Friday, August 19, 2011

The Road less Traveled: Cross-cultural Entrepreneurship

“It is our choices, Harry, that show what we truly are, far more than our abilities,” said Dumbledore to Harry in the book, Harry Potter and the Chamber of Secrets. This quote has stayed with me over the years, as I navigated my way through the myriad pathways of life. Dumbledore was talking about choosing to do the right thing under trying circumstances. Even though very often, the right thing turns out be the more challenging choice.

As I started work at a start-up recently, I was reminded of Dumbledore’s words. What made people choose to start their own companies? What made them give up comfortable and cushy jobs to bet their lives, savings, and family life- all on some nebulous dream of a better future? The answer could not merely be Dumbledore’s words, wise though they were. So I started reading up on entrepreneurship. On why the choices founders made were the choices they made. Was this really the right thing to do? And if so, right for whom?

Considerable research has been done on entrepreneurship in recent years, especially in Silicon Valley, CA. Dr. Wadhwa (2009) conducted extensive research to find the ‘anatomy of an entrepreneur’. Dr. AnnaLee Saxenian also conducted research exploring the nexus between immigrants and entrepreneurship in the Valley. Both of them agree that educated and skilled immigrants not only bring abundant talent to the country, but as entrepreneurs, are also responsible for wealth and job creation. As an immigrant myself, I could relate to some of the attributes of social and ethnic networks that Dr. Saxenian (2002) talks about, that foster immigrant growth

Dr. Wadhwa’s research shows that there are about double the percentage of Indian entrepreneurs than the next closest foreign-born category (3.8% vs.1.7%). Simultaneously, his research also uncovered that the single most important attribute that needed to be inherent in an entrepreneur was the ‘ability to take risks’. As much as 98% of the respondents ranked the lack of willingness to take risks as the greatest barrier to entrepreneurship. Another important attribute was the ability to adapt and change (Wadhwa et al, 2009).

As I pondered these findings, I could see an obvious behavioral pattern emerge. Most immigrants, before they turn entrepreneurs, already have successfully started-up their own lives in a new culture and country. These highly educated and skilled valuable members of society have already once given up comfortable lives, friends, family and supporting social structures to carve out a new life in a new socio-cultural setting. They set out to achieve everything anew starting from scratch, and mostly succeeded. I know how difficult this is from personal experience: even after so many years here, I am still struggling to recreate my sense of cultural and professional identity.

Dr. Saxenian, in her research, talks about strong cultural and ethnic networks that in turn lead to professional growth. A number of ethnic associations have also grown to support co-ethnic entrepreneurs. A strong sense of ethnic and cultural identity binds this group together. Similarly, Wadhwa talks about how friends and family provided funding for up to 16% of startups. Wadhwa goes on to elaborate on the importance of family/ spousal support in successful entrepreneurship. This is in accordance with Hofstede’s cultural dimension of Individualism vs. Collectivism, with both Chinese and Indian cultures rating high on the collectivist scale. Since we already know that familial support is essential to entrepreneurship (about 73% of respondents in Wadhwa’s research said that was an issue), and collectivistic cultures provide more of that support, we can infer a causal correlation that gives Asian cultures an entrepreneurial edge.

While the single biggest motivation for start-ups was the creation of wealth, Wadhwa’s work also uncovered that innovation motivated over 68% of founders. The founders wanted to get a good idea to fruition. This translates into attempting to make a positive contribution to the world at large. To solve a small problem in your area of expertise that makes life better for some people- or at least, try to make life better for some people, also motivates a large number of thinker-founders. This desire to make a positive change to the world and to do the right thing in the face of easier choices is what life is all about, not just entrepreneurship.

Therefore, one can make the obvious connections that emerge after reading all the research. I do think that immigrants are innate risk-takers. Having taken and successfully navigated the cultural, social, physical and mental trans-country divide, increases one’s inherent capacity to take risks. To take yet another leap of faith. In the immortal words of Robert Frost, to yet again choose the road less travelled. And hopefully, to make all the difference.

1.Rowling, J.K.(1999). Harry Potter and the Chamber of Secrets. Arthur. A. Levine Books.
2.Saxenian, AnnaLee (1999). Silicon Valley’s New Immigrant Entrepreneurs. Public Policy Institute of California.
3.Saxenian, AnnaLee, (2002). Local and Global Networks of Immigrant Professionals in Silicon Valley. Public Policy Institute of California.
4.Wadhwa, V., (2009). The Anatomy of an Entrepreneur: Making of a successful entrepreneur. Ewing Marion Kaufman Foundation.
5.Wadhwa, V., (2009). The Anatomy of an Entrepreneur: Family Background and Motivation. Ewing Marion Kaufman Foundation.

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