As reported recently in the Stanford Knowledgebase newsletter, a 1997 alumni survey of Stanford Graduate School of Business MBA students provides data that indicates entrepreneurs are far more likely to have performed a greater variety of tasks, worked at more different careers, and studied a more broadly based curriculum than their non-entrepreneurial peers. Edward Lazear, who is Jack Steele Parker Professor of Human Resources Management and Economics at the Graduate School of Business, has studied results from the survey of 5,000 alumni and concludes that the appropriate term for the entrepreneurs in the group is “jack of all trades.”
Early specialization is not the path that entrepreneurs take in approaching their innovative careers. In fact, for the fewer than 7% of the alumni who are entrepreneurs—have founded their own businesses—at any given time, the chance of start a business rose proportionately with the number of types of positions they held. For the entrepreneurs, graduate school was an opportunity to expand their knowledge rather than to specialize. The overall probability of any single member of the alumni group founding a business at some point was approximately 25%.
Professor Lazear also challenges the common assumption “that entrepreneurs are technical specialists who base their new companies on innovation.” In fact, says Lazear, most are “non-technical people who form businesses in non-technical fields.” Data from the Current Population Survey support this formulation: The top five industries in which entrepreneurs founded companies in 2002 were construction (13.48 entrepreneurial); retail trade (12.98%); other professional services (11.02%); business services (8.10%); and insurance and real estate (6.72%).