What is the self-competition theory of entrepreneurship?
Elias Khalil (1997) at Monash University asks why is it that some entrepreneurs that have prior accomplishments continue to risk their capital again and again?
Why don’t they retire?
One possibility is that these entrepreneurs are trying to be the best in the world or in a given territory or space. Another possibility is that they are striving just to be better than their former selves.
Self-competition theory’s main assumption is that individuals develop the desire to improve themselves, or rather, upon their former selves.
Entrepreneurship can be viewed as behaviors that individuals use to better themselves. The theory also assumes that individuals keep track of their personal best and have the ability to compare themselves to their former bests. For example, one might try to obtain a return on investment that is double what a previous venture was able to provide. Or one might try to expand the scale of the venture to be larger than previous ventures, or to span more territories.
The theory suggests that individuals that actively compare themselves to their former selves may develop a motivation to improve. The theory seems to have links with the self-actualization theory that Maslow described in his needs hierarchy. One may also be motivated by past failures to improve. For example, rather than feeling a sense of loss, and entrepreneur may try to learn from the experience and try again.
The theory is similar to prospect theory and regulatory focus theory. It is also related to self-efficacy theory and hubris theory.