This will be a shock to all entrepreneurs subsisting on Monster Energy and Starbucks, but a steady caffeine habit is not necessary for startup success.
The proof is in the latest report from the National Venture Capital Association. In tracking capital investments through the first three quarters of the year, two Utah metropolises, Provo-Orem and Salt Lake City-Ogden, finished No. 8 and No. 12, respectively, on the list of metro areas that received the most funding, well ahead of far larger metros like Atlanta, San Diego, Dallas and Philadelphia.
Both metro areas are predominantly Mormon, a faith whose adherents do not use caffeine, tobacco or alcohol. That Utah manages to be an entrepreneurial hotspot while eschewing caffeine is not news. The state has produced some eye-popping successes, such as the 2009 sale of Omniture to Adobe for $1.8 billion and Blackstone’s $2 billion acquisition of Vivint in 2012.
Brigham Young University is the fourth-best entrepreneurship school in the country, according to the Princeton Review; and Mormons are disproportionately represented among Fortune 500 CEOs.
But why? What makes Mormons such good entrepreneurs? Here are six good reasons:
1. It’s not the church; it’s the state. Utah is regularly ranked among the most pro-business states for its low taxes, light regulation and overall friendliness. But, then again, the state is run by Mormons so . . .
2. Nearly all U.S. Mormons serve two-year missionary tours, here or abroad, going door to door, trying to win converts to the Church of Jesus Christ of Latter-Day Saints (LDS). Two years of having doors slammed in their faces forces young Mormons to develop a dogged persistence that serves them well later in business.
3. Mormons are organized. The church itself is set up like a business with a president, 12-member board and a complicated bureaucracy. Mormons are encouraged to be active in the church beginning at a young age and routinely volunteer in the community as well.
4. Pioneer spirit. The Mormons settled into the wilderness around the Great Salt Lake to escape persecution and establish their own republic. That takes self-reliance and an independent drive, qualities necessary for entrepreneurs. And LDS has an entrepreneurial story. Since settling in Utah in 1847, the church has grown from persecuted cult to one of the fastest-growing faiths in the country.
5. Education. The church emphasizes education and its members are more likely than the general population to have at least some college education.
6. Capitalism. LDS has been described as a capitalist faith. While it doesn’t preach capitalism, its members are encouraged to do well and use their earnings to help others and, of course, tithe to the church.