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Sunday, October 25, 2015
6 TRAITS SUCCESSFUL ENTREPRENEURS ALL SHARE
RESEARCHERS HAVE FOUND THAT SUCCESSFUL ENTREPRENEURS ACTUALLY HAVE SEVERAL TRAITS IN COMMON.
Entrepreneurs are the 21st century's superheroes. They develop products that make our lives easier and better, create jobs, and inspire us to follow our dreams. But it can be hard getting past the mythology around successful entrepreneurs to see what traits they actually share. That's where empirical evidence comes in handy. Here are six factors researchers say go into the entrepreneurial makeup.
Few top entrepreneurs were experts in their fields when they first launched their ventures. In fact, up to half of all startup founders knew nothing about what they were getting into. Jack Ma, the billionaire founder of the e-commerce giant Alibaba Group, falls into that camp. "I have never written one code," he's said, "Never made one sale to a customer."
But being smart only goes so far. You also have to be willing to do some mischief. Researchers at UC Berkeley’s Haas School of Business and the London School of Economics found that successful entrepreneurs have tended to get into trouble as teenagers. According to Ross Levine, who co-authored that study, many future business leaders were keen on "breaking the rules and taking things by force" in their youths.
For example, Dean Kamen, a successful entrepreneur with over 150 patents to his name, often challenged his teachers and refused to show them his math calculations because he didn’t see the point. That resistance to doing what you’re told seems to serve entrepreneurs well in challenging the status quo.
A knack for taking risks is a third factor. However, the Berkeley-LSE study found that entrepreneurs are driven less by their love of risk-taking than by aversion to losing. The researchers defined loss aversion as a fear of losing one’s salary and prestige at a full-time job. The larger the loss aversion, the more effort an entrepreneur will put into succeeding.
Entrepreneurs also share confidence in the face of risk, a trait that usually comes in two varieties—general and task-specific. A blend of the two is a strong indicator of entrepreneurial success, as business leaders need to be able to step into the unknown, believing they can turn an idea into something of widespread value despite the challenges that stand in their way.
Take Elon Musk, for example, an entrepreneur whose confidence never seems to flag as he launches one bold new venture after another. "Starting a company is like eating glass and staring into the abyss," he said at the New York Times Dealbook conference in 2013. "If you feel like you are up for that, then start a company."
Lest confidence shade into hubris, though, entrepreneurs have to stay humble enough to learn from their experiences—including failure. Some researchers have found that overconfidence can actually be a liability, clouding judgment and creating an illusion of control. That can lead to poor choices. For instance, in 2012 in a statement about the management shakeup, Blackberry CEO Thornsten Heins stated: "At the very core of RIM—at its DNA—is the innovation. We always think ahead. We always think forward. We sometimes think the unthinkable." In the years since, Blackberry hasn't lived up to those words. Although the company is still holding on today, you can be sure the thought of Blackberry dropping from 20% market share in 2009 to 1% market share in 2014 was unthinkable then, too.
And then there's passion. According to researchers at the University of Maryland,passion is a key ingredient in growing a successful new business. It's the reason entrepreneurs inspire the rest of us in the first place. Many of us dream of getting paid for doing what we love, just like entrepreneurs do. And their deep commitment in their undertakings keeps them forging ahead in the face of obstacles.
Finally, there's resilience. Passionate entrepreneurs bounce back from unexpected challenges and failures in order to push onward. Researchers at the University of Gothenburg point out that "learning from failure is an important characteristic, particularly for entrepreneurs, and there are multiple case reports on how failures and the ability to rebuild after failure have formed successful entrepreneurs." It's well known how Steve Jobs built a project from his garage into a company with 4,000 employees, only to be fired by the very CEO he had hired. Yet Jobs chose to see it as a chance to recreate himself, later describing it as one of the most creative periods of his life.
So what does all this empirical evidence point to? Perhaps that entrepreneurs' quasi-mythical stature in popular culture is something of a fallacy. Few possess superhuman abilities at all. Instead, the most admirable business leaders simply share qualities we all do. As more research continues, those patterns will get more distinct.
But something else might happen, too: As more entrepreneurs burst on to the scene, they might disrupt what we thought we knew about those that came before. It's something they're pretty good at, after all.