4 Key Characteristics of Successful Entrepreneurs
Sergio Monsalve, Partner at Norwest Venture Partners
April 18, 2016
This post is based on a talk I did at Stanford University to promising new technical entrepreneurs.
Before I was a venture capital investor, I spent more than 12 years as an entrepreneur and early stage startup operator. In fact, I have spent more time on the startup side than I have as an investor and still consider entrepreneurship to be my primary modus operandi. At the age of 28, I had just finished getting my graduate degree when I decided to start my first company. I founded an online marketplace for second-hand technology equipment to solve a huge problem I thought existed in the market, which was the extreme price inflation for this type of equipment we had seen during the tech boom.
I raised multiple rounds of VC funding and was fortunate to learn from experienced investors and other mentors along the way. However, it wasn’t easy and I made tons of fundamental mistakes. As I continued in the startup world, I began to harness four key characteristics that helped me avoid those same mistakes and become a better entrepreneur. I’d like to share these four characteristics, along with some stories and examples that will hopefully help young aspiring entrepreneurs. First, let me explain what these 4 characteristics are:
1. Sense of adventure: You must be willing to try new, unusual, unknown and exciting things. This sense of adventure causes you to gravitate towards solving the hardest problems with courage. Great entrepreneurs aim to explore uninhabited lands.
2. Curiosity: You must be interested in learning about products, technology, people or the environment around you, but in a deeper way than others. This curiosity flows from a deep need to solve a problem you are very passionate about.
3. Resilience: You must be able to bounce back quickly after experiencing disappointment or failure.
4. Charisma: You have the ability to attract the attention and admiration of others, and to be seen as a leader with a crisp vision and meaningful mission.
Across all of the startups we have funded at Norwest, we have seen variations of these 4 key traits in every founder. Now, let’s explore each characteristic on a deeper level and discover ways to self-assess and exercise them.
As an entrepreneur, it’s important to be an explorer. This doesn’t mean you must love extreme sports or backpacking around remote parts of the world, but your mindset should be explorative.
Push yourself to step outside of your comfort zone, build products that solve big problems, and listen to a wide variety of people with innovative ideas. Look for hard problems that need to be solved and push yourself to find unconventional solutions. Staying in your comfort zone can inhibit you creatively and intellectually, so I encourage you to tackle problems no others have solved before and make yourself comfortable with the messiness of it all.
Take Elon Musk for example. His passion for every mission he embarks on is incredible. I would argue that Elon Musk is perhaps the most courageous explorer of our generation. You may be wondering how you stack up in the adventure category, so I’ll share what I look for to assess it. I think this characteristic shows up most often when you have had to make a big life decision. Look back at your big decisions and the alternatives you considered in making those decisions. Did you make the riskier choice or the safer choice? Ultimately, how did that make you feel? Do you make most choices in this spirit?
For your idea or business to thrive, you must become an expert in that subject. An obsessive level of curiosity and passion for learning are essential to success. Your education does not end in college or grad school, it’s continuous, rapid and iterative. Train yourself to reach for depth and breadth in the understanding of your problem by constantly asking yourself the “5 W’s” (Who, What, When, Where, Why). Approaching a problem from multiple angles and layers will produce a better product.
A great example of extreme curiosity is Sergey Brin and Larry Page’s work at Stanford as PhD candidates. Their unprecedented level of work led them to discover “page rank” which became the basis for one of the most successful and valuable companies in the world. What may be most impressive is that search was thought to have been figured out by players such as Alta Vista, Inktomi, Overture and several other portals. Most venture investors thought search was “done”. However, Sergey Brin and Larry Page applied a level of understanding that went much deeper than previous entrepreneurs and this allowed them to disrupt a highly competitive market. Remember that a deeper level of curiosity leads to more transformative innovations.
When I look at this characteristic, I often want to spend time with entrepreneurs on one specific topic they enjoy talking about and I ask a lot of questions. The most curious ones follow up with me later and want to continue discussing the subject. They are obsessed and it shows.
“If at first you don’t succeed, try, try again.”
It might be cliché, but trust me, you need to keep this saying in the back of your mind when running a startup. If you want to succeed, you have to come to terms with the fact that being an entrepreneur isn’t easy and it is full of dangerous traps along the way. Things will get hard, but you must push through the challenging times and learn from your experiences. Great startups are built through trial and error at very rapid speeds of iteration. The ability to adapt quickly is a skill that has helped many startups disrupt much larger incumbents. Along those same lines, the best entrepreneurs have a strong sense of resilience with a heavy dose of intellectual honesty. I believe the right balance of resilience and intellectual honesty can create great judgment. It is this judgment that allows the best entrepreneurs to identify when and how to pivot. Most great startups get built on a series of readjustments or pivots and each of pivot requires great decision-making skills.
A great example of this is the historic decision made by Jack Dorsey, Noah Glass and Evan Williams to build Twitter inside Odeo and eventually pivot to focus on Twitter and abandon Odeo. By all accounts, this decision was very difficult for the team and their investors at Odeo. However, with intellectual honesty, compelling data and a strategic product vision for Twitter, the decision proved to be a great case of fantastic judgment at work.
Another great example, Is Renaud Laplanche’s, CEO & Founder of Lending Club, decision to stay the course when Lending Club was forced by the government to stop making new loans and essentially cease operations immediately. In this case, Renaud did not pivot. Instead, he worked through the challenges, remained resilient and eventually was able to beat all other competitors including Prosper, the much larger and well-known competitor.
This characteristic can be the hardest to identify properly. To gauge your level of resilience, think of a situation when everything seemed out of your control and a clear solution wasn’t available. What did you do and how did you feel? Were you in a state of discomfort or one in which you thrive the most? Being resilient takes energy and I’ve noticed the best entrepreneurs pick their battles, and they enter every battle with a mindset of winning.
I’m not telling you that you need to be the most charming version of yourself 24/7, but it’s imperative to be cognizant of how you present yourself and your vision. No startup is built by one person; it requires a committed team of mercenaries to get a company off the ground. Those early team members join the company because they believe in the founder and the mission. A great visionary creates a contagious positive energy which is needed to attract a committed and talented team. This magnetism will make potential investors, employees and customers get excited and jump on your bandwagon.
A great example of magnetism is Mark Zuckerberg in the early days. Even as a college student, his clear vision and passion for “The Facebook” enabled him to get great people like Peter Thiel, Sean Parker, and Jim Breyer excited and involved. I specifically look for entrepreneurs who have leadership experience and make a distinct point to always communicate their passion and unique vision.
As you read through these four characteristics, you probably are asking yourself, how do I stack up in each of these and how do I improve any areas of weakness?
If you follow me on Medium.com (smonsalve650), take a look at the very simple quiz I created to help you assess yourself in these four categories. In true growth mindset, I believe you can develop and strengthen your skills in these areas through practice and hard work — no one is born with all of them. In the coming months, I will be sharing tips on how you can exercise these muscles to develop each of these four characteristics. If you think you have what it takes and have a great idea to share, please ping me or come meet me at the App Idea Awards or in our office San Francisco some time.