Success as an entrepreneur is the result of a combination of many factors. Hard work and luck are obvious ones, but what about personality? There’s much research out there, but little insight explaining what inner qualities make successful entrepreneurs. There’s even some debate over whether personality affects performance at all. What I’ve come to find, however, is quite the opposite: Not only does personality make a difference in performance, it makes a huge difference.
Over the last two decades, I’ve sat on many sides of the table — as a founder and CEO, board member, early stage investor, and Partner at BCG Digital Ventures where we’ve launched more than 85 new businesses over the past five years. In this time, I’ve been fortunate enough to work alongside many talented and successful entrepreneurs. In my own personal quest to optimize performance, I’ve found seven key factors that set successful entrepreneurs apart.
- Knowing the ‘Why’
Most people have seen Simon Sinek’s TED Talk, “Start with Why,” where he discusses how leaders can inspire action. According to Sinek, most people know the how and the what, but not all know the why. There are two kinds of whys: One with a capital W and one with a lowercase w.
People tend to focus on doing a task well so they can get promoted, recognized, rewarded, etc. Someone else determines the why for them and they optimize within the confines of the given task. This is the lowercase why. While entrepreneurs are also motivated by these factors (some are even extremely status driven), most are driven by something higher up in the pyramid of needs. A why with a capital W. It’s in their DNA to effect change outside of themselves — whether that be to change the world, make a difference in their community, etc. Aligned to a greater purpose, their why drives them, inspires them, gives them energy.
Interestingly, much of this is a subconscious process. I’ve spoken to a number of successful athletes doing some extraordinary things and when you ask them why they’re doing what they’re doing, they struggle to find an answer because they’re not consciously aware of it. Winning their game is such a driving force it becomes a given that is so deeply ingrained it comes as second nature, like breathing.
2. Being Congruent
Being congruent means your behavior is aligned with your why. Of course, many people can be congruent without being an entrepreneur, but the entrepreneur must absolutely have the self-awareness to be able to see when they are in balance and when they are not.
Congruence is a dynamic state. It ebbs and flows depending on the situation. The successful entrepreneur has refined the art of bringing themselves home, back into congruency. Suppose you’re angry because your favorite soccer club lost. It’s understandable for this to be a temporary irritation, but you shouldn’t be angry for an extended period of time. You should know when to move on, let it go, and come back into a congruent state. In order to have this self-awareness you also need to have an understanding of where you are on your path and how this aligns with your goals, values, and mission.
Many people will stay at a job for a long time because their primary focus is on things like paying the mortgage. Blinded by this need, they fail to see the possibilities associated with leaving a job that is incongruent with their values. That if they left they would most likely feel better and therefore do a much better job and, in turn, have a much better career. Again, being congruent affects decision making and overall happiness. When you are congruent, you know your authentic self and stay true to it.
3. Having Courage
In his book,“The Hard Thing About the Hard Things,” Ben Horowitz highlights the one factor he looks for in an entrepreneur: courage. He makes the point that, when it comes to trade-off decisions, many people take the path of least resistance rather than one that represents what they stand for. It takes courage to make decisions in line with your values and these choices are not always easy or pleasant.
Strong entrepreneurs feel comfortable with and have the courage to face uncertainty. While they may only have 50% of the answer to a given problem, they have a 100% commitment to following their values towards the solution. They don’t wait until they know that all traffic lights on the journey have turned to green. They commit to it knowing they will find answers and solve problems along the way. This mindset is the cornerstone of entrepreneurship and innovation.
Most organizations are not set up to operate with the entrepreneur in mind. They are optimized for efficiency and reward low risk. For those with entrepreneurial spirit, if the answer is not in line with their why it will have a big impact on their commitment. I’ve seen many entrepreneurs leave lucrative positions to be true to their why.
In “The Warrior Code,” motivational speaker, Nadine Champion, reminds us that we don’t need courage 24/7. We only need it for ten seconds — just long enough to make that life-changing decision. Even a tiny moment of courage enables us to make choices that are in line with our purpose and beliefs.
4. Having a Goal-Oriented Thinking Direction
Managers and existing businesses often think from left to right. In this method, they start with where they are today and define the desired state from there. They are so consumed by the present state, they can’t put their mind into the desired state — something that is absolutely critical to innovation.
Entrepreneurs think in the opposite direction, from right to left. They start with the desired state and define their actions today to get there. They know what they want, its purpose, and where, when, and how they will achieve it. Not only do they know the steps and resources they need to obtain their goals, but also how they will feel when the reach it. They don’t let perceived limitations stand in their way. Their internal reality (informed by their why) becomes so powerful it becomes their external reality.
Steve Jobs is often cited as someone who lived by this principle. The term “reality distortion” was used to describe his charisma, which was so powerful it created an aura around him that could convince almost anyone they could achieve the impossible. At its core, right to left thinking direction is about already existing in a future state. While this mindset is largely hardwired, it can be trained like a muscle.
5. Being at Cause
Entrepreneurs think like owners — owners of their business, life, chosen goals, path, failures, successes, etc. They see themselves as the cause and not the victim.
A simple example of not being at cause is a child who resorts to pointing fingers, throwing a tantrum, and generally behaving like a victim. We see business leaders exhibit this type of behavior when they place blame for bad performance on externalities such as the economy or competition. In other words, they look for the cause outside of themselves. Being at cause means knowing and owning the success and the solution, as well as the problem and the process.
When you are at cause, you take ownership of your future and operate from the implicit knowledge that you are always in charge. This doesn’t mean having goals that are not connected to reality (like becoming a Formula 1 race car driver or a supermodel), but great entrepreneurs always feel in charge of the journey to their goal.
Part of being at cause is knowing when to refer to outside resources, i.e. methodologies, expert advice, best practices, external benchmarks, etc., and when to access intuition for the right decision. Entrepreneurs understand that outside resources, useful as they may be, are a hindsight simplification of the real world. They take ownership for their successful and unsuccessful decisions and neither blame nor give credit to a methodology or context. This balance is critical; it has profound significance on the ownership of the result.
Traditionally, we think of entrepreneurs as very left brained. They are considered more logical, linear, and detail-oriented than their right-brained counterparts who are credited with being more creative, intuitive, and able to see the bigger picture.
If you think inside the box you will use your left brain. If you think outside of it, you will need to use both sides. For many of today’s problems, this two-sided approach is required. The ability to think analytically and creatively at the same time is a critical skill and entrepreneurs who master this will find themselves at an enormous advantage.
There is also a third brain, which is your gut, wherein decisions are made based on intuition. This is often where you first digest all the available information and ruminate on it. Then you make a decision based on your intuition and the available data. So, in effect, you are using your holistic brain. For those who are naturally more inclined toward one side over the other, it is possible to learn to use both.
7. Experience Matters
Success is always connected with past hard work, and experience as an entrepreneur matters a lot. Knowing how to ride a bike — or run a business — is good, but it won’t win you the Tour de France and it doesn’t mean your company will become the next unicorn. To compete on this level you need the kind of experience that can only come through hard work and practice.
There are many people out there who are entrepreneurs and don’t know it. For example, starting a family and having kids or relocating to another country are all entrepreneurial activities. They start with a why, jump into the unknown, and execute on the fly. Often times, these unsuspecting entrepreneurs are nominated to step into positions (like organizing a PTA meeting) that can be harnessed to help them grow their entrepreneurial attributes.
Needless to say, there will be very successful entrepreneurs out there with different personality traits and profiles. The seven factors outlined above represent the qualities I’ve found many great entrepreneurs to have in common. While this list is obviously not exclusive, it is my own personal (and unscientific) insight into what makes the great, great.
So, if you’re thinking about investing in an early-stage startup, these traits are what you should look for in the founding team. If you want to hire someone into a company with a very entrepreneurial skill set, this is what you should look for in your next recruit. And if you are an entrepreneur yourself, these are the traits you should aim for.