Bill Gates and Microsoft. Steve Jobs and Apple. Mark Zuckerberg and Facebook. Lots of startup founders dream of attaining the same success as these legendary business icons, but such high hopes isn’t the only reason that people would rather become an entrepreneur than to climb the corporate ladder of an existing company.
In fact, recent research studies show that there are plenty of other reasons why people choose this particular path:
- Their CVs don’t reflect their abilities. When you submit your CVs to potential employers when you’re looking for a job, you’re basically trying to convince them of your ability to do the job you’re applying for. But sometimes entrepreneurs realize or suspect that they’re better than what their current work history may indicate. So instead of futilely trying to convince companies to let them have a top position right away, they start their own companies instead. This is certainly true with immigrants, because they may come from educational and employment backgrounds that are unfamiliar to US potential employers. For example, an economics degree obtained in the US may be more prestigious than a similar degree obtained in South America, Asia, or Africa.
- There’s a greater potential for higher pay. Obviously, you can’t become an instant millionaire when you’re just getting started when you join a company. Studies do show, however, that on the whole, you’re more likely to earn more as an entrepreneur than as an employee. However, it’s still a risky proposition and there’s still a good chance that you’d have earned more money as an employee.
- Entrepreneurs tend to have higher IQs. It’s been found the cognitive ability scores that entrepreneurs can achieve tend to be higher than what other people might predict based on their educational credentials. These entrepreneurs also get a higher score in cognitive ability tests than people with the same educational and work history who gravitate towards working in a company instead. In other words, smarter people are more likely to go at it with a startup.
- Educational backgrounds can’t indicate entrepreneurship. In many cases, these startup founders put their continuing education on the backburner while they pursue and work for their startup company. These founders believe that they will be more productive and successful even if they haven’t completed their formal education. There is truth in this because there’s simply no reliable university course or degree than can correctly predict the real entrepreneur abilities of graduates. The most famous examples of this phenomenon include Bill Gates and Mark Zuckerberg. They became among the wealthiest billionaires in the world, even while they achieved success as Harvard dropouts. Steve Jobs of Apple was a dropout as well.
The rather startling conclusion from these studies is that the reliance of employers on the academic backgrounds of their applicants may actually be misplaced. The CVs we use to list our educational and employment backgrounds may be insufficient. Thus, the smarter people, in general, will choose to start their own business, rather than join a company that’s already started!