Does ADHD make you a good entrepreneur?
People who have ADHD tend to have this draw towards entrepreneurship and are much more interested in taking on start up risks than the non-ADHD population. But are we actually any good at being entrepreneurs? Let’s dive in.
Firstly, this blog today is based on a YouTube video I put out. If you would prefer to watch instead of read, you can find the video here:
Last week I did a post on ADHD and our interest in becoming entrepreneurs, looking at some of the most recent academic study in this space which finds that we tend to be twice as likely to pursue entrepreneurship as the non-ADHD population. If you’d like to hear a little more about the reasons behind why this is then I’d recommend going and giving my last video a watch because today we’ll be continuing on to look at the outcomes of these entrepreneurial endeavours.
I have three papers that I want to go through from the last six years, all three of which tackle this question from a slightly different perspective actually. Before we dive in I do have to acknowledge that all three papers look at things from the perspective of ADHD symptoms instead of an ADHD diagnosis. Now there’s a lot of discussion to be had around symptoms vs diagnosis, but actually the first paper I want to look at explains the reasoning well, so let’s start here.
“ADHD Symptoms, Entrepreneurial Orientation (EO) and Firm Performance” (Yu et al., 2019) recognises that many people who would qualify for a diagnosis just don’t get one and the standards across different countries and socioeconomic statuses for accessibility of diagnosis vary significantly so it can be hard to get a clear picture of who does and doesn’t have ADHD based on yes/no diagnosis.
They also argue that even then a yes/no diagnosis might not be helpful because it is binary, whereas the symptoms that lead to a diagnosis are a continuous variable. That’s why we have assessors trained to perform diagnoses instead of just a quiz you can take home and score 10/10 for ADHD. By using symptoms they might better capture the continuous nature of ADHD.
While online quizzes about ADHD can be helpful if you are exploring whether or not you might be ADHD, there’s a lack of nuance that means that the answers should be taken with a pinch of salt and further research is important.
Finally they point out that many who are diagnosed medicate or pursue other forms of treatments which could alleviate the symptoms and therefore this could make it difficult to get a clear picture when studying ADHD symptoms. So while debate can rage on about official diagnosis, self-diagnosis and ADHD symptoms, I’m happy to move onto the results of the studies without diving into this topic any further.
This paper focuses on Entrepreneurial Orientation, referred to as EO, which has been found across many studies to have a positive influence on success across different countries and types of firms (Finkelstein et al., 2009). The paper actually refers to it as the “most researched concept in the entrepreneurship literature” so seems like the theory behind it is robust.
While entrepreneurial orientation may sound like what we were discussing last week: the fact that ADHDers are more interested in becoming entrepreneurs, there are actually dimensions of entrepreneurial orientation that can be linked to ADHD symptoms, which is exactly what this paper does.
There are three dimensions of entrepreneurial orientation, innovativeness, proactiveness and risk-taking, all linked to each other. Innovativeness reflects openness to new ideas and trying out new things. Proactiveness refers to being forward-looking and acting on future demands to gain a first-mover advantage. Risk-taking is the willingness to commit large resources to uncertainty despite large potential downsides, which seems to be the opening gambit of every discussion on ADHD and entrepreneurship I’ve ever read.
Specifically, the paper states that:
“Innovation generates opportunities for extra economic rents compared to competitors (Schumpeter, 1934); Proactiveness provides first-mover opportunity enabling the firm to occupy market space and charge premium price (Zahra & Covin, 1995); Risk-taking may cause higher performance variance but leads to performance advantage in the longer term (Wiklund & Shepherd, 2005).”
So as many of these academic studies do, we can look at each of these three dimensions in conjunction with each of the ADHD sets of symptoms and compare the two.
Starting with inattention, they acknowledge that this might increase divergent-thinking and thus creativity and more novel ideas. However, in order to move new ideas forward, convergent thinking is also needed, meaning a win on coming up with ideas for innovation, followed by a loss on not necessarily moving forward with them to actually innovate.
In contrast, hyperactivity/impulsivity is often related to risky choices, while inattention is not, and increases decision speed, while inattention reduces it. In fact, inattention hasn’t actually been found to correlate in any way to entrepreneurial intention or actually starting businesses but hyperactivity/impulsivity has. So inattention may not be the best place to look.
When we turn to hyperactivity instead, this is characterised by quick action, often without thinking, sensation seeking and well, we just get bored easily. The fact we get bored easily is seen in the fact that we struggle to persevere with boring tasks after the challenging part is done. Our sensation seeking is related to openness to new experiences and change and our hyperactivity/impulsivity also means we are more alert and responsive. The paper suggests that this means we are future and opportunity oriented.
I knew if I searched for the word “alert” I’d get a picture of a cat just like this. Honestly these captions are often my favourite part of writing these articles…
Hyperactivity/impulsivity is also related to delay aversion, which could cause us to gravitate towards “toward stimulating, intrinsically interesting, and novel tasks being performed in a busy and fast-paced environment”.
Something that came up in all three of the papers I’ve read for this that I hadn’t come across before is that when presented with a risky endeavour, we tend to be more attracted by the upside and less sensitive to the potential downside, and therefore more likely to take the risky gamble. In fact, a quote from the paper states:
“Adults with ADHD have similar intellectual capacity as non-ADHD individuals but are more attracted by rewards and are willing to bear potential losses for the sake of pleasure””
This could be interpreted as us being more likely to find risky situations as less threatening and more attractive, and therefore more likely to pursue them.
When we look at these symptoms just described, we actually see they can be mapped onto the entrepreneurial orientation symptoms, of innovation, proactiveness and risk-taking, and so the paper concludes that while inattention has no correlation with entrepreneurship, the traits of the hyperactivity/impulsivity style symptoms correspond closely with that of entrepreneurial orientation and thus there is validity to the claim that those of us that have ADHD symptoms can perform well in entrepreneurship.
The concept of ADHD traits being sometimes useful, sometimes not continues in the paper Dueling Banjos: Harmony and Discord between ADHD and Entrepreneurship which we’re going to take a look at next. The premise behind this paper is that the positive and negative aspects are two sides of the same coin; an ADHD trait can be positive in some contexts but negative in others and in order to evaluate the benefits or drawbacks of ADHD and entrepreneurship we need to look a little further into that context.
I love it when academic papers contain amusing names!
We spoke last week about the concept of person-environment fit and how if we’re in the wrong environment for us as a person then we are likely to struggle more than if we are in an environment that works for us. This paper argues that the environment of entrepreneurship changes according to the stage of entrepreneurship that we are in.
For an example of this, we can look to the founder problem, the fact that the creators of a new venture are often replaced by business leaders who are better suited to scaling as the companies grow and mature, and that the founder of the company often isn’t the person to lead the company long term.
The paper talks about initiating style behaviours versus structuring style behaviours and how ADHD characteristics tend to fit better with the former, rather than the latter. This would imply that ADHDers make great founders, but perhaps are less effective as the business grows, but that would be an oversimplification of the initiation and structuring required at each stage.
The paper considers six stages and we’re going to take them one by one, starting with interest and opportunity identification as our first stage.
Immediately one the important things it highlights is entrepreneurial interest, because without interest in entrepreneurship itself our attention and motivation goes elsewhere. As we established last week, ADHDers seem to have a lot of that, so we can call this one a win.
In order to move forwards with new ideas, we need out of the box thinking and creativity that ADHD brains are known for and so our divergent thinking can be a huge success. But our ability to ideate could be a negative because if we have too many ideas we might not see them through due to splitting our attention too widely and potentially not checking for market demand or existing competition first.
For stage two, nascent-stage entrepreneurial behaviour, the paper found that ADHDers acted upon entrepreneurial activities more quickly and with greater frequency than those without ADHD. They also found us more likely to be seen as visionaries and more likely to reach out to and inspire others to come with us. However, because our pursuits tended to be more novel, they were also more risky and more likely to fail and we were less likely to be self-reflective for why things failed, leading to us launching more but also experiencing more failure.
This is what stock images comes up with when you write the word “visionary”. I have no idea how to interpret this but it’s a pretty cool image so we’re going with it.
For the resource acquisition stage, the benefits or drawbacks of ADHD became much more of an “it depends on the context” conversation. ADHDers tend to be great at things like bringing people on board but struggle more with frankly boring administrative stuff. And entrepreneurship is ultimately a game about relationships for which the social impacts of ADHD can have an impact.
I actually like what the paper said here, that ADHDers are not incapable of doing administrative things. Just because something is harder for us doesn’t mean we can’t do it, it just means it’s harder, and in fact our ADHD may be helpful to us in looking past barriers and ignoring naysayers as we move forwards, traits that are helpful for gaining external investments.
Next they looked at resource coordination, finding it the least suited to someone with ADHD. This would be things like organising formal policies, procedures and processes and that could be a struggle for those of us with ADHD. However, some entrepreneurial studies do suggest that less formal behaviours allow improvisation to compensate for limited resources so depending on context, ADHD could be an asset instead of a drawback.
For venture capture, again we hit an “it depends”. In order to capture value, a company needs to enter the market at the right time and with efficient delivery of their goods or services. In a market that is more well-known and stable, this could favour the structuring behaviour that us ADHDers are not big fans of, but in a more uncertain and dynamic environment ADHD could be far more useful.
Finally, when talking about innovation and renewal needed for businesses to continue to grow, ADHD is useful for initiating innovation and the benefit of it all depends on whether that comes at the cost of stability.
The paper concludes that the same ADHD traits can either be a benefit or a detriment according to the circumstances of each stage in the entrepreneurial cycle and so when considering the person environment fit, we need to consider that the entrepreneurial environment isn’t just one environment for entrepreneurship and changes over time.
So we have, on the one hand, that symptoms of ADHD can lead to entrepreneurial success due to their relationship with entrepreneurial orientation, and that ADHD symptoms can be both useful and not useful at different stages of the entrepreneurial lifecycle depending on the unique circumstances, so ADHD alone is possibly not enough to predict entrepreneurial success. But what if we paired it with passion?
That was such a clickbaity way to phrase things but it does lead me onto the topic of the third and final video in this series around ADHD and entrepreneurship where we look at the intersection of ADHD and passion and finally answer the question of when ADHD and entrepreneurship hit that sweet spot.
References:
ADHD Symptoms, Entrepreneurial Orientation (EO) and Firm Performance (Yu et al., 2019)
Dueling Banjos: Harmony and Discord between ADHD and Entrepreneurship (Lerner et al., 2018)
If this resonates with you and feel you would be interested in talking to an adhd and autism-friendly coach, feel free to get in touch. If you’re looking for more blog posts, you can find them here.