At the start of every semester, a business school professor asks his students a question, and most everyone gets the answer dead wrong
Courtesy of Noam Wasserman
- Starting a business because you're passionate about isn't always advisable, experts say.
- Too much enthusiasm can be unappealing to potential investors, who would rather see an entrepreneur who's highly prepared.
- Passion can also lead to poor business decisions.
- Some research suggests that passion can grow over time the more effort an entrepreneur puts into their business.
At the start of every semester, Noam Wasserman asks his students a question: How important is passion for the "entrepreneurial magic?"
Wasserman is the founding director of the Founder Central Initiative at the University of Southern California's Marshall School of Business, and he's noticed his students consistently buy into common misconceptions around successful entrepreneurship.
"We get a resounding, 'Passion is critical. Passion is going to be the main ingredient that is going to enable me to go and succeed as a founder,'" Wasserman told me. Then he presents them with a case study "that drives home to them that passion can become your peril."
Specifically, Wasserman said, passion can mislead you into thinking you're readier to start a company than you are, or make you believe that your idea is more valuable than it is.
Preparedness can be more important than passion
Many people in the startup world describe passion as a key element of founding - and running - a company. Consider "Shark Tank" investor Lori Greiner's observation: "I've seen great entrepreneurs convince others to buy or invest in things that they would never have under any other circumstances, but for their passion."
Yet both research and experience suggest that too much passion can backfire. Not only can it lead to ill-informed business decisions, but it can also be unappealing to potential investors.
The authors of a 2009 study published in the journal Frontiers of Entrepreneurship Research surmise that displays of enthusiasm and commitment that come off as inauthentic can make the angel investor less interested in the opportunity. Seeming prepared when you meet with angel investors could be more important than seeming passionate.
Another study of entrepreneurs' pitches to venture capitalists, described in The Harvard Business Review, found that a calm demeanor was generally more convincing than unbridled enthusiasm.
Starting a company because you're passionate about the idea may also be downright impractical. As entrepreneur and small-business expert Carol Roth writes on Entrepreneur, passion can make you somewhat self-centered. "Businesses are borne out of a market need," she writes. "It doesn't start with you."
Passion often follows the effort an entrepreneur puts in
All this isn't to say that you shouldn't be excited about the prospect of starting a company. But the relationship between passion and entrepreneurial performance might be more complex than we've been led to believe.
A 2014 study published in The Academy of Management Journal found that passion results from the effort the entrepreneur puts in and the progress they make.
Or, as Ramit Sethi, bestselling author of "I Will Teach You to Be Rich," has said, "You get passionate about something when you get good at it." Instead of waiting for your calling to materialize before you, follow the things you're interested in and skilled at and eventually, you might become passionate about them.