In this episode: Are entrepreneurs born or made? Jon Peyton looks at research suggesting the drive to start a business is partly inherited, at the brain chemistry that may push entrepreneurs toward new challenges, and at what his own family history suggests. His answer: it’s both nature and nurture, and one trait separates hobbyists from true entrepreneurs.
Key insights
- Twin research by Professor Scott Shane of Case Western Reserve University suggests roughly 30% to 40% of the tendency to become an entrepreneur is innate.
- The same research links lower levels of dopamine to seeking out new and novel activities, such as starting a business.
- The “DOSE” framework (dopamine, oxytocin, serotonin, endorphins) helps explain why solving problems for others can feel so rewarding.
- Dopamine and endorphins fade quickly. Oxytocin (bonding) and serotonin (status) last longer.
- Traits and skills can be learned. An obsession with solving a problem usually can’t, and Jon sees it as the line between a hobbyist and an entrepreneur.
Episode timeline
- 0:00 How do entrepreneurs become entrepreneurs?
- 1:38 Nature versus nurture
- 2:14 Scott Shane’s twin research on inherited entrepreneurship
- 4:05 Dopamine and the search for something new
- 6:00 The DOSE framework: dopamine, oxytocin, serotonin, endorphins
- 8:48 Which feelings last and which fade
- 12:25 Why entrepreneurs are always chasing the next problem
- 17:03 Can entrepreneurship be learned?
- 17:35 Entrepreneurship in Jon’s own family
- 19:46 Ten failed attempts before the businesses that worked
- 22:46 How this show and Building An Exit™ fit together
- 24:48 Why so few businesses ever sell
- 30:43 Obsession: what separates hobbyists from entrepreneurs
- 33:15 Franchisees and the pre-written blueprint
The episode in brief
Every superhero has an origin story. Jon starts with a question most people never ask: are entrepreneurs born, or made over time? There isn’t much definitive research, but one body of work stands out. Professor Scott Shane studied identical and fraternal twins and found that roughly 30% to 40% of the tendency to be an entrepreneur appears to be innate. The entrepreneurial streak in you may come from someone generations back.
Brain chemistry plays a part. The same research links lower levels of dopamine, the brain’s reward chemical, to a stronger pull toward new and novel activities like starting a business. That led Jon to a framework he first heard at an entrepreneurs’ event: DOSE. Dopamine drives reward, oxytocin strengthens bonds, serotonin reflects status, and endorphins come with physical activity.
Entrepreneurs are always looking for their next fix. Hunting for solutions to a constant stream of problems delivers dopamine. Sharing an answer that helps someone raises status, which is serotonin. Positive feedback from peers can strengthen bonds, which is oxytocin. Constant motion supplies endorphins. Executives get the same rewards from clearing obstacles for their teams. The catch is that dopamine and endorphins fade quickly, while oxytocin and serotonin last. It’s also why taking away someone’s role, at retirement or after a sale, can leave them struggling.
Nature is only half the story. Jon can see entrepreneurship running through his own family. Even so, it took ten failed attempts and a great deal of education before he learned what he was best at. That led to the firms he built: a financial education company, a specialized planning firm, an investment management firm and, eventually, an exit planning consultancy. Genes may have opened the door, but experience and learning got him through it.
Why this show exists. Fewer than 20% of businesses ever sell, and fewer than half of those sell on the seller’s terms. Owners need to understand how the business fits into their personal financial independence. This show covers the personal side and how it connects to the business. Its sister podcast, Building An Exit™, covers building and scaling a company toward the day it could run without you.
Obsession can’t be taught. Most traits can be learned and most gaps can be filled with discipline. What usually can’t be learned is the obsessive drive to solve a problem: spending your free time researching it, learning it and living it. Jon sees that as the line between hobbyists and entrepreneurs. Franchisees fall somewhere in between. They can build real businesses, but they work from someone else’s proven blueprint. The entrepreneur usually starts with no blueprint at all.
So, nature or nurture? Both. Whether you build your own blueprint or buy someone else’s, you need the ability to learn, iterate, fail and grow.
Key action items
- Look for entrepreneurship in your own story. Think about family members, early ventures and the problems you can’t stop trying to solve.
- Map your rewards to DOSE. When your energy dips, ask which one is running low and what healthy activity would restore it.
- Test your obsession. If you’d happily spend your free time studying a problem, it may be worth building a business around it. If not, it may be a hobby.
- Plan for life after the business. Your identity and rewards shouldn’t depend entirely on your role, especially before a sale or retirement.
Listen next: Episode 3: How Does One Find Equality in Entrepreneurship?
Value Creation Consultancy™ has since merged into Founder’s Accounting™. References in this episode to the consultancy reflect the firm at the time of recording.
This episode is educational and isn’t legal, tax or financial advice. Speak with your own attorney and advisers about your situation.