study in the Northern Netherlands
Hittersum; Thijs van
Rijksuniversiteit Groningen, faculty of economics and business; Postbus 800, 9700AV, Groningen
April 2008
Abstract: This paper contains a review of an exploratory study on seven potential
entrepreneur related success factors of new businesses in the Northern Netherlands. Eight rather successful entrepreneurs where asked qualitative interview questions on seven
potential SF’s: Motivation, Work experience, A Mentor/role model, Preparation, Education, Personality and Networks. Interestingly, personality was named as most important factor. Also, networks, motivation and mentor support where named as success factors. On work experience, preparation and education, mutual disagreement existed.
Index
1. Introduction ... 3 2. Literature Review ... 4 2.1 Success factors ... 5 3. Research design... 9 4. Methodology ... 11 4.1 Selection ... 11 4.2 Sampling... 12 4.3 Data analysis ... 13 5. Results ... 136. Summary and discussion ... 18
7. Conclusion... 21
8. Limitations ... 23
1. Introduction
The importance of entrepreneurship for a national and more specific regional economy is widely recognised. Especially start-ups that manage to survive their first few though years start to contribute to a healthy economic climate. Therefore, over the past years a lot of governmental and private initiatives were started in the Netherlands. Most of these initiatives had two aims; trying to increase the number of new entrepreneurs and second facilitate their growth.
More so than increasing the absolute number op start-ups, facilitating the growth of start-ups can have a very positive influence on a (regional) economic climate (Schutjens and Wever, 2000). This is confirmed by Van Stel and Suddle (2007) who found that in the Netherlands, in the first six years of existence, the contribution of a start-up to a regional economy keeps increasing. Not before six years, the point of maximum contribution is reached in most cases.
When trying to influence the growth and success of new businesses, it is important to retrieve the drivers of success, so called success factors of new businesses. Numerous papers have been written about success factors in specific markets or branches. Also, a group of researchers tries to retrieve entrepreneurial success factors of a specific region. They use more general success factors that can be of use for a wide range of companies within a specific region. This paper fits in the second group; We try to retrieve success factors for a specific geographic area, the Northern three provinces of the Netherlands. This is a relatively underdeveloped region in the Netherlands where over the past few years many initiatives where started to stimulate (successful) entrepreneurship.
In literature, a lot of contradicing opinions and papers exist and no list of all success factors can be found. Also, very limited research on success factors in the Northern Netherlands excists. The aim of the present study will be to deliver more insight in possible success factors for entrepreneurs in the Northern Netherlands. This might help both future initiatives and entrepreneurs to increase the success rate of new start-ups and can also be used as a starting point for future research.
of the Northern Netherlands. They will be asked to comment on the success factors selected. The interview results will be coded and analysed. Then the most interesting findings and comments will be discussed.
2. Literature Review
Entrepreneurial success is a theme widely discussed in literature. Many authors try to retrieve drivers of entrepreneurial success; so called success factors (Storey 1994; van Praag 1996). When looking at the outcomes of those studies, it rapidly becomes clear many success factors are identified, but different authors come up with very different results. Although some factors are frequently used, the importance attached to the factors differs significantly. This might very well be caused by the contextual differences between studies.
A lot is written for example about success factors in specific markets or branches.
Recently, a study on success factors of new technology firms was conducted (Song et.al., 2008). Based on factors found in literature, they used Meta analysis and out of 24 potential success factors, 8 proved to be homogeneous significant for new technology firms. Zahra and Bogner (2000) and Newbert et.al (2007) too conducted researches in this area. Also, a lot is written about success factors in e-business. Korgaonkar and O'Leary (2006) found 9 SF, specific for e-businesses. Other writings about this topic are for example; Razi e.a. 2004, Eid e.a. 2002 and Wang (2007).
The papers mentioned above are just the tip of the iceberg. Many writings about success factors deal with very specific markets and circumstances and in most cases can not be generalised for a wide range of companies.
Another reason results on success factors differ significantly between studies, can be found in the different operationalisations of success that are used.
The last decade more and more entrepreneurs start their own business with being self-employed as their main motivation. They have a desire for freedom of work and thoughts. Those starters in most cases do not have the desire to grow and achieve an increase in turnover, staff and profits. Others have higher ambitions, are constantly striving for growth and maximum profit. Those starters are called Schumpeterian Starters (Carney 2007).
In literature, different authors are arguing about the right way to measure and assess entrepreneurial success. Hoy et. al. (1992) concluded most authors use single dimensional growth indicators to measure success. This statement is confirmed by Liao et. al ( 2001) who argues single measurement scales such as ROI, employee growth or turnover don’t necessarily represent the true health of firms. Especially in the case of start-ups those measurement scales individually don’t always satisfy. Liao et. al. state firms should not necessarily be assessed on what they call ‘realised growth’. Market expansion, resource based growth and technology development can be useful assessment tools.
Also Griffin and Page (1996) found the biggest problem in assessing product or entrepreneurial success is the multidimensionality. Their most important conclusion is, success measurement is very situation specific and there’s not one general way to measure entrepreneurial success. Murphy et. al. (1996) conclude generalisation of performance variables is not justified. They name several potential success measures but mention the fact they should not be used individually. Also, success measurement is not just measuring short term performance; continuity should be taken into account in most cases. In conclusion, Brush and Vanderwerf (1992) add subjective measurement of success is not at al inappropriate, given the difficulties of objective performance measurement.
As pointed out above different contextual circumstances and definitions of success will lead to different types of success factors. Therefore, it seems very important for any researcher to define both success and the research goal in a very early phase, when discussing success factors. When success is not defined properly in the early stages, it will be hardly impossible to measure the impact of different success factors later on.
2.1 Success factors
A lot is written about the entrepreneur’s motivation in relation to his performance. Many authors name motivation as a success factor. Liao et.al. (2001) distinguish between groups of “push” and “pull” motives for new business starts. Pull motivation suggest the entrepreneur’s motivation is affected by the need for achievement from within. Entrepreneurs, driven by pull motives are more intrinsically driven. The group with push factors contains more extrinsic reasons to start-up. Negative factors, such as the loss of a job and limited options are push factors.
prove their hypothesis, although their findings indicated pull motivation correlates with a relatively better performance.
Vivarelli (2004) succeeded in proving, entrepreneurs who where positively driven by pull motives had a higher success rate than more negatively driven entrepreneurs.
Some authors disagree with Wicker, Keasy and Vivarelli about the superiority of pull factors. Solymossy (1996) for example found pull and push motives had no influence on entrepreneurial success. Storey (1991) tried but failed to prove the importance of push factors. Based on the push factor unemployment he tried to find a link with success of entrepreneurs. In conclusion, motivational factors are mostly recognised as factors of importance.
Most authors believe in the superiority of pull factors over push factors. This is in line with the believe intrinsically motivated people perform relatively better on numerous dimensions to people merely extrinsically motivated.
In some studies difficulties in finding evidence relating push/pull to entrepreneurial success appeared. This however was probably caused by the specific circumstances of the researches. Moreover, the positive relationship between intrinsic motivation and performance in general is widely recognised.
Schutjens and Wever (2000) conducted a survey in The Netherlands. They tried to find determinants of new firm success, thereby not focussing on a specific market. Out of a lot of potential success factors they found three key pointers which they consider important. All three are widely supported by other relevant literature.
Their first pointer is ‘Work experience’. According to Schutjens and Wever, entrepreneurs with work experience are more successful than less experienced starters. This is confirmed by Stuard et. al. (1990). They point out work and management experience is a clear predictor of success for new entrepreneurs. Robinson and Sexton (1994) also found evidence supporting this statement. They found entrepreneurs with over 2 years of work experience are significantly more successful than their less experienced counterparts.
Van Praag (2003) points out work experience can be a success factor, as long as the experience is gained in the same industry or same occupation as the new business. Bruderl et. al. (1992) name earlier self-employment experience as a predictor of success.
performance of especially young starters, according to Schutjens and Wever. This is partly supported by findings of Bruderl et al. who did research in almost 2.000 new registered businesses around Munich, Germany. They found young entrepreneurs had a higher chance of survival and success when they had a father who was self employed too. Having a father who can function as a kind of role model or advisor increases the chance of success. Also Peart (2004) mentions the importance of a mentor, although the need for a mentor decreases with an increasing experience of the entrepreneur. Also, it seems rather hard to find a partner or mentor that suits, because the mentor-entrepreneur relationship has to be one of confidence and trust before the entrepreneur will be able to gain any advantage of it.
In contrast, Waters et.al (2002) failed to prove mentors have a positive influence on new business success. In their study, both career-related and psychosocial mentoring had no positive impact.
Their last pointer is the importance of a thorough preparation. Starters who took time to do some serious research and prepared themselves well on what was coming appeared to be more successful than their less prepared colleagues. Van Gelderen et.al. (2006) specify preparation in making a business plan and gathering all the information needed before getting started. They prove well prepared entrepreneurs (with a business plan) are more likely to be successful than less prepared starters. This is confirmed by findings of Liao et.al. (2006). Gatewood et.al. (1999) on the other hand proved successful and unsuccessful entrepreneurs devote the same amount of time on preparing themselves. They don’t see a thorough preparation as a potential key success factor.
The entrepreneurs’ personality is a factor that influences entrepreneurial success, according to Rauch and Frese (2007). In line with Caprana and Cervone (2000), personality is defined as ‘dispositions to exhibit a certain kind of response across various situations’. We assume the entrepreneurs personality is a predictor of an entrepreneurs behaviour and so a predictor of success/failure (Rauch and Frese 2000). In contrast with Aldrich (1999), who argues there’s no empirical relationship between personality factors and entrepreneurs’ performance, Rauch and Frese (2007) show certain entrepreneurs’ personality traits are positively related to business success.
Collins et. al. (2004) show need for achievement and risk taking are personality factors that influence entrepreneurial success. This is confirmed by Stuard and Roth (2001).
Rauch and Frese studied articles about personality traits and come up with a long list of potential personality factors. They argue personality factors are of influence but the impact differs when circumstances chance.
Maybe the most discussed topic in literature concerning start-up success is the importance of networks. When an individual person or institution has durable information contacts, exchange relations, or both, with other people or with organizations such as firms, universities, or authorities, we are entitled to speak of a network (Witt, 2004).
Bruderl (1998) defines a theory he calls the ‘network success hypothesis’. It states entrepreneurs can gain access to resources by using their network contacts that otherwise are not or at a much higher price are available to them using market transactions. Especially young companies with a lack of cash and resources can profit highly from their network contacts. They seem to have a serious competitive advantage over entrepreneurs with a smaller network. This is confirmed by other studies, such as Brüderl et. al (1992), Elfrink and Hulsink (2003 ), and Schutjens and Stam (2001). Schutjens and Stam show network relationships of starting entrepreneurs develop from social into commercial in the first three years of the new business. In this period the entrepreneurs gains more and more advantage of his starting network.
connections between winners and losers where set. Knowing at an early point which network is a club of winners can influence the chances of success of new entrepreneurs, they assume. Birley (1985) shows that in the early stages, an entrepreneur relies mainly on informal familiar network ties.
However, Witt (2004) also sees some difficulties, especially in measuring the influence of networks on success. This is partly due to the problem of quantifying success. Second, especially the advantages and quality of informal relationships are hard to measure.
The review of literature above mostly suggests the factors named are positively related to new business success and are possible success factors. However, in line with Griffin and Page (1996), contextual circumstances must be taken into account. Therefore, assuming all factors named above, although supported by literature, are important success factors in the Northern Netherlands would be a mistake. To find out which of those factors is indeed a success factor in this region requires detailed contextual analysis.
A first step in this analysis should be a qualitative study. In this type of study specific circumstances can be taken into account, which is much more difficult in quantitative research. That type of research can be the next step.
3. Research design
As pointed out earlier in research on entrepreneurial success factors can be distinguished between regional and branch specific research. Also, many researches limited themselves ton both specific regions and branches. This research is limited to a specific region (Northern Netherlands) but not to a specific market.
Out of literature, seven propositions on potential success factors in the Northern Netherlands are formulated. Based on the comments of successful entrepreneurs, a more in depth understanding of the different propositions will be possible.
Figure 1: Propositions REGIONAL SUCCESS FACTORS BRANCH SPECIFIC SUCCESS FACTORS REGIONAL + BRANCH SPECIFIC SUCCESS FACTORS NORTHERN NETHER-LANDS PROPOSITIONS
1. The entrepreneurs’ motive for starting up a new business has impact on their later success
2. (relevant) Work experience has a positive influence on new business success
3. Mentor support has a positive influence on new business success
4. A thorough preparation has a positive influence on new business success
5. The level and type of education has an influence on new business success
6. Personality characteristics have an impact on an entrepreneur’s success
4. Methodology
Our goal is to provide more insight in potential entrepreneur related success factors in the Northern Netherlands. Therefore we conducted this exploratory study. We determined qualitative interviews with successful entrepreneurs would be the right technique to offer this insight. Our goal is to capture an in-depth understanding of the potential success factors discussed in the literature review. Instead of quantitative research, which tries do draw conclusions based on a large sample, qualitative research tries to capture the individual’s opinion and allows for more rich descriptions. Qualitative research seeks for a variation of opinions and statements instead of a variation of people (Davis et al., 2007). Our emphasis will be on the differences in opinion between the experts.
The interview questions were open-ended and varied in sequence. While the interview protocol was followed, probing questions in areas the interviewees discussed were also explored.
In this study we try to develop a body of knowledge on the matter of success factors. Success factors in the Northern Netherlands is a relatively new field of research and our paper might form a basis for future quantitative research. The results can be useful for both individual (potential) entrepreneurs, (governmental) institutions trying to promote entrepreneurship and for future research.
4.1 Selection
In this study potential success factors for entrepreneurs in the Northern Netherlands will be explored. This is a survey in a specific region. In that context, branch specific success factors are less relevant. Therefore, in literature we focused on those papers which did not deal with specific branches. Instead, we tried to use when possible papers on success factors in specific regions. This is in line with our own survey.
Schutjens and Wever (2000) identify three groups of success factors; factors associated with the entrepreneur, the firm and external factors. Two studies (Bruderl 1992; Harada 2003) of success factors in specific geographical area’s speak of Human Capital factors. They relate entrepreneurial success to specific characteristics of the entrepreneur.
because previous research has showed us, it is empirically almost impossible to capture all different aspects and success factors.
The selected success factors that will be discussed therefore are: entrepreneurs’ motivation, work experience, having a mentor, entrepreneurs’ preparation, education, personality and networks. All factors selected are widely supported by relevant literature.
Two other factors mentioned frequently are age and gender. We decided to not include those factors in our research. We determined those factors are far less interesting for qualitative research. Also, in our sample of successful entrepreneurs, both age and gender seemed no factors of influence, given the variation on both factors in our group of interviewees.
4.2 Sampling
In sampling, the main challenge was to find some kind of tool for selecting the experts. As already pointed out in the first section of the literature review, a lot of different views on success are available and non of them is necessarily correct or wrong. A common view on success is provided by Griffin and Page (1996). They mention the situational dependence of success criteria. A criterion that makes one entrepreneur successful does not mean an entrepreneur who does not meet this criterion is not successful.
Therefore, in line with Brush and Vanderwerf (1992), the entrepreneurs selected where all assessed on individual and sometimes alternative criteria, for example award nominations. However, a few guidelines where used to direct the selection process:
Every entrepreneur selected is at least 2 years listed by the Chamber of Commerce in Groningen.
The entrepreneurs’ companies underwent a constant growth through their (few) years of existence. This can be growth in staff, turnover and/or profit etc.
The entrepreneurs, although they all have relatively young companies, show some continuity in their way of driving a business. None of them wants to quit or chance their business dramatically in short notice.
After eight interviews, the point of theoretical saturation occurred. Each incremental interview provided no new information. This is in line with theory of Strauss and Corbin (1998) and Guest et. al (2006).
to minimize the researcher bias. Also, to reduce this bias, all interviews where analysed and coded.
4.3 Data analysis
For coding, techniques from Strauss and Coblin (1998) where used. They describe the coding process in three phases; Open coding, axial coding and selective coding. Open coding is the first step in de coding process. We located themes and assigned initial codes or labels in a first attempt to condense the mass of data into categories. Open coding brings themes to the surface from deep inside the data.
The next step is axial coding. With axial coding, we tried to organise the codes produced during open coding. The focus lies primarily on the codes and not on the original data. The main purpose was to find categories and concepts that cluster together.
When reaching selective coding, the major themes and subjects where identified. In this phase we followed the process of integration and refining of our data.. The original data where reproduced and made ready for use.
In the section below, the results of the interviews are presented. We did not include all the citations. We attempted to use the most representative ones of each category.
5. Results
MotivationAll but one where driven by intrinsic pull factors. Just one became an entrepreneur because of a more extrinsic reason; a conflict with his/her former boss. The entrepreneur commented: “I
always had the idea of becoming my own boss in the back of my head. Not until a conflict with my former boss emerged I started to think about it seriously and decided I no longer wanted to continue my old job. Starting up a new business felt as the right step in my professional career.”
In the case of the other seven, no external pressure somehow ‘forced’ them to become their own boss. Various reasons where mentioned;
“When writing my graduation paper with two other students, the subject was very much of our interest. We felt we might be able to use the information gained in our research to successfully start a business in that particular market. So we did and right from the start it went really well.”
Two others had their own business before they reached the age of 18. They both said even as a kid they where selling things to other kids. Early on in their lifes it became clear they would start their own business. In two other cases, the respondents had a professional career for several years when they thought of a unique business concept they wanted to exploit.
What’s most important to notify is the fact out of eight successful entrepreneurs, just one of them did not decide to become self-employed completely based on intrinsic reasons. The group of seven contained some internally different starting motives but they all where driven by the feeling they where competent of becoming a successful entrepreneur.
Work experience
Out of the eight entrepreneurs interviewed, four of them gained work experience before they became self employed. Of this group of four, just one however had work experience in the same market they started their later business in. This was the only interviewee who pointed out the experience gained in their former jobs was of any decisive influence on their later success as an entrepreneur.
“I gained work experience in the insurance branch. Today I sometimes take advantage of that experience for my own business. However, I don’t think I would be less successful without that particular knowledge and skills. An entrepreneur should always be capable of acquiring the knowledge and skills needed.”
In contrast, someone else stated: “I’ve worked for a large publisher in Groningen. This was a
very interesting and challenging function. I was able to develop a lot of skills. However, at the end I did not feel I was totally supported in carrying out all of my ideas. When I realized that, I started thinking of the advantages of being self-employed. The skills I developed in that job however are very useful nowadays.”
field. In my opinion, the skills needed to become a successful entrepreneur are very much different from the skills needed in paid service. Moreover, an entrepreneur should be able of finding alternative ways in obtaining the right skills.”
Mentor
In literature, the role a more experienced mentor can play for less experienced new entrepreneurs is widely recognized. One gloss is that the mentor-entrepreneur relationship should be a very trustful and confidential one.
One entrepreneur pointed out: “When my two companions and I started our business, we were
just graduated. Although we all did a entrepreneurship related study, we realised we still lacked a lot of knowledge and experience. Therefore, we decided to install a board of advice, existing of ‘three wise men’ as we like to call them. They have no formal authority but often give very useful advice especially in the early start-up fase.”
An other entrepreneur stated: “Some years ago I was doing business with a Jewish
businessman. He learned me a lot about the business. His most important advice was; ‘it’s all about profit’. I took his advice and run my business based on his view.”
Three out of the eight entrepreneurs pointed out they got advice from a mentor. In all three cases it was named a success factor. The mentors did not have any formal authority, they just gave advice. Some other interviewees pointed out a mentor might have been very useful. In their direct environment, an appropriate mentor was difficult to find.
Preparation
A thorough preparation is considered a potential success factor of new businesses. Gathering information, doing market studies and gaining knowledge are ways entrepreneurs can prepare themselves before taking a new business to the market.
The entrepreneurs had some very contrasting views on the importance of a thorough preparation.
Two others also pointed out they see a good preparation as one of the key factors of their later success. “I knew in great detail everything about the market, distributors, potential customers
and so on. Also I prepared myself really well financially, I was able to deal with unexpected situations. This is important especially in the beginning of a new business, when the uncertainty is high.”
The other five entrepreneurs declared they did not actively prepare themselves. A striking quote that covers their view was: “Good Entrepreneurs are not people that waste time
preparing themselves. They have a more hands-on mentality and just start. They deal with problems on the moment itself. “
On this topic the entrepreneurs mutually disagreed the most. The group that actively prepared themselves pointed out their preparation was an important driver of their success. On the other hand, the interviewees that did not prepare themselves see preparation mostly as a waste of time.
Education
Just two of the entrepreneurs named education as a key success factor. This is rather striking, especially considering three of them finished an high level entrepreneurial related study such as business science. None of them named education as a success factor.
“The knowledge I gained during my study often is useful to me. However, it is not a success factor. It mainly saves me time. I didn’t had to gain a lot of extra knowledge when I started my own business,” one said.
When asked if education is not seen as a success factor because of the low quality, they all responded negatively. Frequently mentioned by all interviews was: “You can’t teach someone
to become a successful entrepreneur.”
One stated: “The best that can be achieved through education is providing a potential
entrepreneur with knowledge and skill so their chance of becoming successful increases.”
Four others did finish an education that was not directly related to entrepreneurship. In just one case it was directly related to the product/market of the entrepreneur’s new business. This entrepreneur stated: “Optimising and developing my product is the most important
Someone else stated: “I finished my teaching education years ago. During that education, I
developed management and leadership skills I now use to direct my employees.”
Just one person did not finish any education. “School is just not my thing. I’ve more a ‘do’
instead of ‘think’ mentality. No teacher can teach me how to entrepreneur.”
Personality
For many authors seemed rather difficult to define personality, many different personality traits are used in literature. Our interviewees reflected this. They all acknowledged the importance of personality. In fact, most interviewees pointed out personality is far superior to the other success factors identified. However, many had difficulties explaining what they believe important personality characteristics are. After some extra questions, the following was mentioned frequently: “Perseverance is very important for an entrepreneur. During a
start-up every entrepreneur gets faced with some bad luck. In situations like that it’s important to believe in yourself and your business.”
Also: “The courage to take a risk and don’t walk the safe road of working for a boss is
important. Most people don’t dare to take such a risk. Those people will never be good entrepreneurs.”
The interviewees pointed out they see personality aspects as far superior to factors like education or work experience. On other interview topics there was mutual disagreement about the importance of the particular success factor. Every entrepreneur however named personality factors. They did not use the exact same words to describe it; courage, perseverance, self-confidence and vision where named the most.
Networks
Maybe the most obvious and widely discussed success factor is the importance of an entrepreneurs’ network for the success of his new business. Networks can provide an entrepreneur with resources, both tangible and intangible, which he could not obtain from the market or at least not for the same price.
The importance of networks is partly confirmed by the interviewees. Just two of them state they did not had or used their network when they started-up.
“Networks are by far the most important success factor. I can’t imagine an entrepreneur being successful without using his contacts. In my case my first orders where all from network contacts. They helped me through my first year. This does not mean I’m successful just because of my network. My company delivers a quality product.”
Networks can provide an entrepreneur with both tangible and intangible recourses and are either formal or informal (Witt, 2000). All our interviewees stated their networks are intangible and informal.
A very illustrative statement was: “Informal networks are far superior to formal ones. In a
formal setting where people get together with the intention to score a new job, less money is made. In the long term, informal contacts grant each other more valuable jobs.”
And: “Networks can’t be forced. Just invest in personal relationships, then a network will
take shape automatically.”
Most entrepreneurs argued they didn’t like network meetings where people try to ‘score’. They don’t have the intention to get a new job when they appear at such a meeting.
“A network not always means you get new jobs out of it. I also get very useful advices from network contacts for example. “
In conclusion, Networks are considered an important success factor by the interviewees. They also point out informal networks are far more important and profitable on the long term.
6. Summary and discussion
We conducted a qualitative study with the goal to provide the reader insight in the views of successful entrepreneurs in the Northern Netherlands on entrepreneur related success factors selected.
Out of literature, seven widely recognised potential success factors where selected; Motivation, Work experience, A Mentor/role model, Preparation, Education, Personality and Networks. Based on literature, we produced seven propositions which where used as a starting-point for the interview questions. The results of the interviews where coded and the most representative ones in each category can be found in the results section.
for a start-up (Liao et.al. 2001). Although many hypothesized pull motives are superior to push motives (Wicker et.al. 1989, Keasy et. al. 1991), empirical evidence was not produced. In the case of motivation, the results from the interviews where in line with our proposition. All but one where driven by (various) pull motives. Just one entrepreneur was extrinsically pushed into self-employment. Most important to notify is the fact most interviewees always had ambitions to become self-employed but waited for the right opportunity; they didn’t rushed into things. Our findings contrast with findings of Solymossy (1996) who found push/pull motives had no influence on later success. In the Northern Netherlands, it seems successful entrepreneurs are mostly pulled to the market with a successful business concept.
The second proposition was not confirmed by our findings. Work experience was not found a key success factor by our interviewees. Authors like Stuard et.al. (1990) and Robinson and Sexton (1994) found work experience is a clear predictor of success. More experienced entrepreneurs outperformed their less experienced colleagues. Van Praag (2003) adds especially work experience gained in the same industry as the later business is a predictor of success.
Four interviewees gained work experience in former jobs. Just one however, pointed out work experience was an important driver of his later success. This was the only person who had work experience in the market of his later start-up. This is in line with the findings of Van Praag. Three others had less relevant work experience and all three pointed out their knowledge and skills gained in their former jobs had no decisive influence on their success. Also, the four interviewees without work experience pointed out they did not felt their lack of work experience formed a barrier for success. Rather surprising, entrepreneur value work experience less important than one would assume based on literature. Especially the fact some finished an entrepreneurship related study and still didn’t found such an education a success factor might occur rather strange. This probably is caused by the fact our interviewees see entrepreneurship not as something that someone can learn through education.
interviewees who did not took advice from a mentor pointed out this was not an aware choice. In line with Peart the right person for a mentor role was not available in their direct environment.
Based on findings of van Gelderen (2006) and Liao et.al (2006) the fourth proposition stated a thorough preparation has a positive impact on an entrepreneurs’ success. On this proposition, very contrasting results came up. Three entrepreneurs did actively prepare themselves and all pointed out this preparation was a driver of their success. On the other hand five entrepreneur did not prepare themselves and started right away. Also, they pointed out this was an aware choice, they see preparation as a waste of time and money. In line with findings of Gatewood et.al. (1999) preparation seems to be no factor of decisive influence in our paper. However, this might be caused by the fact, just successful entrepreneurs where interviewed. In case of less successful entrepreneurs it might very well come up a thorough preparation (or the lack of it) has impact.
On the importance of an education (Bosma et al. 2004; Cooper 1994) was found empirical evidence in literature. However, on those factors was no mutual agreement among the entrepreneurs. Out of seven interviewees who finished an education, just two interviewees named education a driver of their success. Rather striking was the fact three interviewees finished a high level education directly related to entrepreneurship, but not one of them named education a success factor. On education, the findings contrast highly with literature. Writers like Cooper and Bosma point out the importance of an education and deliver evidence on this matter. In our case, most interviewees pointed out ‘it is almost impossible to teach someone to become a good and successful entrepreneur’.
The contrast with literature might be caused by the fact it is rather hard for a person to judge the real impact of their education in relation to personal success. Also the fact, just successful entrepreneurs where interviewed might be a factor of influence.
the most important drivers of success of an entrepreneur. Findings from Frese and Collins are more than confirmed by our interviewees.
A possible explanation can be the interviewees overvalue their own personality over other factors. They might feel qualities like self-confidence, perseverance and courage makes them look good, instead of pointing out they prepared themselves really well for example.
Another explanation might be that, in the Northern Netherlands, personality is in fact superior to other success factors. It may be the case that, in the Northern Netherlands, the success chance is that high that an entrepreneur with a basic level of abilities, combined with a strong personality, has a high chance of success. This hypothesis however, requires further research.
Networks where found important by all interviewees. The proposition was, network contacts and structure have impact on later success. This in confirmed by our findings.
In literature, difference is made between formal and informal networks (Witt 2004). Rather surprising, none of the interviewees points out formal network ties contributed to their success. Informal network ties where found far superior. Also, the interviewees pointed out their networks provided them with intangible resources. The network success hypothesis of Bruderl (1998) states entrepreneurs who can refer to a broad and diverse social network and who receive much support from their network are more successful. This is in line with our findings. The importance of informal relationships on success in the early stages of a new business is also confirmed by literature Birley (1985). However, in contrast with findings of Schutjens and Stam, entrepreneurs didn’t mentioned a shift from informal to formal network contacts over time. Also, a drawback of network research, mentioned by Witt (2004) must be taken into account in this research. It is very hard, especially for individual persons, to measure and quantify their network success. The actual success of a person’s network is rather difficult to measure with qualitative interviews and more (quantitative) research on this matter is required.
7. Conclusion
In the specific circumstances of our research, on four success factors (motivation, the role of a mentor, personality and networks) results where in line with our propositions (based on literature).
On other factors, mutual disagreement existed. Just one person had relevant work experience and this was the only interviewee who pointed out work experience positively influenced his success. In the case of a thorough preparation, all three interviewees who prepared themselves well named it a driver of success, which is in line with literature. The others all pointed out they see preparation as a waste of time. Surprisingly, none of the three entrepreneurs who finished an education related to entrepreneurship named it a key driver of their success, which contrasts highly with findings in literature. Just two entrepreneurs named education a key success factor.
The most interesting finding is the fact, all eight see personality as the most important and superior success factor. Although most interviewees had some difficulties defining personality, characteristics like self-confidence, perseverance and courage where mentioned frequently.
The superiority of personality, on which matter no evidence can be found, might very well be caused by the difference in perception of an entrepreneur and reality. Although one might believe his success is mainly caused by his strong personality, education or work experience might very well be of even more decisive impact. The interviewees might overestimated the importance of this success factor.
On the other hand, if in fact personality is superior to other factors in the Northern Netherlands, then this should be taken into account by present and future initiatives which try to promote entrepreneurship in this region. For example personality training can help to positively influence this success rate.
Future initiatives also should take into account informal networking is preferred by entrepreneurs over more formal meetings. More informal network possibilities might also influence the success rate. Informal network possibilities possibly have a positive impact on the number of potential mentors, since mentors should have a very good and informal relationship with their ‘student’. The positive impact of a mentor on success was another factor confirmed in our study.
eyes of entrepreneurs. For future initiatives that try to stimulate entrepreneurship, it can be very usefull to better investigate which network possibilities can be offered to increase the success of new businesses. A future study to the real importance of personality on success in the Northern Netherlands also can be very interesting. Possibly the perception of entrepreneurs differs from empirical data. If personality is in fact that important, than it should also be taken into account by future and present initiatives.
8. Limitations
A limitation of this paper is the fact, just successful entrepreneurs where interviewed. By interviewing both successful and unsuccessful entrepreneurs, a more holistic view on success factors is possible. Finding and selecting unsuccessful entrepreneurs however is more difficult than finding their successful counterparts. Also, a limitation of our study is the subjective view of the interviewees on their success. The superiority of personality over other factors might be caused by this subjectivity.
The fact, unsuccessful entrepreneurs would probably be even more subjective about their failure, played a big role in our decision to let them be no part of our research.
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