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Rice University research finds certain cognitive factors appear in the minds of entrepreneurs

Does your brain have the right components to be an entrepreneur? Getty Images

The entrepreneur strides into a room of potential backers. Swathed in understated grey, she walks with assurance and chats in the cool, easy-going cadences of the leaders she plans to woo. But will an approach like this really affect the fate of her startup? And if not, what will?

A literature review by Rice Business professor Robert E. Hoskisson and colleagues Jeffry Covin of Indiana University, Henk W. Volberda of Erasmus University and Richard A. Johnson of Arnold & Porter offers clues to a vast range of questions about the entrepreneurs' trade. It also outlines where research still falls short. What, for example, most influences a startup founder's success? Is entrepreneurial triumph driven by innate ability or acquired skill? What's the role of factors such as regulatory structures or an entrepreneur's own work environment?

Traditional research, Hoskisson and his associates note, makes it clear that certain cognitive factors really do differentiate people who start new ventures from their more staid counterparts. And recent scholarship has traced how individual entrepreneurs decide to launch their startups and how they spot entrepreneurial opportunities. Still unclear, though, is whether entrepreneurs think differently overall, possess innate qualities that lend themselves to entrepreneurship or somehow become catalyzed by the entrepreneurial role itself.

More research could help answer those questions. Research is also needed to pinpoint exactly how the best entrepreneurs express their plans in order to sound legitimate enough to earn funding and support, Hoskisson's group says. What the scholarship does show is that that the grey-clad entrepreneur with the easygoing patter knows what she's doing: symbolic language, gestures and visual symbols all help create professional identity, emphasize control and regulate the emotions of a viewer. Setting, props, style of dress and expressiveness all count, and the more experienced the entrepreneur the more props she uses.

At the same time, no unified model fully explains how successful entrepreneurs gain their funding. Models range from the hyper-rational analysis offered by game theory to a stimulus-response model in which people react as if they're marionettes. Other mysteries include how the entrepreneurship impulse arises, how it shapes innovation and competitive advantage and how it is translated in individual actions and interactions. More research in these areas, says Hoskisson, would help not only entrepreneurs in the eternal quest for funding, but also the understanding of how to nurture human potential.

Examining institutional differences among countries and how that affects entrepreneurship is also ripe for study. So far, entrepreneurship research has focused on individual attributes. But there's a need, Hoskisson and his colleagues say, for scholars to connect the dots between startup success and political environments, rule of law, regulation and entrepreneurship.

The same goes for work on diverse contexts in emerging economies. In transition economies, China being one example, networks create political and social capital that allows special access and legitimacy. On the other hand, in those same countries ponderous bureaucracies and basic resource limitations can hamper entrepreneurial projects. Detailed understanding of such cultures will only get more urgent as ventures in emerging economies increase and companies that are "born global" proliferate.

Also on the research to-do list about entrepreneurs: the chances of securing funding in given emerging economies and the power — or frailty — of their intellectual property laws. Regulation, especially, plays a pivotal role in these countries, Hoskisson writes. The lighter the regulation, the more entrepreneurship flourishes, according to one study of 54 countries. On the other hand, countries blessed with a strong rule of law offer entrepreneurs more opportunities for strategic entry.

Understanding the entrepreneurial mind, and its interaction with the material world, isn't simple. Consider the late Texas billionaire H. Ross Perot's plan to send gifts to all POWs in Vietnam during the height of the Vietnam War. Unsurprisingly, the Vietnamese government announced that a gift delivery was impossible while Americans were bombing the country. Undeterred, Perot offered to rebuild anything the Americans had bombed. Rebuffed again, Perot chartered a plane to Moscow, instructing aides to deposit the Christmas presents, one by one, at Moscow post offices, addressed to Hanoi.

Amusing as it can be to hear about such entrepreneurial gumption, it may be even more useful to study entrepreneurship systematically. Not everyone can have an entrepreneur's brain, Hoskisson's review of research suggests, but good scholarship might be able to teach people how to walk the walk.

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This story originally ran on Rice Business Wisdom.

Robert E. Hoskisson is the George R. Brown Emeritus Professor of Management at Jones Graduate School of Business at Rice University.

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Building Houston

 
 

Everest will sell products from more than 1,000 U.S. manufacturers. Photo courtesy of Everest

Houston businessman Bill Voss has forever found his zen through his lifelong passion for the great outdoors, but there’s one aspect that was making him positively furious: the shopping.

Burned out with driving to brick-and-mortar stores, standing in long lines, and dealing with dreaded returns, Voss turned his necessity into invention and launched Everest.com, a new shopping/lifestyle marketplace and community platform that links active-minded customers to more than 1,000 U.S.-based merchants and retailers.

By utilizing what it describes as “state of the art” artificial intelligence, the company aims to create the largest marketplace on earth for the outdoor recreation community, covering activities such as hiking, camping, biking, rock climbing, winter sports, water sports, team sports, fishing, hunting, kayaking, rafting, and road and trail running.

Voss’ timing is sound: Current industry estimates suggest consumers spend $700 billion in outdoor recreation, with less than 20 percent of those sales transacted online. Towards that end, Voss plans to increase his sellers to 10,000 by 2023.

Everest members can also enjoy perks through a program dubbed Caliber, which provides its members with several exclusive benefits including free shipping, advance sales, travel benefits, big discounts on gear, and — a plus these days — discounts on fuel. Voss notes that the site’s core values are pushing U.S.-made products and giving back; Everest will have nonprofit and conservation partners.

CultureMap caught up with the active Voss on the heels of his Everest launch.

CultureMap: Congratulations on the launch. Essentially, have you created an Amazon for the outdoors crowd — but with a sense of community, too?

Bill Voss: We started Everest.com to create the first online marketplace with the sole focus of offering outdoor enthusiasts retail goods for purchase from merchants across the country who offer domestically made goods.

In our experience, people who love the outdoors also appreciate the concept of community. At Everest, we want to bolster that community by giving local businesses a wider sales reach, contributing to local and national charitable organizations, and asking everyone in our community to share the story of their “Everest.”

We’re taking a fairly segmented market and bringing it together into one community-focused ecosystem. We call that ecosystem Everest.


CM: What Houston spots have most inspired you? And have you visited Everest yet?

BV: I’m a fisherman at heart. I have been fishing the Gulf of Mexico since I could hold a fishing rod. There is nothing I’d rather do than spend a whole day on the water casting, trolling, or remembering many epic fights reeling in a big one.

So naturally, I love Galveston, Kemah, etc. and being so close to the Gulf is a huge reason why I love Houston. The city itself may be a major metropolitan area, but it is full of so many parks and recreation areas that are great to walk through when you need to escape the sounds of the city for a bit— which Houston really doesn’t get enough credit or exposure for.

Houston has an amazing outdoor community with so many choices to support it — it’s hard to pick just one activity that ranks number one.

I do have plans to visit Everest actually! I am arranging a trip with two brothers that have made it to the top more than anyone else and they assure me it will be an amazing trip.

CM: Clearly, you’re an avid outdoorsman. Is it correct to say that Everest was inspired by frustration and hassle of bouncing to other sites and stores?

BV: Exactly! I found myself doing just that and it’s infuriating. I’d be visiting multiple stores, going through multiple checkouts, and waiting on multiple boxes to arrive — and sometimes dealing with multiple return scenarios. So, I set out to fix it — for all of us.

I grew up fishing, spending hours on the water with my dad. To me that’s one of the best parts of any outdoor activity, the quality time spent with the people you love. I don’t think you get the same experience if you’re sitting around a tv screen together, and you certainly don’t get it if you’re spending hours on your computer trying to track down the perfect beginner fishing rod for your daughter. Time is precious, and the endless toil of gear compilation eats into those few available hours we have to spend together.

By aggregating thousands of outdoor brands and gear retailers and centralizing them into one marketplace, we’re allowing our users to hop on, find everything they need, and check out easily. We’re just getting started but, within the next two years, we hope to add even more sellers and products along with more community offerings.

Being out on the water showing my kids how to bait a hook or how to find a school of fish, those are the memories I hope they take with them. With Everest, it has been important to me to help make those kinds of experiences easily attainable for everyone and the people they love.

CM: Speaking of other stores, do you plan to go head-to-head with the REIs and Sun and Skis of the world? Or Amazon?

BV: I get this question all the time and I love it. As to the first two, definitely not. We’re a marketplace, we’re here to help companies like REI and Sun and Ski, who can participate as sellers and reach new customers.

The difference is that our members can pick up everything they need, from multiple retailers, in one cart, with one easy checkout option. Many of the big names already spotlight and sell products on Amazon — they can do the same with Everest. We are a community of like-minded outdoor loving enthusiasts that have been looking for a niche marketplace to serve all of us.

Think of what Chewy did in the pet industry — we are doing the same thing for those that love the outdoors. Amazon has to be everything to everybody. We don’t, and we don’t want to.

CM: Do you see Everest ever creating brick-and-mortar stores?

BV: Wonderful question. The beauty of Everest is we are still a young company with options to consider. But remember, one of the main tenets of Everest is supporting our sellers. We are not looking to get into a situation where we are competing directly with them.

However, we’d love to one day open a shop selling Everest sweatshirts and swag in downtown Houston. It would be so fulfilling to see the outdoor community wearing Everest branded clothing and putting Everest stickers on their gear in the future.

The bottom line is, we are sprinting as hard as we can in hopes of waking up one day as a true disruptor, household name, and eternal brand.

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This article originally ran on CultureMap.

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