As you may know, in addition to my brand management and marketing consulting practice, I have also been a coach to dozens of startups over the past five years. In working with business founders, I have determined that these are the most important contributors to success:
- A great idea that adds value to a specific set of customers
- A passion for transforming that idea into a successful business
- Ample "customer discovery" to validate the viability of your idea
- A belief that you can accomplish anything
- A high tolerance for calculated risk - that does not mean that you are motivated by risk or seek it out, only that you are willing to work with risk in smart ways
- The ability to repeatedly overcome adversity - resilience and perseverance (the ability to repeatedly "pivot")
- Learning from failure
- Adaptability
- A strong work ethic
- Decisiveness and a penchant for action
- Ability to thrive in an unstructured environment - there are no directions, there are no hard and fast rules
- Some level of smarts - you do not need to be a genius
- Emotional intelligence
- Salesmanship - the ability to tell a compelling story about your new product or service
- A willingness to network with others - you will fail if you try to go it alone
- No fear of asking for help
- Along with this, an ability to seek out and gather the needed resources to succeed
- Knowing when to switch from an emphasis on product/service development to an emphasis on business development, sales and marketing - this does not mean halting work on product/service development
- Establishing a continuous loop of customer feedback and product/service enhancements
- It is an added benefit if you have some financial management skills, the most important of which is cash flow management
- It is also an added benefit, but not necessary for success (you can hire this expertise), to be a savvy marketer, understanding the target customer so well that you can think through the best messages and marketing strategies for them
- Most successful entrepreneurs also have an ability to delay gratification - many are willing to work tirelessly with little or no pay for a period of time with the vision of one day cashing out for millions of dollars (or at least managing a very successful business well into the future)
The most important of all of these skills is a "can do" entrepreneurial mindset. As an investor in startups, I always focus on the entrepreneur and his or her mindset/skills over the idea. I would rather back an outstanding entrepreneur with a mediocre idea than a person with questionable entrepreneurial tendencies and an outstanding idea.
Having said all of this, these are some of the common problems that entrepreneurs encounter:
- Not offering the right “value proposition,” that is, something people really want
- Not doing enough “customer discovery,” that is, understanding customer needs and desires
- Founder is too focused on product development vs. business development, especially when it is time to switch primary focus from the former to the latter
- Lots of uncertainty and risk and need to change course or “pivot”
- Access to funding/$
- Hiring the right employees and not being afraid of firing those who don’t work out
- “Scaling”/growing the business - investment in inventories (and marketing efforts) before sales occur is a particularly common problem in cash flow management
- Knowing when you need to hire a professional CEO who can take the company to the next level – knowing when the leadership role has exceeded your talents and abilities.
- Introduces new products and services
- Creates jobs and economic growth
- Empowers entrepreneurs to pursue their passions
- Creates wealth for the entrepreneur and his or her investors and employees
- Can address social issues
- Can advance technology, which can be used in other ways
If you have thought about becoming an entrepreneur, I hope this blog post has helped you think though what it takes to be a successful entrepreneur.
