Ever wonder why so many children of entrepreneurs become entrepreneurs themselves?

One reason is that our genes influence the decision to start a business. I don’t mean that figuratively; I mean it scientifically. With colleagues at Kings College in London and the University of Cyprus, I have been investigating how genes affect entrepreneurship for more than five years. Through studies of twins, and more recently, through molecular genetics laboratory research, we have found that genes influence whether people start businesses, are self-employed, or have owned their own companies. Our research shows that the same genetic factors influence the tendency both to see business opportunities and to start companies, as well as how much money self-employed people earn.

At this point you may be wondering how researchers could determine that there’s a genetic component to entrepreneurship. It’s actually pretty straightforward.

With twins, it’s a matter of comparing the choices of the two siblings. Identical twins share the same genetic composition, while fraternal twins have half in common. If pairs of identical twins make more similar choices, such as starting a business, than pairs of fraternal twins, then genetics must affect the choices, as long as a few scientific assumptions hold. In the molecular genetics research, we examine the different versions of genes people have and see if entrepreneurs are statistically more likely to have one version over another.

There are probably many ways genes influence whether or not we become entrepreneurs, but in the twins research, we have found initial evidence that one route clearly is through our personalities. The same genes that affect whether we are extroverted, open to experience, disagreeable and sensation seeking also influence our decision to start our own business. Furthermore, the same genes that influence the tendency to be open to experience also affect the tendency to identify new business opportunities.

Before you start worrying that this research will usher in the world portrayed in the science- fiction thriller Gattaca, we are a long, long way from any practical application of these findings. That will come only after many years of replicating the findings.

Moreover, there’s no single gene or even set of genes for entrepreneurship. Our genes influence broader categories of behavior, such as whether we do things that involve a great deal or small amount of novelty. While entrepreneurship might involve pursuing novelty, so do many other human activities.

Further complicating the issue, hundreds of genes probably influence whether or not we become entrepreneurs. Thus far in the molecular genetics research, we’ve found initial evidence for just one of them–a version of a gene for a receptor for the brain chemical dopamine.

Geneticists have speculated that sensation-seeking people have versions of dopamine receptor genes that require more stimulating experiences in order to produce a given amount of dopamine in the brain. To get the higher level of stimulation, those people are more likely to engage in sensation seeking activities, including starting businesses.

While your genes influence whether or not you become an entrepreneur, experience matters, too. Genes don’t determine anything you do; they merely influence what you do in the same way your life experiences do. Just as receiving a financial windfall increases your odds of starting a business, so too does having a particular genetic makeup. But just as some people without a penny to their name start companies, so too can people without the genetic make-up associated with entrepreneurship.

While the research so far is limited, it does mean that when you describe someone as a born entrepreneur, you really are onto something.

Article source: Entrepreneur.com

 

One of the characteristics of humanity that never seems to change is that we are concerned.  Concerned about the economy, concerned about unemployment, concerned about global warming, concerned about global cooling, concerned about foreign wars, concerned that kids are growing up too fast, and concerned that kids aren’t growing up fast enough.  In some cases, people grow so concerned about the state of the world that they require therapy or medication.

The implicit problem with carrying so much concern around with us is the fact that many of the large problems that people spend so much of their lives worrying about are completely out of their control or ability to influence.  The principal reason why so many people expend such effort gathering information and worrying about things beyond their control is because it bestows a sense of self-importance.  In a way, it makes us feel like “Manager of the Universe”.  We imagine this self-appointed post to be that of an informed and concerned person who knows about all of the world’s concerns and is actively thinking about ways to solve them.

The truth is frequently removed from our perceptions by quite a bit.  The only touch point that most people will have with the “big problems” of the world is the infrequent elections where they cast a ballot.  And in the overwhelming majority of cases, the overwhelming majority of the electorate will mark an “R” or a “D” just like they did in the last election, regardless of the world’s surrounding circumstances.  (Please note that this is not attempting to diminish the importance of voting, but rather to highlight the importance of direct personal action, instead of worrying about what is beyond your control)  In most cases, the best remedy for a self-appointed “Manager of the Universe” is to get over yourself.  The world doesn’t change because you’re worried.

Bearing this in mind, it is important to understand that the world DOES change if you take action.  Under this paradigm of thought, the things that we pay attention to derive their importance by the extent to which they enable, inform, or inspire action.  In general, our attention goes to one of three comprehension levels.  Awareness, Concern, or Active Engagement.

Three Levels of Comprehension

• Awareness:

  • This represents things that we know about, but are not able to influence and do not continually worry about.  Most of what people think of in regards to being an informed citizen exists in the realm of awareness.  It is most certainly important to be aware of our community, nation, and world at large but far too many people spend countless hours becoming aware of things that will not influence any direct action.  The most important things to be aware of are those that will influence present and future decisions.

• Concern:

  • This represents the things that are on our mind.  The things that we are thinking or worrying about.  The critical juncture with the thoughts of concern is whether we spend our concern on things that we can act on, or whether we spend all of our time in worry about things that are beyond our ability to influence.  Excessive worry about the world at large produces two unproductive results.  The first is that it occupies time that could otherwise be spend in productive pursuits.  The second is that it creates a feeling of powerlessness since all of these things we worry about are beyond our ability to change.  For optimal productivity (and sanity), focus your concern on the things that you have the power to change.  For most people, this will be decisions about their persona, professional, and financial life.

• Active Engagement:

  • The last and highest level of attention comprehension is active engagement.  This is where you are personally doing something to accomplish your goals or address your concerns.  The reason why it is highlighted so prominently is because all of the improvements in our life (or the world for that matter) stem from a decision to take action.  If you are unsatisfied with your financial position, begin taking action to improve it by reducing expenses and looking for new opportunities to earn and invest.  if you feel sorrow for hungry children, go out and help to feed those hungry children.  In addition to being tremendously more productive that awareness or concern, active engagement helps to create a sense of power and control over your life.  Instead of focusing on what is bad and out of your control, focus on what you can do to make things better for your family and the community at large.

In the end, each of us must fight the urge to declare ourselves “Manager of the Universe” and take action to improve our lives.  When pursuing or consuming information, always ask whether this information will influence or change any future decisions in your personal, professional, or financial life.  Every time that the answer to this question is negative, it pushes life a little further out of your control.  Every time that the answer is yes, it brings life a little further within your ability to influence.  The way that we can change our lives (for real) is by perpetually taking action and learning to make better decisions.  In this way, it is much more important (for both you and the world) to become master of yourself instead of aspiring to be manager of the universe.

 

When life becomes difficult, it can become very easy to believe that we are the victims of circumstance.  It is comforting to blame the economy, or whichever political party happens to be in power.  (Ironically, the political party in power typically blames the people that were in power beforehand as a way to try and absolve themselves of responsibility)

However, as individuals there is only a narrow scope of things that we can really control.  I do not have the ability to directly influence the political system since my one vote is easily dissipated.  Thus, the only area of my life that I can ‘really’ influence is what I choose to do and how I choose to react to my environment.

The importance of this insight lies in the fact that many people do not actively choose how they will act . . . instead, they react to their environment emotionally.  Therefore, in a very real way their environment shapes them instead of them shaping their environment.  Conversely, if we wish to exercise influence over our circumstances it requires that each action be a conscious choice.  James Allen described this phenomenon in his book: “As A Man Thinketh.”

The composition of the human mind is such that the thoughts we hold in our mind will manifest themselves in action by means of influencing our perceptions.  When our minds are fixed on blame and failure, then all that we will see is failure.  This focus on failure will naturally result in actions that take us in the direction of our thoughts.  When we consciously fix our minds on thoughts of improvement and achievement, we will remain open to opportunities.  Once we become open to opportunity, they seem to live everywhere that we look.

In the end, it is our thoughts that determine what we perceive.  This perception influences our actions and slowly molds the composition of our character.  Thus, it is figuratively and literally true that we are who we choose to be.

 

One of the most prescient concepts in economics is the notion that “all changes occur at the margins”.  Expressed another way, this means that when things change, it happens in small incremental movements.  One of the commonly cited axioms of economics is that “rational people think at the margin”.  What this means is that our decisions should be framed in the context of what impacts our next action or decision, and ignore costs that are sunk or decisions that have already been made.

The importance of this concept comes into play when making both personal and financial decisions.  When deciding whether to fix an old car that has broken down, the only factors relevant to the decision should be the facts at hand.  It does not matter how much money you have already spent to fix the car . . . it only matters what you do with the current situation.  (Note that from a financial perspective, it is optimal to repair your existing automobile unless the cost of repairs exceeds the value of your car in reasonable working order.  The decision to get rid of your old car and buy a new one is almost never financial optimal.  This doesn’t mean that you should never get a new car, only that the purchase is a ‘lifestyle’ decision and not a ‘financial’ one.)

The inevitable result of thinking ‘at the margin’ is a narrowing of focus onto the decisions and opportunities at hand instead of dwelling on mistakes and missed opportunities of the past or fantasizing about expected opportunities in the future.  The only time that anybody ever has to act is now.  The past is gone, and the future has not yet come.  Action must always occur in the present tense.  This is not a renouncement of the benefits that come from planning for the future, but a realization that the future is built on many successive decisions, and that each decision we make builds the road for future decisions.

By zeroing-in on the decisions that you can influence today, it will create a remarkable degree of emotional freedom.  This liberation will come when you are no longer shackled by old decisions and no longer nervous about what will come in the future.  The future is and has always been uncertain.  However, people who have grown accustomed to making rational decisions develop the confidence that they can adapt to whatever future situations unfold.  The most important thing is to use the information and resources at hand to make the best decisions possible.  This crystallizes a seemingly infinite number of possible future options into one decision . . . your next one.  The result of that decision will set the stage for future decisions, but so will external events that are beyond your control.

The single area where most people run into trouble is that they under-estimate the extent to which their future will be shaped by things that they do not control.  Thinking about the unknown is inherently frightening, because we cannot plan for something we do not know will happen.  However, the unknown should not be allowed to become a crutch that scares us into inaction, but should also be appropriately heeded so that actions are not taken that greatly depend on a specific future outcome that is far from guaranteed.

The extent to which we can control our lives always is, always has been, and always will be at the margins.  We can influence small iterative changes that compound over time to produce tremendous results.  On balance, it is best if our actions create outcomes that are robust or adaptable to future changes in the marketplace.  While we may not know what these changes will be, we can be confident in our ability to adapt to them.  By shifting our focus to present things that happen ‘at the margin’ it will allow us to enhance our circle of influence by improving the effectiveness of our decision making.