Adversity Quotient: Perceived Perseverance and New Venture Formation

Gideon D. Markmana* , Robert A. Baronb, David B. Balkinc

Terry College of Business, University of Georgia, Athens, GA 30602-6256 b Lally School of Management and Technology, Rensselaer Polytechnic Institute, 110 8th St., Troy, NY 12180 c Leeds School of Business, University of Colorado at Boulder, Boulder, CO 80309
a

Abstract We propose that the ability to create a successful new venture requires determination and strong self-belief. While past research shows that self-efficacy is fundamental in most work functioning, this study extends our understanding of individual differences in the context of entrepreneurship by looking at perceived perseverance. Specifically, we focus on adversity quotient (AQ), which provides a measure of ones perceived capacity to prevail in the face of adversity. Results showed that patent inventors who started new ventures scored significantly higher not only on self-efficacy, but also on two distinct aspects of AQ perceived control over adversity and perceived ownership regarding outcome of adversity than did inventors who work as employees for established organizations. Post hoc analysis also revealed that the higher the AQ score of patent inventors the higher their annual earnings.

Corresponding address. Tel.: 706-542-3751; fax: 706-542-3743 Email address: gmarkman@Terry.uga.edu

1. Executive Summary A growing research stream suggests that individual differences may play an important role in entrepreneurship. To mention just a few studies, Scott Shane (2000) shows that

individuals from very different technological backgrounds who use the very same invention (e.g., 3DP ) develop very different business opportunities. Sarasvathy, Simon, and Lave (1998) used verbal protocols to show that entrepreneurs as compared with bankers evaluate and process information differently. Busenitz and Barney (1997) suggest that entrepreneurs, as compared with managers, perceive and react to risk differently. In their research entrepreneurs gathered significantly less information, utilized less formal techniques to analyze problems, and followed less rational decision processes. Simon and his colleagues (2000), who studied several cognitive biases, suggest that entrepreneurs might not realize that certain tasks are beyond their control. This paper extends and expands this ongoing work on individual differences by examining the effects of perceived perseverance, a well-documented construct in social psychology, that to date has been overlooked by entrepreneurship research. An extensive review of the literature on perseverance has identified four interrelated constructs that may be particularly important to entrepreneurs (cf., Stoltz, 1997, 2000). Collectively called adversity quotient (AQ), these constructs include perceived control over adversity; perceived ownership of the outcome of adversity (regardless the cause or origin of the adversity); perceived scope of adversity or how far adversity seems to bleed into other areas of ones life; and finally perceived endurance of adversity (i.e., how long will the adversity last). Additionally, since selfefficacy is such a robust predictor of human variability, including in entrepreneurship (Chen, Greene, and Crick, 1998), we decided to test for the unique effect of AQ, over and above selfefficacy. In a nutshell, we propose that because setbacks, challenges, snags, and disappointments characterize the process of new venture formation, perceived capacity to persevere may distinguish those who start new companies from those who work as employees. Findings were base on a random sample of 203 patent inventors (41% response rate) all of whom obtained patents during 1997 and 1998 in the same technological space. Demographically, entrepreneurs and non-entrepreneurs were quite similar: The average inventor in this study was 47 years old, had more than 19 years of formal education, at the time of the survey had been granted over 13 patents, and earned approximately $118,000 a year. On

average, entrepreneurs had started their firms with two cofounders and had raised over $6 million to build their new ventures. A MANOVA offered support for two of the four

hypotheses. That is, inventors who used their patents to build a new company, as compared with inventors who work as employees and invent for their employers, had higher perceived control over adversity, higher perceived ownership over the outcome of adversity, and higher selfefficacy. The two groups did not differ with respect to their perceived scope and endurance of adversity. A post hoc analysis on all patent inventors regardless of whether they were

entrepreneurs or not showed positive relationships between inventors overall AQ score (AQ composite index) and income. To give a concrete example, the annual earning of patent

inventors whos average AQ score was in the top 20% was approximately $35,000 more than the annual earning of inventors whose average AQ was in the bottom 20%. In closing, it is important to realize the resurging interest in individual differences in entrepreneurship, which provided solid foundation to our study (a partial list might include Baron, 1998, 2000; Busenitz and Barney, 1997; Chen, Greene, and Crick, 1998; Ensley, Carland, Carland, and Banks, 1999; Honig, 1998; Sarasvathy, Simon, and Lave, 1998; Stewart, Watson, Carland, and Carland, 1999, to name a few). Keeping previous research in mind, our study advances research on individual differences in entrepreneurship along several dimensions. We used a random sample and we classified inventors into technical entrepreneurs and technical non-entrepreneur only after we received the surveys. This is a strong point because we did not know ahead of time whether some or even any of the inventors were indeed entrepreneurs. The sample used was highly homogenous; assessing individual differences among inventors, who invent in the same technological space, and at the same time period provides a sound hypotheses testing. We also tested for non-response bias; we compared our sample with 46 nonparticipating inventors and there were no significant differences between the two groups on age, education, income, and innovation. Three unusual variables this study brings to research on individual differences in entrepreneurs include adversity quotient, inventive capacity, and financial success as captured, respectively, by perceived capacity to persevere, the number of patents granted to each inventor, and their annual earnings. Finally, and probably most

interesting, is the new evidence that perceived capacity to persevere explains human variability in entrepreneurship and that it is distinctly different than self- efficacy.

2. Introduction Our greatest glory is not in never failing, but in rising every time we fail. Confucius A recent and growing research stream suggests that individual differences play an important role in entrepreneurship (Baum, Locke, and Smith, 2001). To mention a few,

individuals from diverse technological backgrounds who assess the same technological invention (e.g., 3DP ) seem to recognize and then develop different bus iness opportunities (Shane, 2000). Sarasvathy, Simon, and Lave (1998) used verbal protocols to illustrate that entrepreneurs evaluate and process information differently from bankers. Additional evidence suggests that entrepreneurs, as compared with mana gers of existing firms, may perceive and react to risk differently; entrepreneurs gathered significantly less information, utilized less formal techniques to analyze problems, and followed less rational decision processes than managers did (Busenitz, 1999; Busenitz and Barney, 1997). In contrast, Kaish and Gilad (1991) found that entrepreneurs spent considerably more time searching for information and paid attention to different risk cues than did executives of established firms. Studying several biases such as illusion of control and the belief in the law of small numbers, Simon, Houghton, and Aquino (2000) suggest that entrepreneurs might not realize that certain tasks are beyond their control. Others noted that entrepreneurs tend to make quick decisions (Bird, 1988; Eisenhardt, 1989; Stevenson, Grousbeck, Roberts, and Bhid, 1999). New evidence also confirms that common cognitive scripts not only explain similarities in decision- making among entrepreneurs across cultures but also behavioral differences between entrepreneurs and non-entrepreneurs within countries (Mitchell, Smith, Seawright, and Morse, 2000). Most recently, a longitudinal and cross-sectional research showed that, in the architectural woodworking industry, CEOs traits, skill, and motivation are significant (direct or indirect) correlates of ventures growth (Baum and Lock, in press; Baum, Locke, and Smith, 2001). Finally, entrepreneurs and non-entrepreneurs may react to environmental complexity in contrasting ways. Meyer and Dean (1990) report that

professional managers replace founding entrepreneurs because the latter reach the executive limit; entrepreneurs fail to adequately reduce environmental complexity and thereby constrain the growth of their own venture. In recent years, Baron and his colleagues (e.g., Baron, 1998, 2000; Baron and Markman, 2000; in press; Baron, Markman, and Hirsa, in press; Markman and Baron, in press; Markman,

Balkin, and Baron, 2001) and others (e.g., Baum, Locke, and Smith, 2001; Baum and Lock, in press; Chen, Greene, and Crick, 1998; Krueger, 1993) have sought to address the question of individual differences by providing stronger theoretical and empirical links between entrepreneurship and applied and social psychology. The research reported in this paper sought to extend this ongoing work by examining the effects of perceived perseverance a welldocumented construct in the area of social psychology (cf., Eisenberger, 1992) that, to date, has been overlooked by entrepreneurship researchers. 1 In brief, since setbacks, challenges, snags, and disappointments characterize the process of new venture formation we propose that the perceived capacity to persevere in the face of adversity is one individual difference that may distinguish those who start new companies from those who dont. Despite repeated assertions particularly by economic paradigms that at the core of entrepreneurship is opportunities recognition and alertness (cf., Kirzner, 1997), we maintain that with a few exceptions entrepreneurship research has overlooked key activities such as the actual pursuit of opportunities or the ability to essentially convert abstract ideas and new technological discoveries into moneymaking services or products. The recognition versus

execution debate is not new. Entrepreneurial discovery theory (cf., Kirzner, 1997) suggests that in the face of diverse profit possibilities, the key to success is to first recognize and then pursue the right opportunity. At the extreme, misidentification and the pursuit of obsolete

opportunities is an error from which recovery is long, costly, and frequently impractical. This point is important because entrepreneurs start their venture with limited capital and new offerings that are constrained by a narrow window of opportunity, meager organizational slack, and limited product or service legitimacy (Aldrich, 1999; Aldrich and Fiol, 1994). To echo West and Meyer (1997): although mature or diversified firms can afford to err and pursue, at least for a while, low- margin opportunities, entrepreneurs to survive and thrive must place a premium on correctly recognizing fertile opportunities. Since an entrepreneurial undertaking is based on more than a good idea (Timmons, 1994), many scholars remain adamant that the opportunity and particularly the process of opportunity recognition remains fundamental to the entrepreneurial process (Shane, 2000;
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Some entrepreneurship research addressed the issue of persistence and tenacity (cf., Baum and his colleagues, in press and 2001; McGrath, 1995) and others have used persistence as an outcome (cf., Gatewood, Shaver, and

Shane and Venkataraman, 2000).

However, our interviews of patent inventors, technology

transfer executives, and patent attorneys taught us that only a few novel, useful, and non-obvious inventions are actually commercialized, thus suggesting that recognizing opportunity is perhaps necessary but clearly insufficient for entrepreneurship to take place. Because the recognition of opportunity is largely an intangible, cognitive process to be assessed mainly when the new venture or product is launched, a fundamental question in entrepreneurship research is not only who can discover opportunities, but also who can persevere to harvest them (Shane and Venkataraman, 2000). In fact, business history is quite familiar with inferior products, services, and technologies that nevertheless outmaneuvered, out- marketed, and outsold superior counterparts. For example the Wintel (Microsoft operating system and Intel microprocessor) standard of personal computers became the dominant computing technology despite the fact that Apple's MacIntosh technology provided user- friendlier interface. The technology to record video data on magnetic tape and the subsequent battle between Betamax and VHS is another example. To use another anecdote, although science fiction enthusiasts envisioned teleportation dematerializing an object at one location, and sending the details of that objects precise atomic configuration elsewhere, where it is reconstructed as a real opportunity, for years it was thought to violate the Heisenberg uncertainty principle of quantum mechanics (Einstein, Podolsky, and Rosen, 1935). Now, using a paradoxical feature of quantum mechanics known as the Einstein-Podolsky-Rosen correlation or EPR entanglement, it is known that quantum teleportation is possible at least with photons (Bennett, 1993). The point is that despite the recognition of an opportunity (i.e., where time and space could be eliminated from travel), complex technological barriers, high and long-term risk, and intensive investment capital required to convert such opportunity into a reality daunt entrepreneurs, investors, and even nations. Like Thomas Edison, who accumulated 1,093 patents and noted that genius is 1% inspiration and 99% perspiration, we point that it is one thing to identify abstract opportunities, but an entirely different matter to harvest them. We concede that opportunity recognition may be a precondition to entrepreneurial efforts, yet we note that it remains unclear who are the persons who not only recognize novel, useful, and non-obvious technologies, but also personally use these inventions to establish new ventures.
Gartner, 1995). However, such research neither measured the underlying psychological factors that make one

Because the pursuit of opportunities particularly in domains characterized by new technological discoveries is very challenging (McGrath, 1995), we suspect that at least part of the answer to this question lies in human variability in terms of perceived capacity to persevere in the face of adversity. Hence, the goal of this paper is to address the following question: Are patent inventors start new companies to develop and sell their technological discoveries (hereinafter called technical entrepreneurs) higher in terms of the perceived capacity to persevere in the face of adversity than inventors who opt to work as employees for established organizations (hereinafter called technical non-entrepreneurs)?

3. Theory and Hypotheses Although the concept of perseverance has been studied for many years, most research on this topic has focused on how beliefs persist in light of new information and in spite of the discrediting of old information. More recently, Eisenberger (1992); Eisenberger, Kuhlman, and Cotterell (1992), Eisenberger and Leonard (1980), have extended this line of work to the domain of task performance and work persistence. For example, Eisenberger (1992) found that

reinforced effort results in persistence that transfers to different tasks: the phenomenon of learned industriousness (Eisenberger, 1992) occurs when high effort on one task (e.g., solving complex anagrams) transfers to another (e.g., detecting differences between cartoon drawings). Eisenberger and Leonard (1980) found that high effort reduces disruptive responses such as frustration produced by early failure, and thus leading to greater subsequent persistence. Like Eisenberger (1992), we define perseverance as ones capability to persist in the face of difficulties, risks, and failure. We propose that because individuals experience varying levels of adversity, success is determined, to an important degree, by the extent to which individuals persevere despite what appear to be insurmountable obstacles, or in Stoltzs terms (1997, 2000), adversity. A corollary of this is that perceived perseverance may be crucial even if insufficient for ones success in entrepreneurial settings. We suggest that perceived capacity to persevere influences individuals courses of action, the level of effort they put forth while pursuing their endeavors, the length of their endurance and the level of their resilience in the face of lasting obstacles and repeated failures (cf., Eisenberger
persist nor made distinctions between types of perseverance. We thank an anonymous reviewer to this comment.

and Leonard, 1980). Perceived perseverance also influences how much stress and setbacks individuals experience while they cope with taxing situations, and the level of accomplishments they realize (Bandura, 1997). For instance, perseverant people find out ways to circumvent constraints or change them by their actions, whereas less diligent people are easily discouraged by impediments and unexpected challenges (Bandura, 1997; Eisenberger, et al., 1992). Launching a new high- tech venture requires a high level of conviction in ones ability to overcome challenges plus the successfully transformation of the new technologies into attractive commercial products or services. We propose that people who discover or invent similar

inventions and are exposed to very comparable obstacles differ in the way they perceive adversity. This proposition begs the following question: What specific types of perseverance will be most useful to entrepreneurs? Although the answer to this interesting question depends, to an important degree, on the various situations entrepreneurs face, a careful review of available evidence (e.g., Stoltz, 1997, 2000) indicates that ones adversity quotient (AQ), the perceived ability to persevere and persist in the face of adversity, is composed of four interrelated constructs. These include, (1) perceived control over adversity; (2) perceived ownership of the outcome of adversity (regardless of its cause); (3) perceived scope of adversity (i.e., how far the adversity bleeds into other areas of ones life); and finally (4) perceived endurance of adversity (i.e., how long the adversity lasts). As detailed below, we predict that technical inventors who create new ventures perceive higher levels of control over the adversity they face, sense greater ownership regarding outcomes of the adversity, limit the scope of the adversity so that it does not impinge on other areas of their lives, and see adversity as a temporary rather than enduring setback. Although studies on individual differences recognize some unavoidable overlaps among many useful constructs such as self-efficacy, self-esteem, locus of control, and expectancy evidence from theoretical and applied studies on human variability suggests that each of these constructs has unique features that merit their conceptual distinctness (Bandura, 1995, 1997; Nir and Neumann, 1995). Clearly, simultaneously assessing the four types of AQ with each of these constructs is beyond the scope of a single article, yet to further theoretical development we conclude the theory section with additional discussion regarding self- efficacy. We decided to test for the unique effect of self-efficacy, rather than self-esteem or locus of control, because research has shown that the former is a robust predictor of superior task performance (cf.,

Bandura, 1997), and human variability in entrepreneurship (Chen, Greene, and Crick, 1998). We reasoned that testing for the unique effect of AQ, over and above self-efficacy, would provide additional construct validity for AQ.

3.1. Control: Perceived Control over Adversity People strive to control events that affect their life circumstances because doing so provides innumerable personal, financial, and social benefits (Lam and Schaubroeck, 2000). Being able to predict and control events fosters adaptive preparedness, whereas inability to exert influence over adversity breeds apprehension, apathy, and at times despair (Bandura, 1986). Also, because actions are based more on what is perceived or believed than on what is objectively true, alleged control is an important precursor to ones level of motivation and actions. Specific perceived control over adversity is a major basis of action because people who believe they can attain certain outcomes have the incentive to act (Bandura, 1997). Perceived control over adversity which is central to most human behaviors and the focus of this theory should not be confused with general locus of control; the former refers specifically to control over adversity whereas the latter is a global measure of ones ability to influence ones own fate or outcomes (Stoltz, 1997). Perceived control over adversity influences the course of action, the level of effort put forth, and the length of perseverance and resilience in the face of obstacles, failures, or hardship. Perceived control over adversity also affects how much stress individuals experience while they cope with taxing environments, as well as the level of accomplishments they realize (Stoltz, 2000). In short, perceived control over adversity influences what individuals do and become and their motivation to act despite impediments. Theory and practice agree that when confronting setbacks, perseverant individuals intensify their effort and experiment with new actions, whereas those who are less perseverant quickly give up (Bandura, 1987; Cervone, 1989). We note that the development and use of new technologies as a basis for new components or even end products is the outcome of intensive work conducted by determined, self-disciplined individuals (cf., McGrath, 1995). Indeed, our interviews with numerous patent inventors (entrepreneurs and non-entrepreneurs) indicate that their key challenge is to persevere until they thoroughly troubleshoot vexing technological obstacles. Since launching a new venture entails a combination of both technological and

business obstacles, it stands to reason that entrepreneurs would probably have stronger perceived

control over their adversity. Stated differently, launching a business requires strong perceived control over adversity along both technological and business va lue chains; entrepreneurs must not only convert their new technological discovery into working prototypes but also transform them into viable moneymaking products and services. In short, while we suspect that all

inventors perceive strong control over the ir adversity, we expect entrepreneurs to perceive even stronger control over their adversity, as they are personally obliged to convert their new technology into a business. Hence the following hypothesis:

Hypothesis 1: Inventors who build new venture based on their discoveries tend to have higher perceived capacity to control adversity than inventors who invent for an existing company.

3.2. Accountability: Perceived Ownership of the Outcomes of the Adversity Accountability, particularly in response to unfavorable events, manifests itself as regret, disappointment, and blame (Roese 1997). Some individuals, for instance, experience intense discontent when they fail to attain outcomes for which they have a strong mental image (Medvec, Madey, and Gilovich 1995). Such strong emotions are important because growing empirical evidence suggests that emotions have profound effects on perceptions and judgments (e.g., Forgas, 1995), understanding of cause-effect relationships, decision- making, and thus on task performance (Mandel and Lehman 1996). Perceived accountability, despite the short-term negative affect it generates (e.g., sadness, disappointment, and blame), is offset by inferential benefits that prove advantageous on a longer-term basis. For example, when task performance is deemed inferior because of lack of effort (rather than ability), a causally potent antecedent has been identified; deploying additional effort will enhance future performance. Substandard

execution and its associated negative affectivity alert us to a particular problem and prompt corrective thinking and action (Schwarz, Bless, Srtack, and Klumpp, 1991). In short, once accountability mobilizes us to rectify negative outcome (Peeters and Czapinski, 1990), an adaptive reaction is established. Accountable individuals focus on actions and outcomes; they take steps to circumvent unpleasant events or center their attention on the outcomes of adversity regardless of its origin (Stoltz, 1997). Because technical entrepreneurs operate in highly

dynamic environments in which the process of transforming technological opportunities into

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innovative products or services rarely goes undisturbed, human variability in reaction to setbacks and disappointments may be quite telling. The question, the n, is whether technical

entrepreneurs, in the presence of adversity and setbacks, perceive stronger accountability over adversity (regardless of its origin) than do technical non-entrepreneurs? Two rationales suggest that the answer to this question is yes. First, agency theory holds that owners (i.e., principals) are more committed to and accountable to producing commercial outcomes than their agents (Deckop, Mangel, and Cirka, 1999). Although inventors may be equally accountable for their new inventions, technical entrepreneurs because of the substantial stake and personal investment, in their new venture and the salient economic link between innovation and competitive advantage will perceive stronger ownership over outcomes of adversity they face than agents. Lack of perceived ownership over adversity among technical entrepreneurs might increase unnecessary business risk, which can bring premature failure. Implications from research in participative management (cf., Coyle-Shapiro, 1999) suggest that because technical entrepreneurs own, and actively partake in the daily management of, their venture they will be more accountable. It is also true that labor laws and the strong demand for technical workers shield technical employees and tenured incumb ents from being personally responsible for transforming inventions into end products. Thus, agency theory and the obvious bond between inventions and competitiveness suggest that technical entrepreneurs will perceive stronger ownership over outcome of adversity than their counterparts. Second, research shows that accountability and the assignment of blame are particularly vivid in contexts involving product failure (Creyer and Gurhan, 1997). This suggests that

accountability may be predominantly strong if the outcome in question produces repeated negative outcomes (e.g., failing to secure a patent on a key invention and thus suffering financial hardship), which may serve to continually reactivate thoughts of accountability. Keeping this in mind, it is also apparent that the work span and responsibility horizons of technical nonentrepreneurs and technical entrepreneurs are unequal. Technical entrepreneurs are in charge of their business, its growth, and competitiveness; they are liable for more cross-functional work, integrated tasks, and outcomes. Entrepreneurship is an occupation in transition; technical

entrepreneurs work with more diverse and interdependent stakeholders and they are accountable for deliverables that are outside their immediate functio n and control. The cross- functional nature of their work diverges from the traditional work and compartmentalized activities that are

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common in domains in which technical non-entrepreneurs work.

The sense of personal

ownership, beneficial spillovers from innovation, and broad work span and responsibility horizons suggest that entrepreneurs will perceive stronger accountability for the adversity they face than will technical non-entrepreneurs.

Hypothesis 2: Inventors who build new venture based on their discoveries tend to have higher perceived ownership of the outcome of adversity than inventors who invent for an existing company.

3.3. Scope: How Far Will the Adversity Reach? Scope or range of adversity relates to the extent to which perceived adversity will impinge on other aspects of ones life. Social psychologists have found that the moderating influences of strain on coping resources and pessimism can be detrimental to task performance and that some people are better able to quarantine negative emotions than others (cf., Seligman et al., 1995). Adversity is said to have a wide scope when it encumbers adaptive functioning: a dreadful meeting ruins the whole day; a conflict with a single person hinders all interpersonal relationships; and a poor performance on a weeklong project seems like a career failure. The higher the perceived scope of the adversity, the more people tend to catastrophize, thus allowing adversity to spread into other areas of their lives and work. Such persons adopt

pessimistic outlooks; experience agitation, sleeplessness, bitterness, and helplessness; make poor decisions; and become socially and professionally isolated (cf. Stoltz, 1997; Waldroop and Butler, 2000). When adversity is perceived as far-reaching, it is self- handicapping; it takes over ones life and hinders adaptive functioning and adequate performance. Regardless of occupation, the ability to quarantine adversity benefits all individuals (Lyubomirsky, Caldwell, and Nolen-Hoeksema, 1998), however, because the financial wellbeing of technical entrepreneurs, more so than that of technical non-entrepreneurs, depends on their ability to work through obstacles, they will have a better perceived ability to fend off and quickly isolate adversity. Although both technical entrepreneurs and technical non-entrepreneurs must overcome technological problems, as we explained before, the former encounter a tremendous amount of additional rejection as they battle market disbelief and investors scrutiny. Thus, because allowing adversity to hemorrhage into other areas of ones life leads to

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helplessness that in turn prolongs the duration of negative moods, distracts task performance, and hinders ones ability to capitalize on opportunities (Seligman et al., 1995), we predict that technical entrepreneurs will report higher perceived ability to isolate adversity and misfortune. We therefore offer the following hypothesis:

Hypothesis 3: Inventors who build new venture based on their discoveries tend to perceive adversity as more limited in scope than inventors who invent for an existing company.

3.4. Endurance: How Long will the Adversity Last? Paradigms that describe the innovation process as a linear progression inevitably fail to capture its uncertain and serendipitous natur e, its unremitting irregularity, disorder, and complexity (cf., Van de Ven, Polley, Garud, and Venkataraman, 1999). Solutions to scientific puzzles or applied problems yield no immediate economic rents because innovation is the outcome of not only basic and applied research but also a complex confluence of product development, engineering, manufacturing, marketing, distribution, servicing all of which are followed by product adaptation and upgrading. The process contains innumerable leaps ahead, feedback loops, and sudden and unexpected lacunae, with adversities and snags that may seem enduring or even unsolvable. This point is important because most of the responsibility of technical non-entrepreneurs is concentrated at the inception and prototyping phase, whereas technical entrepreneurs are accountable for events that may arise throughout the value chain from product inception and prototyping, to production and sales, and finally to service, repair, and returns. Thus, it seems that the pathways to entrepreneurial pursuits are strewn with more lasting holdups and inherent short-term disincentives than the professional career tracks sponsored by established institutions. Innovation projects demand heavy personal investments that go beyond intellectual effort, and the benefits if and when they are finally realized come after a lengthy process of refinements with numerous setbacks (cf., Leifer et al., 2000). Adverse market reactions,

unresponsive suppliers, and what appear to be unapproachable buyers represent other disincentives to debuting unconventional products and services. Because new technologies particularly during early stages when the availability of capital and resource is most important

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frequently fail to make sense to investors, conventional wisdom constitutes yet another barrier that entrepreneurs must overcome. Finally, technical entrepreneurs also face rival companies that jockey for position within an industry as well as political, legal, regulatory, and economic conditions that can reduce a firms degrees of freedom to pursue strategic choices (Zahra and Neubaum, 1998). They must also overcome technological hostility due to radical shifts in resources deployment techniques and technological standards (Zahra and Neubaum, 1998). As entrepreneurs confront these diverse types of hostilities, perseverant commitment is clearly important. We therefore suggest that entrepreneurs perseverance to mobilize the effort needed to convert discoveries into products and services is prolonged when adversity is seen as short- lived rather than enduring. That is, when the perceived adversity is non-enduring, technical entrepreneurs would be more likely to make an effort. Hence, the following hypothesis:

Hypothesis 4: Inventors who build new ve nture based on their discoveries tend to perceive adversity as more short- lived than inventors who invent for an existing company.

3.5. Self-Efficacy: Perceived Ability to Accomplish Tasks In order to extend theory and because of potential conceptual overlap, it is important to distinguish Adversity Quotient (AQ) from the well-known and highly validated self-efficacy construct. For example, AQ entails perceived ability to handle adversity whereas self-efficacy involves the perception that one can organize and effectively execute actions to produce certain outcomes (Bandura, 1997). Although some research has already suggested that self-efficacy differentiates entrepreneurs from non-entrepreneurs (e.g., Chen, Greene, and Crick, 1998), we reassess self-efficacy because it would be in theorys best interest to test whether AQ explains additional variance that is not explained by self-efficacy. To briefly reiterate the rationale presented in previous self-efficacy research in this context (cf., Chen, Greene, and Crick, 1998; Krueger & Brazeal, 1994), starting a new venture including raising capital, attracting partners and recruiting key employees, and overcoming what appear to be insurmountable technical and business obstacles is substantially more difficult than managing an existing operation. While self-efficacy benefits persons regardless of occupation,

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championing innovative research that culminates in new venture creation seems to call for high self-efficacy. Indeed, entrepreneurs appear to work under significant constraints, including time, funding, and uncertain outcomes despite their relentless technical and business effort. Since the process of technological discovery is strewn with many barriers, the conversion of such inventions into products and services rests heavily not only on effort and creative work, but also on sustained strong self-efficacy. Since self-efficacy reliably predicts personal effectiveness in diverse tasks and careers (Bandura, 1997), we suggest that it will also be related to the pursuit of entrepreneurial activity.

4. Methods To reduce selection biases commonly found in entrepreneurship research (see Markman, Balkin, and Baron, 2001, for a detailed discussion on this issue), while obtaining evidence on the hypotheses, we extracted a random sample from a list of 4861 patent inventors, obtained from the US Patents and Trademark Office. All 4861 inventors were granted patents for their

inventions during 1997 and 1998 for inventions encompassing surgery devices (patent classes 600, 601, 602, 604, 606, 607). Since the original list of 4861 inventors included only minimal contact information (i.e., first and last name, city, and state), we used Visual Basic to scan the Nation Wide Phone Directory (NWPD) software that resides on CD ROMs and to retrieve complete contact information (e.g., full address and phone number) for each inventor. The Visual Basic output yielded 3491 non-duplicated entries. Then, using Excel

Spreadsheet and the randomize command function, we selected a random sample of 586 patent inventors, all of whom were contacted via telephone and were invited to participate in our study. Two weeks later we called all the non-respondents and then sent our second batch of survey mailing. We repeated the same procedure two to six additional times with all non-responding inventors. Although we sent surveys to a random sample of 568 patent inventors and received 233 surveys back (41% response rate), only 203 were usable. Hence, in contrast to many studies in entrepreneurship that compared samples of known entrepreneurs with a sample of predetermined non-entrepreneurs, we relied on a random sample of inventors, all of whom invent in the same technological space, at the same time period, and we did not know ahead of time, which inventors were entrepreneurs and which were not.

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Placed at the last section of the mail survey, a qualifying question asked inventors to indicate whether they used their invention to start their own business in 1997 or 1998. Such a qualifying question used successfully in previous studies including the Entrepreneurship Research Consortium (ERC project; Carter, Gartner, and Reynolds, 1996). Of the 203 inventors, 49 (24%) used their invention to start a new company and therefore were classified as technical entrepreneurs (coded as 1). The remaining 154 (76%) worked as inventors for established companies, and thus were classified as technical non-entrepreneurs (coded as 0). This relatively high rate of entrepreneurship (24%) may be attributable to the monopolistic nature of patents. Unlike traditional businesses, startups anchored in patents enjoy substantial technological protection, competitive insulation, some legitimacy, and a relatively wider window of opportunity (effective patent life is approximately 17 years). Again, unlike many studies in entrepreneurship, we did not know ahead of time whether some or even any of the inventors were indeed entrepreneurs; we only classified inventors into group membership once the completed surveys were returned to us. We also decided to focus on patent inventors because patents are one reasonable proxy for technological innovation, a precursor to newly developed product components, and an indication of technological capital (Balkin, Markman, and Gomez-Mejia, 2000). Patents may also erect legal and technical barriers to rivals. For example, our interviews of patent inventors, technology transfer executives, and patent attorneys suggested that good patents may provide footholds to new technologies and therefore are an important source of competitive advantage. Finally, patents are an indication of inventive capacity that benefits society (Trajtenberg, 1990). Before outlining the studys procedures and operations, it is worthwhile to reemphasize four things that distinguish this study from others. First, classification of participants, in this case, patent inventors as technical entrepreneurs or as technical non-entrepreneur, was made only after the surveys were collected and data were coded. Second, restricting the assessments of entrepreneurs and non-entrepreneurs to inventors who invent in the same technological space at roughly the same time period (1997-1998) provides a stronger test of hypotheses outlined above. Third, although the source of the primary data collection was based on self-reported surveys, we also verified data consistency through phone interviews and crosschecks with the US Patent and Trademarks Office website (e.g., patent count). Fourth, we made an attempt to account for non-response bias. To this end, we compared our random sample with 46 inventors

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who refused to return their surveys back on age, formal education, annual income, and number of patents developed. Data from non-responding inventors obtained via phone calls and Finally, because of

analysis showed no significant differences between the two samples.

potential covariation between opportunities and individuals, Shane (2000) advocates the methodological point that studies on individual differences should control for the characteristics of the opportunity. We were aware of the opportunity control problem and took three steps alleviate this predicament. First, using a random sample of inventors implies that the

characteristics of the opportunities may also be randomly distributed between the two groups. Second, our AQ measures were not tied to the opportunity, but instead were based on the same hypothetical scenarios described henceforth (Table 1). And finally, inventors in this study

invented highly related patents (surgery devices), which to some extent represents a set of opportunities with similar characteristics.

4.1. Procedures and Operational Measures Inventors were asked to complete a short questionnaire consisting of several scales adapted from widely used measures of adversity quotient (Stoltz, 1997, 2000) and self-efficacy (Maurer and Pierce, 1998). The adversity quotient (AQ) measure consisted of 40 items scale that was developed and validated by Stoltz (1997, 2000) with more than 100,000 participants from diverse organizations in a variety of industries. Each item consisted of a statement representing hypothetical events (e.g., you apply for a job change and dont get it; you fail to meet the deadline on a major project) followed by four questions, each representing the four dimensions described earlier (i.e., control, ownership, scope, and endurance). The respondents task was to indicate, on a five-point scale, the extent to which the statements represented them (see Table 1 for constructs description). Factor analysis showed that constructs, composed of eight items each, were reliable (e.g., control: = .77; ownership: = .81; scope: = .83; and endurance: = .81). Following Stoltzs recommendation (1997, 2000) we created one additional variable a composite index of AQ score. Summing the scores on each of the four independent AQ

constructs (described above) and dividing by four computed this variable of AQ composite index.

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Table 1 Sample Items Used in Adversity Quotient Scale Inventors used a 5-point scale to indicate the extent to which they agreed with each of the statements following the situations described below. Situation: Someone you consider important is not receptive to your ideas. How much control do you feel you have in this 1 = no control 5 = complete control situation? To what extent do you feel responsible for 1 = not responsible at all 5 = completely responsible dealing with the outcome(s) of this situation? The reason this person was not responsive is 1 = related to all aspects of 5 = related to this situation something that is my life only The reason this person was not responsive to my 1 = persist for a long time 5 = not persist very long ideas will Situation: You apply for a job change and dont get it. How much control do you feel you have in this 1 = no control 5 = complete control situation? To what extent do you feel responsible for 1 = not responsible at all 5 = completely dealing with the outcome(s) of this situation? responsible The reason I didnt get the job change is 1 = related to all aspects of 5 = related to this situation something that: my life only The reason I did not get the job change will: 1 = persist for a long time 5 = not persist very long Situation: You fail to meet the deadline on a major project. How much control do you feel you have in this 1 = no control situation? To what extent do you feel responsible for 1 = not responsible at all dealing with the outcome(s) of this situation? The reason I didnt meet the deadline is 1 = related to all aspect of something that: my life The reason I did not meet the deadline will: 1 = persist for a long time

Control: Ownership: Scope: Endurance:

Control: Ownership: Scope: Endurance:

Control: Ownership: Scope: Endurance:

5 = complete control 5 = completely responsible 5 = related to this situation only 5 = not persist very long

Although it is frequently recommended to rely on self- efficacy scales that measure perceived efficacy with regards to specific tasks, one exception to this rule entails circumstances whereby the tasks under consideration are broad or require a very diverse set of skills (cf., Bandura, 1997). Since starting high tech ventures requires diverse capabilities for which

validated specific self-efficacy scales are not yet available, we followed Banduras advice and used a general scale. Using an eight- item, seven-point scale (1 = strongly disagree; 7 = strongly agree), we measured perceived self-efficacy in terms of the belief about what one can do under different conditions with whatever skills one possesses. This measure was used successfully in previous research (Maurer and Pierce, 1998) and included such general statements as I am strong enough to overcome life's struggles, I can handle the situations that life brings, and I usually feel I can handle the typical problems that come up in life ( = .89).

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Consistent with previous research on individual differences in entrepreneurship, the survey obtained additional control variables such as age, education (measured by years of formal education), and personal annual income for 1998. Since all the participants in our study worked on novel, non-obvious, and useful technologies, an additional control variable that our study brings to this type of research is a measure of innovation as captured by the number of patents granted to each inventor (Griliches, 1990; Romer, 1996). 4.2. Analyses A MANOVA examined the relationship between the entrepreneur and non-entrepreneur variable on a set of four dependent variables: AQ-control; AQ-ownership; AQ-scope; and AQendurance. Age, years of education, innovation (i.e., number of patents), income, and selfefficacy were included as covariates.

5. Results
Table 2 Means, Standard Deviations, and Correlations among Study Variables Mean s.d. 1 2 1. Groupb 0.24 0.44 2. Age 47.23 9.33 .05 3. Education 19.69 2.69 .16* .15* 4. Innovation 13.14 17.00 -.03 .05 5. Income c 118273 83845 .00 .06 6. Self-Efficacy 6.01 .99 .17** .03 7. AQ-control 3.36 .59 .26** .15* 8. AQ-ownership 3.99 .51 .20** .12 9. AQ-scope 3.86 .56 .02 .08 10. AQ-endurance 3.19 .50 .12 -.01
* Correlation is significant at the .05 level (2-tailed). ** Correlation is significant at the .01 level (2-tailed). N = 203 b Group refers to technical entrepreneurs versus technical non-entrepreneurs. c Income is annual earnings in dollars.

.11 -.01 .01 .03 -.20 -.01 -.03

.05 .05 .11 .09 .23** .18** -.02 .17* .42** .17** -.02 .08 .07 .38** .18** -.10 .14 .08 .22** .28** .11

Table 2 presents means, standard deviations, and correlations for all the inventors, regardless of group membership. As shown in Table 2, the average inventor in this study was 47 years old, had more than 19 years of forma l education, and at the time of the survey had been granted over 13 patents. In 1998, the average inventor earned approximately $118,000 a year. Entrepreneurs and non-entrepreneurs were closely matched on education, age, income, and

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innovations, and the inventors who also became entrepreneurs had started their firms with two cofounders and had raised, on average, $6 million to build their company. The results of the MANOVA revealed statistically significant differences between entrepreneurs and non-entrepreneurs on the set of four dependent variables (Pillai's Trace = .09; F = 2.80; p = .02). The size of the multivariate effect of entrepreneurship on the four dependent variables, as indexed by partial eta squared, was .09. Univariate ANOVAs revealed that group membership (i.e., entrepreneurs vs. non-entrepreneurs) was significantly related to AQ-control (F = 8.03; p = .005); AQ-ownership (F = 4.07; p = .05), but not to AQ-scope or AQ-endurance. Specifically, means AQ-control and AQ-ownership were higher for entrepreneurs than for nonentrepreneurs (respectively 3.6 vs. 3.3; 4.2 vs. 3.9 for AQ-control and AQ-ownership; and 6.4 vs. 5.8 for self-efficacy). Thus, while the data offered support for hypotheses 1 and 2, hypotheses 3 and 4 were not supported. Table 3 shows the adjusted means for the four dependent variables broken-down for entrepreneurs and non-entrepreneurs. Consistent with predictions made

elsewhere (Chen, Greene, and Crick, 1998), we too find that entrepreneurs tend to have significantly higher self-efficacy (F = 5.27; p = .02).

Table 3 MANOVA Analysis: Dependent Variable Means For Entrepreneurs and Non-Entrepreneurs Dependent Variable AQ-Control AQ-Ownership AQ-Scope AQ-Endurance Entrepreneurs 3.65 4.20 3.84 3.23 Non-Entrepreneur 3.32 3.90 3.86 3.16 F-value 8.03* 4.06* .05 .50 eta2 .05 .03 .00 .00

Multivariate effect: Pillai's trace = .09, F = 2.80*, eta2 = .09 * p < .05 Means adjusted for covariates: years of age and education, annual income, number of patents, and self-efficacy.

6. Discussions and conclusions As we outlined at the beginning of this article, much research in entrepreneurship is using stronger theoretical links and better empirical testing to address the question of individual differences (e.g., Baron, 1998, 2000; Baron and Markman, 2000; in press; Baron, Markman, and Hirsa, in press; Busenitz and Barney, 1997; Markman and Baron, in press; Chen, Greene, and Crick, 1998; Krueger, 1993; Markman, Balkin, and Baron, 2001). We tried to extend this ongoing work by proposing that stronger perceived capacity to persevere (Stoltz, 1997, 2000) is

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associated with new venture formation. Findings confirmed that those inventors who start new ventures have significantly higher perceived control over the adversity and perceived ownership of the outcome of adversity that they face. Despite these findings, the two groups did not differ on perceived scope and endurance of adversity. More to the point, we predicted that entrepreneurs would perceive themselves as better able to react to, fend off, and quickly quarantine adversity, yet it appears that the perceived ability to isolate adversity and see it as transient was the same across patent inventors. One potential explanation for this finding is that the mental state of inventors can strongly affect their intellectual and creative work; preoccupation with unpleasant thoughts can exercise a subtle sovereignty over the ability to work and create patentable inventions. Indeed, Eisenberger (1992) proposed that increased cognitive performance and resilience against adversity create a positive feedback loop that reinforces additional high effort and ingenuity. Another noteworthy detail is that although perceived AQ-scope was highly similar for both groups, a cursory review of Table 3 shows that the average score of AQ-scope was quite high (i.e., over 3.8 on a 5-point scale). This suggests that both technical entrepreneurs and technical non-entrepreneurs are able to quarantine negative emotions (cf., Seligman et al., 1995). Since both groups scored high on AQ-scope, they are equally unlikely to catastrophize, thus preventing perceived adversity from spreading into other areas of their lives and work (cf. Stoltz, 1997). Research in social and applied psychology shows that self-efficacy reliably predicts personal effectiveness under diverse tasks and careers (cf., Bandura, 1997), and new studies confirm that entrepreneurs tend to have higher self-efficacy (Chen, Greene, and Crick, 1998). We tried to extend such results to patent inventors and our findings confirm that inventors who start new ventures have significantly higher self-efficacy. Importantly, and more interesting was our finding that after controlling f or self-efficacy, inventors perceived capacity to persevere continue to distinguish between entrepreneurs and non-entrepreneurs. Again, results show that, over and above self-efficacy, perceived perseverance is related to new venture formation; each of the three constructs self-efficacy (eta2 = .04); AQ-control (eta2 = .05); and AQ-ownership (eta2 = .03) accounted for unique variance that was not captured by the other constructs. Since past research suggests that perceived capacity to persevere predict personal effectiveness under diverse tasks and careers (cf., Bandura, 1997; Eisenberger, 1992), we were curious whether AQ explain some variability in inventors annual earnings a crude proxy of

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personal success. To this end, we ran a simple stepwis e hierarchical regression, in which we regressed annual income first on all the control variables (age, education, innovation), and then on self-efficacy and AQ composite index (captured by an aggregate measure of perceived control over, ownership of the outcome of, scope of, and finally (4) perceived endurance of the adversity). Our post hoc analysis showed that patent inventors with high AQ composite index,

tended to earn significantly more than patent inventors whose AQ composite index was low (adjusted R = 12%; F = 4.40; p = .01). To give a concrete example, the annual earnings of patent inventors whos average AQ was in the top 20% (AQ composite index = 3.8) was approximately $128,692 versus $93,933, which was the annual earnings of inventors whose average AQ was in the bottom 20% (AQ composite index = 3.3) almost $35,000 per year difference. Thus, higher AQ scores as measured across all patent inventors were related to higher personal income. Taken together, over and above self-efficacy, perceived perseverance (i.e., specifically AQ-control and AQ-ownership) is related new venture formation and to inventors annual earnings. Naturally our ad hoc analysis provides a simple initial assessment of the link between perceived perseverance and personal success. Such link should be the subject of future empirical research, which includes wage determination variables. This study has some important implications for research, theory, and practice. It provides guidance for future research on individua l differences in the context of new product development and innovation and it makes contributions to our understanding of individual differences in the context of entrepreneurship. For example, it shows that even among persons who discover novel, useful, and non-obvious technologies, those who undertake the daunting journey of creating new ventures appear to score higher on perceived perseverance. The studys focus on adversity and the evidence that people are not victims of their adversities provide hope. That is, unlike relatively stable personality and trait characteristics, perceptions of adversity are somewhat open to modification. As perseverance enables human action, at least to some extent people are the architects of their own destinies (Bandur a, 1986). Assuming all else equal, ones reaction to adversity is with the appropriate education and training (and barring impediments such as long term depression) improvable (Stoltz, 1997; Waldroop and Butler, 2000). For example, developing perceived control and accountability is accelerated when individuals alter the reasons they assign for their successes and failures. When people change their explanations for why important and impactful outcomes occurred, they

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improve their expectations for positive outcomes in the future (Mifflin and Schulman, 1986; Seligman, Reivich, Jaycox, and Gillham, 1995). Seligman and his colleagues (1995) suggest that providing individuals with such tools and skills can help them transform helplessness into mastery tha t bolsters self- efficacy and perseverance. Teaching individuals to challenge their thoughts and assumptions can immunize them against adverse impact of setbacks (Eisenberger, 1992). Improving ones AQ reduces the risk of helplessness as it boosts

performance, improves physical health, and increases self- reliance in the face of new challenges (Stoltz, 1997). At another level, evidence also suggests that a can-do attitude rubs off; that being around dynamic individuals who keep adversity in perspective is infectious (cf., Smith and Muenchen, 1995). This suggests that entrepreneurs can use their pattern of thinking (e.g., cando) to inspire and motivate their partners and others who work with them. Finally, since perceived perseverance is significantly associated with personal success, we may want to assuming all else equal give strong considerations to agents with high AQ. A corollary of the fact that AQ is both augmentable and functional is that it may be worthwhile to assess the AQ of future entrepreneurs. For example, investors such as venture capitalists may improve their odds if they consider technical inventors adversity quotient. Similarly, in the context of corporate entrepreneurship, managers may assess intrepreneurs AQ levels to identify early career track of technical people to become champions of new business units. Of course, these suggestions are tentative and awaiting further empirical testing and validation. Before concluding, several limitations to this study must be addressed. First, although dividing patent inventors into technical entrepreneurs and technical non-entrepreneurs simplifies the methodology, it is an oversimplification. In reality, particularly over time, inventors may migrate from working for others to working for themselves and vice versa. Some inventors may be building their own startup which may or may not be tied to their patent while holding employment elsewhere. Also, the survey did not collect data on the organizations in which participants work, and it is possible that some inventors who were classified as technical nonentrepreneurs actually work for start- up firms. In other words, the division of participants into two dichotomous groups may fail to capture a richness that ranges between what we categorically termed technical entrepreneurs and technical non-entrepreneurs. While the use of

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two dichotomous groups proved quite revealing, assessment of more than two groups was beyond the scope of our study and thus awaiting further empirical testing. A second limitation stems from the reliance on patent count as a proxy of innovation. Economists note that the distribution of patent quality is highly skewed toward the low end with a long, thin tail into the high- value end (Trajtenberg, 1990). Our interviews with technical inventors, chief technology officers (CTOs), intellectual property attorneys, and technology transfer directors reveal that fewer than 10% of patents are commercialized. This is not

surprising because many patents have no market value until they are toned with several other patents (e.g., Gillettes Mach 3 is protected with over 30 patents!). Additionally, some inventors may file for patents for intellectual reasons, others to passively protect technology share, and yet others use patents to strategically position their invention in a particular technological space. Also, our interviews suggest that patents may allow inventors to cajole rivals into alliances, partnerships, and concessions that are not of the rivals initial liking. In short, as patent count is an imprecise proxy of innovation, we suggest that future empirical research try to distinguish between high- and low-quality innovations. Future empirical studies should also attempt to measure and control for additional factors relating to individual differences (such as locus of control, need for achievement, level of motivation, self-esteem, and so on), contextual factors (e.g., independent inventors vs. inventors working for someone else) and various outcomes variables (such as starting a new business, performance, success, etc.). As we suggested earlier, a key challenge to field researcher is the unavoidable tradeoff between casting a broad empirical net and response rate. Highly inclusive survey instruments with a myriad of psychometric scales are also lengthy and time-consuming, and while such surveys may work in classroom settings, they are prohibitively difficult to justify to inventors and scientists or to persuade them to respond. One final weakness of our study, which is mainly due to its cross-sectional design, relates to uncertainty regarding causality. Since data were collected after inventors began building their new ventures, it is unclear whether founding a new firm increases ones perceived AQ-control, AQ-ownership, and self-efficacy or whether scoring high on these dimensions leads one to found a new venture. However, two points and a rich research stream on the causal efficacy of human thought (cf., Bandura, 1995) suggest that the perceptions i dentified in this study are more likely to precede the act of new venture formation than to be the result of it. First, it is

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important to recall that we relied on a general, rather than specific, measure of self-efficacy. Since general self-efficacy is the result of lifelong experiences; is quite stable by the time individuals are adults (Bandura, 1997); and since we obtained data from entrepreneurs shortly after they had launched their new ventures, such short-term business activity, in and of itself, probably did not elevate ones self-efficacy in any meaningful way. Second, success and failure in diverse activities and over prolonged periods of time shape ones perceived AQ-control and AQ-ownership (Stoltz, 1997, 2000). As explained above, since our technical entrepreneurs launched their new ventures only a few months before we surveyed them, it is unlikely that these relatively short-term activities had already altered inventors perceived AQ-control and AQownership in such a significant magnitudes. Clearly, only longitudinal methods or experimental research design will full address this question, but in the meantime, and for the reason outlined above, we suspect that differences in AQ-control, AQ-ownership, and self-efficacy may contribute to the decision to become an entrepreneur rather than the opposite. Notwithstanding these limitations, it is important to recognize the recent resurgence of interest in individual differences in the field of entrepreneurship (Baron, 1998, 2000; Baum et al., 2001; Busenitz and Barney, 1997; Chen, et al., 1998; Ensley, et al., 1999; Honig, 1998; Sarasvathy, et al., 1998; Stewart, et al., 1999, to name a few). In this context, this study adds some value as it was based on a random sample of inventors, all of whom had invented patents in the same technological space, at the same time period (1997 and 1998), and we the researchers did not know ahead of time which inventors were entrepreneurs and which were not. Collecting income information is another dimension that separates this study from its predecessors. Our study provides evidence that suggests that adversity quotient the perceived capacity to persevere in the face of daunting and formidable obstacles may be related to annual earnings. For example, patent inventors whos average AQ was in the top 20% enjoyed almost $35,000 more in annual earnings than inventors whose average AQ was in the bottom 20%. Furthermore, since perceived perseverance, specifically AQ-control and AQ-ownership, explain added varia nce that was not captured by self-efficacy, our study expends our knowledge of individual differences; it introduces new constructs that we believe merit further empirical testing. In closing, we found that technical entrepreneurs, as compared with technical nonentrepreneurs, report significantly higher levels of perceived control and accountability over

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adversity and higher levels of self-efficacy. We also found that, among our inventors, high AQ is related to personal success as measured by annual earnings. To the extent that perceived perseverance is vital in life, we suspect that Confucius was right; our greatest glory is not in never failing but in rising every time we fail.

Acknowledgements We gratefully acknowledge that this research was funded in part by the 2001 John Broadbent Endowment for Research in Entrepreneurship at Rensselaer Polytechnic Institute. The opinions (and errors) are the authors and not the grantors

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