Alex Bussenger, Founder & Managing Partner

February 2025​

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The Unmatched Advantage of Purpose-Driven Entrepreneurs

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During the later stages of my recovery from a life-threatening injury, I began working with a therapist, something I had never done before. In one of our sessions, we discussed the concept of purpose - a seemingly abstract idea that, when truly embraced, becomes a powerful force in life and business. Before my health crisis, my motivations revolved around financial success, status, and material rewards. While these external drivers pushed me forward, they ultimately proved unsustainable. They led to short bursts of motivation rather than a deep, enduring commitment.

 

However, my near-death experience forced me to re-evaluate what truly matters. Today, I am driven by the mission of advancing preventive and personalized healthcare. When I think about the lives that might be extended or saved through the companies we invest in, I experience a sustained energy and motivation that is difficult to replicate. That alignment has given me more drive and clarity than ever.

 

Entrepreneurship is a path fraught with uncertainty, risk, and failure. While some founders achieve success without a clearly defined purpose, research suggests that those who are driven by a deeper mission have a significant advantage in achieving long-term success and personal fulfillment. A strong sense of purpose enhances motivation, resilience, and decision-making, which are all critical to navigating the challenges of building a company.

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The Science of Purpose and Motivation

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Scientific research has long demonstrated that having a sense of purpose leads to higher motivation, resilience, and overall well-being. Unlike extrinsic motivators - such as money or status - intrinsic motivation, which is driven by personal values and meaning, fosters deeper engagement and sustained effort.

 

Ryan and Deci (2000), in their Self-Determination Theory, found that individuals who pursue intrinsic goals (such as personal growth and contribution to society) exhibit higher levels of persistence, satisfaction, and performance compared to those driven primarily by external rewards. Their findings suggest that purpose not only fuels motivation but also enhances cognitive function and decision-making, both of which are crucial for entrepreneurs navigating complex business landscapes.

 

Further research by Wrzesniewski et al. (1997) explored how individuals relate to their work and found that those who viewed their careers as a calling rather than just a job demonstrated higher job satisfaction, increased resilience, and greater long-term success. This aligns with findings from Duckworth et al. (2007), which introduced the concept of grit - defined as perseverance and passion for long-term goals. Their research showed that individuals with high grit scores were far more likely to achieve sustained success, particularly in high-stakes, competitive environments like entrepreneurship.

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Why Purpose-Driven Entrepreneurs Have a Competitive Edge

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For entrepreneurs, the ability to persist through failure is a fundamental requirement. A study from Harvard Business School found that entrepreneurs who tied their businesses to a strong sense of personal purpose were significantly more likely to adapt, pivot, and persist through adversity compared to those motivated purely by financial incentives (Kerr et al., 2014). This is particularly relevant in venture-backed startups, where the failure rate exceeds 75% (CB Insights, 2021). Founders who lack a deeper mission often struggle to sustain motivation when the initial excitement wears off.

 

Research from Stanford University’s Center for Compassion and Altruism Research and Education further supports this idea. Their findings indicate that individuals with a strong sense of purpose experience lower stress levels, improved mental health, and greater overall life satisfaction (Dweck et al., 2017). This has profound implications for entrepreneurs, who face higher rates of anxiety, burnout, and depression compared to the general population (Freeman et al., 2019). Purpose, therefore, is not just a competitive advantage; it is a protective factor against the mental and emotional toll of entrepreneurship.

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Business Performance and Purpose-Driven Leadership

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The impact of purpose extends beyond individual motivation - it directly correlates with business success. Research by Gartenberg, Prat, and Serafeim (2019) analyzed over 500 publicly traded companies and found that organizations with a strong sense of mission outperformed their competitors in terms of employee engagement, innovation, and financial performance. Similarly, a study from Deloitte Insights found that companies with a clear purpose statement had 30% higher levels of innovation and customer loyalty compared to those that did not (Deloitte, 2020).

 

For early-stage startups, this can be particularly critical. Employees at purpose-driven companies report higher levels of job satisfaction and commitment, leading to lower turnover rates and stronger execution of business strategy (Sinek, 2009). This suggests that founders who lead with purpose are not only more likely to stay motivated themselves but also more likely to attract and retain top talent - a crucial factor in scaling a business.

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Why We Invest in Purpose-Driven Founders

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At One Eight Capital, we believe that while some entrepreneurs achieve success without a clear purpose, those who do have one possess a powerful, often underestimated edge.

 

Entrepreneurs who are deeply connected to their mission don’t just push through obstacles - they thrive in adversity. They inspire better teams, build stronger brands, and create businesses that people want to support. Their motivation is not tied to financial outcomes alone, making them less susceptible to burnout and more adaptable to market shifts.

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This is why we choose to invest in founders who are not just building companies but creating movements. Purpose fuels persistence, and persistence fuels success.

 

References

• CB Insights (2021). The Top 20 Reasons Startups Fail. CB Insights. Available at: www.cbinsights.com

• Deci, E.L., & Ryan, R.M. (2000). The "What" and "Why" of Goal Pursuits: Human Needs and the Self-Determination of Behavior. Psychological Inquiry, 11(4), 227-268.

• Deloitte Insights (2020). Purpose-Driven Business: A Strategy for Growth and Impact. Available at: www2.deloitte.com

• Duckworth, A.L., Peterson, C., Matthews, M.D., & Kelly, D.R. (2007). Grit: Perseverance and Passion for Long-Term Goals. Journal of Personality and Social Psychology, 92(6), 1087-1101.

• Dweck, C.S., Walton, G.M., & Cohen, G.L. (2017). Academic and Personal Success through a Purpose-Driven Mindset. Stanford University Press.

• Freeman, M.A., Staudenmaier, P.J., Zisser, M., & Andresen, L.A. (2019). Mental Health and Well-Being of Entrepreneurs: A Critical Review. Small Business Economics, 53(2), 323-364.

• Gartenberg, C., Prat, A., & Serafeim, G. (2019). Corporate Purpose and Financial Performance. Harvard Business Review.

• Kerr, W.R., Nanda, R., & Rhodes-Kropf, M. (2014). Entrepreneurship as Experimentation. Harvard Business School Working Paper.

• Sinek, S. (2009). Start with Why: How Great Leaders Inspire Everyone to Take Action. Portfolio.

• Wrzesniewski, A., McCauley, C., Rozin, P., & Schwartz, B. (1997). Jobs, Careers, and Callings: People'sRelations to Their Work. Journal of Research in Personality, 31(1), 21-33.