Leveraging Multi-faceted Experience for Entrepreneurial Success

In our study, Missing the Forest for the Trees: Prior Entrepreneurial Experience, Role Identity, and Entrepreneurial Creativity, we found that entrepreneurs with no prior experience tend to focus their energy unproportionally in one role, for example the chief product developer.

These creative entrepreneurs often lose sight of other important aspects of running a business, such as market research, which generally helps a business hone in on specific products with marketable features that can sell well and reap in profit.

Our study looked at both the personal attributes as well as mindset and behavior of experienced entrepreneurs, and found that they tend to take on a more balanced and holistic approach by summoning the inventor and businessperson roles in relevant situations.

Compared with novices, experienced entrepreneurs turned out to have the ability of shifting between the role of an inventor and that of a businessperson strategically, so they can see the big picture–or the proverbial forest–rather than the trees.

For example, when pitching a new product to investors, an entrepreneur would play the role of a salesperson. When working in product development, the same person would wear the inventor hat. When the entrepreneur plays the role of a salesperson, their attention would be more focused on profitability and less on the product design. The focus would be on innovation and product features when the same person plays the role of an inventor.

The advantage of having prior business experience becomes more pronounced when entrepreneurs find themselves in stressful situations. Our study confirmed that hypothesis. The business ideas of experienced entrepreneurs were 12.7 percent more creative and 7.7 percent more profitable than those of inexperienced entrepreneurs when both groups were placed in a high-tension situation.

Our findings suggest the benefit of leveraging the holistic capability of experienced entrepreneurs at the start of a new business venture, such as hiring them as mentors. They can guide the less experienced entrepreneurs in seeing the big picture and thus avoid the inherent blind spots in starting a business from scratch.