Why some entrepreneurs succeed, and they seem to have all the success while the rest just keep failing? Is it simply because of the luck, or is it something that anyone can master?
As a venture capital investor, and also started several web businesses myself, it is interesting to notice the characteristics that can identify successful personalities.
For Angel Investors or venture capital investors, it is more important to identify these personalities than the actual business. Business plans can be written to perfect, but it is the people who are driving it.
Here is a list of personalities that my venture capital team has put together when they assess a founder – and look at if he/she has these key personalities.
Is there really such thing as lucky entrepreneur?
Luck can mean these founders already have sufficient personal wealth, usually from wealthy families; but that does not mean they are more likely to succeed. In fact, we have seen many cases where 2nd generation family members failed their businesses miserably as they feel too comfortable with their personal life.
We think some entrepreneurs are luckier in other ways: if they have parents that are entrepreneurs themselves, the experience passed down is invaluable as they can see them in person every day. Some are also luckier as they have lived and travelled around, which opened up their mind and also establishing good contacts. Some are lucky to speak different languages already which can help them to expand into international business; and education is another “luck” factor, as they have necessarily skills (IT, financial knowledge).
But as you can see from the above, these “luck” factors are acquired skills or knowledge; so they have worked harder or pushed themselves harder to learn these skills and knowledge.
Personalities of a good Entrepreneur
1. Long-term vision but realistic person
Entrepreneurs are good in setting good long-term objectives – this can be the revenue target, this can be expansion strategy, or company structure. However, they do not skid off from the reality, they will achieve stage-by-stage in short term but never go away from their long term goal. In another word, they do not change their long-term plan easily even though circumstances may force them to try different methods.
It is important to have flexibility as entrepreneurs – we can probably say “most things will not work according to the plan”. Many have failed simply because they do have back up plans when something happens such as competitor, disruption in supply or loss of a key employee.
However, some founders spend too much -time testing on different plans then go off the track with their key business plan.
3. Someone have go through hard times and survived
These types of entrepreneurs can usually survive, business world is about innovation, creativity but also fittest survives. We have seen many successful entrepreneurs have succeeded because they have learnt from their mistakes from previous ventures but persist and change into another business.
Failure is an important experience to possess being an entrepreneur, it is even more important to learn how to quit on an unsuccessful idea or a venture.
4. Well Organized Personal Finance
A person’s organization skill can be determined by looking at his/her own personal finance. Little details can reveal if a person is organized or not, a well organized person will have a clear idea about his/her latest financial position such as investments, insurance, debt, credit card.
We believe this is an important skill, as being an entrepreneur means you need to multi-task all the time, and that is impossible without being an organized person yourself.
5. Able and Willing to Delegate
It is an important skill to have, I am currently running a small business myself, and even that needs to be delegated to 3 assistants every day. It is not a personality every entrepreneur has, many do not want to share their know-how with others, they do not trust their supports or employees; and prefer to do everything themselves.
Yes, they are very hard workers and spend 14+ hours a day in office, I used to do that myself in the first 2 years; writing every e-mail myself, organize every payment myself. Then I realized, I spent 7 hours a day on these non-revenue generating issues, where I can better utilize the time and focus on sales & marketing activities.
6. Able to Set Personal Examples
Someone who can demonstrate strong and visible leadership. This makes a lot of difference; I have seen many CEOs who just complain whole day long in front of employees during the crisis (which can happen very often for start-ups). These types of companies are doomed because even the CEO is not setting a good example and just want to quit and close the company.
7. Not a Status Seeker
I have met many entrepreneurs who only have 2 or 3 employees and already showing off he is a boss. Status seeking is a ridiculous thing to do, and to be honest, totally waste of time. I had worked for a CEO who spent all his time telling everyone he is the CEO of the company, and the company did not last long.
8. Are you looking after your health?
This is an interesting point, many entrepreneurs thought by mentioning they work 20+ hours a day shows their total commitment to the company, and it’s a good thing to tell investors.
In reality, we think the other way around; start-up companies need their founders to maintain their health, stamina and energy. If he/she fails due to stress, the company will simply collapse days after. This has happened to me once, when I got sick for 2 months due to over-work, the company could not bring in any revenue while I was sick. This is a key risk you need to consider.
9. Resolve Conflicts and Issues Right Away
Too many entrepreneurs are too optimistic – when conflicts arrive, they do not address the issues straightaway and let the risks become snowballs. We often ask entrepreneurs what the biggest conflicts they had encountered so far; some mentioned disruption of key suppliers, delays in payments from customers, problems between partners or loss of a key employee.
The next question is how to address them and resolve them – some are very naïve and reply, “they are my good friends, it will be OK eventually”, which is the wrong attitude towards crisis management.
10. Willing to take the bigger risk
Willing to take the risk is different from risk-takers. Willing to take the risk implies to those who will consider and assess opportunities as they come by. Again, a good way to determine this is look at their personal finance.
A good example is someone who has an investment portfolio with diversified investment assets already, these individuals are often more likely to take reasonable risks for business decisions as opposed to those who just have all the investments in cash.
In contrast, we also see some high-risk takers; these guys trade commodities and FX everyday.
One big issue with these types of entrepreneurs is they will get distracted frequently as they have to stay on their trading activities all the time, you can see that as they look at their mobile phones every 3 minutes; which will become a distraction to their business.