Entrepreneurs are widely perceived as having been superb students, athletes and simply outstanding in almost every aspect. But, say the authors of this article, that is not the case. Many successful entrepreneurs, from those who today head billion-dollar dot-coms to others who are sole operators were indifferent students and athletes. In fact, they were distinctly unremarkable. What did, and does, set them apart is the entrepreneurial spirit, which they have in abundance, and which any entrepreneur must have to win.

For the majority of people, working life consists of performing defined services for an employer in exchange for a regular paycheque. However, there is a group of people who choose something different. They decide to become entrepreneurs and start their own business. In turn, some of them go on to achieve outstanding growth and success. But what set of personal characteristics make these entrepreneurs so successful? Just what is the stuff that these entrepreneurs are made of? These are the critical questions that we addressed in research that we recently completed. This article builds on this research. It is also the first in a series that will appear in succeeding issues of Ivey Business Journal.

In our study, we conducted in-depth interviews with the founders of over 50 rapidly growing firms in the greater Chicago area, a rich hub of diversified entrepreneurial activity. Over the course of the many discussions, it became apparent that the personal characteristics of entrepreneurs conformed to certain patterns. This permitted us to form preliminary views that may help demystify some commonly held perceptions about the makeup of an entrepreneur. Our insights, which we describe below, were drawn from these discussions and are illustrated with personal anecdotes. Some of the firms mentioned are very familiar: Spyglass, creator of the first commercial Internet browser, Mosaic; Peapod.com, an on-line grocer; and Diamond Technology Partners, a publicly owned technology consulting firm. Others, though not as well known, are exciting companies that have grown rapidly and are on the cusp of making it on to the national stage.


If I were a rich man…

There are many popular beliefs about the background of successful entrepreneurs. One is that entrepreneurs are often born into have-not families. Conventional wisdom says that underprivileged children have suffered adversity and are more likely to have a strong desire to overcome their economic hardships. But we observed only a few entrepreneurs that were have-nots. In fact, the majority came from middle-to upper-middle-class families. Though some had more difficulty making ends meet than others, none of the families lived in poverty. Moreover, we found that many of the entrepreneurs achieved their start through help from friends and family. Some took over the family firm and led it to new levels of growth.

A large number of individuals in our sample had a post-secondary degree, and often their studies were unrelated to the business they would enter. For example, our sample featured individuals with degrees in quantitative psychology, history, abstract algebra, zoology and religious philosophy. A number acquired their formal business training only after they had become established—and when they realized how unprepared they were for managing a rapidly growing firm.

These observations run counter to the belief that most entrepreneurs overcome extreme adversity and claw their way to the top.


When does entrepreneurial flair first appear? We noted that the founders of our companies appeared to be bitten by the entrepreneurial bug at different stages of their lives.

Some individuals we interviewed were quite enterprising as children. For example, Tom Parkinson or Peapod.com built a chicken coop and filled it with 20 hens. He sold the eggs to neighbours, a good beginning for a child under 12 years old! And Marge Johnsson, founder and President of The Johnsson Group, a financial consulting firm, organized skits performed by children in the neighbourhood. She charged parents admissions ranging from 20 to 50 cents and paid her actors five to 10 cents for each performance. Even in her youth, Marge understood the concept of leverage.

Others became entrepreneurs while in college. During his senior year, Alex Seropian, of Bungee Software, developed his first commercial computer game. Still others became entrepreneurs much later in life. Donna Mass, who invented a new polish for a wide range of metals, raised a family and saw them off to college before she left her job as a homemaker and went into business for herself.

In recent years, there has been enormous publicity about young whiz kids that start up companies while in their teens or early ‘20s. However, our preliminary view is that it is just as common for people to get experience and build up contacts, skills and a modest nest egg before setting out on their own.


It is not surprising that these founders exhibited an entrepreneurial aptitude and motivation early in life. Surprisingly, however, many of them were distinctly unremarkable in other aspects. For example, only a few were competitive. And only a few were academic standouts or excelled in sports or some other activity. The evidence showed that the founders of rapidly growing firms were actually average, and sometimes mediocre, performers in other aspects of their lives. While this was not uniformly true, it did appear to be a pattern.


We observed that the founders had certain personal characteristics in common. The framework set out in Figure 1 is a “stake in the ground.” Much more extensive research would be needed to test and confirm our model.

The Entrepreneurial Spirit The entrepreneurial spirit is the embodiment of a collection of personal traits that most, if not all, of the founders possessed. This spirit propelled or motivated these individuals to incur great personal risk, e.g., to use their personal resources and/or to abandon their jobs to start their own businesses. Of course, the Entrepreneurial Spirit is not formed by a single combination of traits. Indeed, some traits were more predominant in some than in others. However, all of the entrepreneurs displayed a high tolerance for risk, a desire for control and strong personal ambition. Perseverance and decisiveness also emerged as important characteristics. We posit that there are linkages between each of these traits that, taken collectively, make up the Entrepreneurial Spirit.

Risk Tolerance The founders of these firms took great risks in creating their businesses. Many of them “maxed-out” their credit cards, stretched payments to suppliers, mortgaged their houses, and borrow money from friends and family. In most cases, the founders guaranteed the business loans by pledging their personal assets. Personal bankruptcy or losing the family residence were not the only risks. Losing the money of friends and family would severely strain the entrepreneurs’ personal relationships.

Many in our sample displayed tremendous chutzpah. Take the example of Chuck and Lois LeMenager of Marketing Innovators, an employee-incentive firm. Chuck and Lois were already 44 and 45 years old when they started the firm. They put their life savings on the line to seed the venture; failure would spoil the comfortable retirement they hoped to enjoy. At first, their gamble paid off and the firm did quite well, generating approximately $3 million in annual revenues. But then disaster struck when Chuck passed away. Although Lois was familiar with the back-office operations, Chuck had taken the lead on much of the decision-making. Suddenly, Lois was confronted with significant new responsibilities. To compound a difficult situation, some customers tried to take advantage of Lois by insisting on unreasonable terms and pressuring her for quick decisions. When a competitor offered to purchase the firm, Lois was tempted to sell out. Despite the risk, however, she chose to continue running the business. Although there were some stressful times, the business continued to grow rapidly under Lois’s stewardship. Today, it is more successful than ever. Lois has been inducted into the Chicago Junior Achievement Hall of Fame and revenues of her business exceed $80 million.

A willingness to assume risk was clearly a necessity for most cases, it seemed that the founders appeared to enjoy the risk—that on any given day they were “rolling the dice” with their company. In fact, some began to lose interest when the company became very stable. For most, however, risk was something to be tolerated and managed to the degree possible.

Many were able to live with personal risk by rationalizing it, i.e., by diminishing their perception of risk. Although we felt that most of our entrepreneurs took large risks, a number of them didn’t see it that way. Some viewed themselves as taking little risk because they were established professionals and could always regain employment in their field. A number of the younger people noted that they had taken little risk because they really had put nothing into the business other than their time. Others saw little risk because they were so confident that they would succeed. Perhaps it was simply ignoring the risk that allowed these founders to proceed.

In the final analysis, many of the entrepreneurs appeared to be absolutely driven to succeed. Failure was not defined by insolvency, but by not starting the business at all. Doug Colbeth of Spyglass summed up the thoughts of many when he noted that, “My biggest fear is that I will be sitting on a porch when I am 75 and asking ‘What if?’”

Desire for Control A strong desire to control one’s life seemed to motivate many of the founders. Framed another way, many were unhappy about being constrained by the scope of their decision-making. Indeed, in some cases the entrepreneurs had never really worked for anyone but themselves. In other cases, working as an employee for another company brought the founders to the realization that they couldn’t be happy in an environment where they had to answer to others. It was evident in our interviews that the founders generally had strong personalities and high self-confidence; especially as it pertained to their ability to operate a business. This was consistent with a general desire to be in control.

This trait manifested itself in a number of ways. For example, when we canvassed the entrepreneurs on the problems they experienced in growing their businesses, partnership disputes frequently surfaced as one of the most pernicious issues. We will deal with this topic in a subsequent article. Suffice it to say that a strong desire for control is generally incompatible with the shared decision-making that is often implied by partnerships structures.

Daniel Sanchez of Sanchez & Associates, an advertising and promotion firm, expressed this reality most succinctly. He noted that he never wants to have to answer to anyone again and that if he ever did sell the company, it would be unlikely that he would stay on as an employee. He would move on to some other situation that allowed him to be self-employed.

Intrapreneurship Being an intrapreneur at first enabled some in our sample to secure a greater level of control in decision-making before they launched their own companies. For example, Mel Bergstein of Diamond Technology Partners created several entrepreneurial ventures at Andersen Consulting—including the company’s first development centre—before striking out on his own.

Ultimately many of the founders leveraged previous work experience to start their own firms. It is noteworthy that intrapreneurs that succeeded in starting and operating businesses within a large organization still felt they lacked many of the skills necessary to create and run their own start-up. A number of people contrasted the challenges of marshalling resources in a large organization with the challenges faced in obtaining those resources as a start-up. Everything from hiring good employees, to negotiating favourable supplier relationships, to securing sufficient capital, is generally more difficult for a start-up.

Ambition/Desire to Succeed Ambition, or the desire to succeed, was clearly present in most of the founders. Interestingly, the desire to succeed didn’t appear to be important to all of the entrepreneurs. In fact, as we discussed above, almost the opposite seemed to be true.

Conversely, many of the founders seemed to take success in business very personally. Mike Ferro of Click Interactive, a business-to-business software firm, took this view to its logical extreme when he declared:

“Business is my report card on life. I think I am at my best in business and that is where I must succeed.” Not all of the interviewees expressed it in this fashion. However, this was the tacit message communicated by a lot of the entrepreneurs.

Many of the entrepreneurs in our sample exhibited a relentless pursuit of success. They were constantly thinking about how to expand their business or become the “next big thing.” Triad Construction is a good example. It started as a project-management firm, and continued to integrate vertically in response to perceived opportunities. As a result, Triad is now a full-service group of five companies that offers an end-to-end solution from brokering the real estate transaction, to facilitating financing, to performing the design/build and providing some of the precast materials.

Perseverance Very few of the founders experienced a smooth growth path, and many displayed an incredible will to succeed in the face of setbacks.

Managing Through Setbacks For example, consider Deborah Sawyer of Environmental Design International, an environmental consulting firm with 1999 revenues of approximately $6 million and annual growth of about 40 percent. When Deborah decided to go into business, she had no experience as an entrepreneur. She decided to seek a partner, someone who would have an established environmental consulting business. She struck a deal with Mr. Smith (not his real name) to start a hazardous-waste firm as a division of his existing engineering firm. The new division was to be a separate corporation in which Deborah would have an interest. Deborah invested $20,000 in the new entity but she never received the shares. She demanded her money back, but to no avail. She had to sue to recover the sum. Despite this setback, Deborah persevered. She sold her house, borrowed $20,000 from her mother, and established her own consulting firm.

Serial Entrepreneurs Perhaps the ultimate in perseverance is exemplified by serial entrepreneurs, individuals who have started several firms. Dan Rothstein, the founder of McKenry.com, is a good example. Before creating a successful Internet Service Provider, he opened a tanning salon, a bike rental company, a video store, an Amway business and a bakery. Some of these businesses were moderately successful. Most were closed down.

Doug Colbeth of Spyglass is also an excellent example of serial entrepreneurism. Doug’s first venture was called Stellar, and it was able to raise approximately $300 million over the course of its short life. The object was to build a computer that combined the power of a Cray supercomputer with a high-end graphics system for 3-D modelling and graphical simulations. Stellar was anything but. It never took off. Silicon Graphics was able to capture the low-to mid-range market with a less expensive machine. The high end of the market was not large enough for Stellar to succeed. Doug personally lost about $300,000 on this venture. As Stellar was in its dying days, Doug started Spyglass with three college students from the University of Illinois. At this point Doug had two children, aged 9 and 4. He was also 35 and had just lost most of his personal net worth. Despite the obvious risk, and on the heels of failure, Doug persevered in his belief that he could create a viable business.

Decisiveness The last character trait our founders had in common is decisiveness. One does not have to be around entrepreneurs very long to realize that they are constantly required to make important and far-reaching decisions. Many of these decisions are made alone or with modest amounts of advice, must be made quickly, and can often have a significant impact on the company. These entrepreneurs must also be able to make mid-course corrections. The alacrity and flexibility displayed in making these decisions—and changing them if necessary—are what distinguishes the entrepreneur. Contrast this with the typical process in a large corporation, where time-consuming, extensive analysis precedes each decision, and feedback is slow in coming.

This decisiveness requires a related character trait, namely the willingness to “forgive yourself” for mistakes. The entrepreneurs appeared to be remarkably stoical about errors they had made and did not appear to dwell on them. Instead, they preferred to concentrate their energies on moving on.

A Readiness to Act Related to the notion of decisiveness is a readiness to act. Clearly, it is not enough to make a decision. One must also be willing to act on his or her convictions.

Donna Mass, the founder and President of Mass Polishing Systems, was a homemaker who performed the usual chores associate with maintaining a household. From time to time she polished the silverware in the house and the brass fittings on the family boat. But she was never able to purchase a polish that was effective, easy to apply and environmentally friendly. She saw an opportunity to create and market a product aimed at people like her. Donna persuaded a chemist friend to help her formulate a number of polishes, each of which she tested until she found one that met her needs. She then used her own resources to produce and package a commercial batch of the polish and began to sell it at antique fairs. Before long she had grown the business into a multi-product enterprise selling the product all over the United States and through a variety of channels.


In all, we observed five character traits in the founders we interviewed. When we found all or most of these trains in one person, we said that he or she appeared to have an entrepreneurial spirit. But, we concluded, that spirit alone is not enough to create a successful firm. Some additional combination of skills is necessary to convert this predisposition into a new business idea. To succeed, an entrepreneur also needed to have insight and core skills.

Insight Insight refers to the ability to perceive an opportunity where others may not. It was certainly a contributing factor in generating a business concept for some of the entrepreneurs in our sample. Consider the following example.

Stacey Kanzler is the founder and president of Sandbagger Corporation. Her husband is in the earth-moving business and owns a number of large pieces of machinery and workshop staffed by a mechanical engineer. One day in 1993, Stacey was travelling through Ste. Genevieve, Mo., and witnessed severe flooding. National guardsmen were filling sandbags by hand and building dikes against the rising waters. Stacey wondered why the bags were filled by hand and began visualizing a machine that could do the work. Hence, the creation of Sandbagger Corporation.

Core Skills Having an idea and deciding that you would like to take the initiative and create a company are not enough. It is also important that the entrepreneur have one or more core skills that can help drive the organization forward. The founders we interviewed often had a core skill, such as marketing, providing a vision and motivating others, organizing and managing people, or something more technical, such as an ability to write code.

In a significant number of cases, members of our sample developed their expertise at a large corporation and then started their own business. For example, Tom and Andrew Parkinson worked in marketing positions at Procter and Gamble before starting Peapod.com, an on-line grocer. Daniel Sanchez of Sanchez & Associates cut his teeth in marketing at Procter and Gamble as well, before starting his own advertising and sales-promotion company. There are many more examples of entrepreneurs who leveraged the expertise they developed in their previous employment.

Serendipity Interwoven into the success of many of the ventures is an element of luck. This manifested itself in many ways, from the circumstances in which partners met each other, to the identification of the original business idea, to locating financing. Whatever the case, serendipity was an important factor in the creation of the rapidly growing firm.

As we discovered, there is no clear pattern of childhood behaviour that can predict entrepreneurial success. As well, people can turn into entrepreneurs at any age, but when they do, they seem to find a situation that is very fulfilling. Many of those same people come from comfortable, middle-class families, and were modest performers in school and extracurricular endeavours. Finally, post-secondary education seemed to be unrelated to the type of business that the founders pursued. Of course, there were exceptions to each of these, and in the end, as we discovered, entrepreneurs come in a wide variety of stripes.

In our study, we observed that the founders of our sample firms had a set of interrelated characteristics in common. We call these characteristics the Entrepreneurial Spirit, and they include risk tolerance, the desire for control, a strong will to succeed, perseverance and decisiveness. Based on this Entrepreneurial Spirit, we assume that these characteristics are the building blocks, or the “stuff,” that enables an entrepreneur to build a rapidly growing firm.

However, while possessing the traits that make up the Entrepreneurial Spirit may be necessary, it is not enough to guarantee success. Generating and putting the business idea into practice also requires some combination of insight, a readiness to act, a core skill—and a healthy dose of luck.

About the Author

Jim Hatch is a Professor of Entrepreneurial Finance, Richard Ivey School of Business.

About the Author

Jeffrey Zweig is a Consultant with Monitor Group's E-Business Practice and is based in the firm's Toronto Office.

About the Author

Jeffrey Zweig is a Consultant with Monitor Group's E-Business Practice and is based in the firm's Toronto Office.