What matters more for entrepreneurial success: skills, personality, or luck?
Social Science Research Network Working Paper Series, 2009
Abstract
We conduct a large survey of Swiss entrepreneurs to assess the importance of luck relative to skills and personality as a determinant of entrepreneurial performance. Using various econometric techniques, including a correction for self-selection, we find that luck is about 2 to 3 times as important as the other two success factors. Contrary to Gompers, Kovner, Lerner, and Scharfstein (2008), there is no relation between entrepreneurial experience and performance. We also study the decision to pursue an entrepreneurial career. Entrepreneurs have in many ways masculine characteristics: not only are they male, they are also more overconfident and less risk averse than other people. Moreover, they become entrepreneurs by chance. However, these characteristics have no bearing on firm performance.