Is entrepreneurial success inherited? This is the subject of the May 23 Forbes magazine cover story. The Forbes article makes a good case for entrepreneurial genes, presenting several examples where dad as well as offspring—some sons, some daughters—exhibit stunning entrepreneurial success. Forbes did not include any moms.
Also within the Forbes article, a section titled "Made or Born?" tells of academics who address the question of the entrepreneurial gene. Their conclusion: both genetics and environment play a role and "The question isn't whether genes contribute to entrepreneurship, but how much they contribute."
My take on this: a great deal of the entrepreneurial success that seems to pass from father to offspring actually comes from building on strengths, which are acquired through exposure. I did not specifically examine the role of genetics, but as part of my 20+ years of research seeking to understand what drives successful business growth, I find entrepreneurial success highly associated with building upon strengths. Strengths can encompass all aspects of the know-how needed to make a particular business succeed, regardless of whether it's personal traits or any other kind of expertise. Some strengths might possibly be genetically inherited, while many clearly are not and are the result of exposure to what's necessary for success.
Exposure to required know-how can come from a variety of sources. Often, its source is prior business experience. Exposure to necessary know-how can come from other sources as well, such as personal interests, hobbies, volunteer work, training and education, the kind of immersion that's driven by being passionate about a subject, familiarity with something similar to what the business requires, or even from relationships with other people. Regardless of its source, this exposure is an important factor for business success.
The children of highly successful entrepreneurs are in an excellent position to get exposure to the know-how needed for stellar entrepreneurial success. Any contact they may have with their entrepreneurial parent and the parent's business ventures can help shape the offspring's know-how. With this kind of exposure, offspring are well equipped to follow in their parents footsteps as successful entrepreneurs.
Thus, the role of exposure to know-how can explain the many cases of like father, like child entrepreneurial successes presented in the Forbes article. It also explains my research, which finds that many stellar entrepreneurial successes had entrepreneurship in their family history. This doesn't mean genetics plays no role—again, I have not studied genetics. But, it does show how exposure is a major factor contributing to "inherited" entrepreneurial success.
Furthermore, findings from academic research are also consistent with the view that exposure is a key component in "inherited" entrepreneurial success. For example, University of Chicago professor Damon Phillips studied the issue of who would be more successful as entrepreneurs—former employees of large corporations or former employees of small businesses. He found that entrepreneurs who had worked for small businesses were more successful much faster than those who came out of large corporations.
As I see it, his findings support the premise that exposure to needed know-how is important for entrepreneurial success. Those who came out of small companies had the chance to see firsthand what it took to make a small business succeed. Since his study looked at former employees of small business, not necessarily blood relatives of founders, this has nothing to do with genetics. It is merely exposure to the right kind of know-how. And, children of successful entrepreneurs have this kind of valuable exposure to the know-how that prepares them for great entrepreneurial success.
Finally, the importance of exposure is even supported by the father-offspring entrepreneurial success stories presented in the Forbes article. One daughter who achieved great success did so by intentionally deciding not to do it the way her father did. In her case, exposure to her father's business provided know-how about what not to do. Unlike her situation, genetically inherited success would be expected to resemble, rather than contrast with, the entrepreneurial success of the parent.
So, in my view as someone who has been studying business success and failure patterns for over 20 years, exposure plays a critical role in second generation entrepreneurial success. This doesn't mean genes do not contribute. But, the right kind of exposure has a major impact, and its effect shows up even in cases where there is no evidence of genes being involved. Thus, the right kind of exposure is crucial.
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