Heart, smart, guts, and luck

What personal and contextual traits lead to entrepreneurial success?   I’ve had a stream of folks coming through in the past couple of months asking what I thought about their chances in wrapping a business around a product idea that they are passionate about. Difficult economic times and corporate contractions are driving their thinking: these are all smart people with career success in imagining product and running projects. 

Can I do it; will I be successful?

As one of my mentors advised, asking the question gives its own answer.

I think that it come down to a combination of personal traits and professional context.

Personal traits: There are no end to advisors promising to help you know if you’re ready, or to tell you what to do first.  Expat Explorer offers advice, Internations offers networks, governments offer connections. A new book suggests that HSGL is the answer: Heart, smarts, guts, and luck.  They offer a quiz to see which is your North Star (I am Smart, but not by much):

However, the test does identify four of the personal qualities that I advise people that they need in order to succeed in their own businesses: the others would be confidence, persistence, drive, and resilience.

Ultimately, anyone starting their own business needs to have a clear picture of their professional goals (their product or service, the process for building it, and the business model for selling it) and personal aspirations (is success worth the sacrifices, is failure survivable, and what is the reward for success).

Anything less is  hobby or a class project.

Professional Context:  Beyond the necessary personal qualities lie the tasks of organizing and running a stand-alone business.  Most project and divisional leaders have become very good at one function and very connected within a particular domain.  But general management requires broad skills and connections across at least a dozen skills.  One of the first questions I ask is whether they have a good finance person.  In one business I do; in the other I don’t, and it makes an enormous difference.

A Financial Times columnist recently wrote that the best sort of leadership training would be to run a spinout.  Every company has ideas, acquisitions, and failed projects tucked into corners.  Hand one to an aspiring executive along with some seed capital and give them a year to make the most of it without access to corporate resources.

Lucy Kellaway separately recounted a disastrous story of how Bain’s senior-level leadership went for training in an emerging market, culminating in a VP getting near-fatally gored by a water buffalo. How much better to be out in the markets rather than the jungles?

Personal traits and professional context, together, form the basis of successful entrepreneurship.  People I’ve talked with contemplating spinouts have some of each, but the shortfall is in seeing new business formation through old project management.  It’s not just more intense or risky: it’s very different.

Can I do it; will I be successful?

My mentor told me that I would never build a business as long as I was asking that question.

The right questions are Rumsfeld’s “Unknown unknowns”: What do I need to know; who can help me with it?