Common sense – also known as street smarts, experience, know-how, etc – might just be the key factor in whether you will succeed as an entrepreneur. While there is a lot to be said about education, sometimes the best route is just to be there and learn it hands on.
According to Reliable Plant, Groupon founder Andrew Mason is a good example of how common sense can lead to a successful business. As a teenager he sold bagels to his neighbors. When he noticed that candy was a better seller, he made the switch. The intelligence he demonstrated by adjusting his business to fit the needs of his neighborhood is being recognized by new research as the central lesson that all business owners need to succeed.
The research, to be published in a forthcoming issue of the journal Personnel Psychology, was coauthored by Barbara J. Bird, an associate professor of management at American University’s Kogod School of Business, and J. Robert Baum, an associate professor of entrepreneurship at the University of Maryland’s Robert H. Smith School of Business.
Some people do not learn much from their experiences and so do not accumulate much practical intelligence. Such individuals may still be extremely intelligent, but have attained their knowledge through other means–such as reading or observing–which are less likely to produce ready-to-use, applicable, and situation specific responses to real-life situations.
“Entrepreneurs–especially during the early stages of their start-ups–have to think on their feet,” Bird said. “They have to make the best decisions possible in the least amount of time and usually with few resources. They don’t have time for in-depth analysis and usually do not have the luxury of consulting with others. They need to act. Practical intelligence empowers them to act quickly and confidently.”
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