Professional Documents
Culture Documents
Underdog Entrepreneurs A Model of Challenge-Based. Entrepreneurship Theory & Practice, Jan., 7-17.
Underdog Entrepreneurs A Model of Challenge-Based. Entrepreneurship Theory & Practice, Jan., 7-17.
Underdog
Entrepreneurs:
A Model of
Challenge-Based
Entrepreneurship
Danny Miller
Isabelle Le Breton-Miller
Although there has been abundant research on the positive personality and environmental
qualities that stimulate entrepreneurship, we argue that negative personal circumstances
of an economic, sociocultural, cognitive, and physical/ emotional nature may have an
equally powerful role to play in getting people to become effective entrepreneurs. These
challenges create conditions and experiences that motivate particular adaptive require-
ments which in turn foster outcomes such as work discipline, risk tolerance, social and
network skills, and creativity.
A great deal has been written about the backgrounds and personal qualities that
help to shape entrepreneurs. Much of this work emphasizes personality characteristics,
mostly positive—a few negative—that induce people to become entrepreneurs and to suc-
ceed at the job (Korunka, Frank, Lueger, & Mugler, 2003; Miller, 1983). Abundant work
also investigates the favorable economic and sociocultural environments that foster entre-
preneurship (Acs & Armington, 2006; Scott, 2006; Stephan & Uhlaner, 2010). Less
explored, however, are the trying, sometimes traumatic experiences of individuals that
lead them to become entrepreneurs—often devoted, persistent, and creative ones.
Recent empirical literature suggests, surprisingly, that some critical drivers of entre-
preneurship come in the form of serious life challenges rather than personal advantages
and strengths, or favorable contexts. Survey evidence finds entrepreneurs—those who
start and run their own businesses—to be over-represented among people who cannot find
jobs, e.g., among necessity entrepreneurs (Block & Wagner, 2015), among immigrant
populations (Hart & Acs, 2011), among those with dyslexia and attention deficit-
hyperactivity disorder (ADHD) (Dimic & Orlov, 2014; Logan, 2009), among the physi-
cally handicapped (Pagan, 2009),1 in groups of veterans having undergone the crises of
January, 2017 7
DOI: 10.1111/etap.12253
war (Hope & Mackin, 2011), and even among those who are emotionally “disinhibited”
(Lerner, 2016). The nature of the predominant challenges faced by these different groups
are, respectively, economic and educational poverty for necessity entrepreneurs, socio-
cultural and linguistic challenges for immigrant entrepreneurs, cognitive challenges for
those with dyslexia and ADHD, and physical and emotional challenges in the last groups.
To compound the difficulties of these populations, there is often a bias against them that
makes traditional career paths, and even entrepreneurship, a most challenging endeavor.
In combination, the above findings of over-representation suggest that entrepreneur-
ship is often born of enduring life hardships. We shall develop a model of just how this
may happen and provide some examples along the way. The model suggests that chal-
lenges can force particular kinds of adaptation that may both compel and enable entrepre-
neurial initiatives. These initiatives are often, but not always, of a modest variety, but
they represent important cumulative contributions to national economies (e.g., Bergmann
& Sternberg, 2007; Jones & Latreille, 2011; Pagan, 2009), and more critically, serve as
facilitators of a better life for those truly in need of one (e.g., Hartmann, 2002; Kendall,
Buys, Charker, & MacMillan, 2006; Shaheen & Myhill, 2009).
Just as ecological selection forces drive certain structural forms in organizational
populations (Hannan & Freeman, 1977), and adaptation to environmental challenges and
opportunities represents the dominant force of contingency theory (Burns & Stalker,
1961; Thompson, 1967), so do challenges in one’s personal environment evoke experien-
ces that shape perceptions, attitudes, and sets of skills. We shall argue that like blind peo-
ple who compensate with their other senses, immigrants may, for example, compensate
for cultural unfamiliarity with hard work and ethnic networking, dyslexics may develop
unusual opportunity recognition skills, and those with ADHD may use their surplus energy
for multi-tasking and proactive initiatives. In many cases, these kinds of responses and adap-
tations favor entrepreneurial endeavors. So does an environment that rules out or makes less
palatable more conventional forms of employment. Indeed, today’s labor market can be
especially demanding with the growth of forces such as outsourcing (Contractor, Kumar,
Kundu, & Pedersen, et al., 2010), globalization (Sassen, 1999), and a declining manufactur-
ing base (Dickens & Lang, 1988; Pilat, Cimper, Olsen, & Webb, 2006).
The challenges we have listed above represent conditions entirely or very largely
beyond the control of an individual—thus they constitute circumstances that almost inevi-
tably will shape a person. These challenges will couple with various factors of personality
(McClelland, 1965; Miller, 1983) and context (Arora, Fosfuri, & Gambardella, 2004) that
have been the more common foci of scholars to influence behavioral outcomes relating to
entrepreneurship. However, the challenges are important drivers in their own right, and
primary reasons for why we find such over-representation of entrepreneurs among those
within the challenged groups to which we have referred.
Our model is structured as follows: first we propose two conditions and two experiences
that accompany our categories of challenges; then we suggest how these pose three very
common adaptive requirements; and finally, we suggest how the latter requirements may
produce several common behaviors and abilities that encourage entrepreneurial effort and
entrepreneurial success. We also postulate specific personal and environmental factors that
may condition these positive outcomes. Figure 1 presents an overview of our model.
alternatives, and the experiences are a sense of being different in a disadvantaged way
and a need to confront loss and uncertainty.
The condition of incapacity is difficult or impossible to overcome completely.
Physical handicaps, such as paraplegia, gait disorders, tics, and sense disorders pre-
sent fixed incapacities that lie in the way of normal employment and normal living
conditions. Those with cognitive challenges such as dyslexia or ADHD have neuro-
logical anomalies that are very likely to stay with them for the rest of their lives
(Snowling, 2000). These conditions render schoolwork and sometimes school conduct
less than optimal, and the dropout rate can be high among affected individuals (Bark-
ley, 1997). Moreover, certain skills in reading, writing, and focusing on particular
tasks are more difficult for them, and this makes much conventional work unappeal-
ing, and often out of reach.
The sociocultural and economic hardships confronted by many immigrants who have
inferior linguistic skills, cultural adaptation, and educational backgrounds also constitute
major hurdles to socioeconomic integration with the native population (Min & Bozorg-
mehr, 2000; Rath & Kloosterman, 2000). Again, these are real conditions of hardship
that, although perhaps surmountable over longer periods of time, are very challenging
when an immigrant arrives and must seek out ways to make a living.
A second condition is an absence of common career alternatives. This applies to all
of the above challenge categories. Immigrants may lack the language skills and education
to find acceptable employment; people with cognitive disabilities may lack the mental
capacity needed for many jobs; and those with physical handicaps may be barred from
many positions due to their inability to adapt to conditions in the workplace or the physi-
cal demands of the job. In adulthood, given the need to seek economic support or gainful
employment, a challenged population may have to resort to unusual types of work, with
self-employment in one’s own business establishment becoming an important option.
January, 2017 9
This is true of people with disabilities (Pagan, 2009), immigrants (Light, Bhachu, & Kara-
georgis, 1993), those hobbled by lack of skill or economic opportunities (Block & Wag-
ner, 2015) as well as those with ADHD (Dimic & Orlov, 2014) and dyslexia (Logan,
2009).
Something that is “part and parcel” of the challenges we have referred to is the subjec-
tive experience of “being different” and being marginalized by society—a state that can
erode both one’s sense of identity and social integration (Bourdieu, 1977). There can be a
feeling of having to struggle to access less than what many achieve with minimal or far
less effort. This feature is a fairly obvious one. Those with cognitive problems confront
failure and ridicule in the classroom (Snowling, 2000); immigrants may find themselves
ostracized from or out of place in many kinds of social gatherings (Rath & Kloosterman,
2000); those with physical disabilities may be objects of curiosity or unwelcome pity as
they grapple with everyday life (Jones & Latreille, 2011). These hardships draw upon an
unusual amount of emotional, mental, and physical effort just in order to cope. They
make struggle, often from the earliest years, seem a normal part of everyday life.
A final experience is that of confronting uncertainty and loss. Whether the chal-
lenge comes about as a result of an injury, trauma, or move to a different country, the con-
junction of having incapacities most people do not share, and the reality of living in a
world populated with normal or better endowed individuals, can evoke a sense of loss—
of knowing what it is like to be at a disadvantage and to live under conditions of hardship
(Joseph & Linley, 2005). Moreover, the experience of being handicapped and having to
“compete” with others who do not share that handicap creates conditions of uncertainty:
how will the person be able to adapt, to live a more normal life, to get a job or marriage
partner, to be accepted socially, to earn a living (Pagan, 2009)? The people who grow up,
do battle with, and manage to cope under these conditions of loss and uncertainty may be
rendered unusually well prepared to put into proper perspective and to endure many of
the challenges of life that would be daunting to others (Haynie & Shepherd, 2011; Joseph
& Linley).
The conditions and experiences we discussed above represent very typical features of
the challenges facing our underdog entrepreneurs. They also give rise to certain require-
ments that frequently occasion particular responses. These requirements are: to strive to
work harder than average, to ask for help from others, and to arrange to do some things
quite differently from the way most other people do them.
Incapacities and limitations can to some degree be counterbalanced by working
harder to develop special skills and strengths to compensate or overcome. For immi-
grants, being persistent and learning language skills can help them adjust to their new cul-
tures (Rath & Kloosterman, 2000), ceaseless practice and special effort can aid some of
those with physical disabilities (Jones & Latreille, 2011), and diligence in school projects
can help those with cognitive difficulties (Snowling, 2000). This recurrent need to strug-
gle, and most importantly, the small, encouraging successes that come from such struggle,
may breed confidence in one’s ability to meet challenges, and optimism about the merits
of effort.
Another product of challenging conditions is the need to ask for help and to have
ample experience doing that. For those with cognitive impairments, this may mean get-
ting assistance with homework, special classes, and tutoring (Snowling, 2000). Those
with dyslexia may be used to asking others to help them parse reading materials (Logan
The final stage of our model links the adaptations of the preceding stage to some com-
mon outcomes that may be useful in launching and succeeding at entrepreneurial initia-
tives. As we shall argue later, the extent to which these outcomes will be realized will
depend to a degree on many of the personality and environmental moderators that have
been more prominently discussed in the entrepreneurship literature.
January, 2017 11
follows: “You could tell me that my office burned down . . . and I’m not going to get an
insurance reimbursement, and I’m in the hole $50,000, and I could still say on that worst
day that it’s never any worse than it was back there.”
Work discipline and persistence can come not only from past triumphs over challeng-
ing experiences, but also because failing is a terrible option. With the lack of alternative
career possibilities affecting the majority of our challenged groups, individuals work hard
to make their ventures successful. Given the liabilities of newness associated with launch-
ing entrepreneurial ventures, such persistence and willingness to struggle may be not only
beneficial, but essential.
Positive outcomes
Disciplined,
persistent Socially
(current and skilled, Original,
past need to networked creative (have
overcome Risk-tolerant (have had to been forced to
Types of unusual (used to facing solicit help use the road
Challenge entrepreneurs challenge) bigger risks) from others) less travelled)
multi-tasking and free-associating to intuitively reach a solution.” Once again, these are
useful characteristics for entrepreneurs.
Ingenuity and originality may also occur among necessity entrepreneurs who are
forced to seek out underserved niches of the market (Block , Kohn, Miller, & Ullrich,
2015), or who must build their venture in the absence of significant financial and material
resources (Baker & Nelson, 2005). This is also true of immigrant entrepreneurs whose lin-
guistic and cultural foreign-ness propels them toward businesses with a more internation-
al bent or to servicing a neglected ethnic market that falls outside the scope or attention of
businesses run by natives (Hart & Acs, 2011; Min & Bozorgmehr, 2000).
The desire for independence and autonomy is a common reaction of those having
endured emotional trauma and who suffer from post-traumatic stress disorder (Haynie &
Shepherd, 2011). This is often a stimulus for these individuals to start their own business
and have others work for them rather than having to work for others (Shaheen & Myhill,
2009).
Finally, in tailoring their jobs to accommodate their conditions, some physically dis-
abled entrepreneurs come across new markets such as similarly disabled people and new
January, 2017 13
ways of doing business, for example, telecommuting, internet services, and different
forms of dis-intermediation (De Clerq & Honig, 2011).
Table 1 summarizes some entrepreneurial outcomes relating to economic, socio-
cultural, cognitive, and physical and emotional challenges.
Facilitating Factors
Conclusions
Archer, D. (2014). ADHD: The entrepreneur’s superpower. Forbes. Retrieved from http://www.forbes.-
com/sites/dalearcher/2014/05/14/adhd-the-entrepreneurs-superpower/#3bfba1997063.
Arora, A., Fosfuri, A., & Gambardella, A. (2004). Markets for technology: The economics of innovation
and corporate strategy. Cambridge, MA: MIT Press.
Baker, T. & Nelson, R.E. (2005). Creating something from nothing: Resource construction through entre-
preneurial bricolage. Administrative Science Quarterly, 50(3), 329–366.
Barkley, R.A. (1997). Behavioral inhibition, sustained attention, and executive functions: Constructing a
unifying theory of ADHD. Psychological Bulletin, 121(1), 65.
Bergmann, H. & Sternberg, R. (2007). The changing face of entrepreneurship in Germany. Small Busi-
ness Economics, 28(2/3), 205–221.
Block, J. & Wagner, M. (2010). Necessity and opportunity entrepreneurs in Germany. Schmalenbach
Business Review, 62(2), 154–174.
Block, J.H., Kohn, K., Miller, D., & Ullrich, K. (2015). Necessity entrepreneurship and competitive strat-
egy. Small Business Economics, 44(1), 37–54.
Bourdieu, P. (1977). Outline of a theory of practice. Cambridge, U.K.: Cambridge University Press.
Contractor, F.J., Kumar, V., Kundu, S.K., & Pedersen, T. (2010). Reconceptualizing the firm in a world
of outsourcing and offshoring: The organizational and geographical relocation of high-value company
functions. Journal of Management Studies, 47(8), 1417–1433.
De Clercq, D. & Honig, B. (2011). Entrepreneurship as an integrating mechanism for disadvantaged per-
sons. Entrepreneurship and Regional Development, 23(5–6), 353–372.
Dickens, W.T. & Lang, K. (1988). The reemergence of segmented labor market theory. The American
Economic Review, 78(2), 129–134.
Dimic, N. & Orlov, V. (2014). Entrepreneurial tendencies among people with ADHD. International
Review of Entrepreneurship, 13(3), 187–204.
Hannan, M.T. & Freeman, J. (1977). The population ecology of organizations. American Journal of Soci-
ology, 929–964.
Hart, D.M. & Acs, Z.J. (2011). High-tech immigrant entrepreneurship in the United States. Economic
Development Quarterly, 25(2), 116–129.
Hartmann, T. (2002). ADHD secrets of success: Coaching yourself to fulfillment in the business world.
New York: SelectBooks, Inc.
Haynie, J.M. & Shepherd, D. (2011). Toward a theory of discontinuous career transition:
Investigating career transitions necessitated by traumatic life events. Journal of Applied Psychology,
96(3), 501–524.
Hope, J.B. & Mackin, P.C. (2011). Factors affecting entrepreneurship among veterans. New York: SAG
Corporation.
January, 2017 15
Jones, M.K. & Latreille, P.L. (2011). Disability and self-employment: Evidence for the UK. Applied Eco-
nomics, 43(27), 4161–4178.
Joseph, S. & Linley, P.A. (2005). Positive adjustment to threatening events: An organismic valuing theory of
growth through adversity. Review of General Psychology, 9, 262–280.
Kendall, E., Buys, N., Charker, J., & MacMillan, S. (2006). Self-employment: An under-utilised voca-
tional rehabilitation strategy. Journal of Vocational Rehabilitation, 25(3), 197–205.
Korunka, C., Frank, H., Lueger, M., & Mugler, J. (2003). The entrepreneurial personality in the context
of resources, environment, and the startup process—A configurational approach. Entrepreneurship Theory
and Practice, 28(1), 23–42.
Lampel, J., Honig, B., & Drori, I. (2014). Organizational ingenuity: Concept, processes and strategies.
Organization Studies, 35(4), 465–482.
Le Breton-Miller, I. & Miller, D. (2015). The paradox of resource vulnerability. Strategic Management
Journal, 36(3), 397–415.
Lerner, D.A. (2016). Behavioral disinhibition and nascent venturing: Relevance and initial effects on
potential resource providers. Journal of Business Venturing, 31(2), 234–252.
Light, I., Bhachu, P., & Karageorgis, S. (1993). Migration networks and immigrant entrepreneurship.
Available at http://escholarship.org/uc/item/50g990sk, accessed 7 September 2016.
Logan, J. (2009). Dyslexic entrepreneurs: The incidence; their coping strategies and their business skills.
Dyslexia, 15(4), 328–346.
Logan, J. & Martin, N. (2012). Unusual talent: A study of successful leadership and delegation in entre-
preneurs who have dyslexia. Inclusive Practice, 4, 57–76.
McClelland, D.C. (1965). Achievement and entrepreneurship: A longitudinal study. Journal of Personali-
ty and Social Psychology, 1(4), 389–410.
Miller, D. (1983). The correlates of entrepreneurship in three types of firms. Management Science, 29(7), 770–791.
Min, P.G. & Bozorgmehr, M. (2000). Immigrant entrepreneurship and business patterns: A comparison
of Koreans and Iranians in Los Angeles. International Migration Review, 35, 707–738.
Pagan, R. (2009). Self-employment among people with disabilities: Evidence for Europe. Disability &
Society, 24(2), 217–229.
Pilat, D., Cimper, A., Olsen, K.B., & Webb, C. (2006). The changing nature of manufacturing in OECD
economies. Paris: OECD Publication.
Rath, J. & Kloosterman, R. (2000). Outsiders’ business: A critical review of research on immigrant entre-
preneurship. International Migration Review, 34(3), 657–681.
Sassen, S. (1999). Globalization and its discontents. New York: New Press.
Scott, A.J. (2006). Entrepreneurship, innovation and industrial development: Geography and the creative
field revisited. Small Business Economics, 26(1), 1–24.
Shaheen, G. & Myhill, W. (2009). Entrepreneurship for veterans with disabilities: Lessons learned from
the field. In Brief Newsletter. New Brunswick, NJ: Intar Leadership Center.
Stephan, U. & Uhlaner, L.M. (2010). Performance-based vs socially supportive culture: A cross-national
study of descriptive norms and entrepreneurship. Journal of International Business Studies, 41(8),
1347–1364.
Walker, K., Schlosser, F., & Deephouse, D.L. (2014). Organizational ingenuity and the paradox of
embedded agency: The case of the embryonic Ontario solar energy industry. Organization Studies, 35(4),
613–634.
January, 2017 17