I was recently asked about the most important traits and qualities of successful entrepreneurs. First, I think you need to define success. Entrepreneurial success in my definition is someone that has grown a company to a successful outcome where there has been a superior return on investment to early investors in the company. They have made something out of nothing, and delivered a high return on investment. They usually do this by making something that changes the world in a positive way.
Many of the characteristics that I list below can also be attributed to great leaders, but entrepreneurship is a special type of leadership. I base this list on my own experience of being a startup CEO and knowing dozens of other founders and CEOs and observing them over decades. Here is my list of key qualities for a successful entrepreneur:
- Good Handicapper
A handicapper, or odds maker, is a person who calculates or predicts the outcome of a contest, such as a horse race or an election, and sets betting odds. Think of the character Sam “Ace” Rothstein, played by Robert De Niro, in the movie Casino. A good entrepreneur has a high capability to assess risk/reward. This capability is far superior to the general population. However, it is different than the good investor who takes multiple bets across several companies. The entrepreneur puts “all their eggs in one basket”, and tends to that basket.
I read things all the time that say, “Entrepreneurs need to be risk takers.” I think this is a half-truth. Gamblers are risk takers, but the odds are stacked massively against them. Successful entrepreneurs take calculated risk. Risk taking alone is insufficient for entrepreneurial success. If you want to be a successful entrepreneur, you need to assess the market and competitive landscape, take calculated risks, and work very hard to effect the outcome. This is where successful entrepreneurs build great companies and deliver superior returns, and other people just plod along.
- Team Builder
World-class entrepreneurs naturally attract world-class people to themselves and into their companies. They know how to identify, cultivate and hire candidates for the most important and critical roles in the company. Once they get the right people on board, they know how to get the most out of these people.
Management styles vary with successful entrepreneurs, but they all know how to get the best out of people. They hire the best people that fit with their particular management style. I have seen successful entrepreneurs use love, guilt, manipulation, “carrots”, “sticks”, fear, greed, emotion appeals…whatever it takes to get the job done. They will frequently use “unifying hate” toward themselves as the leader, just to galvanize the team. I know this sounds dysfunctional, and it probably is. However, when you want to start a revolution, you need to have anarchists. When you are making a living out of asking for the impossible, you have to sometimes use unnatural methods of team building and team management. Starting and growing a successful company is pretty close to being impossible.
Just like great athletes, great entrepreneurs are extremely competitive. They love to win, and even more importantly, they hate to lose. I recently read an article that said entrepreneurs “understand that failure is part of the game”. I totally disagree with this statement. I don’t think it conveys the right sentiment. If you ask Tom Brady, the championship quarterback of the New England Patriots football team, if he understands that he can lose, of course he would say yes. However, if you asked him do you expect to win, he would say YES!! EVERY WEEK!!
Winners expect to win. They prepare to win. They fight to win. They relish competition. One of the most enjoyable things in my business career is setting a strategy that leaves competitors confused and bewildered as it plays out over a period of months and sometimes years. Some people might call this sick. I call it fun.
Great entrepreneurs have a strong work ethic. They are willing to make significant sacrifices. They are willing to do “whatever it takes”, within ethical boundaries, to win. They are always looking for ways to work smarter, but know that working smart is not a substitute for hard work. In poker, this is called a grinder. I was recently listening to a TED Talk by Angela Lee Duckworth about the importance of grit to success. It is having the willingness to stick with things, even when times get tough. It is essential for entrepreneurial success.
Most great entrepreneurs are very self-aware. They know themselves. They know their strengths and weaknesses. They frequently have a quality or personality trait that other people see as a weakness, but the entrepreneur actually sees that same quality as a strength because it drives results. Most great entrepreneurs occasionally get angry. If someone occasionally gets angry, it can be very effective. It shows the team that you are upset. It reminds me of the movie, Patton, where Lt. Col. Charles R. Codman says, to General Patton, “You know General, sometimes the men don’t know when you’re acting.” And Patton replies, “It’s not important for them to know. It’s only important for me to know.” If someone is always angry, then the team just sees them as an angry person. If a person is sometimes angry, sometimes fun & playful, and sometimes charming, then they can be extremely effective. All you need to do is to use this repertoire in the appropriate way and at the appropriate times. I have always preferred to work for a difficult boss that is effective as opposed to a super nice guy that is ineffective.
- Operates with Integrity
Great entrepreneurs are true to themselves. It’s not that they don’t care what other people think, it is that they have a deep sense of self, truth and direction. Integrity does not look the same in every individual, but it has commonality. To be a successful entrepreneur, you have to be honest and be morally principled. What morality looks like to one person may not be the same for another. However, integrity always implies “this is a person that I can trust”. Even if they are a sophisticated negotiator and master manipulator, they are trustworthy at your core.
Great entrepreneurs have a thirst for learning and are naturally curious people. They like the challenge of figuring things out. They like to understand how things work. They tinker a lot. However, when they tinker, they do it constructively. They are almost always looking for an outcome that takes them in the direction of their goal.
- Biased Toward Action
I have recently heard some criticism about having a bias toward action as if it is a process of recklessly acting without any information. In my experience, this is a mischaracterization of what I’m talking about here. An entrepreneur needs to make decisions in an environment of uncertainty and ambiguity. It does not mean to take action without collecting any facts. However, data can sometimes be conflicting.
People can do market research for years and still not reach a definitive conclusion. It is just analysis paralysis. On top of that, the market is constantly changing. It is sometimes like the weather in the Midwest part of the US. The saying goes, “If you don’t like the weather today, just wait for tomorrow.” I think inaction is effectively making a decision. They are making a decision by not making a decision.
Great entrepreneurs collect data, quickly assess that data, make a decision, and monitor results. If a course correction is needed, then they make it. If they were wrong in their decision, they admit it, but they don’t dwell on it. They make the next decision and continue to move forward toward the goal. They strive to get the facts, but they are not afraid to use their intuition/gut. They can deal with a high level of uncertainty and ambiguity.
- Embodies Directed Passion
Lots of articles talk about passion, but entrepreneurship is really about directed and productive passion. A great entrepreneur believes that what they are doing is important and it will impact their world in a positive way. They have a deep passion about this. Passion along with grit are what keeps the great entrepreneurs going, even when the perceived odds are stacked against them and they are faced with significant adversity. The business or cause fuels the entrepreneur’s passion.
- Goal Oriented
The famous author and motivational speaker, Earl Nightingale talked about “river people” and “goal people”. He describes river people as the people who have this longer-term vision and some great artistic or creative capability. They cannot help but be great unless they self-destruct. For the rest of us, it is important to set goals, measure our results, achieve things, and set new goals.
This characteristic reminds me of the old singles’ ads in the newspaper, now replaced by online dating sites: “I want to meet a guy who is confident, but not cocky; secure, but not full of himself; has a healthy self esteem, but no ego…and the list goes on. A strong leader needs to have a high level of confidence, while at the same time be capable of continuing to listen. Sometimes the great entrepreneurs can come across as arrogant, aloof or self-righteous. This is usually early in their careers, but for some the rough edges come off, while the confidence remains.
However, confidence alone is insufficient. An idiot can be confident. A great entrepreneur needs to have deep domain knowledge, which comes from learning and deeply understanding customer problems and solutions to those problems. Their confidence comes from really knowing what they are doing. This naturally leads to confidence without false bravado. This quality of confidence is the foundation for effective promotion and selling of ideas without being sleazy or sales-y. The great entrepreneurs are comfortable being the leader and, in fact, feel that it is the natural state for them to be in charge.
- “Natural” Promoter
To be a great entrepreneur or CEO, you need to be able to effectively promote your idea. In the early days of the personal computer, some of the great leaders like Bill Gates and Steve Jobs would give demos of their products. They were so skilled at this, they were known as “demo-gods”. Even when their stuff didn’t fully work, they found a way to pull off the demo to get their point across. But nowadays, entrepreneurs promote online by creating their own website. If you’re interested in doing this, then take a look at slickplan.com for an seo silos, this will result in a better user experience on your website and are more likely to come up for customers in their search engine.
In business leadership, especially entrepreneurship where you don’t have the foundation of a strong brand to stand upon, you need to be able to sell your ideas. A successful entrepreneur can sell them to employees, potential employees, shareholders, the Board of Directors, Angel investors, VCs, friends & family, their spouse, bankers, their attorney, their PR firm, their investors, their suppliers, their strategic partners, and, of course, their customers.
- Patiently Persistent
Successful entrepreneurs are never satisfied. They are discontented most of the time. They briefly celebrate successes, and swiftly move on to the next challenge. Yet, when dealing with customers and sometimes with employees, they remain patient, while persistently moving forward. They are also able to see the long-term vision in what they are trying to achieve. This is why they tend to use the services of someone like Indexsy in order to attract people to their website, which will ultimately lead to more customers further down the road. When a customer says no, the great entrepreneur hears, “I’m not going to buy right now”. When an investor says no, they hear, “Come back once you’ve made more progress”. When great entrepreneurs are told ‘no’, they don’t hear “no, never”. They hear, “not right now”. They can also exhibit “calm in the storm”. The best entrepreneurs can deal with extraordinarily high levels of stress and pressure, and still be very effective and productive.
Great entrepreneurs are creative. This not only applies to creativity in product and solution development. It means creativity in any kind of problem solving. They are outside the box thinkers. They can apply a vast array of knowledge, experience and solutions to problems in new and innovative ways. Great entrepreneurs may sometimes appear rigid due to their drive and passion, but they will be flexible if presented with the right data by the right person. They can work independently and in a group setting.
I hope you found this list thought provoking and informative. What is your experience with effective entrepreneurship? What do you think are the most important qualities for being a great entrepreneur? Take a look at this fitrovia office space if you’re looking for great UK premises.
For more insights on entrepreneurship and startups, visit www.questfusion.com.
This is Patrick Henry, CEO of QuestFusion, with The Real Deal…What Matters.