I was interviewing a founder for my podcast last week and we were talking about how difficult it is for entrepreneurs to stop thinking about their business. An entrepreneur simply doesn’t have an off button. It took a long time for my family to give up being frustrated with me for being glued to my computer most of the time, and realize that for me, it didn’t really feel like work, it was more of a passion. I thought it might be interesting to take a look at the key traits of a successful entrepreneur.
Successful entrepreneurs are always thinking of their next idea, how they can grow, who they should hire, and how they can continue to improve their business. There have been a number of psychological studies regarding what drives an entrepreneur, and they’re pretty interesting.
The first trait is actually love:
Entrepreneur Magazine reported on a study from Finland that compared entrepreneurs to parents. While their brain activity was being monitored, men were shown pictures of their companies, other people’s companies, their children and other people’s children. The results showed that they had similar feelings of parental love for their companies, as the fathers had for their children. The lesson here when selecting your business, is clearly to do something you love so you’ll be more inclined to nurture it to grow.
The second trait is confidence:
A study by the Kauffman Foundation showed some key reasons why successful entrepreneurs are able to handle a higher amount of stress than typical managers. First, they are naturally self-confident, and apparently less neurotic, although I might challenge that last part based on some startup founders I’ve met. But they also believe they can control the outcomes of their environment. This confidence leads to a generally positive outlook and 91% of entrepreneurs in the study believed that their business would be more profitable in the next 12 months. The risk here is that since 50% of businesses will fail in their first 5 years, this doesn’t quite line up with that optimism. The entrepreneur who is in it for the long term needs to balance that confidence with carefully watching their numbers.
The third trait is being open to different experiences:
While managers can sometimes become set in their ways, a successful entrepreneur is ready for whatever changes come their way. Some of these changes can be as simple as attending a networking event and meeting different people, while others could be as significant as market changes that force you to rethink your business model. But research has shown that being open to different experiences leads to that creative thinking that supports finding better ways of doing things.
The fourth trait is being a bit rebellious:
Now this doesn’t mean that you were the crazy kid tearing up the road on a motorcycle in college, but a study by Zhao and Seibert showed that entrepreneurs tended to score lower than managers when it comes to being agreeable. This makes sense when you think about it because successful entrepreneurs need to look for better ways of doing things so going along with the status quo wouldn’t be to their benefit.
Entrepreneurs tend to reason differently than managers:
Neuro scientists tell us that there are two types of reasoning, causal and effectual. Causal reasoning happens when we think sequentially, such as 1. Where are we now? 2. Where do we want to be? And 3. How do we want to get there? That simply isn’t the way most successful entrepreneurs think. They are much more likely to begin by imagining the desired end state of what they want their business to do, and then figuring out how to work with what they have in order to get there.
Key Takeaways:
These traits tend to be what drives us to become entrepreneurs, but like anything there needs to be a balance.
- If we love our business too much, we may not be prepared to let it go if it is failing, and move on to something that could be more successful. It’s a bit like knowing when to get out of a bad relationship.
- If we’re overly confident about our business then we may develop blinders to operational and financial issues that need to be addressed.
- If we’re too open to change, then we may let our business blow like the wind in different directions. It seems that using the term “pivot” has become popular in startup circles when a business changes its target market or business model, but a pivot can be quite costly and is basically the result of screwing up the first strategy so needs to be carefully considered.
- And finally, if we’re too rebellious, then we may have a tough time transitioning from the exciting phase of launching a business that is typically a time of lots of change, to building a more predictable structure that can support being able to scale.
But that, my friends, is one of the benefits of being part of a strong networking group. Because part of the value of the people in this room is that you have a sounding board for your strategy. By simply scheduling a 1-1 you’re able to share what you’re trying to do to grow your business with a CPA, several attorneys, people who understand technology, people who understand how to optimize your physical business space, people who can help you to make the right financial decisions, and of course, a marketer. It’s easy to grab a coffee with someone and talk superficially, but if you really want to grow your business, don’t be afraid to get into the details with a group of professionals who is truly prepared to help. As entrepreneurs we don’t often have our own board of directors to bounce strategies off of, but a strong networking group is like having your own board of helpers.