Entrepreneurship: Nature vs. Nurture? A Religious Debate

Posted on Feb 27, 2010 | 155 comments


People - Twin Premies Sleeping

Nature vs. Nurture.  You’ve all heard the question before.  Let’s talk about kids for a moment.  I grew up believing that human behavior was 20% nature, 80% nurture.  Now that I have two boys (4 and 7) I’m convinced it’s the other way around.  There’s no question that both factors are involved. There have been many studies done on the topic including looking at twins raised in separate families.  There have been studies of adopted children to their natural parents versus the parents that raised them.  I have also seen studies on “birth order.”

As a father, I have strong beliefs on this topic.  I have first-hand observational data.  But I’m not naive enough to think that I am factually right.  I think it is an unknowable topic for which we each have our own observations and points-of-view.  Some data like those in the studies I mentioned above might help influence our thinking but the answer is, in the end, subjective.

So it is with entrepreneurship.  In my bones I’m convinced that entrepreneurs are more nature than nurture although I know both are involved.  Fred Wilson said as much on his blog also.  I wasn’t going to write about it since he had just covered the topic and echoed my point of view.  I have recently written extensively on what I believe the 12 characteristics of an entrepreneur are.

The comments were littered with nature vs. nurture discussions / debates.  Throughout all the discussion I’ve made it clear that my points-of-view are purely subjective.  I think I’m right but I’m not self righteous enough to pretend that my views are scientific.  That is true of all my blog posts.  I have a strong opinion and I put it out there.  I love the debate and I’m willing to alter my views.  It is what I love the most about debates and one of the things I love most about blogging.

So why am I covering the topic now?  Because Vivek Wadhwa has just written a piece on TechCrunch that “proves” the nurture argument quantitatively.  Notes Wadhwa, “Jason [Calacanis], Fred [Wilson], and Silicon Valley VC’s, I’ve got news for you: you’ve got it all wrong. Entrepreneurs aren’t born, they’re made.”  The data in this article is at best, a stretch.

Wadhwa is entitled to his point of view and he may be right.  I suspect he’s not.   To anyone who believes his data proves anything please do me a favor and go read The Black Swan – my favorite book of the past 5 years.  The author, Nassim Taleb is a self proclaimed “skeptical emperiscist” – that is, he is skeptical of any argument that tries to prove the future or any data argument unless he can test it with real data.

In the book Taleb rails against people who use faulty models to predict risk and have self satisfied, false data arguments to convince people of their points of view.  Data are used so convincingly to convince the untrained eye that conclusions are factual.  I said as much in my post that 73.6% of all data is made up.  OK, not literally made up.  I’m prone to hyperbole to get my point across.  But data are given as evidence to draw false conclusions.

Let me give you an example.  If you take 2,000 of the world’s top performing companies, only 29 (1.5%) are run by women.  They run only 15 of the Fortune 500.  It’s a fact, women aren’t good at running companies.  If they were they’d be running more successful companies.  They must be languishing by running many unsuccessful companies.  Data doesn’t lie.  If women were great at running companies they’d be running more of the successful companies.  In fact, data proves that white, middle-aged men are the best at running companies because they run the most successful ones.  Of course I don’t believe this argument.  But you can take data to say whatever you want to say by using it out of context.

I wish Vivek Wadhwa would have given his arguments of why he believes in nurture, given some data to outline his views and then stated honestly that the answer is still subjective.  In fact, when you have studies done by the Kauffman Foundation to the tune of $50 million coupled with a professor (Mr. Wadhwa) one could even point out the obvious bias that people who teach have in saying the answer is “nurture.”  I don’t think he’s overtly biased but all subjective analyses bring in bias.  See this wikipedia link on this topic – it’s called “confirmation bias

I’m an ex entrepreneur.  My views are formed from those experiences.  I’m biased, too.  I worked closely with hundreds of other entrepreneurs.  I’m now a VC that funds entrepreneurs.  I have lots of empirical evidence from which to draw my conclusions.  But I’m still biased by my experiences and am willing to admit that.

Also, I went and read the actual paper Mr. Wadhwa wrote.  Turns out he collaborated with a friend of mine that I respect, Z Holly.  The paper is surprisingly much more balanced in its assertions than this TechCrunch article.  If you’re interested in the topic and the data it is a worthwhile paper and you should read it.  The paper even goes as far as saying, “our research cannot be generalized to the entire population of entrepreneurs in the United States, it is meant to be illustrative of the backgrounds of entrepreneurs.”

I suspect Mr. Wadhwa used hyperbole in his TechCrunch blog post to get more readers to look at his work.  If that is the case I suspect he achieved his goals.  But I’m opposed to using data to “prove” unprovable facts because I know that readers are often susceptible to this kind of data manipulation.

My views are as follows:

  • Many people want to cling to the “nurture” argument because it’s more pleasant.  We all like to believe we can be taught to be great performers.  We can be taught to be better – no doubt – but no necessarily to be truly exceptional
  • Because I believe in the nature more than nurture debate in humans I’m already biased to believe that you have certain characteristics as a child that make you more pre-disposed to be a successful entrepreneur.  You may be a better communicator, have a higher IQ, be more of a natural leader, be more persuasive, be more analytical, etc. from a young age.
  • Before getting slammed in the comments – I’m not saying it’s only nature.  There is of course much nurture and culture weaved in.  But I believe that nature is stronger.  For example, I believe that the data on the studies of identical twins raised by different parents show that the IQ link is much more strongly correlated with DNA than the parents that raised you.
  • So going into a startup scenario you bring these innate skills or you don’t.  At the margin you can make yourself better at sales, product design, marketing, leadership, capital raising, etc. so it’s not pointless to want to improve.  But some people are going to be more likely to succeed than others.
  • Even if you believe in the nurture over nature in raising humans I believe that you are mostly a formed character by the time you start your company.  Your attributes (whether nature or nurture) are formed and hard to change.
  • I mostly subscribe to the 10,000 hours argument that Malcolm Gladwell made in his book Outliers.  People who are naturally talented still differentiate themselves by having put in the effort in the areas that are important for success.  You’re not born into being a world-class software developer.  If you have the innate DNA PLUS you put in the 10,000 hours then you are more likely to be at the top of your game
  • When I look at the attributes that I feel are most important in a startup CEO: tenacity, street smarts, the mental flexibility to pivot, resiliency, leadership / inspiration, work ethic, attention to detail, competitiveness, decisiveness and integrity – I think these all fall into the 80% nature territory.  Or at least 73.6% nature ;-)  The one other attribute – domain experience  – is by default nurture.
  • You don’t need to be great at all of these attributes to be part of a successful startup team.  But I believe the CEO needs to possess many of these traits.  Of course you don’t have do be great at all 12 skills.  Very few people ever would be.

Here are some assumptions in Wadhwa’s article where I believe the truthiness comes across with data assertions:

  • “My team surveyed 549 successful entrepreneurs” – that’s a good start.  I like surveys.  I prefer some data to no data.  He’s already pointed out in his work that this isn’t statistically significant but “illustrative.”  I’m OK with statements like, “here’s what the CEO’s and CTO’s told us and that supports our view of the world” but I’m NOT OK with the inference that “I surveyed 549 executives and therefore this is scientific.”  It is not.  He doesn’t use the words scientific but I believe it is implied.  James Gillmore in the comments section offers these words to Fred Wilson, “I’d say this highly statistical evidence doesn’t counter your original stance.”  James’s overall point isn’t wrong.  I just take issue with the words “highly statistical.”  It is not highly statistical and yet it has the aura of highly statistical.  So anybody who doesn’t know better assumes that these data are “conclusive.”  They are not.
  • “We found that the majority didn’t have entrepreneurial parents.  We found that 52% of the successful entrepreneurs were the first in their immediate families to start a business” What is implied is that if it were nurture then your parents would be great entrepreneurs. Just like the way that all sports stars and all rock stars have famous parents, right?  This argument is flawed.  First, your parents may have had the DNA characteristics to be a successful entrepreneur but life’s circumstances might not have led them to those careers.  Or maybe your parents had the right DNA but the 10,000 hours weren’t there.  PC’s weren’t there.  The Internet wasn’t there.  So they chose other careers.  Or maybe your parents didn’t have the DNA but you did.  Kind of like a guy who can hit a 98 mile-per-hour fastball might have had a dad who couldn’t.  Or … maybe entrepreneurship is nurture and not nature.  Maybe I’m wrong.  But this argument, wrapped in “data” is false evidence and is flawed.  What your parents did does not feature in the argument about whether entrepreneurs are born or made.
  • “They didn’t even have entrepreneurial aspirations while going to school.” Oh, gotcha.  If you didn’t have entrepreneurial aspirations when you went to school then the attributes of a successful entrepreneur must not be innate, right?  They must be learned.  Otherwise you would have had a life-long obsession with building the next Facebook.  The truth couldn’t be further from this.  I’m not claiming I’m a great entrepreneur.  But I’ll tell you that I did start my first company in high school.  I sold t-shirts for the basketball cheering section (called the River Rats) and I sold letters to go on the back so you could call yourself by your nickname.  All the profits were in the letters.  I cleared hundreds.  In college I threw keg parties and again cleared hundres of dollars.  But my aspiration in college was “to get a good job.”  In 1990 that’s what I was trained to want to do – impress my parents and their friends.  I don’t think that everybody with the skills to be an entrepreneur knows that they wanted to do it when they went to school.  This data assertion is bogus.  It is wrapped in the authority of a “conclusive” data study with the pronouncement that Jason, Fred and Silicon Valley VCs are “wrong.”  What you thought you wanted to do in school has no bearing on whether you were made or born to be an entrepreneur.
  • “VC and former entrepreneur Brad Feld also blogged about how many of his frat buddies at MIT had become successful entrepreneurs. Were all of these people born to be entrepreneurs as well? I don’t think so.” Um, are you seriously drawing this link?  Please read up on selection bias.  People who go to MIT are at top of our country in intelligence.  They are more technical than people who go to other universities.  Brad Feld and his cohorts graduated in the late 80’s and worked through the 90’s when many more technology companies were built that favored super-bright, technical people.  Brad himself seems to have had entrepreneurial tendencies and certainly technical tendencies and therefore was more likely to surround himself with like minded people.  Therefore it is very conceivable that this group of people were more likely to be of the right DNA to be entrepreneurs AND were born at the right time ala Outliers.  I don’t know that the truth is – I have an assertion.  Wadhwa presents his arguments and his data as more conclusive.  It’s like saying, “data shows that people who go to the Stanford MBA program are more likely to be successful entrepreneurs than those who go to Harvard,” (I don’t know if this is true – I’m making up the situation) and using this data to say that these students were taught better by Stanford.  It’s very conceivable that they chose to go to Stanford precisely because they are more entrepreneurial by nature and they wanted to be closer to Silicon Valley!

OK, I don’t even know Vivek Wadhwa.  I’m guessing he’s a smart person.  I’m guessing he produces great work.  I have no desire to pick a fight with him. He’s got a louder megaphone than I do as a TechCrunch contributor.  But Vivek, please don’t present data on the topic of nature vs. nurture and assert that you have statistically proven the “truth.”  And if you do … please at least provide more compelling data, graphs and conclusions.  Otherwise, please state your opinion as exactly that.

  • http://twitter.com/in4tunio Amit

    Thanks Norris for bringing some light into the debate that has been dark till now.

  • chrisstatham

    I'm an entrepreneur and entrepreneur trainer. I have very similar characteristics to my brother, though we lead very different lives. I think my single biggest push is my schooling. I went to a school which was academically, sport and financially above me, and so I feel I have something to prove to myself and former classmates. I would say that entrepreneurs are a mixture of nature and nurture. We are a fairly “rare breed”; most people go for the easier life and employment.

  • http://twitter.com/in4tunio Amit

    Thanks Norris for bringing some light into the debate that has been dark till now.

  • Pingback: Where do Entrepreneurial Skills come from? | Ezebis()

  • Claudiuswaveinvite

    I would tend to agree with both Wadhwa and Suster; however, I think they are missing a crucial point. Philip Zimbardo has pointed out the concept that both men are missing – a bit abstractly though. The situation is what matters most. Before I go on here is a link to his TED talk http://www.ted.com/talks/philip_zimbardo_on_the_psycho...

    So many people have nurtured their attributes studying 20 hours a week to get a Harvard MBA, attend leadership programs, and are never heard from again; the same thing can be said about countless first captains (brigade commanders) at the United States Military Academy that command the respect of their peers the second they set foot on campus during Beast.

    Therefore their are potentially great and wonderful leaders everywhere. Have these individuals with this talent they were born with and nurtured thrust themselves, or at no fault of their own been thrust into a situation where history will remember them?

  • Claudiuswaveinvite

    One more thing. In order to be a great leader you must be a great follower.

  • Claudiuswaveinvite

    I would tend to agree with both Wadhwa and Suster; however, I think they are missing a crucial point. Philip Zimbardo has pointed out the concept that both men are missing – a bit abstractly though. The situation is what matters most. Before I go on here is a link to his TED talk http://www.ted.com/talks/philip_zimbardo_on_the_psycho...

    So many people have nurtured their attributes studying 20 hours a week to get a Harvard MBA, attend leadership programs, and are never heard from again; the same thing can be said about countless first captains (brigade commanders) at the United States Military Academy that command the respect of their peers the second they set foot on campus during Beast.

    Therefore their are potentially great and wonderful leaders everywhere. Have these individuals with this talent they were born with and nurtured thrust themselves, or at no fault of their own been thrust into a situation where history will remember them?

  • Claudiuswaveinvite

    One more thing. In order to be a great leader you must be a great follower.

  • joshuacherry

    Mark I have just been introduced to your blog by Fred Wilson and been enjoying catching up on all of your recent postings. While I am certainly not an expert on this, I have found the same thing you have and think folks generally overstate the impact of nurture when looking at how people behave. Perhaps it is what you alluded to, to think otherwise has significant implications on how they see their world.

    If you are interested more about this topic, I found a great book a couple of years ago which dives into the science behind this in a very accessible way (ala New Yorker'ish). It was called the Nurture Assumption and was written by Judith Rich Harris. It was national book award finalist and her background is writing and updating university pych 101 textbooks. So the whole book is grounded in the research. It was a fascinating ride though the Twin Studies, Ethic Studies where 1st and 2nd gen kids assimilate into US culture.

    Given the nature of how you think about this topic, I think you will find it a quick and interesting read. It will also provide more examples to reinforce what I think is a pretty sound hypothesis.

  • joshuacherry

    Mark I have just been introduced to your blog by Fred Wilson and been enjoying catching up on all of your recent postings. While I am certainly not an expert on this, I have found the same thing you have and think folks generally overstate the impact of nurture when looking at how people behave. Perhaps it is what you alluded to, to think otherwise has significant implications on how they see their world.

    If you are interested more about this topic, I found a great book a couple of years ago which dives into the science behind this in a very accessible way (ala New Yorker'ish). It was called the Nurture Assumption and was written by Judith Rich Harris. It was national book award finalist and her background is writing and updating university pych 101 textbooks. So the whole book is grounded in the research. It was a fascinating ride though the Twin Studies, Ethic Studies where 1st and 2nd gen kids assimilate into US culture.

    Given the nature of how you think about this topic, I think you will find it a quick and interesting read. It will also provide more examples to reinforce what I think is a pretty sound hypothesis.

  • http://twitter.com/mustakes Mustansir Golawala

    The high percentage of entrepreneurs coming from entrepreneurial families is an equally strong argument for nature as it is nurture. Would not being involved in (or observing) your parents' business from an early age count as nurture? Perhaps if a study were to find a marked drop in entrepreneurship among adopted children within entrepreneurial families, you could say there was a strong case for nature as the explanation.

    Although I disagree with Mark's views, I have to agree with him that Vivek's post did not prove the nurture argument.

  • http://twitter.com/mustakes Mustansir Golawala

    The high percentage of entrepreneurs coming from entrepreneurial families is an equally strong argument for nature as it is nurture. Would not being involved in (or observing) your parents' business from an early age count as nurture? Perhaps if a study were to find a marked drop in entrepreneurship among adopted children within entrepreneurial families, you could say there was a strong case for nature as the explanation.

    Although I disagree with Mark's views, I have to agree with him that Vivek's post did not prove the nurture argument.

  • http://www.involvd.com/blog nickmartin

    I've got to say I'm struggling to understand the 'what does it matter?' question. Nature? Nurture? What's dominant? Why do you care? What difference does it make? What would you do differently if there ever was an answer like 60% nature/40% nurture?

    Surely the only important question is whether the entrepreneur in question has what it takes to be successful in their current situation at precisely that point in time. The answer to that will always be a judgement call by the person asking the question who has hopefully makes that by putting in the hours to work with the girl or guy to see what makes them tick. Anyone who makes a decision based on what school she went to or whether she had a parent that started their own business is lazy and doesn't deserve success if indeed it comes their way.

    I have a father that started his own company when we was 30 and still runs it today at over 70. I was lucky enough to go to a good school where I studied reasonably hard to receive good results and went to university as a result and got a degree in engineering. None of that has a decisive bearing on whether my venture http://www.involvd.com will be success and I hope that, when it comes to seeking investment, no-one tries to make a decision based on this history. If they do alarm bells will ring loud and clear and I'll need to think about whether this is the right person to partner with.

    Ignore all of that is what I say. Don't waste your time thinking about it because it's just noise and gets in the way of the hard task of thinking about what's really important. Having said that I do love a good old bit of statistics bashing so thanks for putting in the time to do it Mark.

    Anyway, enough procrastinating from me, I need to get back to building a wildly successful business!

  • http://www.involvd.com/blog nickmartin

    I've got to say I'm struggling to understand the 'what does it matter?' question. Nature? Nurture? What's dominant? Why do you care? What difference does it make? What would you do differently if there ever was an answer like 60% nature/40% nurture?

    Surely the only important question is whether the entrepreneur in question has what it takes to be successful in their current situation at precisely that point in time. The answer to that will always be a judgement call by the person asking the question who has hopefully makes that by putting in the hours to work with the girl or guy to see what makes them tick. Anyone who makes a decision based on what school she went to or whether she had a parent that started their own business is lazy and doesn't deserve success if indeed it comes their way.

    I have a father that started his own company when we was 30 and still runs it today at over 70. I was lucky enough to go to a good school where I studied reasonably hard to receive good results and went to university as a result and got a degree in engineering. None of that has a decisive bearing on whether my venture http://www.involvd.com will be success and I hope that, when it comes to seeking investment, no-one tries to make a decision based on this history. If they do alarm bells will ring loud and clear and I'll need to think about whether this is the right person to partner with.

    Ignore all of that is what I say. Don't waste your time thinking about it because it's just noise and gets in the way of the hard task of thinking about what's really important. Having said that I do love a good old bit of statistics bashing so thanks for putting in the time to do it Mark.

    Anyway, enough procrastinating from me, I need to get back to building a wildly successful business!

  • http://www.involvd.com/blog nickmartin

    I've got to say I'm struggling to understand the 'what does it matter?' question. Nature? Nurture? What's dominant? Why do you care? What difference does it make? What would you do differently if there ever was an answer like 60% nature/40% nurture?

    Surely the only important question is whether the entrepreneur in question has what it takes to be successful in their current situation at precisely that point in time. The answer to that will always be a judgement call by the person asking the question who has hopefully makes that by putting in the hours to work with the girl or guy to see what makes them tick. Anyone who makes a decision based on what school she went to or whether she had a parent that started their own business is lazy and doesn't deserve success if indeed it comes their way.

    I have a father that started his own company when we was 30 and still runs it today at over 70. I was lucky enough to go to a good school where I studied reasonably hard to receive good results and went to university as a result and got a degree in engineering. None of that has a decisive bearing on whether my venture http://www.involvd.com will be success and I hope that, when it comes to seeking investment, no-one tries to make a decision based on this history. If they do alarm bells will ring loud and clear and I'll need to think about whether this is the right person to partner with.

    Ignore all of that is what I say. Don't waste your time thinking about it because it's just noise and gets in the way of the hard task of thinking about what's really important. Having said that I do love a good old bit of statistics bashing so thanks for putting in the time to do it Mark.

    Anyway, enough procrastinating from me, I need to get back to building a wildly successful business!