What Makes a Successful Entrepreneur?

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entrepreneurship

Hours of banter, pages of writing, and thousands of dollars of research have been devoted to answering one of the most popular and elusive questions about entrepreneurship: “What Makes a Successful Entrepreneur?”. Is it a personality trait? Can entrepreneurship be learned? Can it be taught? What kind of person does it require? Can anyone become this kind of person, or are certain people born for the entrepreneurial life? These questions can be answered by examining anecdotal evidence, industry trends, and scientific research. And in short the answer is – it depends.


In recent years, the term “entrepreneur” has escaped its stereotype as “your friend who can never hold down a job” and transitioned into “your rich friend with celebrity status”. “Entrepreneur” used to carry roughly the same definition as “inventor”, which conjures images of a mad scientist in a garage. Now, thanks to the wild success of companies like Facebook, Yahoo, Google, and Ebay, entrepreneurship is cool. Kids that used to want to be fireman now aspire to create the “next Facebook”, and colleges are creating entrepreneurship programs to cater to them. So if entrepreneurship is suddenly so hip, why do 99 college graduates out of 100 take solid jobs at established companies with stable incomes? The answer may lie in the personality of that one student that strikes out on his own and starts a venture. Let’s look at the results of some studies performed on the personalities of entrepreneurs, and examine their conclusions –

  • Entrepreneurs are non-conformists. Being non-conformists, they are innately driven to differentiate from the status quo. They don’t listen when someone tells them something cannot be done. [1]
  • Entrepreneurs are motivated by achievement rather than power or money. They set high goals that they can reach through application of their skills. They are more interested in creating something than getting rich (which ironically, sometimes is the result). [2]
  • Entrepreneurs prefer to do new things, or to do familiar things in a different and better way. Entrepreneurs have a preference for innovation. [3]
  • Entrepreneurs have high uncertainty tolerance. They are willing to accept that they cannot predict the future, but recognize that they can guide it through their actions. [4]

So what are we to make of these characteristics? Can you teach someone to be a non-conformist? Can you lecture on uncertainty tolerance? It seems the answer is no – entrepreneurs are born, not made. The research suggests that you cannot become an entrepreneur – you ARE an entrepreneur. This is supported by examining children’s early manifestations of entrepreneurial traits, prior to receiving any formal training.

Long before they were starting innovative companies, they were trying their hand at the most time tested entrepreneurial exercise ever conceived – the lemonade stand. Nearly every child has sat on the curb and hawked lemonade on a hot summer afternoon, and most only did it once, determining that the few dollars wasn’t worth the time in the sun. However, a few children realize that by deviating from the basic formula, they can easily turn a few hours of work into a new bike. Perhaps they move out of their front yard to a more desirable location in front of the local pool. Maybe they hire a friend and operate two locations at once. Maybe they expand into cookies as well. This children are entrepreneurs – long before they have had any sort of formal training in entrepreneurship, or even business, they are exhibiting some of the key entrepreneurial characteristics outlined above.

So if entrepreneurs are born and not made, why do so many colleges and universities offer programs in entrepreneurship? These programs exist not to train new entrepreneurs, but to cultivate and enhance the entrepreneurial spirit that may be lying dormant in young college students. In addition the in-born characteristics that drive entrepreneurship, there are important entrepreneurial skills that can be learned – the ability to see and articulate a vision, team leadership and motivation, and opportunity identification, to name a few. There are also many talents needed by today’s entrepreneur that clearly must be learned. Writing a business plan and executive summary, creating pro forma financial statements, and the art of the elevator pitch, to name a few.

We can conclude that successful entrepreneurs are both born and made. It appears that entrepreneurs have a dual composition – a certain set of born-in personality traits that drive them to seek out and succeed in the entrepreneurial life, as well as set of learned skills that enable them to apply their natural gifts most effectively.

Citations

[1] Rosenfeld, R.B., M. Winger-Bearskin, D. Marcie, and C.L. Braun. 1993. Delineating
        Entrepreneurs’ Styles: Application of adaptation-innovation subscales.
        Psychological Reports, 72(1), 287-298.
[2] Hornaday, R.H. 1982. Research about Living Entrepreneurs. In C.A. Kent, D.L. Sexton,
        and K.H Vesper (Eds), Encyclopedia of Entrepreneurship (pp. 20-34). Englewood
        Cliffs, NJ: Prentice Hall.
[3] Chen, C., R. Green, and A. Crick. 1998. Drucker, P. 1985. Innovation and Entrepreneurship.
        New York: Harper and Row.
[4] Chen, C., R. Green, and A. Crick. 1998. Drucker, P. 1985. Innovation and Entrepreneurship.
        New York: Harper and Row.

About the Author

Bill DAlessandroI'm the CEO at Elements Brands - a company I built from scratch that sells branded consumer products online and in stores. I ship thousands of orders each year, and run it all from my laptop by focusing on automation and outsourcing. I write about my experience with e-commerce, product creation, and startups, with lots of personal bits thrown in. More about me.

Comments

  1. Good, well-researched post. I think there’s a third possibility for the development of entrepreneurship. Some people grow into it through experience. After spending time in the corporate environment, many people become non-conformists. They may already have been achievement-motivated, but the realize that they are working within a structure that has limits. Their preference for innovation may have been discouraged, or at least limited.

    Finally, tolerance for uncertainty grows in proportion to the growth of the first three attributes and with increased financial resources.

    I may be slightly cynical (my wife would say that’s an understatement) but I’m not convinced that entrepreneural “studies” at the college level can ever replace a few years in the corporate world, what with college loan payments and parents who’d like to see some return on their investment.

    Keep up the good work.

    Mike Buckley
    Mine Your Own Business
    http://www.tacony.com/myob

  2. Hey Mike,

    I think I agree with your point about experience also being a “push factor” for entrepreneurs. I know a number of people who worked for a number of years at large companies, only to say “I can do better” and strike out on their own.

    I also agree with your idea that the corporate environment may suppress people’s preference for innovation. However, that preference, in my opinion, was already there. The in-born entrepreneurial drive is what makes them take the leap.

    Thanks for your comments and for reading! I like your blog by the way, seems extremely applicable to your market.

    – Bill

  3. To serve client better, I have devoted considerable time in my legal career to understand entrepreneurship – (see my recent Entrepreneurship Toolkit post at http://www.dilanchian.com.au/content/view/90/56/. Therefore I value your focus on the critical question of what might be some of the personality traits of entrepreneurs. I would add that in the context of corporate entrepreneurship the research and books (eg “Built to Last”) of Jim Collins do suggest that your first and last bullet points don’t necessarily apply.

  4. Bill,

    Your article about what makes a successful entrepreneur is insightful. Virtually all of the successful entrepreneurs I have met have the exhibited the three bullet points you outlined. Some stronger than others. Thus, I disagree with the post by Noric Dilanchian that bullet points 1 and 3 do not apply. In fact, I feel that the concept of corporate entrepreneurship is a huge contradiction.

    I believe that the rules of the game for success of an entrepreneur are clear and distinct and are quite the opposite of what it takes to succeed in the corporate arena. Thus, you can only play by the business owner rules of success or the bureaucracy rules but not both at the same time. The rules of success for bureaucracy and business ownership are as different as night and day. It would be like playing the game of American football and tennis at the same time. Not likely. Calling someone a corporate entrepreneur is like calling someone a football tennis player.

    Entrepreneurs have to want to play by the rules of business owner success and they have to be good at doing so to succeed. The traits you outlined are typical of entrepreneurs who have successfully followed the rules of success for business owners. In my opinion, I believe that the rules of success for business owners are:

    1. The business owner must seek and take full responsibility for the success of the business.
    2. The business owner must focus his or her energies almost exclusively on the success of the business (versus power, politics, or image)
    3. The business owner must recognize he or she has full control over determining his or her work duties, and has total job security.
    4. The business owner must recognize that he or she has no one in the organization to take orders from or indulge. No politics.
    5. The business owner must find, attract and keep the partners, employees and vendors who will assist the business to generate more quality income producing results.
    6. The business owner will want to pass on salutations and credit to anyone who contributes to the success of the business.
    7. The business owner will not want to extract personal favors from subordinates, partners, or vendors that hinder the success of the business, and the owner will not allow anyone else to do the same. The business comes first for everyone in the business; otherwise it is converted into a bureaucracy, which will not be a successful business.

  5. Thanks for posting this great article. I have shared it with my readers on my blog: http://entrepreneur.northstarthinktank.com/busi

    Thanks again, and keep up the good work!

  6. Interesting perspective.. I also posted up an article on what makes entrepreneurs, entrepreneurial http://entrepreneurialactivism.com/2009/05/19/w… check it out

  7. Entrepreneur makes business more competitive in manner of creativity, skills, manner of discipline and aspect of managing the business.

    Townsville-accommodation.com
    —————————————————

  8. esther james says:

    tanx 4 dis article, i hav shared from it. do keep it up

  9. Emanueliraymond says:

    Thanks for your respond Im  in University student I refer that from one of  the myth of enterpreneourship and  Im interesting to be enterpreneour for feuture Im in Tanzania East Africa welcome and just asist me

  10. Hi Bill. its really nice and interesting article. thank you for your valuable information about entrepreneurship success. 

Trackbacks

  1. […] Bill D’Alessandro asks, What Makes a Successful Entrepreneur? Of course we all want to know. Bill looks at some research, questions why so few young people go into entrepreneurship and concludes with some thoughts on whether entrepreneurship is a character trait or learned. […]

  2. […] Adaptability: An MBA is trained in developing and implanting a successful business plan, whereas an entrepreneur focus more on adaptability of environment to get his dream realized and flow them in right direction. […]

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