The Seven Traits of a Successful 21st Century Entrepreneur.
The word entrepreneur was first coined by the French some 200 years ago. Today its meaning and cultural context would be almost unrecognisable to its originators.
The rise of automation, AI, the fact that people are living and working longer, combined with the demise of the job for life mean that being an entrepreneur is now a way of life in the 21st century. As a career choice it’s as seductive to top talent as the most prestigious tech giants, blue chip consultancies, finance houses and consumer brands. But it’s still a riskier choice than many conventional career paths; success is elusive and in reality, despite the hipster PR, it is not a career for everyone. Even the professional investors in the industry – the VCs – get it wrong way more than they get it right.
The word entrepreneur would be almost unrecognisable to its originators.
The requirements, risks and rewards are often over stated and misunderstood, compounded by little or no underlying secondary, tertiary or vocational support to nurture entrepreneurial learning. Great examples here are as difficult to find as the elusive unicorn; we simply don’t teach skills that help students of all ages understand others, the ability to critique or develop creativity of any kind. So how can entrepreneurs cultivate and identify the traits for success and thus through careful consideration and management reduce the risks of failure.
Drawn from over twenty years of participation in the entrepreneurial world, firstly as a practitioner and recently through WhiteCap and The Startup Leadership Program as an advisor, investor and educator of over 200 UK entrepreneurs, I wanted to examine the characteristics that I’ve observed in successful entrepreneurs.
People have spent years identifying the leading indicators of entrepreneurial success. Factors such as resilience and energy are timeless traits shared by many successful business founders. Your energy can transform a team, a problem, a difficult sales pitch or customer. It’s a scarce resource that must be used wisely; without it nothing will happen, but with it you get things done. Being resilient is about constantly testing and improving. You might be right, but it’s hard getting everyone else to see it. And if you’re wrong, it’s your resilience that drives you to start again.
Today in 2020, the startup landscape is changing.
Perhaps if you really want to know what a successful founder looks like ask a VC. Even better a VC who has been an entrepreneur, William McQuillan, Partner at Frontline Ventures, looks for people who are able to attract other great people and inspire them with vision. He says; “They don’t wait for something to happen, they just get started. They work harder to make the opportunity happen, because they believe they can get it. They are confident in who they are while so many founders have poor self-awareness, having no idea what they are good at and bad at.” The great entrepreneur looks for complementary skills and experiences.
Billionaire investor and champion of radical honesty Ray Dalio talks about hyper-realism and an idea of ‘activating’ your dream. “I believe in making dreams happen. To me, there's nothing better in life than doing that. The pursuit of dreams is what gives life its favour. My point is that people who create great things aren't idle dreamers: they are totally grounded in reality. Being hyper-realistic will help you choose your dreams wisely and then achieve them."
Today in 2020, the startup landscape is changing. The rate of business creation is slowing, and in spite of huge available capital, investment is harder to come by. The benefits of cheaper more accessible technology and infrastructure are a double-edged sword. They make getting up and running faster, simpler and cheaper but as a result, investors now expect to be presented with ‘pret-a-porter’ startups, readymade companies with customers, revenues and product, all ready to go. Very few entrepreneurs command investment with the power of an idea.
That said, entrepreneurs are probably the world’s best problem solvers and idea creators. They see solutions others can’t and fit things together in ways most never could. Increasingly the best of the best, those who aim to build the next unicorn, recognise the necessity to work sustainably with our planet. And in all honesty having a bigger ambition – the need to give something back to the world, to create a better business - has never been more important; whether it be profit sharing, a foundation, or supported social causes or volunteering, to name a few popular examples.
Today, I believe the indicators that point to an entrepreneur’s potential extend beyond business and point to successful lives too.
Ambition
I define ambition simply as the need to make a difference paired with the plan that gets you there.
It is impossible to succeed without ambition, a requirement to move, to go somewhere. So important is this inherent need I’d say that it was fundamental to entrepreneurial success. Some call it purpose; the idea of being clear and single minded, knowing where you are going and why you are going there. It is the very foundation, the primary driver, and without it there just isn’t the determination or the energy to succeed. Many people have ambitions, for their lives or their jobs, but often within limits. Successful entrepreneurs have unlimited levels of ambition. No idea is big enough to scare them: only the ones that lack sufficient purpose. It is these disruptive, breakthrough individuals that shape the world around themselves and their ambition. In WhiteCap I define ambition simply as the need to make a difference paired with the plan that gets you there.
I’ll paraphrase the Russian writer Yevgeny Zamyatin here: “The ones who change the world are those who know that progress isn’t made by the diligent functionaries, but rather the madmen, hermits, heretics, dreamers, rebels and sceptics.”
Fearlessness
“However bad things get, no one dies…As time goes on, with the beauty of hindsight, you realise how fearless you have become.”
Starting your own business is exciting and surprising, but at times also terrifying. Everybody has fear; fear of the unknown, fear of what others think about them, and when you’re an entrepreneur, fear of failure. Being fearless doesn’t mean you don’t feel fear, it means you’re able to manage your fear and avoid paralysis. When you’re facing adversity in business or in life, it is fearlessness that keeps you resolute, pragmatic, and sure in the knowledge that if the worst happens you can start again.
Relentless Focus
Entrepreneurs ruthlessly ignore the distractions.
With that initial burst of entrepreneurial enthusiasm comes a very real risk of trying to capitalise on every opportunity that presents itself. The result is a lack of focus that can see you fall at the first hurdle. Entrepreneurs who are relentlessly, even ruthlessly, focused know what will make a material difference to their venture. They can look at it dispassionately, assess what really matters and ignore the distractions.
“One thing I struggled with was bringing myself back to my ‘defined direction’. Of course, fluidity, flexibility and adaptability come to mind, but there is a danger of procrastinating and losing sight of the original ‘why’.”
Open Leadership
If there’s one trait that differentiates between a successful entrepreneur and an average founder it is leadership. Harvard business professor John Kotter’s theory of leadership defined effective leaders as having a vision of how things should be and a plan for how to get there. Entrepreneurs need a vision of what their business should be and a clear plan for getting there.
In successful entrepreneurial organisations leaders tend to emphasise individuals' ability to take charge of their own jobs through initiative and proactivity instead of waiting to be given an opportunity. Entrepreneurial leaders of such organisations know they have the right people in place and they trust their abilities, allowing them to take the initiative and apply them. They listen to team feedback and will consider making changes based on their ideas, and they inspire and motivate their teams through their own positive energy. Gone are the days of the rigid hierarchy.
“Being an effective leader is not just about being confident. It’s about nurturing talent and inspiring people, a more complicated matter, but I am slowly getting there, and it has translated to better leadership with friends and family as well.”
Empathy
You can be the best at what you do, but if you’re unable to understand and share another person's experiences, feelings and emotions, whether it's a customer, an investor, or a member of your team, you’re missing out on vital insights that can optimise the way you run your business.
“Empathy is vital to understanding user needs and respecting yourself, others and the environment.”
Persuasiveness
Successful entrepreneurs have the ability to convince an investor that they have a winning idea, persuade partners that they are taking the right approach, and convince potential customers that their solution is right for them. The art of persuasion is a vital skill that helps you connect with and influence those around you, but it has to be genuine. Unless you are supremely confident in your business idea, you’ll struggle to get others to buy into it. As Amanda Thomson believes that “the ability to inspire and get others on board” is fundamental to success.
Effective learning behaviours
With the evolution of entrepreneurship comes a demand for new skills, such as creativity, problem solving and empathy, and while business is stepping up to meet these demands with the rise of accelerators and incubators, etc., education (and government) is struggling to keep up. Entrepreneurial learning must be ‘fit for purpose’.
Today it is not.
“Today’s education prepares us for ‘tests’, and we are taught to find ways to ‘hack’ them, be it by cramming the night before or by learning a small number of facts. Unlearning that behaviour and just doing it right, i.e. building a great product that solves a real user pain, is a critical lesson to learn for every entrepreneur.”
Your idea, your experience and intellect, the team you build and the networks you belong to matter enormously. But I believe that it is the foundational attributes of energy, fearlessness, relentless focus, resilience, open leadership, empathy and persuasiveness that set successful entrepreneurs apart from the rest.
There is of course one factor that you cannot control. Luck. Ex private equity executive Anne Farlow, now Non Executive Chairman at hedge fund Pershing Square puts it well.
“I was at HBS with lots of bright and talented people — but when I now look at who has gone on to do incredible things, it would have been very difficult to predict it. Many were just in the right place at the right time and took a leap of faith.”
And maybe it is the belief in this idea of a lucky break at the right moment that keeps the entrepreneur going. Some of these characteristics are innate, some circumstantial and others can be learned but only if our educational and support systems evolve and recognise the importance of these characteristics to building a nation of entrepreneurs who succeed in business and in life.