What essential characteristics do America's wealthiest entrepreneurs share? More important, how can you, too, develop these qualities? Read on to find out how to think like the entrepreneurial elite.
The wealthiest entrepreneurs share some common characteristics, according to a 2007 study on affluence in the U.S. from American Express Publishing and The Harrison Group. Researchers looked at the top half of the top 1 percent of America's wealthiest individuals--those who have assets of $5 million and above. (The sampling was representative of the top 600,000 households in the U.S., whose mean value of household assets is $30.6 million.) Within this data set, they compared entrepreneurs with nonentrepreneurs. Among the findings:
- Entrepreneurs are less likely to be college graduates than non-entrepreneurs.
- They are more likely to attribute their success to determination, while nonentrepreneurs credit intelligence and education.
- They say their happiness increases as they accumulate more money.
- They are more likely to say money brings them self-confidence, while nonentrepreneurs say it brings them security.
Author Martin Fridson identified some of the same qualities in his research for How to Be a Billionaire. "Extraordinary tenacity is right at the top of the list," he says. "Billionaires are not satisfied with as much money as they're ever likely to spend in their lives, so there's clearly something going on beyond mere material satisfaction." These entrepreneurs are competitive, desiring to surpass not only their rivals, but also their own past achievements. Such people can often find a way to turn defeat into victory, proving themselves right in their business judgments again and again.
The billionaires Fridson profiled in his book, including Richard Branson, Warren Buffett, Bill Gates, Kirk Kerkorian and the late Laurence Tisch, all communicated effectively with employees, customers and other constituents. "You don't see recluses quietly making a billion in secret," Fridson points out. And, interestingly, he found that many of his subjects were very skilled poker or bridge players. They took pleasure in a bit of a gamble. That comfort with risk, Fridson says, is key: They like the feeling of playing for high stakes. Perhaps that leads billionaires to see possibilities where others don't.
Billionaires have a different view of what reality could be, says Ken Siegel, a social psychologist and president of The Impact Group Inc., a group of psychotherapists who consult with global companies. Billionaires often have a desire to change the world. Bill Gates, who popularized the idea that you don't need paper to write or calculate, is a good example. "If you think about where we came from, using electric typewriters, [Gates' success] required a whole mind shift about reality," Siegel says. Such leaders want to be the driving force of change and have some control over the way their ideas are implemented.
Though the American Express survey found that top-performing entrepreneurs place a higher value on money, Siegel cautions against using money as your primary motivation. "The more you focus on the financial potential you feel you are owed, the less likely you are to get there," he says. Instead, your focus should be on improving your services or products, with greater profits as the end result.
Along with having success in mind, elite entrepreneurs use distinct business strategies to boost their companies' development, says Rita Gunther McGrath, associate professor at Columbia Business School and co-author of MarketBusters. To begin, they figure out a business model with the capacity for what McGrath calls "mind-blowing growth." Dell, for instance, used off-the-shelf components from a variety of suppliers, so it didn't face growth barriers that might have come from difficulties in making or designing components.
While billionaires have a strong belief in their own abilities, the capacity to move forward aggressively, and a willingness to take risks they have thought through, they also hire very talented people to work alongside them. "Unlike a more typical entrepreneur, they are really good at building extremely capable teams without feeling threatened," says McGrath.
Not all attributes common to billionaires are positive, Siegel observes. Those who achieve such great success can be extraordinarily independent, to the point that it's difficult for them to develop close, intimate relationships. Others can be narcissistic, with illusions of invulnerability--witness the recent spate of CEO excesses and fiscal improprieties. Still others can become so engrossed in their work that their families suffer, or they have no life outside of work.
After all the sophisticated analysis, there's one quality billionaire entrepreneurs have that's impossible to deny, much as we might like to. "As corny as it sounds," says Fridson, "capacity to work hard is important."