Are you curious about how we formulated the answers to our quiz about “entrepreneurial spirit”? You’ve come to the right place! Here’s a longer version of the quiz with references.QUIZ: Do have the entrepreneurial spirit?Ever thought of starting your own entrepreneurial business? Take this short quiz to see how much you resemble people who do so successfully …1. Which of the following best describes what motivates you in your daily work—in your choice of work and how you approach it?A. I want to make the world a better place.B. I like making a good living (financially).C. I like being in control of what I do.D. I like work that is challenging and fulfilling.E. I value the job security.F. I enjoy the prestige, power, and influence associated with my position.The entrepreneur’s answer: C—For most entrepreneurs, autonomy (control over what they do) is their most important motivation, according to Wasserman (2012), who analyzed more than 27,000 individual responses to compare the motivations of entrepreneurs and nonentrepreneurs of all ages and both genders. A desire for power and influence (F) is the second most mentioned motivator for entrepreneurs, except for females over 40, who value “intellectual challenge” (D) more. Financial gain (B) ranks highly for most male entrepreneurs, but doesn’t show up in the top four factors for women. Also, female entrepreneurs cite altruism (A), whereas that motivator doesn’t crack the top four for men until they are past 40. Nonentrepreneurs tend to be motivated very differently, citing factors like “job security” (E) as their top priorities.ReferencesNoam Wasserman, The Founder’s Dilemmas. (2012). Princeton University Press.2. Which of the following expresses a measure of success that you find most acceptable?A. Success is measured by level of education or intellectual achievement.B. Success is measured by upward movement within the rankings of my profession or organization (e.g., getting promotions).C. Success is measured by the amount of money I make.D. Success is measured by the degree of control I accomplish over my life and work.E. Success is measured by the level of respect I command from other people.The entrepreneur’s answer(s): C and D—McGrath, McMillan, and Scheinberg (1992) examined entrepreneurs and nonentrepreneurs across several cultures and found consistent patterns in how each measures success. Entrepreneurs define success in terms of degree of autonomy or level of financial success (which may, of course, be related), and specifically reject the idea that success can be measured by academic achievement (A). Nonentrepreneurs do define success in terms of academic achievement and also in terms of getting “promoted” (B). Differences between the two groups become nuanced when it comes to respect from others as a measure of success: Both groups associate others’ respect (E) with success, but entrepreneurs thought gains in such status were available to anyone, whereas nonentrepreneurs specifically disagreed with this notion.ReferencesRita Gunther McGrath, Ian C. MacMillan, and Sari Scheinberg, “Elitists, risk-takers, and rugged individualists? An exploratory analysis of cultural differences between entrepreneurs and non-entrepreneurs.” Journal of Business Venturing 7, 2 (1992): 115–135.3. Which of the following statements best expresses how you think about risk?A. I’m a risk junkie. The more risk, the better.B. Risk can be unsettling, but it is also exciting. I take on a level of risk I’m comfortable with, then try to achieve be best results from taking that risk.C. Risk is part of life. You have to accept some risk if you want to get anywhere. You just have to try to control it and lower it where you can.D. I prefer to minimize risk where possible. Risk means problems approaching.The entrepreneur’s answer: B—It is widely claimed that entrepreneurs have a bigger appetite for risk than nonentrepreneurs, but researchers have had some difficulty establishing this conclusively. Brockhaus (1980), for example, concluded that “risk taking propensity may not be a distinguishing characteristic of entrepreneurs.” However, the earlier mentioned McGrath et al. (1992) study did find that entrepreneurs have a greater risk tolerance than others (entrepreneurs were more likely to agree, for example, that risk is “exciting”); that study also found that too much risk and too little risk (A and D) were demotivating for entrepreneurs. A 1998 study by Sarasvathy, Simon, and Lave found that entrepreneurs accept risk at a level comfortable for them and then try to increase returns at that level of risk (B), whereas others focused on reducing risk C). Stewart and Roth (2001) performed a meta-analysis “to mathematically cumulate the literature concerning risk propensity differences between entrepreneurs and managers” and concluded that there was evidence that entrepreneurs have greater risk taking propensity than others.ReferencesD. K. Sarasvathy, Herbert A. Simon, and Lester Lave, “Perceiving and managing business risks: Differences between entrepreneurs and bankers.” Journal of Economic Behavior & Organization 33, 2 (1998): 207–225.Rita Gunther McGrath, Ian C. MacMillan, and Sari Scheinberg, “Elitists, risk-takers, and rugged individualists? An exploratory analysis of cultural differences between entrepreneurs and non-entrepreneurs.” Journal of Business Venturing 7, 2 (1992): 115–135.Robert H. Brockhaus, “Risk taking propensity of entrepreneurs.” Academy of Management Journal 23, 3 (1980): 509–520.Wayne H. Stewart Jr. and Philip L. Roth, “Risk propensity differences between entrepreneurs and managers: a meta-analytic review.” Journal of Applied Psychology 86, 1 (2001): 145.4. How do you think about past failures? Choose the statement that best describes how you examine past instance when you have not succeeded.A. I think carefully about what happened, what I might have done differently, and what might have happened instead, so that I can learn most accurately from my experiences.B. I carefully examine the assumptions I made about what I can control and what I cannot control, looking for errors.C. I move on, without spending a lot of time thinking about what might have happened, or regretting what I might have done differently.D. I scrutinize what happened carefully for information that will help me be more realistic in the future about things I got wrong in the past.The entrepreneur’s answer: C—One consistent finding in research on entrepreneurs is that they are systematically unrealistic in interesting ways (so not D). They are overly optimistic (Kahneman and Lovallo, 1994) and happily overconfident in their ability to control outcomes (Busenitz and Barney, 1997; Russo and Shoemaker, 1992) (so not B, above). Research by Baron (2000) shows that entrepreneurs are less prone than most people to counterfactual thinking (thinking about what might have happened that did not, as in A above), and less inclined to experience regret over past failures (C).ReferencesD. Kahneman and D. Lovallo, “Timid choices and bold forecasts: A cognitive perspective on risk taking.” Fundamental Issues in Strategy: A Research Agenda. (1994): 71–96. Boston: Harvard Business School.J. E. Russo and P. J. Schoemaker, “Managing overconfidence.” Sloan Management Review (1992): 7–17.L. W. Busenitz and J. B. Barney, “Biases and heuristics in strategic decision making: Differences between entrepreneurs and managers in large organizations.” Journal of Business Venturing 20, 4 (1997): 25–39.R. A. Baron, “Counterfactual thinking and venture formation.” Journal of Business Venturing, 15, 1 (2000): 79–91.5. How do you tend to organize efforts to create something new?A. I plan carefully, set milestones, and monitor activity directed toward each milestone to make sure we make good progress.B. I design and deploy a careful process for experimentation, to maximize the validity of my learning.C. I take a rapid-fire trial-and-error approach, trying lots of things as cheaply as possible, following up on what looks most promising.D. I try lots of random things, just to see what happens.E. I don’t like to try new things; I prefer to focus on getting good at the things I already know how to do.The entrepreneur’s answer: C—Considerable evidence supports the idea that innovation processes need to be iterative and trial-and-error based (see, for example, Thomke, 2003; Austin and Devin, 2003), though there is a role for planning, of course. Despite early enthusiasm for so-called stage-gate models (Cooper, 1986), which sought to make innovation processes more planning and milestone based (A), recent wisdom suggests that trying to make innovation processes predictable, more like industrial processes, risks also making them less innovative (Hindo, 2007). There is also a role for experimentation (B), (see Thomke, 2003), but such processes should err on the side of rapid and cheap, versus perfectly designed. Option D is not as crazy as it might sound: Austin et al. (2012) show that some innovators intentionally induce randomness within their processes, to generate outcomes they could not have thought of to try intentionally. Option E is a legitimate approach to value creation, but much more useful in established companies focused on “exploitation” rather than “exploration” (March, 1991).ReferencesB. Hindo, “At 3M, a Struggle Between Efficiency and Creativity,” BusinessWeek. (10 June 2007).J. G. March, “Exploration and exploitation in organizational learning.” Organization Science 2, 1 (1991): 71–87.R. D. Austin and L. Devin, Artful Making: What Managers Need to Know About How Artists Work. (2003). Upper Saddle River, New Jersey: Financial Times Prentice Hall.R. D. Austin, L. Devin, and E. Sullivan, “Accidental Innovation: Supporting Valuable Unpredictability in Creative Process, Organization Science, 23, 5 (September–October 2012): 1505–1522.R. G. Cooper, Winning at New Products. (1986). Reading, Mass.: Addison-Wesley.S. Thomke, Experimentation Matters. (2003). Boston: Harvard Business Press.6. When starting a new project, how would you be inclined to select people to join your team?A. I seek out people with a similar background and ways of thinking to minimize unnecessary conflict within the team.B. I surround myself with close friends, supportive people who I can depend on when difficulties arise.C. I chose people with different training, different personalities, and different cognitive characteristics, to maximize the number of ideas and ability to discern value in outcomes.D. I choose people who seem most committed to the project objectives, who really want the project to succeed.E. C and DThe entrepreneur’s answer: E—Too much uniformity in viewpoint and ways of thinking leads to too little innovation (so not A). Although it seems somewhat natural to team up with people you are close to (B), personal relationships can complicate entrepreneurial projects (Wasserman, 2012); it can be hard to replace a good friend who isn’t doing a good job, for example. Having a team with diverse training, cognitive endowments, etc., maximizes both the variety of ideas the team can produce, and the likelihood that the team will be able to see value in unexpected forms. Interestingly, research suggests that this kind of diversity of thinking does not require demographic diversity (diversity in terms of age, gender, etc.), that commitment to the well-being of the project (D) can lead to sound processes that produce the necessary diversity of ideas (Chowdhury, 2004).ReferencesNoam Wasserman, The Founder’s Dilemmas. (2012). Princeton University Press.S. Chowdhury, “Demographic diversity for building an effective entrepreneurial team: is it important?” Journal of Business Venturing 20, 6 (November 2005): 727–746.7. Which of the following statements best describes your approach to making important decisions?A. I proceed carefully, gathering all the available information I can, examining all the options, and choosing between them using as rational a process as possible.B. The most important thing is to be sure I am reasoning from valid and unbiased data, so that I don’t succumb to biased intuitions.C. I insist on evidence based decisions, but I try to make them as quickly as is feasible.D. I believe speed is of the essence, so I tend to trust my gut and rely on a set of simple rules of thumb that I have picked up over the years.E. I choose as quickly as possible, even if I don’t have time to gather relevant data.The entrepreneur’s answer: D—The earlier mentioned study by Busenitz and Barney (1997), established that while entrepreneurs are not reckless (E), they are significantly more likely than others to rely on heuristics or rules of thumb rather than carefully rational analysis (A), and also to make decision errors that involve what scientists would consider sample biases (so not B or C). Smith et al. (1988) also found that the managers used a more rational approach than did the entrepreneurs. Busenitz and Barney speculate that “without the use of biases and heuristics, many entrepreneurial decisions would never be made” because more comprehensive and rational approaches would be too slow and complex. They also suggest that while these decision-making tendencies might have value in startup phases of a new enterprise, they may also lead to serious errors as a firm matures. This provides a justification for the common practice of replacing entrepreneurs with experienced managers as a firm grows.ReferencesL. W. Busenitz and J. B. Barney, “Biases and heuristics in strategic decision making: Differences between entrepreneurs and managers in large organizations.” Journal of Business Venturing 20, 4 (1997): 25–39.K. Smith et al., “Decision making behavior in smaller entrepreneurial and larger professionally managed firms.” Journal of Business Venturing, 3, 3 (1988): 223–232.8. Suppose you’ve taken this quiz and none of your answers match up with the “entrepreneur’s answer”—what then should you do?A. Go back to my lab and give up any hope of ever becoming an entrepreneur.B. Try to change, to become more like a “typical entrepreneur.”C. Go ahead and start your own business anyway—entrepreneurship is about doing, not about being a particular type of person.Best answer: C—As Gartner (1988) has pointed out in an influential paper, “Who is an entrepreneur?” may not be a very useful question, because the phenomenon of entrepreneurship is so vast. He argues that focusing on the traits and personality characteristics of entrepreneurs “will neither lead us to a definition of entrepreneurship nor help us understand the phenomenon of entrepreneurship.” Many other researchers agree to some extent, with the caveat that traits are not so interesting, but cognition is (e.g., Busenitz and Barney, 1997). Much of this quiz focuses, for that reason, on ways of thinking, not traits. But Gartner’s main point remains a good one: Entrepreneurship is ultimately about doing things differently, and what it is appropriate to do differently is hugely dependent on context. So in any given context, a good entrepreneur is not a person who tends to act in certain “entrepreneurial” ways, but rather someone who chooses the appropriate different course of action for that context. What does this mean? It means you might be a very good entrepreneur in some contexts precisely because you do not exhibit the specific ways of thinking most common to a category of people labelled “entrepreneurs.” Simply put, if you want to, you should go for it … regardless of any quiz.ReferencesL. W. Busenitz and J. B. Barney, “Biases and heuristics in strategic decision making: Differences between entrepreneurs and managers in large organizations.” Journal of Business Venturing 20, 4 (1997): 25–39.W. B. Gartner, “Who is an entrepreneur? is the wrong question.” American Journal of Small Business 12, 4 (1988): 11–32.—————-Laurel Austin is a professor at Copenhagen Business School.