Mar 18, 2018

The school of hard knocks gives entrepreneurs an edge

I often think that all autobiographies should have the same subtitle: “Look at Me, Mummy and Daddy, Look at Me!” It encapsulates the desire for attention that arises in childhood and typically exerts a commanding influence on our lives. I’ve met a number of successful entrepreneurs who’ve said their greatest regret is that their parents never lived to witness their achievements.

A thoughtful executive coach recently said to me that a great deal of boardroom behaviour is dominated by psychological lessons learnt in early life. While adults like to think of themselves as rational, in fact, we are more controlled by our emotions most of the time. So politics, conflict and power games are rampant in organisations — even though such conduct is destructive. In a sense, management isn’t really so different to playtime at the nursery, except that the stakes are rather higher.

There is a theory that many exceptional individuals had tough upbringings. Such early suffering can teach resilience at a young age, helping people detect and monitor threats, and handle crises and stress. Children from chaotic backgrounds are often better at dealing with uncertainty in adulthood — a valuable trait for an entrepreneur. They can also be good at seizing opportunities and judging risk.

Those who grow up in safe, ordered environments are more likely to study, delay gratification and take a secure career path, sticking to a predictable comfort zone. Quite a few suffer from perfectionism — the wrong characteristic for an entrepreneur, who needs to understand that business progress is about the art of the possible.

Various commentators have argued that parental loss in early childhood has a fairly high correlation with later eminence. The historian Lucille Iremonger discovered that about two-thirds of UK prime ministers from 1800 to the eve of the Second World War had lost a parent before the age of 16.

Children with missing parents need to develop extra maturity, grit and independence. A book called The Talent Code by Daniel Coyle asserts that losing a parent is a primal cue: you are not safe. So it becomes a “springboard of immense compensatory energy”.

Of course, such tragedies can also have adverse consequences on one’s personality. I’ve worked with a number of founders who are insecure, angry or even manic depressive. You might expect such accomplished individuals to be well adjusted and happy — but I would say the balanced ones are in the minority. Founders are driven by a need to prove their doubters wrong and dominate their surroundings. I recall one very wealthy retailer, who left school at 16, explaining how his ambition was fuelled by rivalry with his older brother, who had enjoyed a glittering university education.

Lots of strivers have a need to prove themselves, an obsessive hunger for something — typically a combination of wealth, power, fame and recognition. I suspect such urges are, in effect, a channelling of childhood trauma — perhaps parental desertion, abuse or deprivation. For example, billionaire inventor Elon Musk has criticised his father, saying: “Almost every evil thing you could possibly think of, he has done.” (His father denies the allegations.)

Quite a few well-known entrepreneurs were orphans or adopted, including Tom Monaghan, the founder of Domino’s Pizza; Larry Ellison of Oracle; Arnold Weinstock of GEC; Tony Pidgley, the housebuilder; Roman Abramovich, the Russian oligarch; the late Steve Jobs of Apple; and Jeff Bezos of Amazon — now the richest man in the world. I wonder if losing or being rejected by one’s parents can trigger a stronger hankering for appreciation and respect; or if the creation of a business can somehow substitute for the early loss of family. No doubt financial security is also a factor.

A conventional middle-class upbringing is probably the most certain route for everyday business success, according to research by the Kauffman Institute, an organisation that seeks to foster entrepreneurial success and whose studies show that most established entrepreneurs are over 40 when they start their companies, have a degree and are married with children.

To become an outlying winner such as Bezos or Musk, however, perhaps requires an extra ingredient — one that has enabled them to truly innovate and take much bigger bets. I’m sure that if we make life too easy and secure for our children, we are not giving them the best preparation for a challenging life.