By Andrew Stott, Founder of interactive job tool, ProHireMe (www.prohire.me) and Globiles (www.globiles.com)
Thousands (if not millions) of people in the so-called “developed” world have become “entrepreneurs” in the last few years. A few will succeed in a smaller or larger scale, but most will fail. So what makes some entrepreneurs successful and others not?
Startups are popping up like mushrooms all over the world, partly through increased opportunity and partly borne of unemployment. Increased opportunity has been driven by the ever-decreasing costs of starting a new business, through the availability of open source software, data and ideas. A noticeable generational (Millennials) shift from competitive to collaborative business building has been a catalyst.
My faith in human nature makes me believe that we all start with some entrepreneurial spirit, in the same way as we all start off with some creative talents, until the successive influences of structured educational systems and suppressive corporate environments crush that spirit from us.
So what differentiates a successful entrepreneur from one who fails? Human nature tempts us to look to others for the reason for failure. We could not raise any money! Our customers did not buy quickly enough! Our competitors were too strong! We had a problem with the technology! And so on. But take a look in the mirror – do you have the ingredients to succeed?
Having worked in an entrepreneurial partnership for the last part of my career and since then observed many people who are starting up and running their own business, I conclude that there are some ingredients that qualify you for success. I say “qualify” because success is not guaranteed even if you have those ingredients, but without them, success is highly unlikely. In my view there are six –
- A predisposition to risk-taking
- Access to seed capital to develop your product
- Emotional and physical stamina
- Obsession with detail and quality of preparation
- A holistic vision of the business you are creating
- An ability to communicate.
Risk-taking is the single ingredient that differentiates entrepreneurs from their corporate cousins, the intrapreneurs. Risk averse people are generally not prepared to step out of a corporate environment (or turn down corporate employment) to create their own business. Risk takers typically sooner or later are bound to jump.
Access to seed capital (clearly available in a corporate environment from the mother ship) is necessary to survive the first months and create a prototype or first version of a product that can become an investable proposition for angel investors. Seed capital is generally provided by the entrepreneur and/or from the group that is affectionately known as friends, family and fools. The amount you need varies according to the product and may only be small but some initial capital is necessary. Depending on your product, you may subsequently need to raise finance through one or more rounds with angel investors and institutional investors but if you have created an investable proposition, then this should not be a problem.
The other four are ingredients which are also extremely helpful to top executives and intrapreneurs when building their businesses under the umbrella of a larger corporation.
Entrepreneurs need stamina, because the path to success is long (always much longer than it appears when you start) and has the ups and downs of a rollercoaster. If you expect quick wins, you are likely to be disappointed. Prepare yourself for a marathon!
Many successful entrepreneurs are obsessed with quality, indeed some like Steve Jobs are famous for it (if he was still alive, would the sleep button in the iPhone 6 be, annoyingly, directly opposite the volume controls so you end up lowering the volume instead of putting it to sleep? I doubt it). In corporate life, often employees “meet” targets and satisfy objectives: “good enough” is often good enough. Without such an obsession, you are unlikely to succeed. This often means that an entrepreneur cannot afford to maintain those who work hard but cannot produce quality output.
A holistic vision of the business is critical to being able to operate as an entrepreneur versus a narrower functional or technical specialist. Interestingly there are many specialists, including engineers, marketers, HR professionals, or product experts, who start their own business but find it difficult to see the whole picture. Starting a company does not make you an entrepreneur. Indeed, Luis Martin Cabiedes, a successful investor in startups in Spain, told me once he only invests where the startup founder shows he is an entrepreneur.
Communication is essential because you are leading your team, your customers, your suppliers and eventually hopefully your investors on a journey into new territory. You will not take them with you if you cannot communicate that vision, reassure them when they are doubtful and encourage them to continue to follow you.
Some would add “luck” and it is difficult to argue with that, since I have met individuals who appear to have these qualifying ingredients and have not succeeded. I have always followed the maxim “you create your own luck” but that is another story!
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