What Makes a Successful Entrepreneur?

This article is the second in the Entrepreneurship Series.

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.