Do You Have the Right Kind of Confidence?
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What does it take to be an entrepreneur? I believe genuine success comes if -- and only if -- you have the right kind of confidence. And that means you need two forms of it, not just one. I call these Level 1 and Level 2.
The first level of confidence is the "genuine" part of "genuine success" above. This kind of confidence is the anchored self-assurance that comes when you are at peace with yourself and the basic stuff of life: love, authenticity, and acceptance of your place in the world. If you lose the anchor of Level 1 Confidence, you can run your business for awhile and even make a lot of money. But you are basically running away from life -- chased by your fears -- not running toward it urged on by your dreams. In my book, people who live that way are failures, not successes.
There are many pathways to Level 1 Confidence. Take Amazon.com’s Jeff Bezos for example, he displays clear signs of Level 1 Confidence. Look at the way he talks about and treats his family. He seems to have a deeply respectful relationship with his wife, MacKenzie. He once said that the quality he most wanted in a spouse was resourcefulness. For Bezos, Level 1 Confidence comes (at least in part) from having someone at home who has his back. Consistent with that, he has kept his family life sacred and out of the public eye.
As an entrepreneur, ask yourself: what are my sources of Level 1 Confidence? They could include your love of nature, family, friends, or even memories of challenging rites of passage you endured and overcame -- such as military service, a disability, or personal crisis. At all costs, protect these sources of reassurance that you are a good, capable person with a secure and honorable identity. Level 1 Confidence is the foundation for your life -- not just the foundation for your enterprise.
That brings me to Level 2 Confidence. For an entrepreneur, Level 2 is the confidence-in-action you need to jump into the next stage of whatever you are doing -- to take risks, fail, and then get back on your feet to take even more risks. A big part of Level 2 Confidence is what Stanford psychologist Carol Dweck calls a "growth mindset." People who lack the growth mindset avoid situations where failure is a distinct possibility. That's because they view failure as a threat to their Level 1 Confidence. Failure makes them feel unworthy. It confirms their overall lack the ability to succeed.
An entrepreneur's growth mindset prompts him or her to seek out tough challenges. With abundant Level 2 Confidence, entrepreneurs believe that they will learn more from failure than success. In fact, they are somewhat suspicious of success that comes too easily. They have learned to fail.
In my teaching at the Wharton School of the University of Pennsylvania I have developed a simple diagnostic test based on my "right kind of confidence" theory. If an entrepreneurship student is using his or her MBA as a "hedge" against failing at a startup, that tells me they lack the genuine growth mindset that has allowed Jeff Bezos to run the world's largest online store by embracing risk, taking chances, and learning from failures.
On the other hand, if they are in the program to learn as much as they can – but would drop out of school to exploit an once-in-a-lifetime business model opportunity, then I am ready to get out my checkbook and invest in them.
These are the people who have what even the Wharton School cannot teach – the right kind of confidence.
Related: Fake It Until You Make It: How to Believe in Yourself When You Don't Feel Worthy