The Psychology of Entrepreneurship

Often overlooked or overshadowed by the thought of making millions of dollars, Entrepreneurs and Solopreneurs need to understand the psychological impact of starting a business. Here are five articles you might find interesting to read and digest.   

1) What Is a Digital Nomad? The Psychological Impact of Entrepreneurship – By Mark Goddard (Health Guidance)

  • Nomads lack roots, but people need to belong
  • Nomads might be surrounded by people, but often these relationships lack intimacy and are superficial
  • Loneliness can be a major problem, find ways to develop deeper connections with people

2) How Temperament Impacts Entrepreneurship – By Petra Starkova (Psychology Today)

There are four noted personality types in entrepreneurship

The Sanguine

  • Advantages – Composure, Good at Marketing, PR, and Communication
  • Disadvantages – May lack the ability to understand others deeply or empathize

The Choleric

  • Advantages – Act quickly on Impulses, excel when daily change = seizing on opportunities to create $Cash
  • Disadvantages – Easily thrown off balance and into fits of anger when things don’t go their way

The Melancholic

  • Advantages - Reliability and Stability as both business and relationship partner
  • Disadvantages - Disposition to pessimism and solitude

The Phlegmatic

  • Advantages – Cool, calm, and collected
  • Disadvantages – Slow to react to change

3) What Makes Entrepreneurs Burn Out – By Eva de MolJeff PollackViolet T. Ho (Harvard Business Review)

  • Survey of 326 members of Business Networking International
  • Entrepreneurs who reported high scores of obsessive passion were more likely to say they experienced burnout than those who reported high scores of harmonious passion
  • Obsessive Passion: “The job is important to someone because of the status, money, or other rewards that it brings”
  • Harmonious Passion: “Someone is motivated by the job because it brings them satisfaction and is an important part of who they are”

4) Entrepreneurs Should Watch Out for Cognitive Biases and the Curse of Knowledge – By Yair Harel (Entrepreneur Magazine)

  • Entrepreneurs face many obstacles, but the most treacherous obstacles are in their own minds
  • Cognitive biases - mental gremlins that sabotage the ability to collect the right information, assess it properly and make good decisions
  • As an Entrepreneur, you are highly susceptible to cognitive biases
  • Two of the most hazardous biases to the entrepreneurial process are:
    • Confirmation bias – “The tendency to search for and interpret information in a way that confirms one's own existing preconceptions, beliefs and opinions”
    • Curse of knowledge - Causes a better-informed person to find it difficult to look at a situation from the point of view of a lesser-informed person”

5) The Psychological Reasons Women Fall In Love With Entrepreneurship - By Julia Novakovich (Equities.com)

  • Women are entering Entrepreneurship at an unprecedented rate
  • Forty percent of American businesses are now owned by women (NAWBO)
  • There are still institutional barriers to successful business operation for women, but by understanding why women fall in love with entrepreneurship, organizations can better support women entrepreneurs
  • There are six reasons women go into Entrepreneurship:
  1. Independence – “they are able to craft their own messages, build their own businesses, and create the vision that they see for themselves.”
  2. Family – “women may choose to run their own business rather than leaving the workforce entirely. Entrepreneurship may give them the ability to pursue a fulfilling career as they are a caregiver for their family.”
  3. Drive – “Starting their own businesses may give them the opportunities to pursue as high a career path as they can manage.”
  4. Pride – “Building something from the ground up can be an incredible source of pride.”
  5. Passion – “When women are passionate about something and can seek success in its creation and completion, the satisfaction can be astounding.”
  6. Freedom – “Women who go into business for themselves often find that they are more free than they have ever been within the corporate structure.” 

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