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Now, let's take a fresh look at 
entrepreneurship through different lenses

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Namely, biological, psychological
and economic perspective

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Let's begin with a short
interview clip from Jeff Bezos,

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the founder of the world-top 
e-commerce company, which is Amazon

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Everybody knows that

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Let's take a look at it

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Okay, what about it?

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Interesting, isn't it?

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From this video, he mentioned
his friend, namely Yasantha

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So, what does Yasantha do right now?

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I was very curious

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Did he also become an entrepreneur like Jeff Bezos?

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We don't know

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This guy is Dr. Yasantha

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Again, he is Jeff Bezos' classmate, 
at Princeton University

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Actually, Dr. Yasantha was 
born and raised in Sri Lanka in Asia

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and then later studied at Princeton

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He is kind of a genius

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Not just a simple genius,
he's a national genius in Sri Lanka

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Then later, he earned his PhD degree

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and now participated in
several scientific projects

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and holds many patents

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But he is not an entrepreneur

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He is a scientist

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Okay, take Jeff Bezos

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Did Jeff Bezos become an entrepreneur
right after graduating?

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No

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He worked in Manhattan
in an investment firm first,

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but he was rapidly promoted
and earned a high salary

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But in 1994, he quit everything
and moved to Seattle

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to pursue his internet businesses,
which is Amazon

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So, he became an entrepreneur

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Why two people chose
different career paths?

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Maybe they are different,

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biologically, psychologically
and kind of economically

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So far, we have discussed that

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people are fundamentally the same

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But only the social system
and who you know

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can influence whether you become
an entrepreneur or not

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But in the case of
Dr. Yasantha and Jeff Bezos,

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we can think that,
probably people are different

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So, from now on, 
our viewpoint will be different

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This perspective starts with
the assumption that

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the people are fundamentally different

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Especially at the genetic level

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Genetic and neurological factors
can influence entrepreneurial behavior

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Look at this man

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He is a professor, Scott Shane,

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a famous scholar in entrepreneurship field

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He studied 870 identical twins

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and 857 fraternal twins in UK

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His findings,

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biological genetics
explained about how much?

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Yes, 40

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About 40% of variance of explanation

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It means that,

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genetic factors matter

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That is significant

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This professor is Johan Wiklund
at Syracuse University

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He had ADHD when he was young

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and later,
studied the entrepreneurial tendencies

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of MBA student with ADHD

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Surprisingly, students with ADHD trait

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were more likely to become entrepreneurs

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Why?

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Genetic factors like, 
sensation seeking in the ADHD

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lead them down
the path of entrepreneurship

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This is a biological perspective

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Again, our genetic traits matter

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But, we cannot explain
everything with genetic alone

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What about our kind of personalities

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or motivations and cognitive styles?

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These are the domain of psychology

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Let's talk about Steve Jobs,
founder of Apple

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According to his biography,
people said that,

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he believed it was natural for everyone 
to accommodate him, right?

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And he was very sensitive and emotional

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And he didn't regret
not giving early influence stock options

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What does this tell us?

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Steve Jobs had very unique personality,

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which shaped his path as an entrepreneur

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For decades, scholars have explored

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whether entrepreneurs are driven by

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some kind of unique personality
or traits or motivations

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Look at the picture

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People believe that entrepreneurs have

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high level of achievement of motivation

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They want to achieve more

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Or entrepreneurs have
high level of risk tolerance

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It means they are risk takers

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Or entrepreneurs
really want to control for others,

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which is a high level of locus of control

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And they are kind of extrovert

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So, rather than introvert person,

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extrovert are more likely to be an entrepreneur

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Autonomy

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It means that they want to
be their own boss all the time

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Conscientiousness

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It means, they work very hard

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What do you think?

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Do you agree with these 
personalities, traits or motivation

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matter for the entrepreneurs?

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I think, in my opinion,

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extrovert person are more likely
to be an entrepreneur

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rather than introvert person

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What about locus of control?

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I remember that many entrepreneurs
desire for control

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So, I think it makes sense

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So, these two major studies reviews

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the previous findings and revealed that,

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interestingly,
while some traits do correlate it,

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others like, risk taking and extroverts

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are not necessarily
linked to entrepreneurship

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So, achievement motivation is good,

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but not risk taking

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Entrepreneurs are not risk takers

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It is totally different
from our expectation

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What about locus of control?

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It's not

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And extrovert?

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It's not, right?

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But they want to be their own boss

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and they work very hard

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So, that is the personality

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But now, let's talk about

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kind of a cognitive psychology,

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which is the way how we think

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Let's take Jung Jooyoung,

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the founder of Hyundai Group in Korea

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He was a kind of farmer and not educated

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But he started construction businesses

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right before the Korean War

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But later in the 1960s,

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when the Korean president
suggested construction companies

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to explore opportunities
in the Middle East countries,

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many did not accept the suggestion

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due to the hot weather

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and sand and the lack of rain

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But, Jung Jooyoung,
the founder of the Hyundai Group,

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had a different idea

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He said that

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the Middle East is 
the best place to do construction

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Why?

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Lack of the rain?

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Yes great

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We can walk every day

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Because we don't have rain

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Sand and gravel?

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Sand and gravel, perfect

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These are building materials

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Too hot?

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Yes, we can walk at night

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and sleep during the day

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He simply thought differently
than anybody else

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Look at another example

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This guy is Sam Walton

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The founder of Walmart

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He also thought differently

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He was in an airplane

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He piloted his own airplane

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to scout store locations

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so he could observe

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the traffic condition
and geography from the sky

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Think about it

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From this, he tried to
understand unknown patterns

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He said that

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When you look down from the sky,

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you can see traffic

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and you can grasp

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what kind of cities and towns
you are dealing with,

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and you can easily figure out

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how the competition is going to unfold

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This is a powerful example of
cognitive differences

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How entrepreneurs perceive
the thing differently and uniquely

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Now let's move to the economic perspective

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Economic perspective is all about

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incentive and the people's choice

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Economic perspective suggests that

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people are kind of different in terms of

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their incentive and their choice

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due to their ability, skills and educations

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According to economist,

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entrepreneurship is kind of optimal choice

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driven by these incentives

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This man is Robert Lucas

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He is a Nobel winner in 1995

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He argued that
people have different abilities

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and therefore,
people have different incentives

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Specifically those with higher abilities

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can choose entrepreneurship

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Others remain wage workers

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Why is this happening?

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Let's look at the graph

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This y-axis represents your income

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x-axis represents people's abilities

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If you are a wage worker

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and your income is fixed
regardless of your abilities,

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but your contribution
to the company will differ

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If you are highly capable,

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for example, if you are 
on the right side of the abilities,

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then the profit you generate
for your company

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exceeds your wage

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Then in this case,

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you are better off
starting your own businesses

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Because in this case,
if you start your businesses,

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your return is much better than your wage

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But if you don't have abilities,

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then you don't contribute to the company

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In this case, however,

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you get the same salary
no matter how much you contribute

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So, if your ability is low,

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which is, you are on the right side,

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then wage worker make more sense for you

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On the other hand,
if you are on the right side,

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then you'd better start
your own businesses

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Which is interesting

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What do you think?

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So, Lucas concluded that

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people with high abilities

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are more likely to become entrepreneurs

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because of their incentive

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This man is, Lazear

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He's a labor economist

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and he emphasized the skills

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These skills are not deep specialization,

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but broad skills

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He argued that the learning business

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requires a bunch of different tasks

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It requires many tasks

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Such as accounting, marketing,
and management

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And you name it

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Some people are really good
at many tasks, others don't

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Because people are different
in terms of their skills

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The broader your skill set,

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the more likely you are
to be an entrepreneur

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This is called

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"Jack of All Trade" hypothesis

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So, let me summarize

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Many people agree that
people are different in terms of

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biological factors, traits, motivation,

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cognitive style, ability and skills

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Specifically, 
biological perspective argues that

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your genetic factor

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or your DNA

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determines your entrepreneurial potential

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On the other hand,

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psychological perspective argues that

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your mind and your way of thinking

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is also different,
which shapes entrepreneurship

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And lastly,

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the economic perspective says that

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entrepreneurship results from
incentive-driven choice

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based on your ability and skills

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What about the biological,

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psychological, and economic perspective?

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Those perspectives are
kind of different from

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previous institutional perspective
and sociological perspective

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Now, we are going to talk about

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a new perspective,

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which is a behavioral perspective

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for next class