Happy Entrepreneurs Get Things Done

Resources, Well-being and Venturing: How to Improve Entrepreneurial Persistence

By Erik T. Markin

Leaders play an important role in modern society and are often given elevated status (e.g., heroes). For example, leaders tend to be credited for change and growth in their organizations and communities because they guide constituents through challenging and ambiguous situations, develop and manage key relationships, gather resources and information, and espouse shared purpose. In his classic book Leadership, James MacGregor Burns defines leadership as “the reciprocal process of mobilizing, by persons with certain motives and values, various economic, political and other resources, …in order to realize goals independently or mutually held by both leaders and followers.” In other words, leaders serve as organizers, negotiators, analyzers, listeners, learners, coaches and teachers, among other important roles.

Entrepreneurs assume many of these same roles and are often regarded as noteworthy leaders. For example, successful entrepreneurs like Rockefeller, Carnegie, Ford, Jobs, Bezos and many others are easily recognized as influential leaders. As leaders of their enterprises, entrepreneurs often must pivot their organizations to adjust to changes in the environment and maintain success. As such, entrepreneurs are often touted as catalysts of change and growth who discover or create opportunities while navigating adversity, uncertainty and ambiguity. Indeed, stories of such triumphs make headlines of newspapers and covers of magazines and become subjects of movies, inspiring ambitious, like-minded individuals.

However, the reality is that few prospective businesses ever actually get started, let alone “succeed.” In 2018, LendingTree, a U.S.-based marketing and financial services firm, surveyed 1,067 Americans and found that nearly 32 percent of people considered opening a business the previous year. Out of this group, very few made significant progress toward opening, while nearly half took no action at all. Respondents cited insufficient capital (42 percent) and inertia (44.6 percent) (i.e., we get busy dealing with life) as the most significant impediments. Although limited access to capital is perhaps an expected response, entrepreneurs vary in their ability to access critical resources, and even those with abundant access often still fail to launch. This suggests that research and practice communities need to better understand the issues related to inertia as an impediment to entrepreneurship. Given that entrepreneurs experience differential access to resources, what motivates some bourgeoning entrepreneurs to keep going while others stall? We investigated this issue in a recent study¹ to better understand how resources, entrepreneurs and entrepreneurial perseverance are connected.

Broadly speaking, my colleagues and I examined how access to resources influences entrepreneurs’ confidence in their ability to complete meaningful tasks, their well-being and ultimately their continued effort and commitment to starting a new venture. We based the study on a few basic ideas. First, greater access to resources encourages nascent entrepreneurs to behave entrepreneurially. This is because access to resources helps people feel confident in their ability to be successful. For instance, greater access to human, social and/or financial resources likely strengthens a person’s self-efficacy – one’s belief that he or she can control and produce important positive outcomes. Next, people who are confident in their abilities to accomplish important tasks tend to experience a positive and happy state, which motivates them to achieve milestones. That is, people derive satisfaction from the completion of meaningful work, and happy people tend to be more productive.

We sampled 285 individuals with varying backgrounds and occupations. Respondents were balanced between men and women ranging from 19 to 70 years in age, with a mean age of 37.65, and with educational backgrounds ranging from high school graduates to advanced degree holders. To collect responses, we used an experimental vignette methodology (EVM), which is particularly useful for theories using a “thinking-acting” model (e.g., where individuals are given scenarios and asked how they would act). That is, EVM presents individuals with written descriptions of realistic situations and asks them to answer questions about how they would respond in that scenario.

In our study, each vignette described a situation in which an individual is thinking about entering entrepreneurship. Participants were randomly assigned to either high or low levels of resources. Then, they were asked how they would feel about their ability to accomplish entrepreneurial tasks and how they would act. However, not all individuals have the same entrepreneurial aspirations or growth intentions, and some ventures require greater and more complex access to resources, which likely affects the resources to well-being relationship. Therefore, to isolate the effects of resources on the proposed outcomes, we varied the high and low levels of resources across three forms of potential entrepreneurial venturing and the associated level of resources to successfully launch: lifestyle or hobby, salary replacement and high growth.

Overall, we found support for our predictions. Access to resources encouraged would-be entrepreneurs to pursue venturing because it gave them confidence in their ability to act, which would in turn make them feel happy and satisfied with their entrepreneurial experience. This effect was robust across multiple measures of well-being, such as reduced worry and strain as well as greater life satisfaction and subjective happiness. Academically, this is interesting because it offers a glimpse into both the entrepreneur’s cognitive and entrepreneurial processes. For example, having access to resources may cause less stress throughout the entrepreneurial process or at least provide some cushion for learning to deal with ambiguity. Historically, research on entrepreneurs and their ventures has considered the relationships among personality characteristics, venture characteristics and environmental contexts, as well as the prevalence of entrepreneurship as a career; however, our work shines a light on the entrepreneurial experience and the mechanisms that motivate an individual’s continued commitment toward entrepreneurship.

For practitioners, our research highlights the importance of establishing and maintaining a healthy state of psychological well-being, especially during the early stages of the venture. “Adequate” access to resources helps budding entrepreneurs combat a litany of emotions that often stem from the tumultuous start-up process, which may impede their motivation to persist in entrepreneurial activities. The more entrepreneurs are aware of the connection between their resource endowments and their emotional state, the more they may recognize strenuous moments as temporary hurdles rather than significant setbacks. Likewise, our research emphasizes the need for policy makers and entrepreneurship support centers to educate budding entrepreneurs on these issues and provide clear information on both the types and amounts of resources available through their networks and respective ecosystems. While such efforts are no panacea, they could help many nascent entrepreneurs demystify and better navigate some of the uncertainties of the entrepreneurial process.

¹ Marshall, D. R., Meek, W. R., Swab, R. G. & Markin, E. (2020). “Access to resources and entrepreneurial well-being: A self-efficacy approach.” Journal of Business Research, 120, 203-212.

Erik T. Markin

Dr. Erik T. Markin is an Assisntant Professor of Management at Mississippi State University. He received his PhD from the University of Mississippi. His research areas of interest include family business, entrepreneurship and franchising. Markin has published articles in various management and entrepreneurship journals, including the Family Business Review, Journal of Business Research, Journal of Family Business Strategy and Review of Managerial Science, as well as book chapters and reviews. His work has been presented at major academic conferences including the Academy of Management, Babson College Entrepreneurship Research Conference and the Southern Management Association annual meeting. He also serves as a reviewer for Entrepreneurship Theory and Practice, Family Business Review, International Small Business Journal, and Journal of Business Venturing. Markin teaches the MBA Strategic Business Consulting course and Business Policy – a senior-level undergraduate course designed to develop skills for analyzing contemporary business problems.