There’s a great little breakfast joint near downtown where I meet a friend every few months to catch up. At our last breakfast he was fuming. No, they didn’t burn his bacon (he orders it nearly burnt, anyway). He was burning about something else — his job.
Another company had acquired his previous employer a year ago, and the resulting bad taste had been increasing over time. Salaries were cut, clunky management decisions kept coming and employees who came on board through the acquisition were at the bottom of the list for potential promotions and plum projects.
Like the new kid on the block whose name is called last when dodgeball teams are picked, it was unpleasant and professionally demoralizing for my friend and his colleagues who were caught up in the corporate chaos. He was seriously thinking of getting out — not finding another job, but another company — his own. Yup, he had been bitten by the entrepreneurial bug and was trying to decide his next move.
Our conversation then took a sharp turn into what’s needed to become an entrepreneur. Correction — a “successful” entrepreneur. What does it take? You’ve heard the numbers: Eighty percent of small companies fail. What traits make the impresarios who survive stand out? What makes them able to play small business dodgeball better than most, dodge the failure bullet and sustain and grow their enterprise for the long haul?
Entrepreneurs have a passion for what they do and unbridled energy for getting things done. A willingness to work extremely hard is also a genetic requirement. As we started talking through these powerful prerequisites I realized I had seen an example of this when I was on vacation earlier this year in Vietnam and Cambodia. In Ho Chi Minh City (formerly Saigon), entrepreneurial energy is everywhere — from small vendors along busy, motorcycle-clogged streets to the modern and bustling heart of the city. I later learned that new money and new companies are widespread since the country’s leaders changed course about the time the Soviet Union collapsed and began embracing the market economy (“Capitalist Soul Rises as Ho Chi Minh City Sheds its Past,” New York Times, by Thomas Fuller, July 20, 2015). They began looking for opportunities and fulfilling market needs, which contributed to the voracious vitality now in the air.
It turns out that whether in another hemisphere or right in our own backyard, entrepreneurial traits are strikingly similar, as those my friend was beginning to identify and bring into full throttle — passion, energy, a willingness to work hard. I was hungry to know more. What else did he need as part of his capitalistic DNA to be prosperous? Among the many factors that come into play, Fast Company provided a concise list in its article “Six Traits Successful Entrepreneurs All Share” (fastcompany.com, by Khatera Sahibzada and Rob Bueschen, July 23, 2015). Let’s take a look.
Many don’t have prior experience — Few top entrepreneurs were experts in their field when they started their venture, but they did have a great idea propelling them ahead. It turns out that as many as half of all start-up founders knew nothing about what they were getting into. Hang on — don’t run wildly out of control just yet. Along with their ideas, they had the ability to pull in the experts they needed to produce a product or service that had market promise.
They have both common sense and a willingness to break rules — Because expertise is not essential, what is? Entrepreneurs must have experience-based skills and knowledge, along with the ability to use knowledge and common sense to solve problems. This validates practical intelligence as a critical component for success — in essence, having strong business aptitude and real-world know-how to apply it. But being smart is only a start. Researchers at UC Berkeley’s Haas School of Business and the London School of Economics found that flourishing industrialists often got into trouble as teenagers — breaking the rules, taking things by force and challenging the status quo, as opposed to accepting what they were told (according to Ross Levine, who co-authored the study).
They have a knack for taking risks — Although you might expect risk-taking to be a factor, the Berkeley-LSE study found that entrepreneurs are less driven by a love of risk-taking than by an aversion to losing. Loss aversion was defined as losing one’s salary and prestige at a full-time job. The greater the loss aversion, the more effort was put into succeeding. Along with hating to lose, they love to project confidence — both general and task-specific — in the face of risk. A blend of the two confidences is a strong success indicator because enterprise leaders need to address the unknown with the belief that they can turn an idea and a related vision into pervasive value despite the hurdles involved.
They learn from their mistakes — Balancing the other side of cocky confidence, entrepreneurs must be humble enough to learn from their experience and failure. Not surprisingly, overconfidence can be a liability that muddles judgment, creates a misconception of control and can lead to lousy decisions. They must learn from their mistakes and, I’ll add, take into account the advice of others when crucial decisions are being made.
They have the passion to persist — I pointed at passion earlier, and there are plenty of studies to promote discussing it further. According to researchers at the University of Maryland, passion is a critical ingredient in growing a new profitable organization, period. Passion ignites inspiration and endorses the dream and deep commitment to purpose that keeps industrialists forging forward and breaking through barriers. Think tenacity, combined with “love what you do and love doing it.”
They are resilient in the face of failure — Resilience rounds out the list. To move forward, passionate entrepreneurs must rebound from unexpected challenges and failures, learning from their mistakes and rebuilding. Examples are everywhere — consider the 10,000 tries it took Thomas Edison to invent the light bulb. Or the rise and fall and rise again of Steve Jobs. Resilience is not letting failure define you, but leveraging lessons that failure provides as an opportunity for a fresh approach.
Does my friend with the entrepreneurial flame burning inside his belly (it wasn’t the coffee) have what it takes to start his own venture? I believe he does. He’s highly knowledgeable and is carefully gauging what’s necessary to find success glowing and growing like an aspiring sunrise. His vision, passion and expertise are huge; his risk-taking is relevant and rational.
Good at breaking rules, he owns his mistakes. Hard work is part of his genetic profile, along with incredible resilience. Lastly — if he was the last kid picked when dodgeball teams were divvied up, he always showed up the next day to play again.
That alone is massive. How about you? Is becoming an entrepreneur part of your future fortune? Are you ready to find out? Begin with an honest self-assessment of the above traits. Then call a business-savvy friend or two and plan to meet for breakfast.
Mary Elston has spent more than 20 years in management in the transportation, consulting and technology industries. She is a member of the National Speakers Association and author of the book, “Master Your Middle Management Universe, How to Succeed with Moga Moga Management Using 3 Easy Steps.” Contact her at firstname.lastname@example.org.
This article originally appeared in the December 2015 issue.