Three key contributors to entrepreneurial success
Are successful entrepreneurs born or made?
The answer is a bit of both, but not everyone could be, or would want to be, an entrepreneur. There are three key contributors to entrepreneurial success. They are personality, the culture of the country they live in and the support available to them.
There is no such thing as an "entrepreneurial personality" and there are great variances in psychological makeup of entrepreneurs. In some circles, "entrepreneur" is taken to mean someone who is greedy and just wants to get rich. In others, "entrepreneur" is seen to mean someone with a personality disorder who will do whatever they need to be successful. In extreme cases, for example, Steve Jobs, there may be some truth to this, but neither is a key driver for successful entrepreneurs.
What drives entrepreneurs?
Firstly they have a need for achievement. They will strive hard for success to obtain a sense of personal achievement and, having done so with one business, will often seek another opportunity. Entrepreneurs have a tendency to start up and work hard in businesses that offer a great sense of personal achievement and that hold a moderate, as opposed to a high chance of success, but without excessive risk of failure.
They will usually not get involved in businesses where there is very little chance of growth and success.
Do entrepreneurs believe in luck?
Many entrepreneurs have what is known as an internal locus of control. This means they believe the performance of their business is very much the result of their own actions, good and bad, and that luck and fate don't determine the success or failure of their business.
This can increase their comfort in making tough business decisions, both ones that are popular within a business and those which don't go down well with other shareholders and employees. Think Steve Jobs again.
Why are entrepreneurs good at coping with uncertainty?
Many entrepreneurs have a higher tolerance for ambiguity and uncertainty. They may find an ambiguous business situation desirable, even enjoyable, and if things are just ticking over this may seem boring. Larry Page, of Google fame, has continued to invest in businesses looking to develop innovative new technology without clearly defined market opportunities for the technology.
Do entrepreneurs take risks?
An entrepreneur actively looks for risky ventures and has a greater tendency to take risks. There is a difference, though, between making a risky but calculated decision and simply taking a risk. Entrepreneurs, or the successful ones, make calculated decisions but usually don't make simply rash decisions. Although they have a risk-taking propensity, they probably don't see themselves as extremely high risk-takers. Serial entrepreneurs aren't distressed by a business failure to the point where they won't try again. I have worked with entrepreneurs for whom it has been "third time lucky". A business failure has been a valuable learning experience for them in the next venture they started.
Paul Gregory is executive in residence at The Icehouse and a clinical psychologist.