What people think they know about successful entrepreneurs is usually wrong
Culturally, entrepreneurs have always been a bit misunderstood. A couple generations ago, they were seen as the weirdos. Some became successful, most failed, and in all they just didn't play by the rules. Over the last 20 years, though, entrepreneurship has become more mainstream. Unfortunately, as with most things, once it goes mainstream, it inevitably gets sensationalized. Here we outline five of the most common stupid assumptions everyone makes about people like us, entrepreneurs.
It's easy to assume that anyone who would leave the comfort of a steady paycheck in order to start a company is someone who enjoys or at least doesn't mind risk. When we think of famous entrepreneurs, we envision bold, pioneering visionaries who don't think twice about failure. In the same thought, we likely look at ourselves and think, "I don't have the right stuff to be an entrepreneur," or "I don't like taking risks. I could never start my own company." When it comes to entrepreneurship, there is an assumption that starting your own business is a lot like gambling and requires a fearless resolve and a willingness to wager everything on one big shot. In short, you could say successful entrepreneurs like taking risks.
Side note: the word entrepreneur literally means "bearer of risk."
Surprisingly, our culturally held beliefs about entrepreneurs and risk-taking are wrong. Research shows that while many entrepreneurs are risk-takers, it's actually the risk mitigators who are most likely to be successful. The founders who rush in and gamble everything have a higher chance of failure than those who carefully weigh the risks and work to limit their exposure. It sounds crazy, we know, but look at some of the most famous entrepreneur success stories of our time.
Bill Gates is known for dropping out of Harvard to start Microsoft. That's true, but before he "dropped out, "he got approved to take a one-year sabbatical and then had his parents bankroll him while he tried to get Microsoft off the ground. Before he took his year off, he had already sold his first piece of software, but he wanted to be sure that if things didn't work out, he would be able to get back into Harvard. His story shows us that his primary concern was limiting his exposure to risk.
What about the founders of Google? Sergey Brin and Larry Page figured out how to dramatically improve internet searches two years before dropping out of their Ph.D. programs to focus full-time on Google. They even tried to sell Google for $2 million in cash and some stock. Fortunately for them, the deal never went through. They were concerned that if they dropped out of their Ph.D. programs and failed with Google, it would hurt their careers.
There are countless other stories and stacks of research on this. The evidence shows that the most successful entrepreneurs are people who avoid unnecessary risks and only take calculated risks.
Another common misconception about successful entrepreneurs is that they are extroverted people. It's easy to imagine that you have to be extremely outgoing to cast a vision, rally support, make sales, and land partnerships. It's true that if you're terrified of meeting new people, speaking in public, or sharing your ideas, you will find many parts of entrepreneurship challenging. But this doesn't in any way mean that you need to be on the opposite end of the spectrum as a life of the party, outgoing extrovert.
As an entrepreneur, one of the primary parts of your job will be sales. Much of it will be non-traditional sales, but most of what you do will involve moving people, which is a form of sales. Research shows that the most successful salespeople are neither introverted nor extroverted—they are what researcher Adam Grant calls ambiverts. Ambiverts are people who sit right in the middle on the spectrum, from introverted to extroverted.
The research on leadership, sales, culture, and persuasion is all telling us a similar story, that authentic connection is the most powerful way to move people. This is really good news for entrepreneurs who want to build meaningful businesses. So as an entrepreneur, you don't need to be worried about having a strong enough personality. You are better off focusing on how you can develop real connections with the people you lead and serve.
One of the most pervasive misconceptions about successful entrepreneurs is that they have an almost prophetic ability to think of new business opportunities. Have you ever sat around trying to think of the next big thing, the next iPhone, the next Amazon? Most of us probably have, and it's because we see these incredible innovations and assume that the founders just thought them up one day and then made them a reality.
The most significant innovations did not come about as a single and complete idea. Most of the time, visionary founders who built highly successful businesses had two distinct advantages that contributed to their success. Timing and exposure play a massive role in the success of innovative companies. Amazon was only possible because of the rapid growth of the internet. Airbnb started as a way to make some extra rent money with an air mattress before the three founders realized it could be much more. GoPro was started by a surfer looking for a better way to film himself and his friend's surfing.
"The verb you want to be using with respect to startup ideas is not 'think up' but 'notice.' At YC we call ideas that grow naturally out of the founders' own experiences' organic' startup ideas. The most successful startups almost all begin this way." - Paul Graham, Founder / YCombinator
The best businesses are not the result of sitting around and thinking up the next significant innovation. They result from founders who are in the right place at the right time with their eyes and ears wide open. There are billion-dollar ideas in every industry. So if you want to build a successful company, you're better off spending your time noticing the needs around you.
For some reason, all of the best stories about successful companies seem like a direct path to success. They usually go something like this: Founder had an idea, worked hard in mom's garage, and ten years later is one of the richest people in the world. What we don't see in these short narratives is the incredible struggle and consistent failure that most founders and companies face on the path to success. If you really want to dig into one of the greatest authentic genesis stories, then you need to read "Shoe Dog" by Phil Knight, the founder of NIKE.
The truth is that the path to success is filled with failure. In fact, failure is not just something we may encounter on the path to success; failure is the path to success. We dig into understanding the role of failure and how to leverage it to build your business in our Startup Toolkit. There is a lot of incredible research behind failure and its role in creating success, so we want to ensure everyone understands the positive power of failure. If you are afraid to fail, then it is much more likely you will, or worse, you may never start.
The relationship between failure and success isn't only true in business. Abraham Lincoln was a failed politician and all but written off before becoming one of the most influential United States presidents in history. Michael Jordan was too short for the varsity team his sophomore year in high school. Sara Blakely faced a torrent of rejection both as a door-to-door fax machine saleswoman and a visionary entrepreneur before becoming the world's youngest female self-made billionaire.
Virtually no successful entrepreneur had a direct path from idea to success without experiencing failure. The trick is not spotting and avoiding failure; the trick is learning quickly from it, adapting, and moving forward.
Most businesses change a lot from their original idea. It's very rare that the business model, product, or offering that a company starts with is the same one it succeeds with. For instance, Slack was a video game company before it became the enterprise chat juggernaut. Netflix was a DVD-by-mail rental business before dominating streaming. And best of all, Berkshire Hathaway was originally a textile manufacturer before Warren Buffett bought it and ultimately turned it into the parent company for his investment portfolio.
The reality is that when you start a business, you have a plan. You see a need and believe you can build a company to meet that need. But in the beginning, all you have is assumptions, even if they are very educated assumptions. And as you go, each one of those assumptions gets tested and some of them prove to be wrong. Successful entrepreneurs know that the key is not having a perfect plan when you start. The key is knowing when to acknowledge you were wrong and change your approach.
Most of what we think we know about successful entrepreneurs is wrong. And unfortunately, these misconceptions lead many people never to realize their potential. In the words of Adam Grant, the author of Originals, "we can only imagine how many Wozniak's, Michelangelos, and Kings never pursued, publicized, or promoted their original ideas because they were not dragged or capitulated into the spotlight."
If you have a dream to start a business but you believe that you're not qualified, then we want to challenge you to complete our Startup tool kit. We believe that by the end, you will understand that successful entrepreneurship isn't about IQ, DNA, or where you went to school. Anyone can build a successful business; you just need the right tools!
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