According to the 2016 US Census, only 5.6 million of the 24.8 million small businesses in the US have employees. This means 7% of the population are entrepreneurs, 2% are more than solo-preneurs, and yet less than 0.001% of these companies will become unicorns, private companies valued at $1B or more. This narrowing from sole proprietor to unicorn demonstrates a clear distinction between the individuals that start business and the individuals that start businesses that revolutionize industries. While all high growth founders are entrepreneurs, not all entrepreneurs are high growth founders. Household names like Henry Ford and Eric Yuan of Zoom have a set of key traits that elevate them above the majority.
First and foremost, these entrepreneurs can see around corners. All of them see simple solutions to complex problems, but these founders see opportunities where markets don’t even exist. Henry Ford famously said, “If I’d have asked people what they wanted, they would have said ‘a faster horse.’” In 1903, when the Ford Motor Company was founded, there were only a few hundred miles of road suitable for cars. There was no market data, no research, and no user testing that could have shown that, within a generation, over 1 million cars would dominate transportation. Ford had the vision to see a market where others did not. This ability to “see into the future” defines paradigm changing entrepreneurs.
Part of what they see in this future is that they will need to constantly replace themselves. In the 77% of small businesses with only one employee, the entrepreneur IS the product. In these cases, it’s easy to fall in love with tactical time sinks like coding or sales. To truly scale, the day-to-day blocking and tackling need to be handed off to specialized experts. Steve Jobs is quoted as saying, “It doesn’t make sense to hire smart people and then tell them what to do; we hire smart people so they can tell us what to do.” It can be uncomfortable to give up the elements that may have made the business fun in the beginning. But to truly grow, the founder needs to drive the vision of the business.
Making this transition to business building stems from a focus on outcomes over income. Despite early sacrifice, there comes a time when there will be enough cash flow to be a sole source of income. This is the point where the company can become a “lifestyle businesses,” generating enough revenue for salaries but not enough to achieve scale. High growth founders care about money, but they also care about the outcome. Evan Williams and Twitter rebuffed both Google AND Apple in 2009 because they felt that a larger organization would stifle the vision for the company. Building it into what it could be took precedence over the near-term financial reward.
The funnel of successful companies is built on a few key traits that elevate their founders from small businesspeople to Rockstar entrepreneurs. Unlike the innate traits of entrepreneurship, these aren’t all qualities that have to be in-born. While seeing emergent trends may be a talent, recruiting rock-star team members or focusing on mission over money are elements that can be built into a strategic plan. Eric Yuan of Zoom built a massive company simply by focusing on building a higher quality product. So, if your dream is entrepreneurial stardom, start replacing yourself now and focusing on your company’s raison d’etre, and TechCrunch will surely hunt you down for an interview.