A Formula For Success
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I met an entrepreneur a couple of weeks ago who was so inspirational with his passion and vision, that it was contagious to me. His eyes were sparkling while he was telling me about what he was doing. He already had a team of 10, and he was so busy with projects that he was considering to start growing his team further. Despite all that momentum, he found himself feeling down because since launching his startup, he barely had any time to be creative and visionary, instead finding himself swamped in the administrative and business development tasks.
He was actually so down that he started doubting himself as an entrepreneur. Was he right? Does he have what it takes to be an entrepreneur? In fact, what is entrepreneurship? What does it mean to be an entrepreneur? Was he instead falling short at managing his startup as a businessperson, rather than at being its founder, and if so, what is the difference between an entrepreneur and a business-person? These are questions that eat at me because I have met many super-driven entrepreneurs and seen them doubt, fade, and fail at the different stages of setting up or running their startups.
WHAT IS ENTREPRENEURSHIP?
Entrepreneurship isn’t an easy thing to learn. The typical ways to learn about it are not very helpful. One of the typical ways is to listen to the experience of a successful entrepreneur, but is it really relevant what he did in 2002 in Silicon Valley, when we are in 2019 in another part of the globe? Another way is to listen to people coming up with formulas about entrepreneurship, like “10 steps to follow to build a successful company.”
While I wish it were that easy, it actually can’t be further from the truth. Entrepreneurship is not a science. At its core, entrepreneurship is about attempting to do something new, be it an innovative idea that has never been done before, or an innovative way to copy something done before, but in a new competitive landscape. Only by being dropped in the deep waters do you really learn entrepreneurship.
So, then, is entrepreneurship about coming up with a breakthrough and introducing something never done before, much like the iPhone, cryptocurrency, or the Google search engine? Or, is it about looking at some of the pressing problems we have, such as, say, 60% mortality by a heart attack, pollution, overpopulation, and trying to find solutions? Or, is it about copying a proven model, and implementing it in a new geography with some form of localization, and some incremental enhancements? Or, is it about job creation within disadvantaged populations, and an alternative to unemployment?
Maybe entrepreneurship is all of that together: innovation, problem-solving, opportunism... The real question to ask ourselves is what kind of entrepreneurs we are. Instead of going through a narrow definition of an entrepreneur, I would rather go through the traits of an entrepreneur. I came across an article with 20 company founders telling Business News Daily what they think the traits of a true entrepreneur are.
Here is a summary of all their common descriptions: entrepreneurs are driven, creative, opportunistic, self-confident, courageous, individualistic, and stubborn people!
> They are driven by the need to create something and see it grow.
> They are creative, and can envision new things and make them happen.
> They are opportunistic in the sense of seeing a need in the market, and turning it into a business opportunity.
> They are self-confident and believe they can navigate any challenges and bumps.
> They are courageous in taking risks, and mobilizing people around them.
> They are individualistic in the sense that they need to be the masters of their own destiny (or at least try to!).
> They are also stubborn about their vision, and on making things work no matter how many tries it takes.
By all the above descriptions, that person I met a few weeks ago was indeed a great entrepreneur. So, where was he really falling short? To answer that, it is worth looking into the difference between an entrepreneur and a businessperson. According to keydifferences.com, here is a comparison between these two: A businessperson enters a business world by contributing to an existing business or product idea, usually in the form of franchising or replication. The typical goals of a businessperson relate to increasing financial profits and the development of his/her own career.
A businessperson is an individual who calculates risk and conducts a cost-benefit analysis. He makes a decision on the basis of an available and reliable information. A businessperson hires and manages people in order to realize the company’s objectives. A businessperson makes all efforts to beat competitors and increase market share. He does not waste time on unnecessary activities which are not related to business objectives.
An entrepreneur enters a business world by transforming the original idea or innovative product into a startup company. The goals of entrepreneurs relate more to the realization of original ideas and changing the world, rather than pure financial profits. Entrepreneurs are focused mainly on their contribution to the improvement of social wellbeing. Entrepreneurs make a decision on the basis of their intuition, rather than calculated and reliable information. In order to realize their dream and passion, they take excessive risk.
Entrepreneurs lead people by inspiring them to contribute and realize their innovative ideas. The entrepreneur is less focused on beating competitors, and more focused on improving the drawbacks of his idea. He is not time-oriented and willing to spend all time on activities which he believes are crucial to his idea- not for generating profits.
I had to reflect on the aforementioned distinction. Maybe it is only a contextual distinction? Both a business- person and an entrepreneur are individuals who run their companies. However, both of them have different goals, different contexts, and more importantly, different skill- sets and mindsets.
It is true that a business- person is focused on earning profit, but I would argue that entrepreneurs, in the absence of a steady source of income, are forced to work relentlessly until profit is realized. That means that they have to be resourceful enough, and come up with whatever is needed to make things happen. That also means that they have to have the resolve to deal with uncertainty, and eliminate all the unknown variables that they face on a daily basis.
It is also true that an entrepreneur’s forte is to find problems that need solutions in the market. He loves building a case to address the market opportunity, and then attract resources to launch a startup. This is great, but not enough! I would add here that for this entrepreneur to be successful, they need to become a great businessperson, and build the right team around them, put the right processes in place, and manage the growth of the startup. That requires learning some basic business skills like management, sales, marketing, finance, and accounting. They are the skills needed to grow a sustainable and successful business.
Maybe our friend from earlier was lacking a few of the businessperson’s skillsets. Could we also be missing something else?
THE TAO OF ENTREPRENEURSHIP
Each entrepreneur must determine what type of entrepreneur they are, understand their strengths and weaknesses, and then learn what it takes to be a great businessperson. Creativity, intelligence, and passion are great and essential traits for entrepreneurs, but running a startup requires certain business skillsets. Entrepreneurs can easily acquire and learn these skills as they go. But is it enough?
Making decisions based on intuition (and without calculating risks) is also a great and essential trait for entrepreneurs. It makes them navigate inevitable uncertainties better, and play the odds sometimes. It is a great trait especially if it stems from the humility of admitting that life is unpredictable, and any foresight of risks is just a guess at best.
Yet again, while managing a startup requires making decisions based on intuition, one must also take into account the consequences of those decisions on oneself and other members of the team. That level of self-responsibility and responsibility is what makes a great leader.
Problem-solving is also essential for entrepreneurs. It’s what drives most innovations. Taking a startup through the long road of sustainable growth requires problem-solving to be connected to a greater cause. It is what will inspire motivation to wake up every day, and face all of the challenges and uncertainties. That kind of motivation is also one of the main traits of a great leader.
The entrepreneur’s mindset combined with the business- person’s skillsets are a great recipe for success– but I believe there is one more missing ingredient: leadership centered around empathy and purpose. When that kind of leadership is confronted with different challenges, it leads to deep transformations on all levels, the self, the team, and the wider community. That is exactly what is needed today. I wish you a tao journeying through your entrepreneurship path!