Are entrepreneurs born or are they made?

20 January 2017

  • 40 per cent of variance in entrepreneurship accounted by genetic factors
  • Research finds genetics has an influence on becoming an entreprenuer
  • "We create our own environment based on our genes"
  • Genes matter but entrepreneurial skills can be taught

Are entrepreneurs born or are they made? It’s a question that has puzzled researchers for many decades.

But Nicos Nicolaou, Professor and expert in the biology of the entrepreneur, is shedding new light on the role DNA plays in shaping who chooses to be their own boss. And his results suggest that genes do matter – but only up to a point.

“It’s not nature, it’s not nurture – it’s a little bit of both,” he says.

Twins are a fantastic natural experiment which can help scientists tease apart genetic and environmental influences on all sorts of behaviours. Whereas identical twins share all of their DNA, non-identical twins share around half.

Researchers can use this fact to look at twin concordances for entrepreneurship – the probability that one twin is an entrepreneur given that the co-twin is also an entrepreneur.

If this is greater between identical twins than their non-identical counterparts, it suggests nature plays a role in determining who becomes an entrepreneur. But if both types of twins display similar twin concordances, it would suggest that nurture plays the only role.

Nicolaou’s research show genes do indeed make some people more likely than others to become entrepreneurs.

“We found that about 40 per cent of the variance in entrepreneurship is accounted for by genetic factors,” he says. 

However, we won't be seeing a world where would-be businessmen and women undergo genetic screening before being granted a bank loan.

“It’s important to clarify what that means,” says Nicolaou. “That does not mean that genes determine who becomes an entrepreneur. We’re only talking here about probabilities and likelihoods, nothing else - this is not deterministic.”

In any case, people looking for a specific ‘entrepreneurship gene’ will be disappointed - the genetic tendency to start a business is likely to be due to a large number of genes that manifest themselves in many ways, including through a complex dance with the environmental influences that each individual meets in their life. 

Perhaps the most straightforward way genes influence our entrepreneurial tendencies is through personality. People who have inherited traits such as extroversion, creativity or an openness to new experiences, for example, are more likely to go into business for themselves.

Environmental factors might also interact with genetics to influence whether someone becomes an entrepreneur - so a person with a certain combination of genes may react more strongly to an environmental stimulus, such as a better availability of finance. 

Related course: Executive MBA with Entrepreneurship specialism 

And on a more complex level, genes may lead people to seek out environments that may in turn make them more likely to become an entrepreneur.

For example, people who are genetically predisposed to embrace new experiences may choose to follow an adventurous career path where they are exposed to a richer seam of potential business opportunities.

“In a way we partly create our own environment based on our genes,” says Nicolaou.

Twin research can only give us an idea of the role genes play at the population level. But when we zoom in to look at individuals, it is impossible to say whether any one person’s entrepreneurial zeal is down to nature or nurture.

It would be nice to know, for example, how much influence genes had on John Dymond, who seems to be the classic born-entrepreneur. He comes from a very business-minded family where his father and uncles have all at some stage run their own ventures.

Dymond is now co-founder and CEO of DocDelta, a US-based tech start-up that he describes as a talent search engine for healthcare professionals.

He previously spent several years working for another healthcare start-up, where he came on-board at a very early stage and helped to grow it to a multi-million dollar company. He points to a key personality trait he believes he has inherited from his father.

“There’s definitely an element of drive that is inherent in what I’m doing,” says Dymond, who graduated with an MBA at WBS in 2013. “I don’t like to settle. I like to be pushing forward all the time - it drives everyone mad, including my wife.” 

Similarly, the career to date of Neil Hutchinson, another WBS alumnus, is testament to that same kind of drive. But unlike Dymond, Hutchinson doesn’t come from a family of entrepreneurs - his father was a university librarian and his mother a teacher.

What are the salient traits of entrepreneurship? 

“I think, for me, it’s probably more shaped by my environment,” he says.

Having made his name in the internet marketing industry with TrafficBroker and then acquiring energy comparison website uSwitch, his firm Forward now focuses on both early-stage venture capital and later-stage private equity style investment.

His personal investment vehicle Neon Adventures also has many projects on the go, including a boutique hotel in Marrakech, a professional cycling team for promising young cyclists and a philanthropic project called The Kindness Initiative, which aims to make the world a better place by helping people to be kinder to one another.

He wonders whether it was his upbringing, particularly his father’s love of sport, which gave him the drive behind his multifaceted entrepreneurial career.

“I did a lot of sport growing up so I was used to competition,” says Hutchinson. “I think having a competitive element is probably a key trait in an entrepreneur.”

Hutchinson’s story is an inspiration for those people who don’t come from a particularly entrepreneurial family but who dream of launching their own business. And hearteningly, Nicolaou’s research backs up Hutchinson’s experience. 

“Environmental factors are actually more important than genes” says Nicolaou. “Even though genes do matter, I believe that pretty much anyone can become an entrepreneur with the right training, guidance, opportunities and so on.” 

That’s where people like Deniz Ucbasaran come in. As Professor of Entrepreneurship at Warwick Business School, she definitely believes the entrepreneurial mindset is something that can be learned.

“Given the proliferation of entrepreneurial education, there’s obviously a large proportion of society that believes it can be taught," she says.

Can an entrepreneurial mindset be learnt?

Ucbasaran points to some of the key hallmarks of an entrepreneurial mindset - identifying opportunities and selecting the most promising ones; lean and agile thinking, and knowing how much you can afford to risk. And these can easily be learned, she believes. 

“There is probably a form of entrepreneurship for many people,” she says. “It may not necessarily be a start-up, it may be within an established organisation or it may be a social enterprise. It’s finding a match between the individual, their skills, their passions and the opportunity.”

Ultimately both Ucbasaran and Nicolaou agree that in the real world of business, it doesn’t really matter whether the drive to be an entrepreneur is down to nature, nurture or a little bit of both.

Nicolaou says: “What is more important is to demystify entrepreneurship and make people believe it’s possible and that it’s not rocket science.”

Nicos Nicolaou teaches Entrepreneurship & NVC on the Executive MBA (London). He also teaches Entrepreneurship and Business Venturing on the MSc Management programme.

Deniz Ucbasaran teaches Innovation and Creativity in Organisations on the Distance learning MBA and Entrepreneurship & NVC on the Executive MBA

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