Houston Voices

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

 
 

This week's innovators to know include Steve Jennis of Founder's Compass, Denise Hamilton of WatchHerWork, and Chris DuPont of Galen Data. Courtesy photos

Houston's innovation ecosystem continues to grow. Last week, a group of startup mentors formed a new program that's a masterclass for aspiring entrepreneurs. Plus, a Houston innovator is writing the book on inclusion while another has a new partnership with a medical device company.

Steve Jennis, co-founder of Founder's Compass

Steve Jennis, along with three other Houston entrepreneurs, have teamed up to create a program based on each of their expertise that provides a launch pad for aspiring startup founders. Photo courtesy of Steve Jennis

Steve Jennis, a founder and mentor within the Houston innovation ecosystem, was thinking about opportunities for aspiring entrepreneurs. While there are several accelerators within the ecosystem, they tend to be months-long programs that might require equity.

"A few months ago it struck me that maybe there was a gap in the market between the aspiring entrepreneur," says Jennis, "and the accelerator or incubator program."

Jennis tapped a few of his fellow founder-mentors to create Founder's Compass, an online masterclass for people who have a business idea but don't know what to do next. Read more about the new program.

Denise Hamilton, founder and CEO of WatchHerWork

Denise Hamilton is publishing a book that helps guide Black Lives Matter allies to make changes that will help them change the world. Photo courtesy of WatchHerWork

After developing a long career as a corporate executive, Denise Hamilton was fielding tons of requests to lunch or coffee to "pick her brain." While she loved helping to mentor young businesswomen, it was starting to become exhausting. "Frankly, there weren't enough hours in the day," she says on this week's episode of the Houston Innovators Podcast.

So, five years ago, she turned the cameras on and started a library of advice from female executives like herself and created WatchHerWork. The company evolved to more, and now she's focused on diversity and inclusion consulting and leadership — and, amid COVID-19 and the resurgence of the Black Lives Matter movement, she's particularly busy now. Stream the episode and read more.

Chris DuPont, CEO of Galen Data

Houston-based Galen Data, led by Chris Dupont, is collaborating with an Austin health device company on a cloud-based platform that monitors vital signs. Photo via galendata.com

Houston-based Galen Data Inc., which has developed a cloud platform for medical devices, and Austin-based Advanced TeleSensors Inc., the creator of the Cardi/o touchless monitor. Together, the two health tech companies are collaborating to take ATS's device and adding Galen Data's cloud technology.

Chris DuPont, co-founder and CEO, has led the company to meet compliance standards set by the U.S. Food and Drug Administration (FDA), the Health Insurance Portability and Accountability Act of 1996 (HIPPA), cybersecurity organizations, and others.

"We knew that our platform would be a great fit for Cardi/o," Chris DuPont, CEO of Galen Data, says. "Speed was critical, accentuated by the COVID-19 crisis. We were well positioned to address ATS' needs, and help those at-risk in the process." Read more about the innovative Texas partnership.

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