Joe Devlin: Welcome to Changing
Minds. I'm your host, Joe
Devlin. Society tends to idolize
successful entrepreneurs Mark
Zuckerberg, Richard Branson,
Elon Musk's well they get a lot
of attention for their immensely
successful business to the point
that dressing up like Steve Jobs
was a thing in Silicon Valley
startups for a while. I am going
to go out on a limb here and
suggest that maybe wearing a
black turtleneck isn't a core
feature of successful
entrepreneurs. But I admit that
I don't really know what does
make them successful.
Fortunately, my guest today is
an expert exactly that. Dr.
Gorkan Ahmetoglu is an associate
professor of business Psychology
at UCL whose research
specializes in identifying and
supporting entrepreneurship.
Welcome to Changing Minds
Gorkan.
Gorkan Ahmetoglu: Thanks very
much Joe.
Joe Devlin: I'm really pleased
that you're here with us today.
Before we get started, I just
like to invite our audience to
share any questions that you
have for Gorkan in the q&a board
as we go, and then towards the
end, we'll get to as many
questions as we possibly can.
Gorkan I'd love to start by just
sort of out asking how you would
define entrepreneurship, what
makes someone an entrepreneur?
Gorkan Ahmetoglu: Alright, so
I'll start with, you know, the
broader picture, which is that
there's been quite a lot of
debate about this, but really
two core sort of definitions.
And I've taken one of them. And
I'll tell you which one is the
most common, which, which I
don't necessarily take, although
I do from time to time use it.
And I think it's the most common
certainly in research. When you
look at entrepreneurship
research, and what do we
research so, and there's a
difference also between
entrepreneurship and
entrepreneur, but you know, one
follows the other. So I'll start
simply by saying that generally
when you think of entrepreneur,
what researchers and I think
many lay people as well will
define it as someone who starts
a business. It's as simple as
that it's categoric, right and
then on entrepreneurship is
essentially the process of
starting a business. So that's
one definition. If you are a
business owner, you founded a
business, or co founded a
business, you are an
entrepreneur, if you haven't,
then you're not an entrepreneur.
It's very simple, right?
Joe Devlin: That's not the one
you use.
Gorkan Ahmetoglu: It's not it's,
it's not the one I like, really,
because I'll tell you why. So
when you look at the facts about
entrepreneurs, because when we
think about, you know,
entrepreneur, you think quite a
lot, you have a positive image,
someone who is, you know, a
potentially charismatic risk
taker. You know, changes things
innovates makes huge changes. I
mean, you think of Facebook, you
think of Apple and all of these
companies that have been founded
by entrepreneurs, but then when
you look at the facts in terms
of what is the typical
entrepreneur, you see a quite a
different picture. So I'll just
ask you a simple question or the
audience. Just to think About
first few seconds, what do you
think most entrepreneurs 70%
have in common? You get a guess,
Joe Devlin: If I had to guess
they don't succeed would be my
guess. Is that true? Or is that
is?
Gorkan Ahmetoglu: That is true.
Yeah. So I had one audience
member wants to now get a talk,
saying they're prepared to fail.
And I said, it's an interesting
answer. I'm not sure if they're
prepared, but they do fail.
Right? So it's like, most of
them do. Well, 70% of
entrepreneurs fail we have
that's just facts. And that's in
the developing world. This Is US
data similar in the UK. And then
90% never actually grow. So
imagine you have 90% of all
entrepreneurs never never
actually grow their business.
This is like a mom and pop shop.
So when you say an entrepreneur,
you think of the sort of, you
Joe Devlin: I would have thought
the US
know, the game changer. And then
you look at a typical
entrepreneur, there's a huge
difference there. And when you
ask, 90%, percent of
entrepreneurs, you ask them,
would you like to innovate? Or
are you intending to innovate
with your business? Are you
thinking to change things and
change the market? Or introduce
something new to the market? 90%
of entrepreneurs say, no, it's
it's pretty far from what what
our image I mean, let alone, you
know, innovating, right? They
don't even want to. So you can
imagine that there's a very
small percentage of
entrepreneurs, which constitutes
the picture that we have in our
minds. And the picture that we
have from media generally, which
is, you know, those game
changers essentially. And so
there's also another thing that,
you know, the other reason to
why I think there's a
misconception there in that
definition, and why I don't
particularly think it's it's
interesting to study it, because
my view is, well, why would I
study relatively unsuccessful
business owners if you say, I
mean, just relative to employed
individuals from a psychological
point of view? Like what? Why do
people become entrepreneurs?
Well, the most common reason is
because they can't get a job.
You know, there's no employment.
So when you look at, and I tend
to ask this to my students,
which is and I've done it in so
many talks, it's incredible. You
ask it to entrepreneurs, you ask
it to VCs, whatever. The
question is, which country has
the most entrepreneurs? What do
you think is the most common
response that I get?
Gorkan Ahmetoglu: Correct. This
is the most common response yet
when you look at the OECD
countries, it's the least
entrepreneurial country is the
country which has the least
entrepreneurs in the whole OECD.
So, so it's it's very untypical.
So the point is, why do people
start a business? Why do people
become interested because they
can't get a job and there's a
good job market, you don't
become an entrepreneur. So the
most the country with the most
entrepreneurs in the world is
New Guinea, in Africa. And then
Rwanda i think is the second and
then lots of sort of poor
countries. So there's almost
like quite a decent correlation
between how poor your countries
and how many entrepreneurs you
have as a percentage of total
employment. So that's why I
don't think it's, you know, from
a psychological point of view,
if I want to know, what is the
makeup makeup of the
entrepreneur of Steve Jobs. I
don't look at the typical
entrepreneur, right. So it
wouldn't make any sense.
Joe Devlin: Well, maybe I should
rephrase my question then and
say, Okay, so what makes someone
a successful entrepreneur?
Gorkan Ahmetoglu: Yes. So the
way I've thought about it, this
is the the other definition
which is essentially
entrepreneurship is, you know,
and this is also well
established definition, but
it's, it's more like, people
don't use use it or don't
operationalize it or don't
measure it in that sense, which
is the recognition and
exploitation of opportunities,
So recognizing and exploiting
opportunities to create value.
And generally some innovation is
sort of put in there, right?
Because I think there's quite a
bit of overlap between the
concept of innovation in the
recognition and exploitation of
opportunities and the creation
of value. Right. So that that's
the sort of definition I'd like
to take because then you can
also say, Well, that makes
sense, but because creating
value by recognizing and
exploiting opportunities surely
is a good thing, right? This is,
this is clearly what you want to
predict, from a psychological or
an economic perspective. So So,
so when I started looking at who
is an entrepreneur or, or from a
psychological point of view,
what is the entrepreneurial
personality, like? It was
essentially easiest to look at,
not what makes people choose a
business. business ownership or
as a career, but but who are the
people who tend to recognize and
exploit valuable opportunities?
Right. So, so this is what I, I
thought, well, that's that seems
to be a good endeavor to try to
understand that. So, so we've
done lots of research on that on
looking at, can we from almost
like a personality perspective,
look at, well, look at the
entrepreneurial personality from
the perspective of, can we look
at people who tend to recognize
it and exploit valuable
opportunities, but those, you
know, as you can imagine, an
academic can do that, right. It
doesn't have to be. It doesn't
have to be a business owner. I
mean, for us academics, we have
individual differences in in how
good we are at recognizing and
exploiting opportunities and
creating change. You can be an
employee you can be a manager in
existing organization and do
that. So. So the research that
we've done is is basically
looking at trying to measure
sort of the characteristics of
people who recognize and exploit
opportunities and see what can
we get to that psychological
profile? And can we then predict
something that's useful?
Joe Devlin: Sure.
Gorkan Ahmetoglu: Let's say, and
so yeah, so we've done a lot of
research on that. And I'm
assuming sort of, that's where,
where we want to go with the
next topic. Right?
Joe Devlin: Right. Well, in
fact, that was what I was gonna
ask them is, can you tell us a
little bit about one how you
kind of go about that? Because
that's sounds complicated, given
the diversity of the definition,
and then to what kind of things
have you'd be found, are there
personality traits that predict
this?
Gorkan Ahmetoglu: Yes. So first
of all, we did it in a very
simple way because this sort of
definition of the recognition of
exploration opportunities is an
agreed definition, but we have
to sort of dig a bit in the
literature and research And try
to find those themes, those
themes came out. Then we said,
Look, the simplest way of doing
it is just to ask people in a
psychometric questionnaire or
personality questionnaire type
thing. Like, are you a person
who regularly recognizes
opportunities? Are you a person
who regularly exploit
opportunities? Once you
recognize you ask it in many
different ways, of course, you
know, do do you have a desire to
change things for the better? Or
do you have a desire to, to
change the world to make it a
better place? Like how ambitious
are you in that sense? How
creative are you? How much do
you want to innovate and things
like that? So so just sort of
literally asking people, to what
extent are there are they
entrepreneurial are they
exploiting and recognizing
opportunities? And, and we did
find that those particular
tendencies I call them
psychological and behavioral
tendencies is to recognize an
opportunity and of course,
there's a difference between a
tendency and an ability, right?
So you might be someone who
recognize opportunities all the
time. But, but you might not be
very good at as in you might not
spot very good opportunities,
right? Your opportunities are
just sort of bad ideas kind of
thing. But we just looked at
whether those people who
reported recognizing and
exploiting opportunities,
whether they actually did
something in the real world. And
again, this is now 10 years of
research. We found this
consistently with both
entrepreneurs, and people within
organizations, that if you score
higher on these tendencies, and
people tend to be quite honest
about it, so if you are if you
aren't the person who regularly
would like once you see an
opportunity to exploit it, which
is quite a difficult thing to
do. If you report not being it,
it seems like you're far less
Likely to actually do things
that are traditionally
considered as successful
entrepreneurship or
intrapreneurship. So, the latest
studies that is a quite
interesting one, which is with
the largest entrepreneurial
research project in the world,
if you like Global
Entrepreneurship monitor does a
study every year with 155,000
people in 50 different
countries. And basically, look,
they included our sort of
psychometric tests for the first
time last year and looked at
what makes national and
internationally successful
entrepreneurs. So a business
owner with national and
international impact and found
that if you scored let's say,
4.5/5 instead of 1.5/5 ie. if
you're highly entrepreneurial,
versus not very highly
entrepreneurial, your chances of
becoming a new national or
international level, or an
entrepreneur with national and
international level impact
increases by 300%.
Joe Devlin: Wow.
Gorkan Ahmetoglu: So so the
question of 'to what extent can
psychology or the psychological
profile and maybe even more
granular that than that a
psychometric test
Joe Devlin: Yeah.
Gorkan Ahmetoglu: predicts
whether you are national, or
internationally impactful
entrepreneur. That's the answer.
It's it's quite a huge effect.
And we find similar like with
all of our other studies we do.
We do studies internationally
with both large organizations,
but also microfinance
institutions. We find very
similar results.
Joe Devlin: So how do they
determine that you have impact
then like, I can see how they
they use your profiling tool to
get a measure of your
entrepreneurial sort of latent
skills. But how do they decide?
Yeah, you're the next eat well,
you have been a Steve Jobs
versus you within a Joe Bloggs.
Gorkan Ahmetoglu: There are
different ways of doing it. So
you can just look at people's
revenues for instance. Or or
profits, or the size of the
business number of employees,
assets, things like that, or
just self reported. You know, do
you sell internationally? Do you
have a business internationally?
Do you have a business
nationally or is it a local
business? So there are a number
of different ways of measuring
impact and sometimes we get data
from accelerators and venture
capital firms, where they
essentially rank companies as
high impact companies. And
generally those companies will
have you know, 20-30% growth
year on year for the last three
years in terms of employees, or
revenues. But yeah, it will be
on the traditional metrics. And
then you could also add, like
how innovative a product has
been that they've launched.
Essentially, there are a number
of ways of doing.
Joe Devlin: Yeah. I can imagine
that that that kind of a
profiling tool would be
incredibly valuable for
accelerators or venture
capitalists or angel investors,
things like that. Do they use
that? Or is that mostly done by
you know, that sort of Dragon
Den, gut feeling sense?
Gorkan Ahmetoglu: Yeah,
absolutely. It's mostly done
while the psychological
profiling bit you know, they
will have their due diligence on
the business side of things.
You're so just, there's there's
a long process that not that I
mean, okay, so I was gonna say
that it's there are biases in
every evaluation that you make,
but you know, this is pretty
hardcore evaluation of economic
and experience and things like
that. But the psychological
profiling generally and this is
not my view, most accelerators
VCs will tell you this, they do
it by gut feel, right? So, so
looking at the pitch of the
entrepreneur, just having the
chemistry there, and a lot of it
is the Dragon's Den stuff. I
mean, Dragon's Den is
essentially, you know, they do
have very little time, often
accelerators, venture
capitalists, angel investors,
very little time to spot the
right person. And so a lot of it
is gut feel, which is why, you
know, a very common question
that I get from those kinds of
institutions is, can we do it
slightly more standard in a
study more standardized way? In
a slightly more scientific way,
if you like? Sure. So it's, it's
it definitely there's, I feel
there's a definite trend to use
science and psychometric testing
in particular, in the VC world,
Angel, you know, accelerators
world So, so I think they're
sort of getting more warm to the
idea.
Joe Devlin: Okay, well, that
sounds very positive,
particularly if the tool is able
to predict such a dramatic
difference between low and high
entrepreneurial success rates. I
mean, that's remarkable. It does
raise a question then that I
feel like as a psychologist, I
should ask more than I do about
that sort of nature nurture side
of things. Is are people born
with these entrepreneurial
skills? Are they can they be
trained? Can they learn them?
Gorkan Ahmetoglu: So yeah, it is
an old question, isn't it? And
the simple answer is, as with
any personality characteristics
out there, there's some
heritability, right? I think the
latest figures like 45%
heritable, but at the same time,
there's stability there. So when
we've done it, I found that
quite interesting, because the
way I see entrepreneurial traits
are sort of slightly on the
lower level of these big five if
anyone is familiar with the sort
of standard personality trait,
but But what we've seen is that
these traits are quite stable.
So over eight year period, we
did a test retest reliability
and the correlations are quite
high even over an eight year
period. So it's almost point
seven. So people don't change
very much is is, you know, is
one answer to that. But but the
correlation isn't one. So, you
know, there's some scope
Exactly. Even even the
heritability studies seem to
suggest that there is scope for
change. It's just that most
people don't. So if you if you
try to engage in systematic
change, you probably could do
it. And there is some evidence
with some of these traits,
especially productivity done
with, you know, some
collaborators that we have, they
did some great research where
they change the productivity
level of entrepreneurs, and then
look at their profits one year
and two year on I think, it
looked at and saw a 30% increase
in profits relative to a control
group who did just business
training, regular sort of
entrepreneurship training?
Joe Devlin: Well, I can imagine
that if you're a government
trying to promote innovation in
small business and startups, or
even if you're an organization
and you just think, look, I'm a,
I'm a large company that has a
lot of employees, therefore,
many of them within the
organization will have these
kind of entrepreneurial skills.
How do I promote that? How do I
get the most out of them and and
encourage them to reach their
full potential? That does sound
like there's some encouragement
here that there is potential to
develop some of those skills?
Gorkan Ahmetoglu: Absolutely. I
think especially when you talk
about organizations, large
corporates, I mean, it's very
difficult to see whether someone
is entrepreneurial, purely
because it's very difficult to
observe, those behaviors are
just not encouraged or sometimes
even allowed, right. So you
might be really entrepreneurial,
but not an intrapreneur as if
you like so you're not actually
sort of displaying those
behaviors. So, so there's quite
a lot to do that for
organizations, I would feel and
I think there's a huge potential
for organizations to identify
individuals by psychometric
profiling rather than trying to
see who is actually contributed
to organization with new ideas
and images, because if the
culture doesn't allow you to do
it, you're very unlikely to see
those individuals come forward
in the first place.
Joe Devlin: And presumably, it
has different value to some
organizations relative to
another. I mean, if you're doing
something that's traditional,
and has been the way it's been
done for 100 years, and the
company's been successful, then
maybe you're not really looking
for that. Whereas some young
hungry or companies might be
very much sort of looking for
competitive edge that gets them
at the, you know, to the big
table.
Gorkan Ahmetoglu: Yeah, I mean,
I have two answers to that. One
is I what is the comment that
you made on if you've been
successful for so long? Why
change and I think most
companies nowadays don't feel
that anymore. I think most
companies feel that, you know,
you kind of have to keep
innovating because innovation is
happening too quick and too big
to be complacent with our
history. And the second is, it's
true that, you know, some
organizations wouldn't want to
have too many entrepreneurial
individuals or even innovate too
much. But I don't even see it as
you don't have, you have to be
the next next Facebook. It's
just like, if you're a law firm,
you just have to be slightly
more entrepreneurial than
another law firm or the rest of
the law firms to be the
entrepreneurial law firm, if you
see what I mean. Right. So this,
you have to sort of have the
right comparison group.
Joe Devlin: Fair enough. I'm
sensitive to the time and I see
that there are some questions
here that people have asked. So
if you don't mind, I'd like to
turn to the audience questions.
Is that okay?
Gorkan Ahmetoglu: Of course
Joe Devlin: Fantastic. There's
one here from Lee saying, Would
the psychometric test be useful
in industry when hiring people
in the long term? Wouldn't
applicant simply learn to
respond in a certain way? And
are there more implicit sort of
non self report measures of
assessing these entrepreneurial
tendencies that might be worth
looking into as well?
Gorkan Ahmetoglu: Yes, so two
different questions there. Let
me see which which one I start
with? Are there different? Yes.
So there are let me start with
the latter one, which is, Are
there different measures for
this? And, you know, we are
certainly trying so we are
currently doing a situational
judgment test. So, where, where
you're not asked whether you are
a person doing something but
you're asked which particular
option you would choose out the
four options, let's say that
seem quite similar to one
another, and thereby we evaluate
whether you're more or less
likely to be a successful
entrepreneur. Other things are
like reaction time so far more
implicit level measures, game
based assessment, let's say is
something that we've looked at
found some interesting stuff
there. So so there's certainly
things out there not very well
validated I should say, yet yet.
So We don't know the accuracy or
the reliability of these tests.
But when it comes to the self
report measure, we haven't seen
this learning effect. So I'll
give you the best example of
this. But there are two reasons
for that. I mean, but the best
example of this is a company
that we worked for, and they
probably profile over a million
people now using psychometric
testing. It's with microfinance
institutions where people have
no credit score, no bank account
details, so the bank can't
actually lend to them. So the
alternative is to use a
psychometric test and see, and
so the way you do it is, you see
whether the psychometric test
predicts whether you will
default ie whether you will not
pay back the loan. And
obviously, that's what your bank
and credit score and bank
account history does, right? So
can the psychometric test do the
same as the credit history? And
we see that it doesn't either as
well or better than the credit
history. So you can certainly
predict whether someone will
default or not, but the you
know, just to sort of stick to
the point is that people there
either get a loan or not,
depending on how they score on
the psychometric test. And still
we don't see that they fake it,
if you see what I mean, so they
don't gain the test, even though
they know that they will be
lent, you know, they know that
the bank will lend them the loan
or not based on how they score.
So, so we don't see too much of
that faking bit, or gaming the
test, it's that you would think
would happen, right?
Joe Devlin: Yeah, absolutely.
There's a another great question
here from Matthew saying, what
were the main things you suggest
organizations can do to promote
entrepreneurial behavior among
the staff?
Gorkan Ahmetoglu: I would say
that there are two things to
think about here. You have to
have the people and you have to
have the culture. So it's very
it's a very simple suggestion
because the the the real answer
is much more complex. And should
be taking within a particular
context. I don't think I can
have a general ask for all
industries, and all sorts of
size of organization. But one
thing that's probably going to
be true for most organizations
is that first, you have to have
people who have the willingness
tendencies psychological
tendency to want to recognize
and exploit opportunities and
create change and create value.
And the second, they have to
have the ability to have good
ideas, because a lot of people
might have ideas, but not very
good ones, like I said, so so
the people the right people have
to be there. Because no matter
how much you spend on, you know,
decorating your office and
giving people 20% time off, to
work on ideas. If you have
people who are not very
interested in doing it, you're
still not going to be very
successful with your sort of
efforts to be not innovative.
And then the opposite is true as
well. And this we see this in
our research as well. This kind
of interaction effect of You
can't have one without the other
is even if you hire lots of
people, you know, you steal
Facebook's and Apple's employees
the talents, let's say, but then
you have managers who are
totally uninterested in
listening to their ideas, you're
not going to have very, very
normative organization. So you
kind of have that interaction
effect. So if you have zero in
either culture, or people,
you're going to have zero in the
output, right? It's not just an
additive effect where a bit of
both or one and slightly more of
the other is good. You kind of
have to have both there for to
be successful. That's the simple
answer to a very complex
question, I would say,
Joe Devlin: cool. And there have
been a number of questions here
along similar lines. I'm just
going to pick one from Victor
saying, My understanding is the
famous entrepreneurs like Steve
Jobs and Elon Musk, Jeff Bezos,
etc. and very strong extrovert
in some might even describe
Harsh personalities. Is that
characteristic of successful
entrepreneurs? Or can you be
more on the introvert side and
still be a successful
entrepreneur?
Gorkan Ahmetoglu: Now, there's
certainly evidence to suggest
that you can be on the introvert
side and be a successful
entrepreneur. And I mean, the
whole sort of the dark side
traits, if you like what
psychologists sometimes call
them. That's a very interesting
phenomenon because we do see it
correlating with successful
entrepreneurship. But whether
it's a cause is an interest so
whether it's because or despite
of you is we're still unsure.
The way I see it is that we've
done some research on you know,
the entrepreneurial percentage,
so people who are more
entrepreneurial than that they
tend to be higher on primary
psychopathy. Right, so they know
it doesn't right. So they're
more manipulative. They have
less sort of they're less caring
and things like that, but then
that they're not reckless or
risk taking, which is secondary
psychopathy. So, so
entrepreneurial people tend to
have these dark side traits. So
the more entrepreneur you are,
the more of the dark side you're
likely to have. I just think
that, you know, it's a bit of a
ticking time bomb, the higher
that goes right, the more risk
you have of big failure, but
also the more likelihood you
have of innovation. So so it's
kind of like disruption in the
true sense of the word like
disruptive innovation or
socially disruptive, right? So
you can go either way, I would
say the higher you are, which is
why you probably also see very
famous failures as well. Like
firms failing really big. I
think it's the sort of high
gamble or high risk gamble
there.
Joe Devlin: So it's a sort of go
big or go home approach. Pretty
much pretty much okay.
Fantastic. I'm sensitive to the
time and I'm aware that we're
running out here. So I would
like to take, take this
opportunity to say thank you,
Gorkan for a really fabulous and
stimulating discussion. I
certainly had never really
thought about entrepreneurship
in the in those terms before.
Gorkan Ahmetoglu: My pleasure J
e, re
Joe Devlin: Thanks again. And
then next week, we will be
talking about messenger effects.
I look forward to seeing you all
then. Thanks again Gorkan. And 
hanks everybody else, take 
are. Bye bye.
