All entrepreneurs begin life as founders. Usually young, but not always. I’ve just had the privilege of interviewing and selecting entrepreneurs for the 2018 London Startup Leadership Program. Here in London, SLP has a network of 120 alumni, the global community extends to around 2,700. It is certainly one of the largest, if not the largest not-for-profit entrepreneur community in the world.
The UK program team have probably read, reviewed and debated applications and interviews from nearly 1,000 entrepreneurs over the last seven years. This is a big number and got me thinking about what I’ve learned playing my part in that process.
What makes a great entrepreneur? Are they born or made? Can you predict who will be successful?
There is no doubt that being an entrepreneur is in vogue. As a career, it easily competes for the best school leavers and graduates alongside bluechip consultancies, finance companies, tech giants and consumer businesses. Having the founder card can now trump associate, director, VP, SVP, EVP. In the U.K. we estimate that over 700,000 new business will start this year. That is a lot of founders. These small and medium enterprises contribute about £1.8 trillion in GDP to the UK economy. That is half the size of the economy. It seems that the UK, historically a nation of shop keepers has maintained its entrepreneurial spark.
But how many founders will succeed?
The average early VC fund returns around <1% stellar unicorn like success. And even that is a stretch. Most investments barely return their capital. CB Insights estimats that 70% of early stage startups end up dead or just about self sustaining (aka zombies). Maybe okay for the founder but not great for the investor. So, that is 1 in 100 chance of winning or 7 in 10 chance of loosing.
Can you learn to spot the potential when the professionals get it more wrong than right? I believe that there are three leading indicators that can suggest successful entrepreneurs.
- Energy. It’s a scarce resource and needs to be used wisely but without it nothing will happen. Your energy can transform a team, a problem, a difficult sales pitch or customer. Early in your startup’s life it is your energy that powers the business. How do you manage your energy? You need to apply systems thinking to your whole-being, what you read, how you sleep, what you eat, how you exercise. Raw determination is not enough.
- Resilience. A lot of people are going to tell you that whatever you are doing won’t work, they wont work with you or for you, that it is just not possible. While a thick skin is important, resilience is more subtle. You believe in what you are doing but are smart enough to constantly test, learn and adapt but without giving up your conviction. Being resilient is about constantly testing and improving. Do not get stuck in a binary mental model — I’m right, they are wrong. You might be right, but how do you get everyone else to see that? And in cases where they are right and you are wrong, resilience is the drive to start again. Most successful entrepreneurs once started again.
- Focus. The world is an amazing place, full of distraction and opportunity. Landing that one mega deal with a corporate is transformative. But so is building a community of committed customers. Everyone you meet is a source of ideas, some from experienced, successful executives and entrepreneurs, the kind of person you’d love to be. Who do you believe? You can’t do everything. You must focus your energy and embrace your resilience. What will make a material difference to your venture? Look at it dispassionately. Work it out. What really matters?
Your idea, experience, intellect, the team you build and network you are part of are all very important (especially your team) but it is the three leading indicators that, I believe, separate successful entrepreneurs from young founders. All three are difficult to identify in a traditional interview and they are a challenge to teach. But it might be time for our interview, selection and educational systems to evolve, recognising that these intangible characteristics can help to springboard a class of young founders into a nation of successful entrepreneurs. Who knows these skills can only become more important in a world where the job you do now many not exist next year.