Untapped potential of hiring former startup founders

Are you considering hiring a former entrepreneur? You need to know whether such a person is a reliable investor and whether they will be a committed contributor to your company, especially after recovering from a startup setback. You may wonder if you can trust it if you continue. A widespread concern among hiring managers is the idea that former entrepreneurs are simply waiting for the next big idea and are therefore a high-risk hire.

The truth is, not all former entrepreneurs are at higher risk of quitting than the average new employee.

“Full-time employees who are satisfied with their role may not be as innovative as their entrepreneurial colleagues. They may be dedicated to the company but may not pursue side hustles. In contrast. , entrepreneurs are often not satisfied with just a monthly salary. They may start a side hustle, which can lead to burnout.” Chris ChimeraFounder of Techtiq Solutions.

First of all, most former entrepreneurs bring a wealth of experience in strategic planning for major projects, securing funding, building and managing teams, and tackling complex business challenges. It is worth noting that 90% of startups fail. This means that these people have likely made it through difficult times and learned valuable lessons along the way.

Additionally, former entrepreneurs who once competed with your company are more likely to have done thorough research on your business and industry, regardless of the size of their venture. This insight is invaluable in helping businesses outperform their competitors.

In addition to strategic acumen, former entrepreneurs are also good people managers and are often good leaders. They understand the importance of building strong teams and are adept at making difficult decisions, such as when to fire underperforming employees. Given the autonomy to recruit their own teams and make key departmental choices, they are prepared to excel in their roles. Their confidence in management is often based on real-world business experience, setting them apart from managers who rely more heavily on theoretical knowledge and are more likely to be indecisive.

However, groundbreaking research by Siran Zhan, Liwen Zhang, Xueheng Li, and Yu Wu challenges this notion and provides a new perspective on the value that former founders can bring to organizations.

Former entrepreneurs, with their proven creativity and entrepreneurial abilities, represent a largely untapped resource for companies striving to innovate and gain a competitive edge in today’s marketplace. However, widespread bias against them causes recruiters to overlook their potential to drive organizational innovation and performance at scale.

Research argues that the timing of past entrepreneurial experience relative to current wage employment is a key indicator for distinguishing between those who are more likely to quit and those who are less likely to quit.

For example, those who have recently exited a startup are less likely to have intentions to embark on a new entrepreneurial venture than those with older startup experience. This difference in timing has a significant impact on the likelihood of quitting your current job.

The study analyzed data from more than 12,000 Australian wage earners and found that those who were entrepreneurs immediately before starting their current job were less likely to quit to start a new business.

In contrast, those whose current job was their second work experience after leaving a venture were more likely to develop entrepreneurial intentions and quit.

The study also revealed some interesting gender differences. Men who were entrepreneurs immediately before starting their current job were less likely to have subsequent entrepreneurial intentions and to leave their jobs voluntarily. On the other hand, those who had entrepreneurial experience in their second most recent job were more likely to do so. Interestingly, women did not show a decline in entrepreneurial motivation immediately after leaving their startups.

These findings provide valuable insights for both employers and former entrepreneurs. They challenge the stereotype that all former entrepreneurs are risky hires and highlight the importance of considering the timing of entrepreneurial experience.

Former entrepreneurs can be valuable resources for your organization. As the business world continues to evolve, embracing the diverse skills and experience of former entrepreneurs can be a key strategy for fostering innovation and growth.

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