“Entrepreneurship is living a few years of your life like most people won’t, so that you can spend the rest of your life like most people can’t.” – Anon.
Entrepreneurship occurs at the intersection of a lucrative opportunity and an enterprising individual. Entrepreneurs think differently from most people. They are sensitive to signals for change in the environment, and can make decisions in situations where stakes are high, time pressures intense, and outcomes uncertain. The start-up process involves building a culture from scratch, raising funds from investors, and managing business growth.
When most people think of entrepreneurs, they imagine an extroverted, energetic Type A over-achiever who has a great idea and succeeds through a combination of timing, skill and good luck. But in fact these are not the main characteristics that define the majority of entrepreneurs.
Research has shown that successful entrepreneurs are likely to display the following traits:
- A strong need for achievement;
- Propensity to take risks;
- Resilience to stress and high workload;
- Passion and focus; and
Entrepreneurs are dynamic, adaptable and self-regulating people with the ability to make creative mental leaps. They can recognise, analyse and exploit opportunities before others notice them. Start-ups that go on to become household names often solve a problem that customers didn’t know they had. The Apple iPad is an example of a product that consumers hadn’t asked for, but many can’t imagine living without.
Lack of challenge and opportunity leading to boredom and frustration at work are often triggers for the entrepreneurial process to begin. Research suggests most budding entrepreneurs initiate their start-up careers between the ages of 22 and 45, based on a desire for autonomy. They harness their experience, financial resources and energy to invest ‘sweat equity’ into a new venture. Successful entrepreneurs show strong initiative, have conviction in their own ability, and display high levels of perseverance in the face of setbacks.
Many entrepreneurs do not have relevant formal qualifications, although ability in finance, strategic planning, sales, marketing and communication is correlated with success. Collaboration, with an experienced advisory board for example, can assist if these attributes are lacking. The knowledge, skills and problem-solving abilities learned through educational and life experiences, particularly in product or service development, manufacturing or distribution can also be successfully transferred to start-up activities.
Most start-up founders don’t succeed on the first attempt, with many ‘overnight successes’ preceded by multiple failures and years of effort. The landscape is littered with great ideas which didn’t fire the imagination of potential customers, and therefore didn’t find a market. Previous start-up experience, particularly the ability to ‘pivot’ rapidly when an idea is not working, is a predictor of success. To quote Winston Churchill: ‘success is the ability to go from one failure to another with no loss of enthusiasm’.
Once a business is established, a different set of skills is required. Where the early stage entrepreneur values their autonomy and juggles most tasks on their own, as growth accelerates it is increasingly necessary to transition to a more professional management style.
Developing the workforce, building a sustainable culture, and managing investor expectations are necessary elements of the next phase. Skills in conflict management, contract negotiation, corporate governance, alliance building and business planning are needed to deliver the framework for growth. Unless a founder recognises the gaps in their skill set and is willing to delegate these responsibilities, start-ups can falter as growth outpaces the available resources.
As the business becomes more complex, the serial entrepreneur can yearn for the autonomy and simplicity that originally motivated them, and sell their interest to start the process again with their next big idea.