Hybrid Entrepreneurship
Most entrepreneurs work for organizations before or while they start their businesses. There is macho entrepreneurship dogma that says you have to go all in, experience "the fear" and dedicate yourself for 80 hours a week to your venture. Implicit in this is the notion that an entrepreneur cannot succeed if
they hedge their bets by keeping one foot in employment. But isn't this a bad assumption?
Why go all in to a startup if startup success stories are probabilistic events, not givens?
Why go all in to a startup if startup success stories are probabilistic events, not givens?
Hybrid
entrepreneurship refers to entrepreneurship whereby an employee starts a
business on the side and keeps their stable and sustaining day job until the startup reaches a
certain size. Ardianti
et al. (2022) suggests that hybrid entrepreneurs experience a distinct
psychological well-being than other entrepreneurs, perhaps because they are keeping their foot in the door of stability.
Once the business is large enough to command the founder's full attention, then the employee makes their exit from employment to focus on the venture.
Once the business is large enough to command the founder's full attention, then the employee makes their exit from employment to focus on the venture.
Many employers and regulators allow employees the freedom to pursue new ventures on the side, especially those that do not directly compete with their employers. For example, Ontario and California have banned non-compete agreements. Regardless, entrepreneurs often also proceed with their side ventures without anyone's permission.
Folta et al. (2014) argue that:
"In contrast to previous efforts to model the individual‘s movement from wage work into entrepreneurship, we consider that individuals might transition incrementally by retaining their wage job while entering into self-employment."Their research on Swedish wage earners in the knowledge sector demonstrates that hybrid entrepreneurs represent a large minority of entrepreneurs.
Don't quit your day job!
Raffiee and Feng (2014) say:"hybrid entrepreneurs who subsequently enter full-time self-employment (i.e., quit their day job) have much higher rates of survival relative to individuals who enter full-time self-employment directly from paid employment"Perhaps if more employers knew that hybrid entrepreneurs are more successful, they would be more forgiving. Policymakers could also get involved and ensure that employers do not overly restrict employees from starting businesses.
Demir et al. (2020) suggest that there is still a lot disagreement among researchers about the boundaries around the phenomenon of hybrid entrepreneurship.
Sources:
Ardianti, R., Obschonka, M., & Davidsson, P. (2022). Psychological well-being of hybrid entrepreneurs. Journal of Business Venturing Insights, 17, e00294.
Demir, C., Werner, A., Kraus, S., & Jones, P. (2020). Hybrid entrepreneurship: A systematic literature review. Journal of Small Business & Entrepreneurship, 34(1), 29-52.
Folta, T. B., Delmar, F., and Wennberg, K. (2010). Hybrid entrepreneurship. Management Science, 56(2), 253-269.
Raffiee, J., and Feng, J. (2014). Should I quit my day job?: A hybrid path to entrepreneurship. Academy of Management Journal, 57(4), 936-963.
Demir, C., Werner, A., Kraus, S., & Jones, P. (2020). Hybrid entrepreneurship: A systematic literature review. Journal of Small Business & Entrepreneurship, 34(1), 29-52.
Folta, T. B., Delmar, F., and Wennberg, K. (2010). Hybrid entrepreneurship. Management Science, 56(2), 253-269.
Raffiee, J., and Feng, J. (2014). Should I quit my day job?: A hybrid path to entrepreneurship. Academy of Management Journal, 57(4), 936-963.
