Around 13% of Americans are starting or running their own companies.
Almost everyone else is an employee.
We may have found out the difference between the two types.
According to a 2013 Swiss-German study, the difference lies in disposition: While an employee is a specialist, an entrepreneur is a jack-of-all-trades.
“Entrepreneurs differ from employees in that they must be sufficiently well versed in a whole set of entrepreneurial skills,” write Uschi Backes-Gellner of the University of Zurich in Switzerland and Petra Moog of the University of Siegen in Germany.
On the other hand, they say that employees are “specialists who work for others and whose talents are combined with those of other specialists (employees) by the entrepreneurs.”
In their study, Backes-Gellner and Moog analyzed survey data from 2000 German college students. Their analysis showed that people with a broader portfolio of experiences were more likely to have a “disposition toward entrepreneurship.” Qualities that predicted against entrepreneurship included a desire for job or income security, as well as, perhaps surprisingly, having an apprenticeship or internship — since those lead to specialization.
Their study built on a decade’s worth of research.
The “jack of all trades” theory first came from Stanford University economist Edward P. Lazear, whose studies of Stanford MBAs show that students who take a broad range of classes and a wider range of jobs are more likely to become entrepreneurs. A follow-up German study replicated those results.
Backes-Gellner and Moog expanded on that finding by taking in social networks. Their research suggested that entrepreneurs don’t just have a diverse set of skills, but they also have a diverse network of relationships — friends, parents, and business contacts that they can call on when launching a business. Findings in network science show that having such a diverse social network is hugely beneficial at a creative level, too, since the more perspectives you’re exposed to, the more refined your ideas become.
So it’s a double-diversity that leads to entrepreneurship: lots of experiences, lots of contacts.
“It is the jacks-of-all-trades across a whole portfolio of individual resources and not the masters-of-one who are likely to become entrepreneurs,” Backes-Gellner and Moog write. “The mere social butterflies or the mere computer nerds are not likely to become entrepreneurs because they are both too imbalanced and thereby less likely to be successful as entrepreneurs.”
The research confirms a lot of folk wisdom about what makes founders function. None other than Steve Jobs used to say that creative people have a more diverse “bag of experiences” than everybody else. In a 1982 speech, the Apple founder told his audience that “if you’re gonna make connections which are innovative … you have to not have the same bag of experiences as everyone else does.”
Author: Drake Baer reports on strategy, leadership, and organizational psychology at Business Insider.