Entrepreneurs, Grades and the “Smart and Illicit” Study

Managing Expectations Research Note · May 2026 · Studies / entrepreneurship / business psychology

Chris sent a Codie Sanchez YouTube Short claiming that a “Harvard Business Review analysis” found the best entrepreneurs are not top students, but nonconformists who get bored, dislike rules, and launch without certainty. That is a useful business-culture prompt — but the source trail needs tightening.

What the Short claims

The Short says a Harvard Business Review analysis found there is “zero correlation” between high GPA and long-term entrepreneurial success. It says successful entrepreneurs tend to have slightly higher IQ, weaker grades, dislike rules, get bored easily, prefer new things over rigid systems, take risks, push back, and launch without certainty.

That is the kind of claim that travels well online because it gives ambitious nonconformists permission to stop worshipping grades. But it also risks turning a real research pattern into a simple identity badge: “bad student equals future founder.” The research is more careful than that.

The closest verified source

The strongest match is a paper by Ross Levine and Yona Rubinstein: Smart and Illicit: Who Becomes an Entrepreneur and Do They Earn More? It appeared as an NBER working paper in 2013 and was later published in The Quarterly Journal of Economics in 2017.

The paper separates the self-employed into two groups: incorporated self-employed business owners, used as a proxy for entrepreneurs, and unincorporated self-employed workers. That distinction matters. The authors are not talking about every person who freelances, sells online, starts a side hustle, or dislikes school.

What the paper actually found

The paper’s abstract says incorporated self-employed people and their businesses tend to do work requiring stronger nonroutine cognitive abilities. It also says that, as teenagers, people who became incorporated business owners tended to score higher on learning aptitude tests, have greater self-esteem, and engage in more disruptive or illicit activities.

The paper’s memorable phrase is the combination of “smart” and “illicit” tendencies. In plain English: the strongest entrepreneurial profile in this dataset was not simply “obedient high achiever” and not simply “rebel.” It was closer to cognitive ability plus self-belief plus willingness to break from the standard path.

What not to overclaim

• Not proven from the Short: that the exact claim came from Harvard Business Review. The clip does not name the article or link the analysis.
• Not the same as “grades are useless”: the paper found higher learning aptitude among future incorporated entrepreneurs; it does not glorify ignorance.
• Not a recipe: disruptive or illicit teenage behaviour is an association in the dataset, not advice to break rules.
• Not every business owner: the study’s key category is incorporated self-employment, not all entrepreneurship.
• Not destiny: observational studies describe probabilities and patterns, not guarantees about an individual child, student, or founder.

Better takeaway for business people

The useful lesson is not “school doesn’t matter.” It is that conventional achievement signals are incomplete. Entrepreneurial success often depends on traits school does not measure well: opportunity recognition, tolerance for uncertainty, selling, resilience, autonomy, and the ability to act before the path is fully approved by the room.

For Managing Expectations, this belongs under Studies because it is a good example of how a real paper becomes a viral motivational claim. The claim is directionally interesting, but the evidence needs labels.

Primary links

• YouTube Short: Codie Sanchez
• NBER working paper: Smart and Illicit
• NBER PDF
• DOI: published QJE version
• Local source note and transcript

Bottom line

The Short points toward a real and interesting entrepreneurship finding: many high-performing entrepreneurs are not just rule-following top students. But the clean version is: entrepreneurship may reward a combination of ability, self-belief, risk tolerance and nonconformity — not bad grades by themselves.