In a recent experiment run with the Columbia Business School, the findings from the email responses of 11,000 innovators showed some exciting drivers for innovation.
Startup founders around the globe have shown that their motivations behind starting a business vary. Many are very resilient in finding a balance between their motivation for making money and serving their community needs.
Today, most venture capitalists offer much more than funding and understand that budding entrepreneurs also need support through inspiration and incentives, no matter their background, culture, or gender.
What are the Rewards Entrepreneurs Seek?
Long hours of work and financial risks characterize the road to success for any business built up from scratch. Entrepreneurs and innovators are essential to economic growth and are willing to undergo all the hardships, to reap their rewards. However, for each person, these rewards are represented by different motivations.
No entrepreneur can say that at least a part of their motivation is to make money. Not everyone can match the entrepreneurial skills of Steve Jobs, Elon Musk, or Richard Branson, but dedication, timing, and the right idea can turn profits — sometimes at a fast rate. However, the creation of wealth cannot be the only driving force behind a business idea, and turning a profit takes time.
The demands of working for a boss often take their toll, and many people turn to entrepreneurship to break away from these limitations. At the outset, developing an enterprise can be even more demanding than working under someone else, but eventually, most successful entrepreneurs manage to achieve the flexibility they dream about.
For many entrepreneurs, being able to call the shots and make decisions motivates them to leave their employment and go out on their own. With their own business, they have choices. They can choose their mentors, partners, and employees, ensuring that they reach their desired levels of productivity as they make their innovations happen. A passion for resolving social problems within their communities also drives many entrepreneurs.
Global Field Experiment Reveals Interesting Motivational Characteristics
In a recent experiment run with the Columbia Business School, the findings from the email responses of 11,000 innovators showed some interesting drivers for innovation. There were interesting differences between gender and culture. Women and individuals from more charitable cultures tend to be more motivated by social impact, whereas men and those from less charitable cultures are more motivated by money.
Investors Have an Essential Role to Play
Investors and supporters of new entrepreneurs need to make their programs accessible to all innovators, whether their startups are money-driven or socially driven. Countless people may not have a tech-background but have innovations geared toward making a social impact.
Stereotypes of what a promising entrepreneur looks like changed over the last few decades. Investors need to understand that many startups now have a double purpose of turning a profit while also solving a problem. One example of this is the Renewal Workshop, where discarded apparel is either recycled or up-cycled, instead of ending up in landfills.
Even though every new venture relies heavily on financing, other resources like technical expertise and mentorship are just as valuable. The right mentor can help any business idea to grow because of the experience and connections acquired in business. Mentored startups have been shown to grow three times faster and raise more capital as they grow. This expertise helps startup founders to focus in the right direction, especially at the beginning.
Investing Their Expertise
The adage, “knowledge is power,” says it all. Venture capitalists can impart their expertise to new entrepreneurs in many areas. These include identifying the right types of investors for the startup initially, while also guiding it to focus on the growth that will attract further investments.
Startups can also benefit from their investor connections to understand the various requirements to expand their business geographically. This type of expansion requires an understanding of the environment, the need to leverage the investor market, and opportunities for the development of the enterprise in a new market.
Understanding competitive awareness is another aspect that investors can offer guidance. Each industry has various levels of retention percentages, and they know how to compare these to other competitors in each business field.
Investors can play a major role in helping more communities with access to funding for their innovations. No matter the motivations behind their business ideas, these innovators may have the ability to make a marked difference to the economy of their communities and globally.