Blog: what motivates entrepreneurs?
It is often assumed by those who have not started a business that the main reason why someone would become an entrepreneur is to make money. The truth, however, is seldom so simple.
Take Jennifer Riria, chief executive of Kenya Women Holding, a financial services business helping women in her east African homeland to get the financial support to work their way out of poverty.
She is representing Kenya at the EY World Entrepreneur of the Year contest in Monaco, which the Financial Times is reporting from, but her company’s roots could not be further from the opulence of Monte Carlo’s yachts and designer shops.
Kenya Women Holding started by offering small loans to its clients just so that they could start businesses to escape the cycle of poverty and want. However, the business itself got into financial trouble as the number of bad loans mounted.
Ms Riria, who studied at Leeds University in the UK and has a PhD in women, education and economic development, was brought on board in 1991, when Kenya Women Holding was technically insolvent. The business was reeling under the weight of its debts, was struggling to persuade disappointed donors to stick with it and could not find a lender willing to risk any additional funds to bail it out.
Ms Riria’s skill was to turn the situation around, such that 23 years later Kenya Women Holding is a sound bank, providing not just microfinance but savings, insurance and other financial services to enable its underprivileged client base to improve their lives.
She is passionate about Kenya as well as the achievements of her business, as you can see from the video interview the FT conducted with her earlier. She finds her motivation in seeing women better themselves.
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Other finalists here in Monaco have more overtly commercial businesses with much higher turnovers, profits and reach. However, they share a common motivation in making a difference by doing something.
Melbourne-based Andrew Bassat is here representing SEEK, the world’s largest online employment marketplace by revenue, which he co-founded with his brother in 1997.
This is a business that has also overcome some challenging years. SEEK lost more than $20m in its first five years and was still losing money at the time of the dotcom crash in 2000. It recovered, listed on the Australian Stock Exchange in 2005 and now enjoys a market capitalisation of A$4.4bn ($4.1bn).
However, talking to Mr Bassat, the overwhelming sense is that what motivates him most is the belief that his initial hunch that the web could make jobseeking easier was correct.
“We have always believed in the rightness of what we were doing and in each other,” he says. “Looking back, the more difficult periods are among the times I have enjoyed the most.”
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I have been sent some research from Cranfield University in the UK, which provides some more insight into an issue discussed on this blog yesterday – namely what is the ideal age to become a founder.
Cranfield academics collected data from its Business Growth Programme (BGP), a highly practical peer-learning course that helps ambitious founders to up their game and build their companies into substantially larger enterprises.
BGP was set up 26 years ago and is the largest and longest-running growth programme for entrepreneurs managing small businesses. More than 1,500 owner managers have participated in it.
Cranfield interviewed 171 BGP alumni, who have completed the course in recent years. The average age was 50 years old while only 2 per cent were 30 years old or younger.
One of the advantages of being 50-plus is that these founders have come through several economic cycles and recessions, according to the academics at Cranfield. Those lessons learnt have proved invaluable in expanding their businesses, it was noted.
Some may find it difficult to admit that entrepreneurs are not as young as first thought. However, it could be seen as good news. After all, with an ageing global population and the end of old certainties like final salary pensions, the fact that is not necessarily too late to start a business could be a source of hope for many older people.