I Can't Get No Satisfaction—Necessity Entrepreneurship and Procedural Utility

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Abstract
SUMMARY: We study a unique sample of 1,547 nascent entrepreneurs in Germany and analyze which factors are associated with their self‐reported satisfaction regarding their start‐up. Our study identifies a new facet of procedural utility and offers new insights about the motivations and goals of nascent entrepreneurs. Most importantly, we identify a group of nascent entrepreneurs that ‘cannot get satisfaction’ with their start‐up—not because their start‐up fails to deliver financial returns, but because they did not choose to become entrepreneurs in the first place. This group of unsatisfied entrepreneurs includes individuals starting a business after a period of long‐term unemployment and those individuals with a lack of better employment alternatives (necessity entrepreneurs). In addition, we provide additional evidence for the importance of both financial and non‐financial incentives of entrepreneurs. While financial success is the most important determinant of start‐up satisfaction, achievement of independence and creativity is also highly important. Our results emphasize the relevance of procedural utility for understanding economic behavior. We show that the process leading to a decision has an impact on the later satisfaction with the outcome of that decision.