When imagining new venture ideas, sleep is not something that entrepreneurs generally think of as important. Yet, it's been well established that sleep is important for learning and memory, for mental alertness, for sustained attention, and for higher-order executive functions.
Jeff Bezos and Arianna Huffington have attributed their ability to come up with brilliant ideas to a good night's sleep! Is this just anecdotal or can sleep really affect "entrepreneurs' abilities to imagine promising new venture ideas" and evaluate their potential business success?
Key Takeaway
Generating and evaluating new business venture ideas are cognitively demanding processes. Two studies show that adequate sleep is a crucial ingredient. But not just for imagining new venture ideas. Rather, this research is just the latest in a growing body of evidence that sleep is important for all kinds of cognitively demanding tasks. Sleep could be the number one ingredient for high level functioning in any domain.
Prior research has found that "relevant prior knowledge or experience, education, motivation, and social capital" are important for business innovation. Research is now looking at the "influence of day-to-day variations in moods, emotions, and other biological dynamics like one's level of rest and sleep." "Entrepreneurs typically develop their initial insights about an idea in a vast array of different circumstances, from spontaneous and serendipitous “flashes” of genius to more deliberate “scan-and-search” efforts." This could take weeks, months or years, and would naturally be "subject to potentially important variations in how well rested they may or may not be."
In a series of studies, researchers at the University of Central Florida wanted to find out if this was indeed the case: That sleep could affect the business quality of new venture ideas.
Study 1
In this study, 101 small business entrepreneurs from around the world tracked their sleep for 13 days using a smart phone. Every day, they were asked to review a business pitch on its merits for potential success. The pitches differed in their superficial and structural similarities such that when both were high, the project had a high degree of success. When both were low, or mis-matched, the project had a low degree of success.
The researchers found that on the days when the participants reported less sleep than usual, they were poorer at picking the best pitches. On the days when they had more sleep than usual, they were better at correctly evaluating the less desirable pitches as lower in quality.
However, this study was correlational and could not establish that the sleep disturbance caused the participants to err in their evaluation of business pitches. To established causality, in study 2, the researchers directly manipulated the sleep of participants in the laboratory.
Study 2
The participants were 73 senior business school students who were asked to read a description of an emerging video recognition technology and then to describe how they might commercialize it. They "could propose as many ideas as they wanted and could expand on them as much as they chose." In a second task, they were asked to "rank three new venture ideas sampled from a real-life business plan competition." But, before their tasks, one group of participants was completely sleep-deprived overnight. Here's what they found:
Evaluating structural similarities "between an idea's underlying technology and market application" and "generating market application ideas characterized with higher levels of structural-similarity" are cognitively demanding processes. Yet these skills are essential when seeking the next successful business venture. Adequate sleep is a crucial ingredient. But not just for imagining new venture ideas. Rather, this research is just the latest in a growing body of evidence that sleep is important for all kinds of cognitively demanding tasks. Sleep could be the number one ingredient for high level functioning in any domain.
Reference:
Gish, J., Wagner, D., Grégoire, D., & Barnes, C. (2019). Sleep and entrepreneurs’ abilities to imagine and form initial beliefs about new venture ideas. Journal of Business Venturing, 105943.