When I get asked about the key characteristics that make successful Entrepreneurs I often cite : The ability to build & lead great teams, To persevere, To thrive under risky environments, To focus obsessively on the Final Goal without getting distracted by competitors, and To think very long term with the objective of building something that will, ultimately, outlast the entrepreneur who built it.
But even though I consider all these attributes very important for entrepreneurs to have, If I were to highlight TWO Key -characteristics, they would be :
- being a ” Stubborn Contrarian “
- being an ” Eternal Optimist “
Some people believe entrepreneurship can be taught, others believe it is a born trait. I do not have a final opinion on this, but I believe that anyone who is not a stubborn contrarian is substantially less likely to be a successful entrepreneur.
I remember the first time I communicated my idea about starting an e-commerce marketplace in Latin America to my Latin American classmates at Stanford back in 1998. The overwhelming majority told me it would never work. They would say that Latin Americans don’t trust each other and hence, they will never buy something they have not seen or touched, to someone they do not know….”that behavior only works among Gringos!” they would say..
The one person who said it might work, went on to add that it would be impossible to collect a fee since buyers and sellers would collude and cheat the honor system we intended to use. This was just one of the many instances where we had to be contrarians and defy accepted wisdom. The truth is, if you go with accepted wisdom, you are unlikely to build something different, that will have a long lasting impact.
Being a contrarian is important for entrepreneurs, but it is not enough. Successful entrepreneurs are typically stubborn contrarians, since creating a new reality that most people believe cannot exist will typically take a lot of time and several failures along the way. In our case, after a few years of launching it was clear that Latin Americans were willing to trade stuff they had not seen or touched with people they had never met; but building a sustainable business by collecting fees from that trading, was much harder to prove.
In the first couple of years, our bad debt ratio was close to 90%, and to reach break even, instead of the 2 years we had originally planned, it took us over 7 years. During those years, we had to significantly decrease our overall spending in salaries and marketing expenses to ensure that the cash we had raised in the year 2000 would last whatever time we needed to finally build a profitable and sustainable business.
The second key characteristic many successful entrepreneurs have is that almost invariably they are also eternal optimists. This optimism enables them to create something out of nothing and to convince funders, prospective employees, clients, suppliers and partners, that whatever vision the entrepreneur has, it will become a reality in the near future.
Entrepreneurs always believe that the world will be a better place and that, whatever part of the world they are trying to make better, will get better. This eternal optimism is a key trait that helps them to persevere as the inevitable complications appear when they start to build their vision into a reality.
A great example of a successful entrepreneur who is an eternal optimist is Elon Musk. His efforts to build a successful electric car company, a major step to ending society’s addiction to oil, helping reduce carbon emissions and making life on earth more sustainable, are admirable. Not to mention that in the United Stated no one has successfully created a car company in almost a century. It is worth noting that, on the side, he is also making progress in conquering space and enabling interplanetary life.
Many sceptics continue to doubt, but Tesla is making steady progress. It started with a high priced, low volume model, the Roadster which sold 1000 cars at over $100,000 each car, and now, during the second phase with a less expensive car aimed at the high end market. The Model S will sell over 20,000 cars in 2013 at close to $70,000 per car. The third and final stage will likely occur in a few years with a lower priced model targeted at the mass audience.
In the meantime, large automakers have taken notice and launched their own versions of electric cars (the Volt from GM and the Leaf from Nissan/Renault) moving society closer to disrupting the combustion engine and the great network of gasoline stations which we have learned to rely on for many decades.
Most people however, are not eternal optimists, they are not convinced that the world can and will be a better place. On the contrary, they tend to believe that the world simply is the way it is because “otherwise, someone would have made it better” and therefore, they try to adapt to this world and try to be as happy and effective as possible within this status quo.
But the fact is that the world continues to be a highly imperfect place, governed by highly imperfect governments, using highly imperfect systems sorted, haphazardly, in different geographic places. Ultimately, therefore the way the 7 billion people in the planet organize ourselves to produce and distribute goods, services, well being and happiness for everyone is, clearly, not a perfect outcome or the best possible outcome.
” The Good News is that, therefore, Entrepreneurs will be able to keep their hands & minds busy for many more centuries”.