4 Most Important Qualities of an Entrepreneur
BY Minda Zetlin
Forget about your business idea--most of them don't pan out anyway. Here's what it really takes to succeed.
Are you cut out to be an entrepreneur?
Peter Relan, founder of YouWeb Incubator, believes that the personality of the entrepreneur is a bigger determinant of a new company's success than the idea itself. "If an entrepreneur says, 'I want to build a company around music licensing,' I would look at that space and advise that it is a good space to solve a problem," he says. "But before I did that, I'd say, 'Let's talk about what's motivating you to start a company.'"
Since most ideas go nowhere, he looks at the entrepreneur's personality when deciding whether to offer a spot at YouWeb. "I look for the four qualities that define an entrepreneur and it's almost independent of the idea," he says.
So what are these four all-important qualities?
You're here reading Inc.com, so we already know you're intelligent. But Relan draws a distinction between general intelligence and "entrepreneurial intelligence." He says the latter combines a high I.Q. with street smarts. "There's a difference between an inventor and an entrepreneur," he says. An inventor isn't interested in the commercial aspects of the business. On the other hand, he says, a pure salesperson may not be right either. "There has to be a balance of the two."
How can you tell if you've got the right combo? Relan counsels aspiring entrepreneurs to read four books:
Once candidates have read the books, Relan asks them to say which qualities of which of the four entrepreneurs they identify with. Each represents a different entrepreneurial archetype, Relan says. "Grove is a great strategic manager. Ellison is a great competitive athlete. Gates is a great business modeler. Jobs had great product vision. Talking about it in these terms makes it very concrete and very easy to have those discussions."
In the TV series Gilmore Girls, when a nay-sayer warns Lorelei Gilmore that most new businesses fail within two years, she replies: "Then we'll have the most exciting two years of our lives."
That's the kind of attitude Relan wants in aspiring entrepreneurs. "A relentless passion to solve problems is what we look for," he says. "You have to be prepared to fail. Don't come into an incubator assuming you're going to succeed." All new businesses, including incubated ones, encounter tough times and times when they don't have the money to fulfill their goals. Successful entrepreneurs need the passion to get through those times without giving up, he says.
"And all of this has to be fun. If you're slogging away thinking, 'I can't wait till I get through with this,' don't do it. Every moment you spend as an entrepreneur should be a wonderful moment you'll never forget."
3. Leadership Skills
"I distinguish between people who are great leaders and people who are great managers," Relan says. "Leadership means having big ideas and the ability to communicate them." This includes communicating them to people who don't work for you. "You have a lot of people around you you have to convince."
That doesn't mean that YouWeb will only consider proven business leaders, he adds. "Tell me about an idea you had where you convinced people. Some people have done it in high school. I met a guy who had convinced his parents to let him drop out of high school and start a tech consulting company, and he convinced people to pay him for his work. Some people have ideas and they're so enthusiastic and persuasive that you can't help but f0llow them."
This is the least important of the four qualities, Relan says. "If you're going to start a technical company, you have to have a technical background and some knowledge of the tools you'll use." But, he emphasizes, he wouldn't take a subject matter expert who's lacking the other qualities.
What if you don't have Relan's four qualities but you still want to start a business? Should you give up and go back to your day job? Not necessarily, Relan says, some of these qualities can be acquired. But he advises that you set modest goals. For instance, give yourself four months to raise $10,000 from investors--not your family and friends. Your chances of success may be low, he says, but "You'll have put yourself through start-up college."
And, he cautions, "Don't convince yourself that you have to be an entrepreneur. Like buying a lottery ticket, you have to know there's a good likelihood you will fail, and you have to be 100% OK with that. Not everyone has that mindset."