IASNOVA
Entrepreneurial behavior is a subset of human action pertinent to the initiation and development of new business ventures. Applied psychology examines such behavior to understand and predict how entrepreneurs will act in different circumstances and the traits that predispose individuals to entrepreneurial success. Here are the characteristics of entrepreneurial behavior with contextual examples and case studies:
Innovativeness
Entrepreneurs are often characterized by their ability to innovate. They bring new ideas to the market by identifying unfulfilled needs or by creating novel solutions to existing problems.
- Example: Steve Jobs and Apple’s reinvention of the mobile phone with the iPhone.
Risk-Taking
A willingness to take financial, psychological, and social risks is another hallmark of entrepreneurial behavior. Entrepreneurs often act under conditions of uncertainty.
- Case Study: Reid Hoffman invested in and launched LinkedIn, which was a risk at the time, as its success was contingent on the network effect.
Proactivity
Entrepreneurs tend to be proactive in their approach. They are not passive recipients of their environments; they shape them through their actions.
- Example: Elon Musk’s development of SpaceX and Tesla, where he proactively tackled industry challenges head-on.
High Achievement Motivation
Entrepreneurs display a high level of achievement motivation, always setting challenging goals and working persistently to achieve them.
- Example: Oprah Winfrey’s career trajectory shows a consistent pattern of setting and achieving higher goals.
Autonomy
A desire for independence is frequently a motivator for entrepreneurial endeavors. Entrepreneurs often seek to be their own bosses and have the freedom to make decisions.
- Example: The founding story of WhatsApp by Jan Koum, who valued personal communication without ads and interference, illustrates the pursuit of autonomy.
Flexibility and Adaptability
The ability to adapt to changing markets, consumer needs, and technological advances is essential for entrepreneurial success.
- Example: Netflix’s shift from DVD rentals to streaming services in response to changing technology and market demands.
Self-Confidence
Entrepreneurs often have a strong belief in their ability to succeed and overcome obstacles.
- Case Study: Sara Blakely’s confidence in her idea led to the creation of Spanx, a successful undergarment company that she started with $5,000 and no experience in fashion or business.
Tolerance for Ambiguity
This trait enables entrepreneurs to deal with uncertain outcomes without experiencing debilitating stress.
- Example: Mark Zuckerberg’s continued development of Facebook despite the uncertain future of social networking platforms.
Passion
A passionate commitment to their business and belief in the value of their work often drives entrepreneurs.
- Example: Tony Hsieh, the CEO of Zappos, was known for his passion for delivering excellent customer service, which was instrumental in the company’s success.
Vision
Entrepreneurs often have a clear and compelling vision of what they want to achieve.
- Example: Jeff Bezos had a vision for Amazon to become the “everything store,” beginning with books and expanding relentlessly into diverse categories.
Resilience
The ability to bounce back from failure, learn from mistakes, and continue pursuing goals is a critical characteristic of entrepreneurial behavior.
- Case Study: The story of Rovio Entertainment, the company behind “Angry Birds,” which created 51 unsuccessful games before striking gold.
Social Networks
Entrepreneurs often leverage their social networks to gain access to resources, information, and support.
- Example: The role of Pierre Omidyar’s personal and professional networks in founding and expanding eBay.
Persistence
Persistence is the tenacity to keep going in the face of hardship and delay in achieving success.
- Example: Colonel Sanders, the founder of KFC, was known for his persistence in franchising his business model after many rejections.
Problem-Solving Skills
Effective entrepreneurs are adept problem solvers who can think critically and make decisions under pressure.
- Example: The way Michael Dell identified and solved inefficiencies in the PC market with his direct-to-consumer model.
These characteristics combine to create a behavioral profile that supports entrepreneurial activity and success. By studying these traits, applied psychology can contribute to the development of training programs, support systems, and policies that foster entrepreneurship.
