacement of beast drawn vehicles in modern
transportation. Despite Schumpeter's early 20th-century contributions,
traditional microeconomic theory did not formally consider the entrepreneur in its theoretical
frameworks (instead assuming that resources would find each other through a price system). In this
treatment the entrepreneur was an implied but unspecified actor, but it is consistent with the concept
of the entrepreneur being the agent of x-efficiency.
Different scholars have described entrepreneurs as, among other things, bearing risk. For Schumpeter,
the entrepreneur did not bear risk: the capitalist did.
For Frank H. Knight (1921) and Peter Drucker (1970) entrepreneurship is about taking risk. The

behavior of the entrepreneur reflects a kind of person willing to put his or her career and financial
security on the line and take risks in the name of an idea, spending much time as well as capital on an
uncertain venture. Knight classified three types of uncertainty.
 Risk, which is measurable statistically (such as the probability of drawing a red color ball
from a jar containing 5 red balls and 5 white balls).
 Ambiguity, which is hard to measure statistically (such as the probability of drawing a red
ball from a jar containing 5 red balls but with an unknown number of white balls).
 True Uncertainty or Knightian Uncertainty, which is impossible to estimate or predict
statistically (such as the probability of drawing a red ball from a jar whose number of red balls is
unknown as well as the number of other colored balls).
The acts of entrepreneurship are often associated with true uncertainty, particularly when it involves
bringing something really novel to the world, whose market never exists. However, even if a market
already exists, there is no guarantee that a market exists for a particular new player in the cola
category.

The place of the disharmony-creating and idiosyncratic entrepreneur in traditional

economic theory (which describes many efficiency-based ratios assuming uniform outputs) presents
theoretic quandaries. William Baumol has added greatly to this area of economic theory and was
recently honored for it at the 2006 annual meeting of the American Economic Association.
The entrepreneur is widely regarded as an integral player in the business culture of American life, and
particularly as an engine for job creation and economic growth. Robert Sobel published The
Entrepreneurs: Explorations Within the American Business Tradition in 1974. Zoltan Acs and David
Audretsch have produced an edited volume surveying Entrepreneurship as an academic field of
research, and more than a hundred scholars around the world track entrepreneurial activity, policy and
social influences as part of the Global Entrepreneurship Monitor (GEM) and its associated reports.
2. Motivation and entrepreneurship

Motivation is a complex, conceptual process syte, which actions have been described with the aid of
different learning swots. Motivation is said to be the prerequisite for all actions. The action for
becoming an entrepreneur is consequently entrepreneurial motivation, which consists of
entrepreneurial attitudes. By measuring different motivation theories and attitudes it is possible to
receive an image and understanding of the preconditions of becoming a possible entrepreneur.
Motivation theories create foundation for entrepreneurial behaviour.
Motivation can be considerd as an individuals state of mind, which is attached to a certain situation
and thus motivation indicates the direction of individuals functions. Whilst analysing motives and
motivation, we are searching for particular reasons for ones behaviour. Reasons such as why we are
behaving a certain way. Answers to these questions seem to be dependent of the values related to
society, schools of specific fields of science and it is worth noticing that motivation might consists of
several individual motives. In the case of certain occasion there might be supported at the same time
by performance motive and desire for power. Several researches have shown that impression that the
main part of the motives can be applied to instrumental motives i.e entrepreneurship is a way to make
one’s living , expressive motives entrepreneurship feeds emotions, entertains and gives value, and
personal growth motives(enhanced skills, mental progress as a human). But some other researches say
that human needs may be the reason for motives, but the roots lie elsewhere as well. Motive can also
derive from social norm, external idea, reward or situational change. Needs are a group of different
motives and they can be devided as the satisfaction of hunger, thirst sexual and safety need.
Motivation is central to the way an entrepreneur behaves in a business environment. Motivation is
dependent upon the potencies of needs.
Maslow’s Hierarchy of needs
Maslow identified a hierarchy of needs, which govern the pattern of motivation. These needs are
physiological, safety, social, esteem and self-actualization. Porter and Lawler (1968) proposed need-
expectancy theory for explaining the effort needed to fulfill an unfulfilled need.

Herzberg’s 2-factor theory

Herzberg two factor theory also deals with so-called circumstance and motivational factors. This
theory of his attaches working and certain needs together by defining the needs that can be satisfied
with good performance. The main hypothesis in herzbergs theory is the fact that satisfied factors
motivate effective performances, where as dissatisfied performances do not. Two-factor theory
illuminates two basic dimensions of work , which are works external circumstances and the work
itself. An entrepreneur may be dissatisfied with the external circumstances i.e hierarchial
constructions, but he can be satisfied with the job itself. On the other hand, a person might be happy
with the environment and the ambience of the work plce but motivation and results may be
discouraging. The two factor theory was applied to study the motivations within employees so may
may not directly be related to entrepreneurial motivations. McGregor’s XY theory devides people into
two groups. The X and Y theory are based on human concepts, in which people are originally highly
lazy workers, or then they have a natural desire towards working and trying. Thus a person is willing
to work only because he is forced or he lacks something, or on the other side his perceptions of
working and motives derive from own positive desires to work and perform. Entrepreneurs
particularly seem to have expressive motives (independence, individuality,job satisfaction) as
dominant ones. In addition mental growth motives, which are desires to improve ones own ideas,
innovation, creativity are also attached to entrepreneurship. Instrumental motives seem not to be the
main motives in this context.
McCelland theory of needs
Human needs are attached towards life’s concrete plans, e.g. work education, family etc. Plans and
goals refect values and when the results from certain actions or processes change the goals, the change
pressures also target the values. Achievement motivation theory also emphasiszes value complex
which seems to have a direct contact on successful entrepreneurship. According to McClelland, a high
desire to perform is a common charachteristic for entrepreneurs. Its appearance features are the desire
for self-fulfilment, success and the will to take responsibility of one’s own actions. Risks are
calculated as there is a need to have strainght and concrete response from any sorts of results.
Additionally, for this charachteristics it is natural to set rather strict timelines, and encourages oneself
to innovative action.
Push Pull theory of Entrepreneurial motivation
Different scholars have contributed to our understanding of the supply of entrepreneurship (Hamilton
and Harper, 1994). Apart from the (perceived) ability to become an entrepreneur determined by
factors, such as human, social and financial capital, individuals have to show a willingness to become
self-employed. Here entrepreneurial motivation plays a role. Gilad and Levine (1986) distinguish
between push and pull hypotheses of entrepreneurial motivation. The distinction between push and
pull factors is also implicitly present in the Model of the Entrepreneurial Event (Shapero and Sokol,

1982), arguing that the act of starting up a business is dependent upon a change that occurs in the life
of an individual, i.e., a displacement. This displacement can take the negative form of the loss of a job
or a divorce, but may also be positive, such as an inheritance. Individual characteristics (including
socio-cultural factors and economic, social and human capital) determine how individuals experience,
value and perceive 'disruptive' events (Shapero and Sokol, 1982) or encountered opportunities, as well
as how they react to them (Giacomin et al., 2007). It is not the objective situation but rather the
perception of an individual that makes him/her decide upon an entrepreneurial career. In reaction to a
certain 'disruptive' event some may start a business, whereas others go in a different direction.
In terms of push motivation, Oxenfeldt (1943) was one of the first to argue that unemployed
individuals or individuals with low prospects for wage-employment may become self-employed to
earn a living. This can be traced back to the Knight's (1921) view that individuals make a decision
between three activities: unemployment, self-employment and employment. The effect of
unemployment, lowering the opportunity costs of self-employment, thereby driving individuals to
start their own business, is often referred to as the push effect of unemployment4. Evidence of this
unemployment-push effect has been provided in several studies (Storey and Jones, 1987; Audretsch
and Vivarelli, 1996; Foti and Vivarelli, 1994; Ritsilä and Tervo, 2002; Gilad and Levine, 1986).
Although push motivation is usually understood as the unemployment-push, there are, in fact, other
factors that may push individuals into the direction of new venture creation. In addition to
unemployment, Giacomin et al. (2007) mention the push motivations of autonomy
(instead of being bossed around) and family pressure, for example in case of a business transfer to the
new generation. Sarasvathy (2004) argues that there are different types of necessity entrepreneurs,
including individuals who are fired from their jobs; individuals who decide themselves to leave wage-
employment because their boss does not want to commercialize their ideas or inventions; and
individuals who are "unhireable", e.g., due to a lack of educational or language skills (immigrant
entrepreneurs) or criminal backgrounds. In the same vein, several studies show evidence of job
dissatisfaction as a reason for new venture creation (Hisrich and
Brush, 1986; Brockhaus, 1980; Cromie and Hayes, 1991). As with push motivation, pull motivation
may come in different forms. Giacomin et al. (2007)distinguish between three pull motivations:
market opportunity, social status and profit5. Shane etal. (1991) find evidence for four motivation
constructs, including recognition, independence, learning and roles (the latter of which is driven by
the wish to continue the family tradition, to have more influence in the community and to follow a
role model). Carter et al. (2003) distinguish between six categories of motivation: innovation,
independence, recognition, roles, financial success and self-realization. Along similar lines are the
categorizations in studies by Birley and Westhead (1994) and Scheinberg and MacMillan (1988),
which each provide evidence of a multitude of (pull) motivations, including the need for approval,
independence, personal development, improved welfare and wealth, and following role models.

Notwithstanding the role played by each of the different motives in the explanation of
entrepreneurship, it has been found that the wish to be independent is the dominant factor explaining
new venture creation (Scheinberg and MacMillan, 1988; Birley and Westhead, 1994).Hence,
individuals are more likely to be pulled than pushed into entrepreneurship. This does not mean that
other factors did not play a role in this occupational decision. It often happens that individuals are
driven by a combination of factors. As recognized by Birley and Westhead (1994, p.14): "…starting a
business is a complex process which involves a variety of motivations and stimuli". This also means
that, next to the 'pure' push and pull motivated individuals, there may be (potential) entrepreneurs who
are motivated by a combination of push and pull factors. Several studies highlight the possibility that
push and pull factors are simultaneously present when an individual decides to start up a business
(Giacomin et al., 2007; Block and Sandner, 2009; Solymossy, 1997). In the present study we
investigate the characteristics and drivers of three types of entrepreneurs (opportunity-motivated,
necessity-motivated and mixed motivated
entrepreneurs) at different stages of the entrepreneurial process (distinguishing between potential
(nascent), recently established, incumbent, and former entrepreneurs
A modified motivation model for entrepreneurship is shown above. The strength of an unfilled need
of an entrepreneur and expectations of beneficial-outcomes motivate an entrepreneur for efforts in
venture. Combined with these, the individual capabilities of the entrepreneur govern his performance.
The opportunities in business environment and risk due to future uncertainty affect the rewards, which
are intrinsic and extrinsic both. Instrinsic rewards are related to factors internal to the entrepreneur,
such as self-satisfaction, pride, etc. Extrinsic rewards are more towards material, wealth and growth.
Independence
Independence entails taking the responsibility to use one’s own judgement as opposed to blindly
following the assertions of others. It also involves taking responsibility for one’s own life rather than

living off the efforts of others. Many investigators have observed that the entrepreneurial role
necessitates independence. First, the entrepreneur takes responsibility for pursuing an opportunity did
not exist before. Second, entrepreneurs are, in the end, responsible for results, whether achieved or not
achieved. Further, individuals may pursue entrepreneurial careers because they desire independence..
In addition, there is some existing empirical evidence which suggests that entrepreneurs may be
higher in independence than other individuals. Hornaday and Aboud (1973) surveyed 60 founders
with several personality inventories and showed that these founders were significantly higher than the
general population on measures of independence. Similarly, in a study with 63 founders, Aldridge
(1997) found that firm founders scored significantly higher than the general population on personality
measures of independence.
Drive
There is some relation between the term drive and that of nAch, but we use the term drive somewhat
more broadly. We use it basically to refer to the willingness to put forth effort— both the effort of
thinking and the effort involved in bringing one’s ideas into reality. When entrepreneurs pursue
opportunity, they must take action to make it real. We differentiate the four aspects of drive: ambition,
goals, energy and stamina, and persistence. Ambition influences the degree to which entrepreneurs
seek to create something great, important, and significant when they pursue opportunities. The nature
of the entrepreneurial ambition may include making money or the desire to create something new,
from conception to actuality. Ambition translates into setting high goals for oneself and others (see
the earlier Goal setting section). It is well known that high goals lead to better performance results
than moderate or low goals (Locke & Latham, 1990). To achieve high goals requires enormous
energy and stamina. When goal-directed energy is sustained over time, it is called persistence or
tenacity. Pursuing an opportunity is never easy; failure at some point or in some respect is an
inevitable part of the process.
What sustains such effort over long periods? One factor is high self-efficacy or task specific
confidence—a topic that we covered earlier. The second factor is, strangely enough, love.
Egoistic passion
More precisely, it is a passionate, selfish love of the work. Some commentators like to pretend that
businessmen’s core motive is to selflessly serve their employees and society. There is an argument, in
contrast, that ego is a central motive. The true or rational egoist passionately loves the work; they love
the process of building an organization and making it profitable. They are motivated to do what is
actually in their own interest—that is, to do everything necessary. Surprisingly, there have been
virtually no quantitative studies of the role of passion in entrepreneurship. One exception is the study
by Baum et al. (2001). Although not shown in that report, when Baum entered passion for the work as
a separate variable along with 29 other variables from five domains (personality, situational
motivation, skills, strategy, and environment), passion had a direct significant effect on firm growth.

3. Common motivations that contribute to becoming an entrepreneur
1. A need for financial independence and security
Setting up and managing your own business can be a tricky and stressful endeavor; however, it can
prove to be very profitable. Having your own business can result in financial independence and this is
an enormous accomplishment for most people, especially when the economy is in a period of decline.
2. Frustration with their current workplace or career
Some people become frustrated with their past achievements and feel like their current career path is
not going the way they expected or fulfilling their personal aspirations. The feeling of reaching a dead
end is what motivates them to make the brave decision of giving up on their current job and take on
the challenge of setting up their own business. Some of these entrepreneurs were also employees with
many years of experience in a certain field that saw the shortcomings of that industry and decided to
introduce innovating ideas on the market and benefit society.
3. A desire for achievement and self-fulfillment
For many, having a business of their own is a childhood dream or a lifelong aspiration. The natural
desire to fulfill this ambition will drive some people to pursue their goal of becoming entrepreneurs.
Having your own business can bring a lot of satisfaction and a deep sense of achievement. This is
especially true for people who have an inborn entrepreneurial spirit: they are excited by the challenge
and they enjoy taking risks. At Toyota, everyone within the organization, from executives to shop-
floor workers, is challenged to use their initiative and creativity to experiment and learn. We often
hear labor advocates criticize assembly line work as being oppressive, and claim that menial labor
robs workers of their mental faculties. However, this could not be further from the truth with respect
to lean. When Toyota sets up assembly lines, it selects only the best and brightest workers, and
challenges them to grow in their jobs by constantly solving problems. All areas of the organization
(including sales, engineering, service, accounting, human resources, etc.) are staffed with carefully
selected individuals, and the company gives them directives to improve their processes and increase
customer satisfaction.
Toyota invests time and money into their employees and has become the model for a true learning
organization. The importance of teams and teamwork is a way of life: team-building training is

required, and it is put to practice daily. This investment in its employees far exceeds that of the typical
organization that focuses on making parts and counting quarterly dollars.
So, what can companies learn from Toyota? The most important lesson is to develop a continuous
improvement culture and stick with it. Organizations have a tendency to jump around from program
to program based on the latest “buzzword.” It is difficult to build a learning organization when the
program changes from month to month. Companies must start their lean culture transformation with a
philosophy of continuous improvement. The change must start from the top, and this may require an
executive leadership shakeup. Everyone from the bottom up must be involved in the transformation.
This includes training in lean principles, team building and problem solving. Use middle managers as
change agents to drive the transformation.
To truly understand the power of a continuous improvement culture, we again look to Toyota. Toyota
employees generate more than one million process improvement ideas annually. The more astounding
number is the fact that 90 percent of those ideas are implemented. There is no secret to why this
occurs. Toyota executives have created a culture that encourages and rewards this behavior.
Whether you are beginning or continuing your journey, the transformation to a continuous
improvement culture is vital to one’s entrepreneurial success.
4. A need for having a stable income
The current state of the economy has resulted in a dramatic increase in the unemployment rate. Many
of the people who lost their jobs are forced by the circumstances to search for new ways of earning a
living and supporting their family. For some, setting up a business can be the way to regain their
financial stability.
5. A willingness to invest their resources
People who are already wealthy may find that setting up a business can be a good way of creating
more wealth and generating a steady flow of income. Investing in the right business can be immensely
profitable and increase one’s net worth. Seeing an opportunity in the great number of Indian families
with two-wheeled rather than four-wheeled vehicles, Tata Motors began development of an affordable
car in 2003. The purchase price of this no frills auto was brought down by dispensing with most

nonessential features, reducing the amount of steel used in its construction, and relying on low-cost
Indian labor. The introduction of the Nano received much media attention due to its low price.
The Nano's development was foreshadowed by the 2005 success of the affordable, 4-wheeled Tata
Ace truck
6. Ability to do something that others cannot do

People who posses special talent or skill which others do not posses would want capitalize on it and
implements it the right way.
8. Having a unique and brilliant plan
Capitalizing on a plan one has for eg.On October 23, 2001 Apple Computers publicly announced
their portable music digital player the iPod, created under project codename Dulcimer. The iPod was
announced several months after the release of iTunes, a program that converted audio CDs into
compressed digital audio files, and could organizes your digital music collection.
One man that could be named the father of the iPod is Tony Fadell. Tony Fadell was a former
employee of General Magic and Phillips who wanted to invent a better MP3player. After being turned
down by RealNetworks and Phillips, Fadell found support for his project with Apple. Tony Fadell
went to work for Apple Computers in 2001 as an independent contractor, leading a team of thirty
people to develop the new MP3 player. Tony Fadell also partnered with a company called
PortalPlayer who had been working on their own MP3 player to design the software for the new
Apple player. Jonathan Ive, Senior Vice President of Industrial Design at Apple Computers led the
team that kept perfecting the iPod itself after Fadell's team had finished their contract. In the Wired
article, Inside Look at Birth of the IPod, Ben Knauss a former senior manager at PortalPlayer revealed
that Fadell was familiar with PortalPlayer's reference designs for a couple of MP3 players, including
one about the size of a cigarette packet. And though the design was unfinished, several prototypes had
been built and Fadell recognized the design's potential. Within eight months, Tony Fadell's team and
PortalPlayer completed a prototype iPod and Apple polished the user interface adding the famous
scroll wheel. And th phenomenon called the iPod was released
9. A want to do something for the society
Another motivation for entrepreneurship is the want or urge for doing something for the society.
One such firm is the hrudaya post. A unique rural healthcare facility ''Hrudaya post'' was
launched in Karnataka today to enable heart patients in villages scan and send their medical
reports to superspeciality hospital Narayana Hrudayalaya for consultation from a neighbourhood

post office.
The Postal Department and Superspeciality Hospital Narayana Hrudayalaya have joined hands to
offer ''Hrudaya Post'. Under the scheme, first of its kind in the history ofhealth care, heart
patients in small towns and villages can go to any of the Post office and send their entire medical
reports by scanning and uploading to Narayana Hrudayalaya.
The Hospital in turn, within 24 hours, after studying the report, would send a detailed report back
to the sender thus saving time to visit Heart Specialist for advice.
Narayana Hrudayalaya Chairman Dr Devi Shetty, talking to newsmen here, said that the service
of studying and advice to patients, including medicine prescription, would be provided free of
cost.
"Our aim is to link the post offices to our hospital, so that heart patients living in small town and
villages can get medical advice at their door step." Replying to a question, he said that people
living in villages were also equally vulnerable to heart disease as in urban areas.
Dr Shetty said that besides advising about the treatment, the hospital would also help in meeting
financial requirement for the needy patients.
He said that 'Hrudaya Post' would be of great helpful for the heart patients in rural areas since
about 99 per cent of heart patients does not need surgery and can be cured with medicine. More
than 30Surgeons and 200 personnel of Narayana Hrudayala would be working 24 hours to serve
the people, he added.
Replying to a question, he said that more than 22,000 people were treated since last five years of
introduction of Telemedicine introduced in association with Indian Satellite Research
Organisation (ISRO).
Heart Specialist Dr Jairaj of Narayana Hrudayalaya said that under Karnataka government's
unique health scheme 'Yashasvini' more than three million people were insured.
Karnataka Chief Post Master General Meera Datta, in her address, said that, to begin with the
'Hrudaya Post' would be introduced in 25 District Post offices and gradually it would be
extended to all post offices in the State. It has been decided to charge Rs 100 for scanning and
sending the report to the Hospital and additional Rs 25 would be charged if a person desires the
report be delivered at his door step.
She said that there are 511 post offices in Karnataka with Computer facility and one of the

computer may be devoted for the purpose. India has world’s largest network of post offices
covering major cities, small towns and villages. Good numbers of these post offices have very
good connectivity including telephone connections, Internet and broadband. These days, post
offices are used for various functions to support the people living in towns and villages.

In India heart disease has become virtually like an epidemic. Heart disease doesn’t spare the
people living in the villages. Unfortunately most of them are not in a position to access high tech
heart care available only in the cities. When these villagers develop chest pain, they do see
various medical specialists; get basic investigation like ECG, Blood test, Echo-cardiography, and
sometimes-even angiogram. However, all they have is a thick file of various medical documents
and they do not know where to go next.
Entrepreneurs come from all the paths of life. The diversity of reasons to become an
entrepreneur accounts for a large number of businesses being opened at any given time. However, it
also explains why some businesses are a huge success, while others fail. At the same time, this variety
in mentality and motivation is what makes the corporate world so interesting and unpredictable.
4. Methodology
In order know what are motivations, that drives the people whom I know to become an entrepreneur
and wanted to verify my result with that of results obtained by renowned researchers. In a survey
conducted by Vivek Wadhwa, Raj Aggarwal, Krisztina “Z” Holly, Alex Salkever, they surveyed 549
company founders in a variety of industries, including aerospace and defense, computer and
electronics, health care, and services. (This was a broader range of industries than we previously
researched). They also asked founders more detailed questions about their backgrounds, motivations,
and experiences in launching companies. While our research cannot be generalized to the entire
population of entrepreneurs in the United States, it is meant to be illustrative of the background of
entrepreneurs in industries that we expected to be higher growth. Unfortunately, like most research in
this area, we are affected by a survivor bias, in that we are able only to reach entrepreneurs whose
companies are still alive.
The strongest motivations for respondents in starting their own businesses were
 Building Wealth
 Owning Their Own Companies
 Capitalizing On Business Ideas They Had, And
 The Appeal Of Startup Culture.

Regarding desire to build wealth, 74.8 percent of respondents indicated they viewed this as an
important, very important, or extremely important motivation in becoming an entrepreneur. In terms
of capitalizing on business ideas they had, 68.1 percent of respondents indicated they viewed this as
an important, very important, or extremely important motivation in becoming an entrepreneur.
With regard to always wanting to own their own businesses, 64.2 percent of respondents viewed this
as an important, very important, or extremely important motivation in becoming an entrepreneur. In
terms of the appeal of a startup culture, 66.2 percent of respondents viewed this as an important, very
important, or extremely important motivation in becoming an entrepreneur. And 60.3 percent said that
an important, very important, or extremely important factor was that working for others did not appeal
to them.
Some of the the important factors were
 Inability to Find Traditional Employment
 Co-Founder Encouraged Me to Become a Partner and Start Our Company
 Developed a Technology in a Laboratory Environment and Wanted to See it Make an Impact
 An Entrepreneurial Friend or Family Member Was a Role Model
In order to strengthen their findings I conducted a survey in our college upon 29 people to find out
how many of them wanted to be entrepreneurs and what their motivation was? It was found that out of
the 29 respondents 25 of them which amounts to 86.20 wanted to be an entrepreneur and some of the
important motivations being
 Building wealth
 Having an idea to capitalise upon
 Want of Owning a Company
 Working for someone else not is so appealing
 Social Wellbeing
 To leave a legacy
 To achieve love

5. Results and Analysis
From the study it was found out that 18% of them considered building wealth[2] to be one of the most
important motivation to become an entrepreneur, 23% of them have a business idea which they want
to capitalize upon[1], 27% of them feel working for others don’t appeal much[3] so the want to
become an entrepreneur, 9% of them always wanted to own a company[4], 14% of them have a
relative or a friend[5] whom they look up to, % of them want to make a change to the society and
contribute to the social well being, and very few 1 each want to leave a legacy and achieving love as
their motivating factor to become an entrepreneur
Pie chart representation of the motivations

7
6 5%
5%
1
5 23%
14%
4
9% 2
18%
3
27%
From the findings it can be seen that, most of the students feel that they wanted to be an entrepreneur
because working for someone else didn’t appeal them, they wanted autonomy, freedom etc., which
they might not be able to enjoy if they are working under someone else. Building wealth and having a
business idea they need to capitalise upon are other major motivations that top the list. One of the
greatest benefits of becoming an entrepreneur is that one can get paid while you're not working. In a
conventional job, one might only get paid hourly, monthly or annually. You're basically exchanging a
certain amount of time for a certain amount of money. But by being an entrepreneur, you can create
passive income streams and get paid while you're sleeping, eating or out playing. For example,
an Internet entrepreneur might have a website where they have digital products that visitors can pay
for and download while the owner is away from the computer. Being an entrepreneur can offer
experience that can be a lot more fulfilling. To make your entrepreneur ventures succeed, you have to
learn something new all the time. As opposed to working at a job, you might have to do the same
work every single day, which can limit any new knowledge and experience that you might gain.
Because times are always changing, the experience you get from being an entrepreneur will more
likely help you adapt to new technologies. Having a job means you have no control really over

anything. If the economy declines, your job may at risk. You can get fired at anytime by someone,
even if you happen to be doing a good job. But when you work for yourself, you are in control of your
own business. You handle all the paperwork, transactions and anything else is related to helping your
business grow. When working at a job, the opportunity to build new relationships may be limited to
the environmental conditions of the job. But when working as an entrepreneur, there is a lot more
opportunity to meet new people, especially if you work online. With the uprising culture of social
media, it's possible to meet thousands of new people online who have gone through what you are
going through and will be willing to offer you advice and support. Furthermore, you can use these
relationships to build a solid business network. The biggest motivation to becoming an entrepreneur is
the freedom that you can get while working for yourself. You are not limited to the thoughts of the
company you work for or the thoughts of what your boss wants you to do. You are not always in a
space where you are constantly competing with your co-workers for the security of your job. You are
also not always being watched and don't have the pressure of being possibly fired at any time. You are
free to use your creative ability to see if you can make some financial gains from whatever kind of
business venture that you set out to do. Becoming an entrepreneur can create fear or anxiety for many
people because of the risks involved when working for oneself. You don't start out with a certain
income and you also don't know whether your venture will succeed. But even though there may be
risks involved, some of the benefits of becoming an entrepreneur look more appealing than the
benefits of working at a conventional job.
Very few considerd, social wellbeing as an important motivating factor. From the results we can see
that our results are almost on par with the study done by Vivek Wadhwa, Raj Aggarwal, Krisztina “Z”
Holly, Alex Salkever.

6. SUCCESS AND ENTREPRENEURSHIP
Money is success” has become the mantra of our age.
But does money really deliver the success it promises? Sure, it is near impossible to be a
successful entrepreneur and not have it, but money does not define success for the
entrepreneurial spirit which sees it as simply the natural outcome from a life dedicated to
never giving up, dedicated to overcoming the challenges of life in all its forms and dedicated
to seeking genuine fulfilment from life's journey. But the ill informed on seeing the
correlation between money and this spirit, seek out money as a pathway to own it. This
misguided pursuit is none more evident than in the plethora of ‘Get Rich Quick’ schemes that
masquerade as delivering an easy entrepreneurial success, but they have got it wrong as

nothing could be further from the truth!
Entrepreneurial success and money

Entrepreneurial success is defined, driven and derived from a world unrelated to excessive
greed, flashy trappings and in need of external acknowledgement. For the entrepreneur knows
that whilst money is often the accompaniment of a successful life, it is not the measure of it.
Anyway, if money alone defined success, then the likes of Mozart, Rembrandt, Vivaldi,
Oscar Wilde, Orson Welles, Jimi Hendrix and Judy Garland are failures indeed – for they all
died paupers!
The true entrepreneur measures success using a variety of scales unknown and even derided
by the “Get Rich Quick” schemers: typcial measures like contentment, character, conscience,

commitment and continuance. Entrepreneurial success is intensely personal. The entrepreneur

knows what success is – for them. For them success is not just an outcome – it is the journey.
Whilst others may covet the entrepreneur’s money and spirit of success, the entrepreneur
knows that this external manifestation of success is just the tip of the iceberg - Desire,
dedication, determination, concentration, self-discipline, effort, courage, hard work, sacrifice,
singleness of purpose, unswerving focus and a will to win are the bits that most never see and
the “Get Rich Quick” schemers fail to disclose as pre-requisites.
But the incessant marketing message to our age, that money delivers success, is the classic
‘cart before the horse’ scenario. The sad outcome from this misaligned pursuit is often a life
characterised by its emptiness, soullessness and discontent. For not everything that looks like
success is success and we all know many successful people who wish they were.
The entrepreneurial spirit puts their personally defined pursuit of success centre stage, with
spin-offs like money being simply the accompaniments and servants of the main game. This
entrepreneurial view is far too focused on living a successful life to think too much about the
money anyway. People of this ilk can live without possessions but they can’t live without
success. Success for them is something far greater than just possessions, money and status
and includes intangible assets like destiny, legacy and life meaning.
Anita Roddick, founder of the Body Shop retail chain, is quoted as saying;
"I want to define success by redefining it. For me it isn't that solely mythical definition -
glamour, allure, power of wealth, and the privilege from care. Any definition of success
should be personal because it's so transitory. It's about shaping my own destiny."
As Henry Ford is quoted as saying:

"A business that makes nothing but money is a poor kind of business."
Many people are fooled into believing that the trappings of success and the fulfilment earned
on the journey to success are inexorably linked and it matters not in which order they are
pursued. By the time these people find out the truth it may be too late, because they will have
spent their life to get money instead of spending their money to get a life. So I believe that the
trappings, like money, should be viewed as ‘outcomes from’ not ‘pathways to’ success.
Definition of entrepreneurial success

The term ‘success’ obviously needs qualification. For example: some world dictators have
also been very successful, at murdering thousands of their countrymen just as other business

people have been very successful at making huge wealth by either destroying our
environment or by the ill-gotten plundering of the investments made by naïve investors.
Entrepreneurial success is not defined by these types of activities. When asked to define
entrepreneurial success, Richard Branson says
“It is the satisfaction of doing it for yourself and motivating others to work with you in
bringing it about. It is about the fun, innovation, creativity with the rewards being far
greater than purely financial.”.
For other entrepreneurs, it is simply finding a way to pay the bills whilst they do what they
truly enjoy. For these people, money is important but it does not define them. They seek
definition from doing what sustains, doing what they want and doing what they ought. It is
pursuing their destiny via the work they love and doing the work that is right for them.
Now success is a concept that society attempts to define but in fact only an individual can
define it for themselves. For success comes to us in many guises, but only one truly fits.
Others, for fair gain or foul, will direct us towards their meaning of success. The trouble with
adopting someone else’s success is that you can never have it. For whose success will you
really achieve anyway? – yours or theirs? It is a strong character indeed that can pursue their
own success without the need of external acknowledgement. But this is the entrepreneurial
spirit, in that it chooses to live their brand of a successful life – with or without this
acknowledgement.
What is also least evident to others, in observing entrepreneurial success, is the perseverance
that is required to achieve it. For entrepreneurial success is all about timing i.e. being there at
the moment when it matters as well as the 99 times when it didn't. The entrepreneur knows
that there is a hard work that leads to success and there is another that just leads to
perseverance. But they press on believing that countless setbacks will eventually be redeemed
by just one moment of solitary success.
Guy Kawasaki in his book 'The Art of the Start' talks about the need for meaning in
entrepreneurial development and establishment. For him though, "Meaning is not about
money, power, or prestige. It's not even about creating a fun place to work. Among the
meanings of “meaning” are to;

• Make the world a better place.
• Increase the quality of life.
• Right a terrible wrong.
• Prevent the end of something good."
Other aspects of entrepreneurial success

For the ill-informed, entrepreneurial success is defined and evidenced by the acquiring of
what we don’t have but true success for the entrepreneur is more about holding on to what
they have. They know that precious possessions like integrity, creativity, passion, freedom
and their legacy are all threatened by the improper application of money, power and fame.
The other aspect of entrepreneurial success least promoted is that it must be sustainable.
There is no arrival for the true entrepreneur, only continuance. For them, true success must be
sustainable. They have witnessed success in others being a sweet poison in that it has
strangled the drive for continuous development in many a great talent. Entrepreneurial
success is not in pursuit of an outcome but rather a process of continually overcoming
challenges. The entrepreneur knows that if you look for it, you will find success in your
failure but if you don’t lookout you may find the failure in your success.
Furthermore, success in not necessarily about winning. For winning does not guarantee
success just as losing is no automatic failure and when you only define success as winning,
then you are truly on the road to personal failure. The entrepreneurial journey calls for you to
focus on being a better person not necessarily to be better than everyone else. Even in
personal relationships, successful people seek to win the person, not the argument.
Now nothing characterises entrepreneurial success more than that it is a journey, and that
must first past the milestones of indifference, ridicule and attack. Continuing on this road to
success they must also pass many milestones marked disappointment. But continue they do,
which is why these entrepreneurs are successful long before they are recognized as such and
why it takes many nights to become an overnight success. These entrepreneurs would rather a
failed greatness than to settle for a mediocre success
7. Reasons for Success and failure for Entrepreneurs

7.1 Individual Factors
Big Five
Extraversion is characterized by positive emotions, surgency, and the tendency to seek out
stimulation and the company of others. The trait is marked by pronounced engagement with the
external world. Extraverts enjoy being with people, and are often perceived as full of energy. They
tend to be enthusiastic, action-oriented individuals who are likely to say "Yes!" or "Let's go!" to
opportunities for excitement. In groups they like to talk, assert themselves, and draw attention to
themselves.
Introverts lack the social exuberance and activity levels of extraverts. They tend to seem
quiet, low-key, deliberate, and less involved in the social world. Their lack of social
involvement should not be interpreted as shyness or depression. Introverts simply need less
stimulation than extraverts and more time alone. They may be very active and energetic,
simply not socially.
Extraversion is an aspect of personality that includes characteristics such as sociability, talkativeness,

assertiveness, and ambition. It is a valuable trait for entrepreneurs because they need to spend a lot of
time interacting with investors, employees, and customers, and have to sell all of them on the value of
the business.
Empirical research indicates that people who score high on extraversion are more likely than others to
become entrepreneurs
Agreeableness is a tendency to be compassionate and cooperative rather than suspicious and

antagonistic towards others. The trait reflects individual differences in general concern for
social harmony. Agreeable individuals value getting along with others. They are generally
considerate, friendly, generous, helpful, and willing to compromise their interests with others.
Agreeable people also have an optimistic view of human nature. They believe people are
basically honest, decent, and trustworthy.
Disagreeable individuals place self-interest above getting along with others. They are
generally unconcerned with others’ well-being, and are less likely to extend themselves for
other people. Sometimes their skepticism about others’ motives causes them to be suspicious,
unfriendly, and uncooperative

Agreeableness characterizes someone who is cooperative, trusting, forgiving, tolerant, courteous and
soft-hearted. Agreeable people are less likely to start businesses because people with this trait are less
likely to pursue their own self-interest, drive difficult bargains, or use others to achieve their
objectives. Less agreeable people also are more skeptical than others which makes them more likely
to have a critical approach to assessing business information.
Empirical research confirms the negative association between agreeableness and the odds of being an
entrepreneur.
Openness is a general appreciation for art, emotion, adventure, unusual ideas, imagination,
curiosity, and variety of experience. The trait distinguishes imaginative people from down-to-
earth, conventional people. People who are open to experience are intellectually curious,
appreciative of art, and sensitive to beauty. They tend to be, compared to closed people, more
creative and more aware of their feelings. They are more likely to hold unconventional
beliefs.
People with low scores on openness tend to have more conventional, traditional interests.
They prefer the plain, straightforward, and obvious over the complex, ambiguous, and subtle.
They may regard the arts and sciences with suspicion or even view these endeavors as
uninteresting.
Openness to experience characterizes someone who is open to novel experiences and ideas and who is
imaginative, innovative and reflective. Such attributes are important for entrepreneurs as they need to
explore new ideas and take innovative approaches to the development of products and the
organization of businesses. Empirical research confirms the positive association between openness to
experience and the odds of being an entrepreneur
Conscientiousness is a tendency to show self-discipline, act dutifully, and aim for

achievement. The trait shows a preference for planned rather than spontaneous behavior. It
influences the way in which we control, regulate, and direct our impulses. Conscientiousness
includes the factor known as Need for Achievement (NAch).
The heritability of entrepreneurship may also be partly mediated by conscientiousness. This trait is
associated with dependability, hard work and perseverance. Entrepreneurs need to be high on
conscientiousness since they need to be organized and deliberate to achieve their goals. They also
need to be persistent and put in the hard work necessary to overcome obstacles, like the failure to

obtain financing or cost overruns, associated with the venturing process. Empirical research confirms
the positive association between conscientiousness and the tendency to be an entrepreneur. A meta-
analysis of several studies showed that this was the largest of the big five dimensions on which
entrepreneurs and managers differ.
Neuroticism is the tendency to experience negative emotions, such as anger, anxiety, or

depression. It is sometimes called emotional instability. Those who score high in neuroticism
are emotionally reactive and vulnerable to stress. They are more likely to interpret ordinary
situations as threatening, and minor frustrations as hopelessly difficult. Their negative
emotional reactions tend to persist for unusually long periods of time, which means they are
often in a bad mood. These problems in emotional regulation can diminish the ability of a
person scoring high on neuroticism to think clearly, make decisions, and cope effectively
with stress.
At the other end of the scale, individuals who score low in neuroticism are less easily upset
and are less emotionally reactive. They tend to be calm, emotionally stable, and free from
persistent negative feelings. Freedom from negative feelings does not mean that low scorers
experience a lot of positive feelings. Common characteristics associated with people scoring
low on this factor include being anxious, worried, insecure, embarrassed and emotional.
People who are emotionally stable are more likely to start their own businesses than people
who are neurotic because entrepreneurs need a high tolerance to stress to cope with the hard
work, significant risks, social isolation, pressure, insecurity, and personal financial
difficulties that come from starting their own businesses. Entrepreneurs cannot worry
excessively, and need to be resilient in the face of set backs when building a company.
Moreover, they need to work in stressful and highly unstructured environments where the
separation between family life and work life is often fuzzy.
Self-efficacy
Self-efficacy refers to the extent to which persons believe that they can organize and effectively
execute actions to produce given attainments. Entrepreneurs high in self-efficacy will outperform
those who are lower on this dimension. This rationale is based on social cognitive theory and a rich
body of research in applied psychology showing that adaptive human functioning is motivated,
regulated, and directed by the ongoing exercise of self-efficacy.

According to the theory’s triadic reciprocal causation model, self-efficacy operates as an interacting
determinant to bidirectionally influence behaviors (Since self-efficacy positively affects diverse
human functioning, we suggest that it will have similar consequences in the context of
entrepreneurship. For example, individuals high in self-efficacy not only prefer challenging activities;
they also display higher staying power in those pursuits . Thus, it stands to reason that entrepreneurs
who have high self-efficacy will outperform entrepreneurs with lower levels of self-efficacy.
Similarly, because the incentive to act is highest when entrepreneurs believe that their actions (e.g.,
starting a new company) lead to attainable outcomes (e.g., successful venture), high selfefficacy is an
important determinant of successful entrepreneurial behaviors. Indeed, in a study of patent inventors,
found that high selfefficacy was a significant predictor of personal success as measured by annual
earnings and that high self-efficacy reliably distinguished between technical entrepreneurs and
technical nonentrepreneurs (technical entrepreneurs being significantly higher on this dimension).
Taken together, social cognitive theory and empirical evidence support the view that entrepreneurial
success is significantly influenced by individual differences in self-efficacy.
Opportunity recognition
Individuals differ greatly in their abilities to capture, recognize, and make effective use of abstract,
implicit, and changing information. Notions of opportunity recognition suggest that the ability to
identify high-potential from low-potential opportunities and to spot obstacles before they become
insurmountable would lead to the creation of superior ventures. Because newness and ambiguity of
emerging markets create a powerful incentive for entrepreneurs to obtain superior information, we
suggest that those who are more alert and better at monitoring and processing information would
stand a better chance than those who are less adept on these dimensions. Our perspective is that
individual differences in cognitive processes (e.g., mental models) may facilitate identification of
previously unrecognized factors that can raise the likelihood of success of new businesses. Although
most individuals scan their environment, successful entrepreneurs may be better at discovering
opportunities embedded in that environment. Stated differently, alertness, or ‘‘lookout for hitherto
unnoticed features of the environment’’, allows successful entrepreneurs to spot high-potential
opportunities and thus use them to overcome commercial newness. Since new product development is
inherently uncertain, lacking information regarding its use and market size exacerbates the
uncertainties and heightens the chances of failure. The benefit of alertness is exemplified by research
showing that failing to understand customers, designing cost-ineffective products, and disregarding
intermediate and end-users’ needs, were prescriptions for new-venture failure. Past research on
opportunity recognition and alertness has assessed entrepreneurs’ behaviors, background, and
cognitions. For example, suggest that novice entrepreneurs tend to search for information less
extensively than more seasoned entrepreneurs. Kaish and Gilad (1991), who assessed the number of

reading materials or amount of time spent thinking about their business, report that entrepreneurs and
managers scan and search for information differently.
Nonetheless, because markets and technological innovations present diverse profit possibilities, it
seems reasonable to suggest that individual differences in the ability to identify high-potential from
low-potential opportunities do indeed play an important role in entrepreneurs’ success.
Perseverance
Entrepreneurs try to create and sell ‘‘new combinations’’ and as such they encounter substantial
uncertainty regarding market acceptability and buyers’ demand. In fact, the more radical the
innovation, the harsher the skepticism they must endure, and the more likely they are to incur
additional costs stemming from efforts to educate investors and persuade disinclined buyers. Starting
a new company also incurs many personal costs; entrepreneurs bear the opportunity cost of other
alternatives, a liquidity premium for time and capital, risk stemming from uncertainty, financial and
social perils, and other hazards due to rapid technological development and obsolescence. Creating a
new company entails doing more with less; entrepreneurs suffer from limited resources, unfamiliar
brand name, limited product offerings, and questionable access to markets. Inherent in such
undertaking is a constant vulnerability to failure, precipitated by ambiguous conditions under which
new firms are created. Thus, until success is achieved, entrepreneurs bear numerous disincentives,
including unpredictable markets and unknown competitive rivals. Success often comes at a price of
high financial, technological, and legal liabilities. Inseparable from risk of failure are the ambiguous
conditions under which new firms are created; conditions precipitated by the nature of entrepreneurial
work and technological innovation. This suggests that individuals who engage in venture formation
incur, sometimes personally, substantial amount of financial and social adversity. Research indicates
that under challenging circumstances, individuals high in perseverance perform more adeptly,
whereas individuals who fail to persevere not only perform inadequately, but also experience
increased anxiety and negative affect. To be successful, entrepreneurs must rise above numerous
obstacles including working intensively despite very uncertain outcomes, establishing market
foothold with frail economic power, fending off retaliatory actions from established and resourceful
rivals, and overcoming liabilities of newness, smallness, and legitimacy. Entrepreneurs also endure
very harsh private difficulties, such as personal and financial liabilities and periods of social. Since
entrepreneurs encounter repeated obstacles with many uncertain outcomes, the ability to withstand
and quickly overcome adversity would be an important personal advantage. To recap, since
perseverance reliably predicts personal effectiveness and performance under difficult circumstances,
and since creating a new company is an ongoing challenge where success is a function of lasting
personal persistence, perseverant entrepreneurs will tend to outperform those who are less persistent.
Human and social capital and social skills

In the past, means of production constituted a major share of an organization’s tangible assets. Today,
however, human talent is capital; talented persons carry within them, in their knowledge and
expertise, important aspects of the means of production. Firms’ capacity to compete is imbedded in
incumbents’ capability, education, and experience. Intellectual capital and talented labor force is now
central to many business enterprises and so persons who have access to vital information become
powerful agents of processes leading to business creation. Human capital encompasses both abilities,
which are influenced in part by genetic factors (e.g.,intelligence, health, personality, attractiveness) as
well as acquired skills such as education, job training, tenure, work experience, and interpersonal
relationships Several arguments support the view that a high level of human capital is related to firm
survival and growth.
Social capital, in contrast to human capital, refers to opportunities enabled by social structure; it is a
proxy of resources made available through organizational positions, elite institutional ties, social
networks and contacts, and relationships with others.
Not surprisingly, human and social capital are complementary. High levels of social capital facilitate
flows of knowledge and thus determine access to resources and may contribute to one’s success.
Since entrepreneurs are embedded in a social context, many of the tasks entrepreneurs must
accomplish in order to succeed involve elements of socialization. Raising external capital generating
enthusiasm and commitment in employees, communicating effectively with people from a wide range
of backgrounds, attracting effective partners and employees, developing business networks and
relationships, establishing trust and legitimacy, and negotiating with others over diverse issues, are
only some of the interactions entrepreneurs must initiate and manage. Since the creation of new
companies entails the ability to work effectively with many constituencies in numerous contexts and
under varying degrees of uncertainty, we propose that, ceteris paribus, proficiency in dealing with
others may be a key ingredient in entrepreneurs’ success.
The success or failure of new organizations hinges in part, on entrepreneurs’ ability to work together
to commercialize their discoveries. Moreover, a high level of social skills may assist entrepreneurs in
several other ways—for example, in forming mutually beneficial strategic alliances with other
companies, in securing orders from new customers, hiring desirable employees, and so on. Moreover,
the fact that in entrepreneurial firms on-the-job and trial-and-error learning are important, suggests
that hiring and investment decisions should be based, in part, on whether candidates have high human
and social capital as well as sound social skills. Given the wide and positive impact social skills have
on diverse human functioning, it is surprising that entrepreneurs, researchers, and investors have, until
recently, been somewhat reluctant to recognize it as an important factors in such contexts. The
foregoing discussion provides a foundation for our model of person–entrepreneurship fit and
entrepreneurial success.
Briefly, this model suggests that becoming an entrepreneur places people in a situation where certain
individual-difference factors will be instrumental to their success: the greater the person–

entrepreneurship fit, the higher the likelihood of entrepreneurial success. As drawn, the model
presents a ‘‘snapshot’’ of the process at a single point in time, however, in essence, it incorporates
both iterative and recursive interactions. That is, the model captures the nonlinear interplay among
several individual-difference factors (e.g., self-efficacy, ability to recognize opportunities, personal
perseverance, human and social capital, and superior social skills) in the context of tasks that
entrepreneurs undertake (e.g., evaluate, deploy to market, and exploit technology-based opportunities
via firm formation) to achieve entrepreneurial success, multifariously defined. We couched our
arguments to suggest causality, but we acknowledge that in fact, the relationships illustrated are
successively and reciprocally causal in nature. For example, as articulated throughout this discussion,
people with high self-efficacy or human capital become more successful entrepreneurs at the same
time that entrepreneurial success fosters stronger self-efficacy and raises one’s human capital. There
are multiple ways in which all or only some of the five elements discussed and their dynamic
interplay may lead to high person–entrepreneurship fit and subsequently to entrepreneurial success.
Finally, the model is not meant to be inclusive with respect to individual-difference factors; rather,
other factors not discussed here probably also play a role with respect to person–entrepreneurship fit.
Goal clarity:
Clarity is a very important factor that contributes to a successful business. In order for a
business to run smoothly everyone from the junior most employee to top management should
know about how the business is to be run. A business can only work if the employees work
together as a team. As an employer, you need to be clear about the business plan before you
can expect your employees to know of it. With a clear idea of the plan and tactics that you
will use to reach your goals you can pass on the information to everyone in the organization
so that everyone is one the same page.
If your business is based on clear objectives and plans it is bound to succeed. Clarity in your
business plans also allows your team to focus on the goals and to keep moving in the same
direction. This may sound very easy but this kind of clarity is in reality very difficult to
achieve in an organization. Most businesses find it extremely hard to define their business
purpose.
Clarity in business is important as it helps in defining expectations. Unless you have clear and
specific expectations you cannot hope to fulfill them. The more clarity you possess, the more
profits you will see coming your way.

Achieving clarity in your business is not a one time activity. It is something you should try to
aim for continuously. Every day you should set aside some time to study business trends, the
growth pattern of your business etc. This will help you anticipate changes in your business
and make the adjustments before it is too late.
Business clarity starts from the top. Unless you have a clear picture of what you want to
achieve you cannot expect your employees to know what is expected of them. Only of you
have your goals clearly set out can you formulate a plan for their implementation.
Once the plan is in place you need to specify each employee's role and responsibilities. Every
employee should know what their role in the plan is and what they are expected to do so that
there is no confusion later on. The focus of your business should be clear to everyone. This
will ensure that your employees work as a team to move together in the same direction.
Clarity of vision should percolate from the top to the bottom so that everyone shares the same
focus.
Both the external and internal environment of the small business will affect the first idea
of developing a business
a- These two main factors together with start-up activities influence the
entrepreneur’s decision to initiate a business. The initialisation and first year of a
new business are critical stages in determining the success or failure of a new
business. In this stage entrepreneurs ability to compromise internal and external
factors and better organization and structured his/her business are important.
b- If they are could make a reasonable compromising, they successfully will
continue their business. Meanwhile in order to survive they are supposed to
struggle hard with different external, internal, and compromising activities. If they
could come over the raised problems they will survive, otherwise they would go
bankrupted.
Figure 1: Theoretical framework of study
The success or failure of businesses is often dependent on overcoming a series of
potential barriers, e.g. securing sufficient financial backing, adequate and
appropriateguidance, etc
Planning and organizing business

What seems to be a common citation are poor planning , poor management and marketing.
There are many reasons given, but it is hard to actually know for sure why a business failed
unless you analyzed each particular case. good idea for a small business to succeed. Small
business entrepreneurs must plan for success. This includes market research, identifying the
primary audience/consumer and developing a five or ten-year plan that includes cash flow,
financing and expansion concerns. Marketization involves far more than just knowing your
market and what motivates it. Most businesses focus on the marketing "push," but few ever
focus on the "pull," which is one of the secrets to success.
Pre-start-up planning is "the process by which the entrepreneur, in exploiting an opportunity,
creates a vision of the future and develops the necessary objectives, resources, and
procedures to achieve that vision
Financial management A chronic problem facing many small businesses is the lack of funds
to establish them on a sound and stable financial footing. Initially, a business's capital may be
limited to what its owners can raise from savings, mortgaging the family home or borrowing
from relatives etc. Different studies observed the importance of financial issues for new and
existing entrepreneur. In terms of financial, the entrepreneurs were complaining about
obtaining capital/finance , cash flow problems, a guaranteed income during the first year of
activity, their low information about the tax
Putting Money First
One reason why many entrepreneurs fail is because of their love for money. One thing every
entrepreneur must know is that the quality of your product or service is more important than
the money you will make. It is crucial that you put your costumers first and always have them
in mind when taking any major step in your business.
Failure to Plan Ahead
As entreprenuers, it is always very important to plan ahead because many of our decisions
will affect us in the long run. When trying to invest or innovate as an entrepreneur, it is
always very important not to just come up with an idea and implement it right away but to
think far more in advance. You need to be able to calculate what the future consequences
would be and distinguish if this decision is truly beneficial. Failure to plan is planning to fail.

Failure to Network
Many entrepreneurs fail to network correctly and prefer to be alone. When trying to succeed
as an entrepreneur, never underestimate the power of others. It is very important to try and
associate with top entrepreneurs and influencers in your field because you can tap into their
audience. There is so much that you can learn from others, whether or not you embrace
this opportunity is your decision. Find one or two people, work together, bounce ideas off
each other, ask questions and argue with them and your business will develop quicker.
Lack of Patience
Many entrepreneurs are so impatient that after a few weeks of starting a business they will
close it down claiming the business was not producing results. As with so many things,
success does not come overnight; it only comes after years of serious hardwork. It is always
very important for you to wait patiently for your business to bring results, and not kill your
great dream because of slow results.
Not Having a Priority List
This is another major element of entrepreneurial failure which can also be referred to as “lack
of organization.” Every entrepreneur must prioritize and keep a list of things that need to be
done. It is also important to focus your time and efforts on what matters most. Everything is
not going to work out perfectly, but you must make sure you get the best out of that which
works.
As an entrepreneur, you can not simply run into a business hoping it will succeed. Growing a
business takes time and commitment along with people that can help. Make sure you plan for
the future, make decisions wisely and prioritize your task
7.2 External and contextual Factors

In terms of external and contextual factors, it is widely recognised that successful

organizations are those that best adapt to fit the opportunities and the constraints inherent in
the environment in which they operate.
Here some factors are more concentrated by previous researchers, namely:
a. Economic factors,
b. Government support,
c. Social support
d. Information factors
a- Economic and infrastructure factors

The vast majority of new micro and small businesses are initialized in the localities in which
their founders already live, and the chances of success are closely related to the geographical
location. In addition, in geographical areas of high large-plant-industries there tends to be a
lack of suitable start-up premises for micro and small businesses. Thus, business start-up is
likely to be greatest in areas, which are low in large-plant-industries, and which have a high
small business population’s already established .Also, there appears to be a number of key
locality influences that have a positive impact on the development and growth of small firms.
These included previous population growth, capital availability through housing wealth, local
enterprise cultures, and professional expertise. Local market demand also has a degree of
influence, although this is less important in determining survival and death rates in micro and
small businesses.
b- Government support and empowerment role

It is realized that business has a greater role in economic growth. Therefore, the government
should help entrepreneurs to start new business and protect them to continue the business.
The government can stimulate private business development and employment growth by
fostering an "enabling economic environment". This means minimum regulations; fair,
broad-based taxation as low as feasible and simple for compliance; liberalized trade both
domestic and external, and helping to create a financial sector with easier access to funds for
all businesses. The government should also make available funds (along the lines of the
social fund mentioned above), including lines of credits for small business loans to mitigate
the damage to businesses and of employment losses created by policy reform and
restructuring. the quality of advisory services, especially with regard to advice at start-up;
subsidies for support advice; the availability of effective business mentors; the awareness of

business support opportunities; the level of bureaucracy involved in new business

development, especially with regard to the process of employment creation. The government
should act as a facilitator -- a provider of resources -- for support and advisory centers, but
not as a direct provider of services.
The government is also responsible for creating the physical infrastructure -- roads, power,
water, transport links, telecommunications, industrial land, estates and incubators -- and basic
skills training and satisfactory education at all levels. Without these, the private sector cannot
flourish. It is important to recognize that the provision of some of the above facilities may be
the responsibility of local or regional authorities as well as central government. The
decentralization of support services and the encouragement of regional and local initiatives
are desirable and usually more cost-effective.
c- Social support
The availability of social support can be a significant factor in the ability of small business
owners to cope with the barriers and difficulties they face during the initialization of a new
enterprise. A lack of family support places small business owners at a serious disadvantage
and this is especially destructive for those who have heavy family responsibilities,
responsibilities that generally fall on women. These results in female entrepreneurs working
significantly fewer hours than their male counterparts and the effects of this on business
growth can be clearly seen, with women operating smaller businesses than men do.
8. Conclusion

From the study that was done and from the results so obtained from the survey conducted, the
findings it can be seen that, most of the people feel that they want/ wanted to be an entrepreneur
because working for someone else didn’t appeal them, they wanted autonomy, freedom etc., which
they might not be able to enjoy if they are working under someone else. Building wealth and having a
business idea they need to capitalise upon are other major motivations that top the list. Some other
less important motivations being Building wealth, Having an idea to capitalise upon,Want of Owning
a Company Working for someone else not is so appealing, Social Wellbeing, leaving a legacy,
achieving love..etc. These are just some of the motivations there can be various other motivation
which can lead to entrepreneurship.
Entrepreneurial Success is driven by both internal and external factors. Internal factors lie within the
hands of the entrepreneur where as in terms of external and contextual factors, it is widely
recognised that successful organizations are those that best adapt to fit the opportunities and
the constraints inherent in the environment in which they operate.
9. References

1. Yadollah Mehralizadeh (PhD) & Hossain Sajady (PhD), A study of factors related to
successful and failure of entrepreneurs of small industrial business with emphasis on their
level of education and training
http://www.modon.gov.sa/Arabic/AboutIndustry/Research/Documents/Journal1.pdf accessed
on [1/1/2011] at [7:45 pm]
2. Big Five Personality traits ,
http://en.wikipedia.org/wiki/Big_Five_personality_traits accessed on [2/1/2011] at [8:45 pm]
3. Kurt Naulretz 7 ESSENTIAL THINGS TO DO BEFORE STARTING A BUSINESS

http://ezinearticles.com/?7-Essential-Things-to-Do-Before-Starting-a-Business&id=1982929
Accessed on on [31/12/2010] at [7:45 pm]
4. Matthews, G., Deary, I. J., & Whiteman, M. C. (2003). Personality Traits.
Cambridge University Press
5. Harvard Business Review on Entrepreneurship
http://books.google.co.in/books?
id=2dBQRvGF740C&printsec=frontcover&dq=hbr+on+entrepreneurship&hl=en&ei
=h0YhTcy0EIiKvgPEjNXWDQ&sa=X&oi=book_result&ct=result&resnum=1&ved=
0CC4Q6AEwAA#v=onepage&q=hbr%20on%20entrepreneurship&f=false
[31/12/2011] at [6:45 pm]
6. UNI, News article Hrudaya post launched in Karnataka to help heart patients
http://news.oneindia.in/2007/03/15/hrudaya-post-launched-in-karnataka-to-help-heart-
patients-1174128920.html accessed on [14/11/2010]
7. Scott Shane, Edwin A. Locke, Christopher J. Collins, Entrepreneurial

Motivation
http://faculty.weatherhead.case.edu/shane/pem/PEM1.pdf accessed on
[12/11/2010] at [9:30pm]
8. Cameron. J[March2010] The anatomy of an entrepreneur family

background and motivation http://roachpost.com/2010/03/03/the-
anatomy-of-an-entrepreneur-family-background-and-motivation/ accessed
on [1/11/2010] at [7:43pm]

9. Hulbert Lee[May 18 2010],http://www.ehow.com/about_6525949_motivation-become-

entrepreneur.html accepted on [14/11/2010] at [8.30 pm]
10. Phil Thompson, SUCCESSFUL ENTREPRENEURS BEYOND STARTUP: ACHIEVING GROWTH AND
LONGEVITY http://www.thompsonlaw.ca/pdf_folder/beyondstart.pdf accessed on
[14/11/2010] at [8:45pm]
11. Anja Emerson[May 18 2010],Why do People Become Entrepreneurs,
http://www.helium.com/items/1614398-why-do-people-become-entrepreneurs accessed on
[13/11/2010] at [8:40 pm]
12. http://www.khoslaventures.com/presentations/What_makes_entrepreneurs_entrepreneurial.pd
f on [15/11/2010] at [3:45 am]
13. http://www.basilpeters.com/Presentations/Being_an_Entrepreneur_in_the_21st_Century.pdf
on [14/11/2010] at [7:45 pm]

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Entrepreneurship and motivation

ENTREPRENEURSHIP AND MOTIVATION

1.1 History of Entrepreneurship

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supposition that entrepreneurship leads to economic growth is an interpretation of the residual

For Frank H. Knight (1921) and Peter Drucker (1970) entrepreneurship is about taking risk. The

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The place of the disharmony-creating and idiosyncratic entrepreneur in traditional

2. Motivation and entrepreneurship

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Herzberg’s 2-factor theory

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3. Common motivations that contribute to becoming an entrepreneur

1. A need for financial independence and security

2. Frustration with their current workplace or career

3. A desire for achievement and self-fulfillment

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4. A need for having a stable income

5. A willingness to invest their resources

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6. Ability to do something that others cannot do

8. Having a unique and brilliant plan

9. A want to do something for the society

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5. Results and Analysis

Pie chart representation of the motivations

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6. SUCCESS AND ENTREPRENEURSHIP

Money is success” has become the mantra of our age.

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nothing could be further from the truth!

Entrepreneurial success and money

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commitment and continuance. Entrepreneurial success is intensely personal. The entrepreneur

As Henry Ford is quoted as saying:

Definition of entrepreneurial success

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• Make the world a better place.

• Increase the quality of life.

• Right a terrible wrong.

• Prevent the end of something good."

Other aspects of entrepreneurial success

7. Reasons for Success and failure for Entrepreneurs

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7.1 Individual Factors

Extraversion is an aspect of personality that includes characteristics such as sociability, talkativeness,

Agreeableness is a tendency to be compassionate and cooperative rather than suspicious and

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Conscientiousness is a tendency to show self-discipline, act dutifully, and aim for

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Neuroticism is the tendency to experience negative emotions, such as anger, anxiety, or

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Human and social capital and social skills

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