What makes an entrepreneur is a complex question. It includes factors from the environment in which an individual was raised, his or her family situation, and his or her personality traits. This question has been the subject of a great deal of both study and research. The following discussion is a summary of my own observations plus some of the conclusions of others.
About 20 or 25 years ago if you asked almost any expert to describe a successful entrepreneur, you would probably have been given a list similar to this:
- Only child
- About 35 to 45 years old
- Bachelor’s or master’s degree in engineering
- Born in the Midwest
- Father owns a hardware store
- As a youth, delivered newspapers and sold lemonade
Should you be concerned if you do not fit this stereotype? Absolutely not. Very few of these are factors that determine whether an entrepreneur succeeds or fails.
However, much recent research and many of my own observations seem to indicate that there are qualities commonly found in successful entrepreneurs, and there are things that you can do if you are concerned about any you may lack. Many writers on this subject seem to be primarily concerned with the qualities found in successful entrepreneurs. I look at the questions a little differently and believe it is equally as important to consider those traits that successful entrepreneurs usually do not have and those traits that simply do not matter.
Personal qualities common in successful entrepreneurs
Motivation to achieve — In almost every case, successful entrepreneurs are individuals who are highly motivated to achieve. They tend to be doers, people who make things happen. They are often very competitive. Many researchers have concluded that the most consistent trait found in successful entrepreneurs is the sheer will to win, the need to achieve in everything they do. They don’t want to come in third, they don’t want to come in second, they want to come in first.
The habit of hard work — Starting a company is hard work. Let no one kid you about that. Some time ago a student reported that one of his other professors said that unless you are prepared to work hard you should not start a company. He asked my opinion, I said the statement was nonsense. I think the correct way to say it is that unless you already work hard you should not start a company. There is a big difference. Starting a company is unlikely to turn a lazy oaf into a raging bull. In his excellent book, Winners, published by Holt, Rinehart and Wilson, Carter Henderson quotes Nolan Bushnell, founder of Atari game company and Pizza Time Theater, as saying it all comes down to one critical ingredient, “Getting off your ass and doing something.” In summary, entrepreneurs are almost always very hard workers.
Nonconformity — Entrepreneurs tend to be independent souls, unhappy when forced to conform or toe the line. They are people who find it difficult to work for others, who want to set their own goals. It is hard to imagine anyone who is more nonconformist than Steve Jobs and Steve Wozniak, the founders of Apple Computer, or Bill Gates, founder of Microsoft.
Strong leadership — Starting a new company can be a harrowing experience full of uncertainty and risk. Successfully bringing a small organization through these trying periods requires a lot of leadership skills.
Street smarts — I do not know quite how to put this. Shrewd or sharp might be a better word. Paul Hawken describes it as “trade skill” in his excellent book Growing a Business, published by Simon and Schuster. We all know owners of some very successful businesses who were lucky to finish high school and never even considered college. Yes, they always seem to make the right moves. Call it common sense, instinct, whatever you want. Successful entrepreneurs seem to have intuitive good judgement when making complex business decisions.
Personal qualities not found in successful entrepreneurs
Compulsive gambling — Almost without exception people who start companies are not gamblers. They are attracted to situations where success is determined by personal skill rather than chance. They strongly prefer that their destiny be determined by hard work and conscious decisions rather than by the roll of the dice.
High risk-taking – Contrary to popular opinion, entrepreneurs do not take excessive risks. Through careful product and market selection, creative financing, building a good team, and thorough planning, the real risk of starting a new business can be quite low. In the world of small business, optimism is truly cheap and high risk- takers die an early death.
Age — This simply does not matter any more. During the 1950s, 60s and 70s the large majority of people starting companies were in their 30s and 40s. Not true during the 1980s or today, Steve Jobs and Steve Wozniak were both in their early 20s when they started Apple Computer. At the other extreme Ray Kroc was 59 when he started the McDonald’s restaurant chain.
Sex — Here again, it just does not matter. Until recently, entrepreneurship was considered by many to be the last bastion of male dominance in the business world. This is no longer true. More businesses are now being started by women than are being started by men. I know many women who have started successful companies in recent years and I do not mean only gift shops or snack bars. I mean building contracting, bicycle manufacturing, printing, software, real estate agencies, newspaper publishing, market research, law firms, accounting firms, and on and on.
Marital status — This is almost, but not quite, irrelevant. For a woman, being pregnant or having several preschool children may not be the best time to take the step into entrepreneurship. For a man who is the sole support of the family, having two or three children in college may not be the best time. But this in no way means they should not start a business. It means that perhaps they should have it done several years earlier or wait a few years longer. The question is when to start a business–not whether.
Educational level — Knowledge and skill are very important. How you acquire them is less important. Too many college degrees may be a handicap rather than an asset. One researcher suggested recently that one of the biggest handicaps you can have when you start a business is a PhD. For example, Bill Gates, founder of Microsoft, the country’s largest software company, quit Harvard after his sophomore year.
Other — After writing this section, something gnawed at me. Somehow I felt that I had overlooked an important personal quality. It occurred to me that intelligence is not on my list. People with below-average intelligence should probably not start businesses, but it is not necessary to be a genius. Somehow or other, being smart-whatever that means-ought to be better than being dumb, but I do know quite a few very average people who have started some very successful companies. I watched a television program recently on which the founder of a major company with sales in hundreds of millions of dollars was interviewed. He said he had graduated last in his high school class of 230 students. Then he added that he did not think he graduated at all, but they just wanted to be rid of him. As I said earlier, if you do not fit the mold, don’t panic. Every entrepreneur is an individual with different skills, different strengths and weaknesses, and different personality traits. Your smartest strategy as you start or develop your business is to be aware of your own special set of skills, strengths and weaknesses, and build on these.
Excerpted with permission from Start Up: An Entrepreneur’s Guide to Launching and Managing a New Business, – 1999 by William J. Stolze.