Winning a battle is not the same as winning a war. Great entrepreneurs need these five traits to build a sustainable business that maximizes success in an uncertain environment.
In my experience, the following traits are essential to starting and growing a business, whether it be a start-up, a division of a larger company, or a sales territory. Many business people are not born with these traits, but they can be learned in the same way that emotional intelligence can be developed-- with practice and patience. Applying primary and secondary research to your own work habits creates the omnipresent mindset of a successful entrepreneur. In contrast, some budding "entrepreneurs" adhere to a "shoot first, ask questions later" mentality of rolling up your sleeves and jumping head first into a business. This can cause long-term issues for the business and its culture. Successful entrepreneurship is like a general operating in the fog of war-- you have an end goal, but no clear path to success. Your competition is out there and moving around behind the lines. You can't just charge out and let everybody know you are coming. That is why it is important to be detailed, meticulous, and plan for everything that can happen along the way. Here are the most important traits of a successful entrepreneur.
5. Resourcefulness
The first trait applies to processes, products, and people. Businesses are built on resourcefulness. Call it lean or six sigma, or just call it plain math, but the more efficient you are, the more value you will generate from a given input (often a combination of time or money). Your first task is to catalog what you have, making note of your human resources, intellectual assets, equipment, and facility. Not all resources are created equal. For a start-up, the first capital is usually the owner's contribution in the form of time and your savings account, net the opportunity cost of paying yourself a "real" salary. Eventually investors or upper management are going to give you a budget, and if you are salaried, your time is now the least dilutive resource. Being efficient maximizes this limited resource for the benefit of your investors. Side traits that relate to resourcefulness include creativity, confidence, and persuasion. Ask for what you want and receive what you need.
Argument against resourcefulness: The "growth at any cost" mentality may take market share from your competitors and establish your company as the initial leader in a segment. Out-spending your competitors through aggressive expansion of production or marketing initiatives seemingly overcomes gains from savings received from austerity measures. My counter-point is two-fold: 1) there will always be new market entrants with bigger pockets and 2) savings from efficient resource utilization allows you to re-direct resources elsewhere. First mover advantage is not always an advantage. Look at Blue Apron and HelloFresh. Look at Bird and Lime. Market share will ultimately be won by the most efficient model with the highest quality product or service and using resourcefulness to get there should always be the mindset of a successful entrepreneur.
4. Pragmatism
Oxford dictionary defines the second trait as "dealing with things sensibly and realistically in a way that is based on practical rather than theoretical considerations." Adhering to this trait is a way to keep your emotions in check when you go through the ups and downs of a venture that rests squarely on your shoulders. Aim high with your goals--of course--but do not let your ambition cloud your judgement, lest you will fall from the sun. Tactically speaking, track achievable activities on a daily and weekly basis. By setting and achieving these "little" goals in a stepwise fashion, progress can be rolled up toward greater personal and professional goals, as reported on a monthly and quarterly basis to key stakeholders. This goes hand and hand with good communication. Engaging stakeholders with clear, consistent messaging around realistic expectations ensures sustainable progress. This, in turn, keeps the team motivated over what my former entrepreneurship professor calls the "Spartan death march" of building a start-up company.
Argument against pragmatism: I've heard more than one board advisor tell me that "We need to sell the dream." Similarly, a venture capitalist looks at your financial projections and thinks "this is too conservative", or "where is your hockey-stick growth?" Trigger-warning: start-up culture in the United States tends to emphasize unrealistic dreams and business models, destroying emerging industries time and time again. This includes the dot com bubble of the early 2000's and the electric vehicle bubble of today (triggered yet?). You may be able to raise the A round on hopes and dreams, but eventually you need to execute or face a down-round. The time-tested strategy to do this is to get to a Minimally Viable Product (MVP) as soon as possible and demonstrate real business traction through users, partnerships, or better yet, sales. If you don't stay pragmatic your technology is eventually going to catch up with you, regardless of what you are trying to sell (think Theranos).
3. Perseverance
If few jobs are more unstable than that of an entrepreneur, then few lives are more unstable than that of an entrepreneur without any money. As noted in the title, there is no clear roadmap through the fog. Your advisors, investors, and team members will tell you different things about the direction to go and who to take with you. Everyday countless decisions need to be made that are based on limited, often conflicting information. Decisiveness is the little sibling to perseverance, a trait that enables you to continue making difficult decisions. The fact is that an early-stage, pre-revenue venture will not generate return on investment for quite some time. This is especially true for high-technology companies based on an intangible portfolio of intellectual property. These ventures typically generate revenue from licensing royalties or milestones over a period of seven to ten years. By exhibiting perseverance, an entrepreneur has the means to continue making progress no matter what.
Argument against perseverance: Re-read the first sentence. You can have all the right traits of an entrepreneur, but your product or service won't deliver a profit. The value you are creating is not worth the cost to create it. And now you are arguing with your husband or wife on a daily basis about getting a "real job". There is a reason why kamikaze is not a viable long-term military strategy. Don't sacrifice your livelihood for a single venture. My counter-point relates to the application of perseverance. A business may be ephemeral, but entrepreneurship is perpetual. One out of every ten start-ups will fail. The lemonade stand I had when I was six wasn't my only unsuccessful venture. To be a successful entrepreneur you need to know when to admit failure and regroup for a new battle, again and again. You persevere.
2. Extroversion
I apologize in advance to all the introverts out there, but every entrepreneur should exhibit the traits of an extrovert to efficiently and effectively uncover the unmet needs of their customers. This is the basis of selling; as an entrepreneur you are selling your business, your product or service, and especially in the beginning, yourself. Training yourself to act like an extrovert if you are not one naturally should be an early priority. It will make your job easier and save you and your investors time and money. For example, one creates stronger relationships by meeting folks in person instead of emailing them. Attending events costs money, so increase your networking ROI by presenting and then meeting folks afterward to gather new leads, referrals, and general information. By capturing the ethos of an extrovert, you may find yourself growing in character without actually changing who you are.
Argument against extroversion: I've worked with a medicinal chemist who is both brilliant and an introvert. They successfully raised money and are in talks with major pharmaceutical companies to out-license their IP portfolio. They did not need to change who they were. My response: both introverted and extroverted people, as defined by the Myers-Briggs personality test, can be successful entrepreneurs. Extroversion, however, affords you the energy to cold call customers and get through one hundred "no's" in order to receive a game-changing "yes". In contrast, it may not always make sense to be the primary extrovert on your team. You do not need to have an entrepreneurial mindset to contribute to a successful start-up. Recruiting complementary co-founders, such as an "entrepreneurial lead", allows inventors to prioritize their time by adding greater value in the lab.
1. Passion
This is the key trait every successful entrepreneur should have according to numerous articles on entrepreneurial traits and even to the greatest entrepreneurs themselves. “If you’re lucky when you’re very young, you find something you’re passionate about. I did when I was 13 years old. I found computers and software,” said Bill Gates, whose company Microsoft is now valued at nearly a trillion dollars. I believe passion is what makes you get up early in the morning and work late on the weekends. Passion takes many forms: it drives you to make something you love faster, cheaper, better or it forces you to fix something you hate in order to mitigate a pain point. Passion manifests in the individual and evolves into your company's mission, spreading from your team and onto your customers. It becomes your brand. My passion for helping researchers bridge the "valley of death" inspired me to help design a pharmaceutical accelerator business model to get life-saving drugs to the clinic faster.
Argument against passion: There are entrepreneurs who are driven by other things then passion, such as money or their talents. Similarly, there are entrepreneurs who are passionate about something that aren't particularly good at making it a business. Mark Cuban, host of Shark Tank, agrees. He suggests that instead of following your passion, potential entrepreneurs should "look at where you apply your time... and when you get good at something, you tend to enjoy it more." I read this as instead of passion inspiring your work, your work inspires your passion. I concur with Mr. Cuban. I think entrepreneurial success is ultimately a combination of these five traits applied over time and executed skillfully with the right team and resources. Like a great general, a great entrepreneur is tactful and deliberate and can make sustainable progress, despite the fog emanating from an uncertain path.
Thank you for reading! I would love to hear your comments. What traits made you a more successful entrepreneur?
Drew Hertig, MBA, CLP, is a business development and marketing professional passionate about entrepreneurship and the biotechnology and pharmaceutical industries.