Entrepreneurs have long been fascinated by understanding the defining traits of great founders and business builders. Four qualities that successful entrepreneurship and business require are Heart, Smarts, Guts, and Luck. No single archetype for entrepreneurial success exists, but figuring out which trait drives you can help you sense how and when you might need to "turn up" or "turn down" the volume, so to speak, of the other traits.
A Heart-dominant individual conjures up a great idea, a venture's seed or bulb. Typically, she has less interest in the soil, the garden, the climate, or the daily maintenance. She will simply will the bulb to grow. Which is where the Smarts-dominant person comes in - a rational, fact-driven individual who begins steering the early stages of a business by creating a culture, forging a system of accountability, setting goals, and emphasizing top-notch performance. To continue with our garden analogy, a Smarts-dominant person pores over the Farmer's Almanac, optimizes the fertilizers in the soil, and ensures that the bulb is watered on a regular schedule.
Cutting across the various kinds of intelligence in the world, from Book Smarts to Street Smarts, is a skill commonly known as Pattern Recognition. In our experience, a person's ability to absorb and classify patterns through trial and error, business experience, handy shortcuts gleaned from a university seminar, or sheer shrewdness about human behavior, leads to the creation and application of practical, repeatable habits that in time become second-nature, and that apply directly to successful business building.
The Smarts-dominant individual is both a long-term and short-term strategist. She may not have come up with the core business idea, but she has a rare ability to seize, capture, frame, and extend its essence. She connects ideas, trends, and patterns earlier and faster than others, then shapes them into a coherent storyline. Where others may see chaos, she uses logic, perception, critical intelligence, experience, and a gut-knowledge of markets and conditions to create an alphabet and a language that propels a business forward. If the Heart-dominant person kicks things off with passion and fire, the Smarts-dominant individual is best-suited to providing structure, analysis, a plan with action, and people who can help, and generally figuring out how best to navigate and scale a business. Her job is not to smother or defuse the founder's vision, but to ground, extend, and expand it.
Smart-dominant individuals graduating from analytical MBA-oriented investment banking or consulting backgrounds can be highly successful business builders. Meg Whitman at eBay and Jeff Bezos at Amazon are both good examples. Whitman built her career as a consultant at Bain & Company, while Jeff Bezos forged a career at D.E. Shaw, a New York investment firm. Bezos did not grow up toiling in the book industry, but instead spied a great opportunity in the growth of the Internet, then methodically reviewed the top mail order businesses to pinpoint which ones might flourish on the web. Unlike a Heart-dominant individual, the Smarts-dominant person might first establish key facts to drive her decision: What is the largest market out there? Where are the black holes? What is our blue water strategy?
As we noted above, we can break down "Smarts" into smaller categories. Some key variants include Book Smarts versus Street Smarts, and People Smarts versus Creative Smarts. Each variety brings with it an innate capacity to recognize and classify distinct varieties of useful patterns. Some people also possess incredible contextual intelligence across these smart types and hold the ability to see patterns and understand various macro-level factors over a period of time, from government regulation to globalization to demographic trends.
(Incidentally, all this hair-splitting of the Smarts trait is to say that we believe pure brain-based IQ is perhaps the least essential quality for business success.The most outstanding entrepreneurs and business-builders across the globe generally possess greater degrees of Street Smarts, as well as People and Creative .) They have a more holistic, pattern-recognizing, smarts.
Bottom line: smarts defined around IQ is narrow and not sufficient. As we will see, most will have the minimum threshold of IQ/Book Smarts requisite to build a business.
As companies mature and leaders need to scale and develop institutional processes so that their businesses can sustain themselves, the Smarts and Guts sides of the equation becomes more important. Few leaders can transition from fast Heart- and Guts judgments to the more carefully considered choices that the Smarts-driven individual is required to make, yet this change is crucial to the survival of a business.