What Motivates Innovative Entrepreneurs? Evidence From a Global Experiment at MIT

Entrepreneurship plays a central role in translating new inventions into useful products and services, and it is often stated that income or wealth is critical in establishing the incentives to create these inventions in the first place. However, despite this strong emphasis of theory on income incentives for entrepreneurship, empirical research has found little evidence of them. Existing studies of comprehensive samples of business owners or self-employed individuals across the United States find that most entrepreneurs do not think they are innovating, do not think they are addressing a new market, have little intention of growth, and are often largely driven by non-pecuniary incentives such as the personal value of ‘being your own boss’. Critics of this lack of evidence often emphasize is that the empirical analysis has focused on the wrong sample. The entrepreneurs of economic theory are ‘innovative (or high-growth) entrepreneurs’, not small businesses and self-employed workers. They represent the small number of innovators bringing new ideas to the market, which are themselves only a small portion of new firms. Since self-employment can occur for many reasons, both positive and negative ones (e.g., lack of other employment options), insights from one group do not necessarily inform the other.

We perform the first causal study on what motivates innovative entrepreneurs. We carry out a series of field experiments which allows us to characterize the role of incentives on the commercialization of technology and the way it shapes the process through which new innovations enter society. We try to assess whether these motivations differ across gender and culture. We take advantage of a unique setting where we can observe innovative entrepreneurs all across the world considering the same task to help their startup: applying to various MIT entrepreneurship challenges.

The first experiment focuses on individuals likely to have interest in the MIT entrepreneurship challenges, this is a larger sample of broad range of entrepreneurship-oriented people. The second focuses on people who have already considered they are a good profile for these competitions by having registered but not yet completed the full application process. Our emails emphasize three different potential incentives that are thought to matter for entrepreneurs: income, social impact, and a control group merely highlighting the MIT brand. In our experiment we randomly send people emails with one of two treatments or the control.
Jointly with the emails we send to the mailing lists, we setup a web page for members of entrepreneurship communities to access on which we also randomize the incentive messages. We then track the behavior of these users on the website.

With these different treatments, we aim to analyze which priming condition engages the individuals more. Engagement will be measured by clicks and time spent. This will allow us a revealed preference way to measure the motivations of these entrepreneurs and why they might engage with these emails. We also aim to analyze these preferences across gender and regions.