STUDY: Researchers overestimate their own business acumen

All researchers who want to take their research to the market are faced with the same question: do I need someone by my side who knows business? A new study shows that the answer often depends on how competent the person thinks they are.

Companies started by researchers linked to a university, known as ‘academic spin-offs’, are an important way to bring research results to society. Previous studies show that teams composed of both researchers and non-academic co-founders with business skills are often more successful. Nevertheless, not everyone sees the value of bringing in a co-founder from outside academia.

The research results point to a clear psychological pattern: the so-called Dunning-Kruger effect, whereby people with low business knowledge overestimate their skills and therefore do not realize what they lack.

The researchers identified four types of academic entrepreneurs:

• Lackers – researchers who completely lack business knowledge, but realize this and see the need for a co-founder who can complement their technical expertise.
• Little-knowers – researchers with some entrepreneurship training who think they have sufficient knowledge. They underestimate the difficulties and think that business issues are easy to handle.
• Advanced – researchers with solid business experience and industry contacts who know their limitations and are happy to partner with a non-academic co-founder to strengthen the team.
• Experts – researchers with very extensive business experience, who already possess the skills needed to run a business themselves.

The most problematic from a commercialization perspective are the “little-knowers”. They overestimate their abilities and therefore miss the chance to bring valuable business skills into the team.

Insight more important than knowledge

The researchers stress that the first step is not the search for a co-founder itself – but the recognition that a need exists. This realization is subjective and does not always match the actual skills gaps. This means that academic entrepreneurs with moderate business skills may be less likely to seek help than both beginners and more experienced colleagues.

Support that matches self-image

The study provides important lessons for universities and innovation agencies working to support researchers who want to commercialize research. Entrepreneurship education should not only be about training researchers to become business leaders. They also need to understand what skills are required – and to realistically assess their own skills.

Becoming an entrepreneur is not just about being able to sell an idea. It’s also about knowing what you can’t do – and having the courage to let someone in who can do it better.

More about the article and the authors
The article Recognizing the need for a non-academic cofounder: competence (mis)perceptions in academic spin-off team formation is published in the scientific journal Small Business Economics. The authors are Argyro Iro Nikiforou, Lars Alkærsig and Jes Broeng at the Technical University of Denmark, Denmark, and Irini Voudouris at the Athens University of Economics and Business, Greece.