People sometimes ask me what I think is the defining characteristic of an entrepreneur. What they really want to know, I believe, is the one quality that distinguishes a true entrepreneur from any other businessperson. I've thought about that quite a bit myself, and I've decided, if I had to narrow it down to one trait, it would be the ability to see things differently. A true entrepreneur is able to look at a situation and identify an opportunity, or a solution to a problem, or a path around an obstacle that, for some reason, everyone else has missed.
This came to mind recently when I met an entrepreneur named Linda Pagan. She's a milliner. That is, she makes and sells hats. Her store, located in New York City on Thompson Street in the SoHo district of Manhattan, is called simply the Hat Shop NYC. My wife, Elaine, and I were walking in the neighborhood when we happened upon the shop and decided to go in. Elaine wanted a hat to wear to the Inc. 5000 conference, and she picked one out. She also noticed the interesting hatboxes the store had and asked if her hat came with a box.
"Oh, yes," Linda said. "All of our hats come with boxes. There's a paper-packaging factory in Brooklyn that makes our boxes. As a matter of fact, see this box over here?" She pointed to a huge hatbox. "That type of box has become a big seller for our manufacturer, which is really thanks to me."
"What do you mean?" I asked. I couldn't imagine that she sold enough hats of that size to make a big difference to the box manufacturer.
She explained that she had been getting more and more requests for hats with large brims, mainly from women who were planning to attend the Kentucky Derby or New York City's Easter Parade. But she didn't have boxes wide and deep enough to hold such large hats. She had called the owner of the paper-packaging factory and described the kind of boxes she needed. Unfortunately, he said, the die cutter required to make boxes of that size had broken down decades earlier, and he hadn't fixed it because there wasn't enough demand for large hatboxes.
But without the appropriate boxes, Linda couldn't sell the wide-brimmed hats for which customers were willing to pay a premium. That meant sacrificing what was potentially a significant source of revenue. She asked the factory owner how much it would cost to fix the die cutter. A couple hundred bucks, he replied. She said she would gladly pay for the repair. Nevertheless, by the time she'd hung up the phone, Linda could tell he still wasn't convinced that it would be worth the effort and expense.
So she was surprised when, a few months later, the large hatboxes she'd requested arrived from the factory, but without the bill for fixing the die cutter. She talked to the factory manager, who told her that the owner had done some investigating on his own and concluded that there was, in fact, a growing market for hatboxes much larger than he was used to making. He had the die cutter fixed and proceeded to sell so many of the big boxes that he felt it wouldn't be right to bill Linda for the repair. He was grateful to her for recognizing an opportunity he had been totally unaware of.
Her ability to see the opportunity made me realize that Linda was more than a milliner and shopkeeper. She was a true entrepreneur.