Elon Musk, suggests researcher Andrew Raine, has all the critical qualities of a successful entrepreneur. Photo Credit: Duncan.Hull - Own work, CC BY-SA 4.0

A Research Project Builds the ‘Three C’s Model of Entrepreneurial Success’

Andrew Raine, 17, is a junior at Friends Select School in Philadelphia. In 2017, he was a summer intern in the Character Lab at the University of Pennsylvania and in 2018 attended the Knowledge@Wharton High School Global Young Leaders Academy summer program, both of which inspired him to pursue further research about entrepreneurship. In this personal essay, Andrew talks about his experiences and presents his findings on curiosity, creativity and commitment.

According to Forbes magazine, nine out of every 10 startups fail. This inspires an important question: What dictates which startups fail and which succeed? At least part of the answer lies with who is leading the startup and whether or not that person has what it takes to be a successful entrepreneur. Successful entrepreneurs come in all shapes and sizes, and yet one of the burning questions in business has always been to decode the magic formula for success.

While I can’t say that I’ve discovered that formula, my experiences over the past few years have led me at least to a working hypothesis – that curiosity, creativity and commitment — what I call the three C’s – are important factors.

Commitment Alone Is Not Enough

It all began with an internship I had in Dr. Angela Duckworth’s Penn Character Laboratory two summers ago in 2017. I took away the idea that success of any kind is not just about intelligence, it’s about grit. In her book, Grit: The Power of Passion and Perseverance, Duckworth, a University of Pennsylvania professor of psychology, talks about having the mindset to stick with your goals.

Which kids are most likely to advance to the finals in the National Spelling Bee? Which cadets will go on to achieve military success? Which new teachers are most likely to become effective educators? In all cases, grit was the answer. People who are gritty, which is to say that they are determined to follow through and achieve what they set out to do in the first place, most often succeed. And grit predicts those various outcomes mentioned above better than many other factors, including IQ, good looks and health.

I know what you’re thinking. Winning a spelling bee is not exactly the type of success that entrepreneurs are seeking. But hearing that message about grit during my time in the Character Lab made me curious about whether grit or what I call commitment, was solely responsible for the world’s entrepreneurial success. Did other personality traits play equally important roles? These questions began buzzing around in my head during that hot summer – and they wouldn’t go away.

Cut to last summer, when I was part of the KWHS Global Young Leaders Academy on entrepreneurship, learning lots of new insights about innovation and even crafting a team-based plan for a start-up venture. I became even more motivated to pursue my questions about how grit influences entrepreneurship. I began speaking with the Knowledge@Wharton team and reviewing the existing literature on what is known about entrepreneurial success.

The empirical evidence was fragmented and was neither clear, nor compelling. I did discover, however, that commitment alone is not enough. Effective entrepreneurs are curious creatures – they are full of seemingly offbeat questions about the world around them. They are creative, with a mindset that is imaginative and inventive. And yes, they are indeed committed to their ideas. Here is the model that I developed in a research paper that I worked on all last year:

This is not pie-in-the-sky theorizing, but instead has a firm empirical basis – in other words, it is shaped through data-driven studies. Take the research published in the Journal of Business Venturing in 2017 by Brandon Mueller, a professor in the College of Business at Iowa State University. Using Duckworth’s personality measure, Mueller assessed grit in 244 entrepreneurs who personally managed firms and maintained majority ownerships. A year later, an executive-level employee of each company was asked to accurately assess the overall performance of the company through sales, profitability and net profit margin. A significant positive correlation was observed, showing that grittier entrepreneurs had companies with higher venture performance a year later, a relationship that held up after controlling for many background variables including demographics, startup experience and educational level.

I researched many empirical and theoretical perspectives from Duckworth’s book and other academics, including M.H. Chen, Y.Y. Chang and Y.H. Lo, who published a paper on “Creativity Cognitive Style, Conflict and Career Success for Creative Entrepreneurs” in 2015 in the Journal of Business Research. My exploration of this topic reached back to 2010, when J.R. Baum and B.J. Bird wrote about “The Successful Intelligence of High-Growth Entrepreneurs: Links to New Venture Growth” in Organizational Science.

Deep Childhood Curiosity

I found the process of research and discovery fascinating, and it led me here to think about the application of what I learned in a practical context – who actually demonstrates the three C’s in their lives and their work? I turned to the Knowledge@Wharton High School online journal for inspiration.

Take, for instance, Hannah Herbst. Last year, at 17, she was one of youngest members of Forbes 30 under 30 class of what they call “brash entrepreneurs”. In 7th grade, Herbst was entered a summer engineering and technology camp, only to discover that she was the only girl. She had to build robots, which she had never done before. She desperately wanted to quit. But Hannah had perseverance, a building block to commitment, and that led her to stick with it. It also helped to cement her curiosity for engineering. Combined with perseverance, Hannah demonstrated the other building block of commitment — passion. She went on to develop an ocean energy probe prototype that uses ocean currents to provide power to developing countries. Small wonder that Hannah, with her perseverance and passion, was named America’s Top Young Scientist in 2015. Most recently this May, she won best of category at the Intel International Science and Engineering Fair for a translational medical science project.

In addition to commitment, creativity can propel an entrepreneur forward. Kai Kloepfer was a science-fair enthusiast from a high school in Colorado when a tragic event occurred 30 minutes from his house in a town called Aurora – the killing of 12 people at a midnight showing of the movie “Dark Knight Rises.” That got him thinking about a related issue – suicide and accidental deaths from firearms and what could be done to enhance gun safety in the U.S. His creative solution? A simple, yet ingenious way to prevent accidental misfires: fingerprint-secured firearms. He took the concept from smartphones and imagined how it could be applied to guns. With his new invention, Kloepfer (who is currently a junior at MIT) founded a company, Biofire Technologies, and was able to raise $225,000 from angel investors, a grant, and Silicon Valley advisers. Like Herbst, Kloepfer was also named one of 2017’s Forbes 30 under 30.

This curiosity piece is critical. To supplement my research, I started to look into one of the most well known entrepreneurs of our century, Elon Musk, founder of SpaceX and Tesla Motors – and before that, PayPal. Musk’s deep curiosity emerged at a very young age. As a child, he was reportedly so introspective that his own parents thought that he was deaf. His mother later found out, however, that Musk was constantly daydreaming about inventing things to do with space and rockets. His childhood curiosity was not just limited to daydreaming, though. At the young age of 12, Musk had already taught himself how to code and successfully created and sold his own video game. He demonstrated inventiveness, a building block for creativity, before he even hit his teenage years.

Musk has shown repeated grit or commitment in his entrepreneurial career. During the creation of his first IT company, Zip2, he had to work morning, noon and night, living in the warehouse where he had rented an office and taking showers in the locker room of a local stadium. His passion for his product led him to save every penny to persevere with his company and keep it afloat in its first two difficult years. When he was down to his last $20 million, he doubled-down on Tesla and saved it from bankruptcy at a critical point when less-optimistic entrepreneurs would have cut their losses.

Musk also has the futuristic imagination and inventiveness needed for creativity. Consider his Neuralink venture, a company aiming to merge man with machine to enhance our cognitive capacities by implanting an ultra-thin mesh into the human brain so that it can upload or download information directly from a computer.

All of this is to say that the three C’s are valuable personality traits for success in entrepreneurship. Reflecting on how Musk illustrates more than anyone all the critical qualities of successful entrepreneurship, I sense that my original model missed the mark. I previously highlighted curiosity, creativity and commitment as individual characteristics, each with its own power to fuel the entrepreneurial mind. Instead, it may be the interaction between these characteristics that captures true entrepreneurial success. Those entrepreneurs who are consistently curious, creative and committed have a fighting chance of driving their ideas forward and even being among that 10% of start-up successes.

 

Essayist Andrew Raine, 17, spent two summers on the Penn campus studying aspects of entrepreneurship.

Conversation Starters

Did Andrew Raine always like entrepreneurship? What awakened his curiosity to this topic and how did he pursue it further? What is empirical evidence and how did he use this to formulate his model?

What is grit? Using the Related Links, explore Angela Duckworth's grit research and grit scale. Do you have grit? How have you personally displayed grit in your own life?

What qualities would you add to Raine's Curiosity, Creativity and Commitment model? What other traits do you believe contribute to entrepreneurial success?

5 thoughts on “A Research Project Builds the ‘Three C’s Model of Entrepreneurial Success’

  1. Entrepreneurial success is not about how large of a figure you make yearly or monthly but about how large of a dent you form in the world around you. Entrepreneurship is about innovation. It is about creating something revolutionary that will fundamentally impact the culture of humanity for many decades, centuries, or forever. It is about setting out to discover and execute something that nobody is willing to do. It is about thinking differently. Indeed, maintaining curiosity, creativity, and commitment undoubtedly generate entrepreneurial success. However, a great product and great marketing is needed to generate the most successful corporations. Marketing is about communicating the unique, unconventional values that define who you are and what your company is to the world. The success of Nike didn’t come from making ads that stated why and how their soles were better than those of Reebok’s or Adidas’s and the success of Apple didn’t come from making ads that argued why and how their computers and phones were better than those of Microsoft’s or Android’s. Rather, Nike honored great athletes and Apple honored people who drove the world forward. Essentially, “the people who are crazy enough to think they can change the world are the ones who do,” as they tell others that they can.

    1. Hi Kenny, I agree that originality is very important in helping entrepreneurs succeed. This connects to two of the three c’s in the model: curiosity and creativity. Your comment got me thinking that there is probably an additional host of factors, not just the three C’s, that contribute to entrepreneurial success. I was curious and did some more research on this. A successful business results partly from being organized, having great time management skills, and being resourceful. One day, I was watching Shark Tank and one of the sharks, Daymond John, was discussing about his childhood, and how poor he was. Often times he didn’t even have enough food on the table to eat. He only had a few things in his house, and one of those things that sparked inspiration to start his clothing line, FUBU, was his mother’s sewing machine. He turned this one idea into a $6 billion company. Marketing is important too; he used graffiti to increase customers’ awareness about his brand.

      Additionally, success comes from being a risk taker and sometimes having a bit of luck. Opportunities, preferences, and trends always change. How much money your business makes depends partly on what products are already out there and the amount of competition there is. In terms of skills, a successful entrepreneur must have great communication skills. This will create a vast network of people who will support his/her business. Independence is important as well. As a result, the product should fit the market and the company should grow fast.

      Another factor that is very important for entrepreneurial success is how your business positively impacts the world. A great example of this can be found on another article on the KWHS website called “Get Your Lemonade Here! And Business Tips from Mikaila Ulmer.”[https://kwhs.wharton.upenn.edu/2019/06/get-lemonade-great-business-insight-entrepreneur-mikaila-ulmer/]. Mikaila Ulmer is a young teen who has created a very successful lemonade business to help save the dying populations of honeybees. Definitely read this article if you get a chance!

  2. Grit is not about intelligence or talent. It is passion, perseverance, courage, determination, and discipline. Quite literally, it can mean gritting your teeth through difficult circumstances and disagreeable situations for the sake of achieving your long-term goals. For example, as Raine mentioned, grit (or commitment) is necessary for entrepreneurs as they will need to endure through various rounds of disappointment and failure. In the medical field, students must have grit to endure through the competitive medical application process, courses, endless testing, and certifications before donning the white coat as an official physician. Grit is a necessary and valuable characteristic that can drive one towards the path of success in any field.

  3. A terrifying thought has just struck my mind, and I’m trying to keep a poker face while getting as far away from the chessboard as possible. As I walk away, I hear my opponent’s piece hit the board. I turn back, and to my horror, my opponent made the move that I spotted. I search across the board desperate for a miracle but to no avail. Staring at the American flag next to me, I’m paralyzed as reality hits me like a pile of bricks: I lost the gold medal for the US at the World Youth Chess Championships. All my hard work vaporized in one move.

    After my game ends, one of my friends catches me as I walk outside. “Tough luck,” he muttered. Yeah, real tough luck, I thought. As an eleven-year-old, I thought my chess career had ended. I had been committed and passionate about chess for years, but I failed at the very last second. Andrew Raine’s insight that grit is vital to success didn’t resonate with me then, and it didn’t on the long plane ride back.

    Years later, I encountered a similar situation in the penultimate round of the 2019 High School National Championships. After a strong start, I faced the top seed on the first board and needed not to lose to keep chances of winning the tournament. While I was calm at the beginning, I soon made a mistake, and my opponent exploited it. I sat paralyzed in fear as the moment at the World Youth flashed before my eyes, and I thought I was fated to blunder again only steps away from success.
    Almost by accident, I realized the value of grit from my mockery. Like a video game character, was there any meaning to death if I could respawn as many times as I wanted? As long as I had grit and kept fighting, I could reach victory eventually, no matter how many failures it took. My mistakes were no longer evidence that I was fated to lose because my mastery over chess was inevitable if I kept learning from my mistakes. I went back to focusing on the game, no longer scared of failing.
    I drew the game and went on to defend my title as National Champion. While I had hoped to win, I was still proud of myself. My grit and optimism had turned around a bad situation.

    The lesson I learned that day certainly applies to entrepreneurs as well. The fact that every nine out of ten startups fail is a testament to the fact that business is harder than the profits and fame that we dream of. As Raine mentions, commitment from optimism is critical in these moments to stick with our ideas when times get tough, like how Musk doubled-down on Tesla with his last 20 million. Optimism also drives us to bring our thoughts from our daydreams to the market. However, while I agree with Raine that all successful entrepreneurs are optimistic to some extent, unfettered optimism may do more harm than good in business. Unchecked optimism may lead entrepreneurs to be less cautious and underestimate the difficulties of business, which can be devastating for those who go all-in on their startups.

    According to research from the University of Bath, the London School of Economics and Political Science and the Cardiff University, overly optimistic business owners earn around 30% less than those with below-average optimism. Optimists who believe their idea is too good to fail may create startups where there was no market to begin with. While these entrepreneurs are indeed committed to their product, their commitment backfires against them. It seems that one factor to creating a successful startup is realistic optimism, or striking a balance between faith in an idea and careful analysis of their product and the market.

    However, even the most well-prepared entrepreneur is going to face hardship. After all, entrepreneurship is a complicated and risky venture, and the process of learning starts with facing an unknown situation. In these moments, grit and resilience are the keys to a successful startup. Instead of setting unrealistic expectations and quitting when they aren’t met, entrepreneurs have to continually learn from tough situations and their mistakes to evolve with their product. To admit mistakes and learn from them while believing in the long-term success of a product requires a mix of grit and careful optimism, critical components to any successful startup.

    Statistics on Optimism and Entrepreneurship – https://www.marketwatch.com/story/too-much-optimism-can-cost-you-your-shirt-2018-10-04

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