Entrepreneurial Careers and Happiness

by Ethan Mollick

Does becoming an entrepreneur make MBAs happy?  Some early results from a study I am working on with Matthew Bidwell (also at Wharton), seems to suggest that it does.

To get the data, we surveyed 30,000 Wharton MBAs about their career histories, and around 28% of grads since 1990 filled out the survey.  We then performed a variety of statistical checks to confirm that the data was representative, which it was.  We have been using the data in a lot of ways, but, since I study entrepreneurship, I was particularly interested in how the careers of Wharton students affected their chances of becoming entrepreneurs, and their success at entrepreneurship.

One piece of news is that entrepreneurship is very common among Wharton MBAs, with over 20% having a stint as an entrepreneur at some point in their career. Also surprising were the types of companies that Wharton MBAs found.  The top 10 most common industries are less finance-heavy than you might expect from Wharton:

1.Consulting
2.Internet Products or Services
3.Software
4.Private Equity
5.Real Estate
6.Business Services
7.Investment Management
8.Retail
9.Financial Consulting
10.VC
MBA founders also appear to be a lot happier than people who have not started a company.  If you look at the graph below, you will see that entrepreneurs (the green bars) are more satisfied with their careers and with their jobs than non-entrepreneurs.  The effect persists even after we control for earnings and for years of experience (money and age both tend to make people happier).
The lessons from these results? Wharton MBAs often found companies, even when they weren’t originally planning on doing so early in their careers.  And those people who do go on to start their own businesses are happier with their careers, jobs, and work-family balance than any other group of MBAs (though Wharton MBAs seem to be a pretty happy bunch overall).
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6 Responses to Entrepreneurial Careers and Happiness

  1. I am not sure I ever filled out this poll but as an entrepreneur, but I do agree with the results… I worked for a start up company in Boston for 2 years after business school before branching out on my own. Since leaving that job, I have been successfully running art consulting business/ art gallery for the last 14 years and love what I do. Even during the recession times of 2009-2010, I felt more secure and in more control over my job than many of my friends and colleagues. Prior to going to Wharton, I always knew I wanted to be running my own business, I just did not know it would be an art gallery,(www.julesplace.com) till much later…..

    Julie Mussafer
    Wharton Class of 1996

  2. Ethan Mollick says:

    JP – good point, and its hard to rule out self-selection entirely. However, I found it comforting that how long people were planning on becoming entrepreneurs before they launched a business was not significant in explaining career satisfaction. That is, people who were clearly planning on becoming entrepreneurs were no happier than those who did not plan. However, people who were fired or laid-off before becoming entrepreneurs were less happy, though there are many possible reasons for that.

  3. JP Ferguson says:

    You know this one will come up: self-selection into entrepreneurship?

  4. Ethan Mollick says:

    Matt, it is a good point, so I want to address it.

    The success rate for entrepreneurs in general is much better than 5-10% (depending on how you define success), and even more so for Wharton entrepreneurs. Still, in the sample I am using for this post, over 25% of Wharton entrepreneurs have companies that have been shut down without being acquired, and many more have companies that are probably not successful (low revenue and zero employees, etc.) Of the entrepreneurs in the survey, 40% are no longer running their own companies, and have gone back to regular jobs. So, the happiness stats include both successes and failures; current entrepreneurs and past founders.

  5. Matt Quigley says:

    Would love to hear whether the Founders you polled are people who are currently running businesses.

    If only 5-10% of new ventures succeed, and you’re only hearing from that 5-10% who would self-describe as a founder, there is a silent majority that might feel quite differently about the resultant happiness of pursuing a career in entrepreneurship.

    Can you address that concern?

  6. Very interesting, thanks for sharing this research. Perhaps this can help to quantify the value of having a greater sense of power and authority over your own career and future.

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