Too Rich Or Too Poor For Success
Stanford Law Professor Vivek Wadhwa comments on the role family income plays in creating successful entrepeneurs in The Financial Times.
Keith Wymer’s father was a “journeyman window cleaner” when he was born and his mother worked in a factory. Two years later, the family took an assisted-passage flight to Canada to take up unskilled manual work, trying to better themselves. By the time he was 11, in 1965, they were back in a freezing London flat with no television, telephone or car. The experience made young Keith determined to work his way out of it.
“I was miserable,” he says. “I had grown up in the bright and shiny new world where even families like mine would have a phone and a car and even a house. I cried for months as I tried to get used to the awful wet weather. I was really bitter about this and found it hard to settle.”
Research suggests that Mr Wymer might indeed have done better if his background had been slightly wealthier – but not too wealthy. Vivek Wadhwa, the Indian-American technology entrepreneur and academic, recently interviewed 549 founders for the Ewing Marion Kauffman Foundation, the US-based entrepreneurship research centre. When it came to questions of family background, he found that the most successful entrepreneurs tended to come from middle-income backgrounds (see panel).
The key was having enough support to be able to focus on the business, but not so much that the urge to keep grafting is lost. Mr Wadhwa says: “To succeed you need both the motivation and the connections. If you come from a very rich family, you will have advantages but I would argue you have less motivation [to start a business].”