28% Before age 21
72 As an adult
Jim Benedict had 15 teenagers working for him -- shoveling snow off shopping-center roofs in his hometown of Buffalo -- by the time he was 10 years old. By age 27 he had started three more companies, including the advertising and marketing agency he now owns.
You can find these entrepreneurial wunderkinder if you look hard enough, men and women with company building apparently in their blood. Depending on how you count, anywhere from one-sixth to one-third of our sample are these Born Entrepreneurs (see page 3).
But if you want a more typical case history, consider Jim Hanahan. Or maybe Mark S. Smith.
Hanahan, 56, runs a third-party administration company, as it's known, which manages self-insured health plans for corporate clients. You wouldn't have pegged him for an entrepreneur: no childhood businesses, no other start-ups, just a 23-year career with multibillion-dollar Connecticut General Life Insurance Co. (now CIGNA) in the staid old insurance industry. Smith, 41, worked in Southern Railways Inc.'s marketing department and wound up with the wonderfully bureaucratic title of manager of intermodal pricing. If Southern hadn't wanted to transfer him from Washington, D.C., to Roanoke, Va., he might still be there, instead of running his own transportation service company out of Overland, Kans.
What makes Hanahan and Smith typical? Just this: two-thirds of our respondents grew up in households where their parents worked for wages rather than running their own businesses. Nearly as many undertook no entrepreneurial ventures as children. Three-fifths started no companies other than the one that landed them on the Inc. 500. Almost all of the respondents, in fact, did just what most people do: they went to school, got jobs, took up a particular line of work. Ask them how important for their current role were the skills they acquired while working, and a whopping 85% check "critically important" or "somewhat important." Ask them to cite the single most important source of their abilities as a company builder, and at least twice as many point to "work or professional experience in an industry" as to any other answer.
There's a theory, dubbed trade skill, that argues for the importance of early exposure to entrepreneurship. "Usually the person who successfully starts and runs a small business," write the people who invented the concept, "either had a parent or close relative who had a business or . . . they had significant business experience themselves before the age of 18." For about a quarter of our respondents, that theory seems to hold true. Like snow-shoveler Jim Benedict, they point to family background and childhood experience as the key source of their talents, and report that they had the most important skills and abilities for company building by the time they turned 21. And doubtless a much larger fraction of our CEOs come from entrepreneurial backgrounds than you'd find in the population as a whole.
But if the trade skill theory doesn't describe you, don't despair. It doesn't describe Hanahan, Smith, or most of the other Inc. 500 founders either. For the majority of respondents, what made the difference between continuing a career and starting a company wasn't any formative childhood experience. It was the simple fact of spotting -- and developing -- a new idea.
BORN ENTREPRENEURS
If you wanted to prove that entrepreneurial instincts are genetic in origin, you might trot out Robert G. Barbour as Exhibit A. "The question growing up was never whether I'd be in business for myself, it was what that business would be," says Barbour, founder of Windline Amanet.
Some people do seem almost born to the calling. Thirty-seven percent of our respondents started at least one serious business in their youth. Nearly half of those started two or more. And 41% started at least one business as adults other than their Inc. 500 company, with a quarter of that group starting three or more companies.
Barbour, 42, qualifies on all counts. In college he netted some $150,000 selling inventions ranging from a "slurp gun" (for trapping tropical fish) to a patented alarm system. Then came more serious company building. Sunrise Leather, a manufacturer of belts, vests, and handbags, reached $700,000 in sales before Barbour cashed out. Two companies later Barbour was designing and selling equipment and technology used in the art glass and decorative ceramics industries. After that he started a laboratory to grow synthetic emeralds, and he imported natural emeralds. Finally his interest in yachting led to the creation of Windline Marine, a manufacturer of boating accessories. Several years later he started an industrial and aerospace-components division called Amanet. Today Windline Amanet is doing $3 million in sales. -- Elizabeth Conlin
THE IDEA
Where Good Ideas Come From
43% Got idea while working in same industry or profession
15 Saw someone else trying it, figured I could do better
11 Saw unfilled niche in consumer marketplace
7 Did systematic search for business opportunities
5 Brainstorm, can't really explain it
3 Got idea from hobby or avocational interest
16 All other
How to explain where Great Business Ideas come from? Some of our respondents didn't try; they checked the box on the questionnaire that said "Brainstorm; can't really explain it."
But more common than the out-of-the-blue inspirations were the explicable ones, the ideas that caught their creators by surprise but in retrospect seem pretty logical. James Ake's liquid plant-food business was chugging along at a modest speed until, caught in the middle of a rush order, he realized his automatic bottle-fillers couldn't do the job fast enough and so designed a new machine. Today Ake's Electronic Liquid Fillers Inc. sells $11 million worth of filling equipment.
The mythology of entrepreneurship celebrates such serendipity, propagating an image of the lone company-inventor suddenly flashing on the idea of a lifetime -- and sometimes it happens just that way.
