Raj Echambadi is the Dunton Family Dean of the D’Amore-McKim School of Business at the Northeastern University. In 2004, he co-authored innovative research on Employees who quit jobs to start their own ventures. However, there was always something nagging him. He would often wonder what could be the motivation behind these people leaving their companies. Fifteen years later, he has his answer. The catch is that it is not about money.
With the help of two co-authors, Echambadi interviewed 22 entrepreneurs who were involved in his original look at the disk-drive industry. The 2004 paper detailed how knowledge gained from old businesses led to success for the startup competitors. The latest research is a spin-out of his previous work where his updated interviews have straightened out the popular misconception that entrepreneurs are inspired by money. The product and its profit were incidental to the fundamental desire of entrepreneurs to prove themselves. What they did was less important than the fulfillment of a need.
Echambadi commented, “It was never the idea that made people move. It was the primacy of the people”.
His latest study categorises the leaders of startups. They have the “ringleaders,” who are very ambitious and launch the company based on their personal ambition. They surround themselves at the upper-management level with “cofounders,” who are less daring. While the ringleaders tend to be all-in, the co-founders are hedging their bets and keeping the door open for a return to their old firms in case the new venture might fail. This research is called Jewels in the Crown: Exploring Motivations and Team Building Processes of Employee Entrepreneurs. It was found out that when all of the team-assembly processes were followed, the long-term performance of the spinout increased.
Shahjadi Jemim Rahman