Does Your Mind Work Like an Entrepreneur’s?
Some of us may ask ourselves what a true entrepreneur would most likely be interested in, wondering if we have the right psychology to dip our own toes into that pool.
Starting a company in the 2020s is still something of a long-odds bet, and people sitting on the fence nursing a potential business idea tend to seek all kinds of assurances before committing. One way that people tend to assess this for themselves is to ask, Do I have many personality traits in common with the world’s most famous founders? I’m I fascinated or motivated by the right things to make it work?
As a startup mentor at the world’s #1 private business incubator, I meet a cohort of new entrepreneurs every quarter. I see many of them develop powerful selling propositions and go on to achieve significant funding. I also see many others decide that startups might not be the proper arena for them at this point in their lives. With this experience, I have my own take on those things a true entrepreneur would be interested in.
I’m going to lay out a list for you, but first I’m going to lay out some caveats and dispel some myths.
Entrepreneurs Are Not a Monolith
There’s no harm in seeking out commonalities of highly successful individuals. Tim Ferriss has done this for years. It’s generally alright as long as you don’t assert that those commonalities prove anything, but rather that they make interesting hypotheses to test.
But it would be a mistake to assume that the personalities of successful entrepreneurs converge in a way that paints the picture of an “entrepreneurial personality type.” There is no one personality type for successful entrepreneurs. In large part, their interests vary across the board.
A great many programmers want to be entrepreneurs, for example, but it’s a mistake to think that founders today resemble a late-90’s hacker cohort. Some of the ones I met had backgrounds in other businesses, some have been freelancers, and a surprisingly large number of them have been artists. They all had varying levels of talent, conscientiousness, attention to detail, and subject matter interest.
So those looking to rationalize their lack of commitment by telling themselves, “I don’t have it,” will have a hard time finding a concrete picture of what it is.
What Do The Experts Say?
Those who study entrepreneurial psychology professionally can help us dispel some further stereotypes.
Debunking the cliche that entrepreneurs tend to be reckless risk-takers, Robert Roy Britt, a contributor for the U.S. Chamber of Commerce, notes, “Successful entrepreneurs tend to be reasonably self-confident, more risk-averse than you might think and extremely passionate about their ideas.”
His article goes on to cite research that entrepreneurs are even more risk-averse than the general population. That’s an interesting commonality for a domain in which a third of businesses fail. But it turns out that risk-averse people have a fear of losing money and prestige that serves as a core motivator to make their business profitable. They were compelled to start the business for other reasons, and their anxiety about failure keeps them resilient.
People start businesses for many different reasons. Commonly they don’t find enough meaning or intellectual gravitas to their current job, or also may be unemployed. Just as commonly, entrepreneurs may feel compelled to start their businesses because it has a direct impact on people’s lives. One study from Columbia Business School of women entrepreneurs indicates that they are driven less by money on average than they are by social impact.
One might also picture the cliché of the brashly overconfident founder who trades in the currency of venture capital deals. You’d be forgiven this if you saw the portrayals of the cartoonishly glad-handing Sean Parker or the sociopathic “I’m CEO, Bitch” Zuckerberg in The Social Network.
Confidence, to a point, is crucial. More than just for resilience, it’s true to say that the other players in the entrepreneurial ecosystem react to a founder’s confident optimism and will sometimes defer to it. But contrary to movie portrayals, reckless overconfidence tends to be absent from successful startups.
“Studies that have looked at the long-run success of startups have found that more overconfident and more risk-tolerant entrepreneurs have less profitable businesses on average and ones that are more likely to fail,” says Dr. Olav Sorenson, director of research at UCLA’s Anderson School of Management.
So What Are Entrepreneurs Really Interested In? Give Me the List!
Now that, hopefully, everyone has heard my throat-clearing on how entrepreneurs run a wide personality gambit, and how one shouldn’t try to exclude oneself on a personality comparison, can we still answer the original question: What are those things an entrepreneur would most likely be interested in?
Here is my personal take, based on mentoring over a hundred startup founders, of the four top interests, preoccupations, and quirks that entrepreneurs tend to share.
1. An entrepreneur would most likely be interested in…identifying unmet needs in the marketplace
I never personally had this kind of talent. Inequities in the marketplace don’t stick out me enough to make me stop what I’m doing and realize that I’m in the presence of a business opportunity.
Mediocre founders see themselves as visionaries, and they select their business idea based on what kind of product they would (selfishly) like to work on. But excellent founders are sensitive to market needs. They may perceive an opportunity at first based on their own needs, but that’s where the exploration begins, not where it ends. They welcome the market feedback necessary to mold and refine their initial inclination.
They choose their business not necessarily due to the joy of producing a certain product, but rather the joy of tapping into unmet demand.
For more information on the “visionary fallacy,” read section three of “Building an Antifragile Startup.” [opens in a new tab]
2. An entrepreneur would most likely be interested in…the personal or contributive impact of an idea
The vast majority of the founders I work with are pursuing an idea that has some social, communitarian or environmental impact.
A large part of making a startup successful is surviving long enough. Professional poker and chess players would view this as not getting knocked out in the early rounds of competition. So a predictor of success is whether or not there are compelling factors outside of simple profits or work preferences that would keep a founder motivated through bad times.
Brooke Bechtold is one such founder. Her Impactually podcast tells the stories of community activists who normally don’t get their work seen by a large audience. The notion of community contribution is what keeps the project going.
3. An entrepreneur would most likely be interested in…tinkering and fussing with things well beyond the point of “good enough”
In my opinion, the single greatest contribution a founder can make to their own company is their ability to make constant testing a way of life.
Generally speaking, founders tend to think they’re doing more testing than they actually are, and that they’re conducting it with a rigor that is, in fact, absent. Secretly, they dream of a “steady-state” for their company when they’ve picked the lock of product-market fit and they can simply kick back and listen to the cash register ring.
Life does not work that cleanly. Certainly not the unusually volatile space of startups.
The most successful startup dedicates a healthy portion of their resources and energy to generating creative permutations of the things that are working, and swiftly eliminating the things that are not. And this does not stop at product-market fit. This is a philosophy that permeates all aspects of operation, from promotional techniques to 3rd party vendors, to new technologies.
The key to success is survival. The key to survival is making your mistakes small. The key to small mistakes is aggressive testing.
4. An entrepreneur would most likely be interested in…playing in volatile, unpredictable spaces
Even though they may not admit it to themselves, many first-time founders share a covert belief that there is a sure path to startup success if you just do the right things.
The 1871 incubator features a four-step PYROS program that takes a founder from initial exploration through launch and subsequent growth. If you are a first-time participant in such a program, you might get the mistaken impression that, “If I just follow the steps, do the right things and be smart, this is guaranteed to work out!”
The relative safety of institutionalized life—school, corporations, organizations—does not follow us into the startup domain. We can develop some materials and processes to try and make consistent headway, but they do not come with surety. Just as no actor is guaranteed to become a celebrity by studying Method Acting.
Make no mistake: Founding a startup is playing golf in a hurricane. The domain is completely dominated by rare events and confluences. Randomness plays an enormous role. Successful entrepreneurs tend to love this style of chaotic, opaque, volatile environment. The are naturally agile and love adapting to the curve balls thrown their way.
If You’re Still Interested…
If you’re read this far and haven’t been scared off, here is where you should start your journey:
My free guide, “Building an Antifragile Startup,” is a one-of-a-kind look at how to build a business that actually grows from the stressors of the market, rather than getting weakened by them. This material is taken directly from a class I teach at 1871 and distills many of the ideas that come up in my mentor sessions.