Business Professor: Experience Doesn't Increase Odds for Entrepreneurial Success

Feb. 26, 2013

Peter RobertsIt stands to reason that entrepreneurs with experience behind them are more likely to succeed in new business ventures. But that bit of common wisdom doesn’t hold true for social entrepreneurs, according to an Emory researcher. Social entrepreneurs seek to achieve social change, not just monetary gain.        

Peter W. Roberts, associate professor of organization and management and director of social enterprise, analyzed three data sets on new ventures launched by social entrepreneurs. Some had prior start-up experience, others had none. He found that social start-ups created by veteran entrepreneurs had less impact online, in the community, and financially, and were outperformed by those created by neophytes. His findings were discussed in a recent issue of Inc.

“We just don’t know yet what produces social value in the for-benefit enterprise,” Roberts told Inc. magazine. “I don’t think the usual categories are going to be helpful: that they founded before, worked in a for-profit before, worked for a non-profit before.”

In a blog post, Roberts wrote that social businesses founded by entrepreneurs who had prior entrepreneurial experience had “accumulated fewer Facebook likes… and fewer Twitter followers.” Ventures started by experienced entrepreneurs also earned lower revenues and raised less capital than those launched by inexperienced entrepreneurs.

“It doesn't seem to matter whether these experienced founders had started nonprofit organizations or for-profit companies,” Roberts wrote. “In fact, those ventures that had both kinds of entrepreneurial experience on their team produce lower commercial performance.”

But why? One reason might be that social entrepreneurs launch what some refer to as hybrid organizations, which are neither completely non-profit nor for-profit models, and therefore prior experience may not prepare them to navigate the new terrain.

Roberts added that, at a deeper level, “No one yet knows how to systematically produce social value by using markets and business acumen. . . . The lingering truth is that we don't currently know what an ideal resume should look like for a promising social entrepreneur.” 

To read the Inc. article, click here.

To read Roberts’ blog post, click here.

Steve Frandzel

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