What Makes an Entrepreneur? A Look at Their 5 Die-Hard Traits!

Startup Stock Photos

Think carefully before you answer. Because, this question is not about distinguishing good entrepreneurs from the bad ones. It’s also not about who among them has a Midas touch and who doesn’t.

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Guest Post – I initiate… therefore I am !!

17th century philosopher Rene Descartes said – ‘I think therefore I am’. With all due respect to him, I am inclined to revise this for the 21st century as – ‘I initiate therefore I am’.

For me the world is truly binary, people who take initiatives and people who don’t and that pretty much decides who survives the marathon and who doesn’t. Don’t get me wrong here. I don’t want to discount the value of thought because the very act of doing has its roots in a thought. However, in the modern world, taking the initiative to execute matters much more than just penning a thought on – is what needs to be done.

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Before we delve deeper, let’s be clear on the definition of initiative. If you look on the net, you will find many interpretations, but for this write-up, I define initiative as not accepting status-quo and exploring ways to make things better. People who take an initiative are always working for the betterment of their own self, their family, their organization and the society at large. People who don’t are on the receiving end and perpetually complaining about the state of affairs.

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Guest Article – What can be your core competency in today’s world?

A lot has been written about core competency in innumerable management books. But what does it really mean? Its only when companies understand the real meaning of core competency in today’s context, can they truly work on building a ‘differentiator’ that gives them an edge over others in the market.

A dynamic concept

The notion of core competency has evolved with changing times and market dynamics will continue to do so. For instance, in the times of Sony Walkman, the term ‘core competency’ was associated with deep technical innovation, and at other times,with just the sheer size of assets and deep pockets of a company, since they were crucial in the formation of a large conglomerate.

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So what can be the core competency of an organization in today’s digital economy, where it only takes a handful of smart guys with minimal funds to bring the next disruptive innovation and consumers adopt it in millions, thanks to the internet?

Can it be the capability of your R&D labs and patents you own? Yes, in some sectors like pharma, patents go a long way in demonstrating a company’s prowess, but not in the industry a general. They can be used to protect the product and manage market leadership only until the next innovation comes around. At the same time, it is not the patent that can be  your core competence, as customers buy products, NOT patents.

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Guest Article – Do good leaders make good managers?

A lot has been written in the industry about leadership traits and whether it maps to good management skills or not.

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In my perspective, leadership and good management are two different skills and an organisation needs both of them. Also, it is very rare to find both the characteristics in the same person and it is imperative for CEO’s to realise this.

The quintessential trait of a leader is to ‘make sense of it all’ in this highly unstructured and dynamic world. Leaders get a good handle on what is happening, and how it will/may transition the industry (or society at large) in the next couple of years.

Leaders don’t believe in status quo and know that change is the only constant in life. What sets them apart is the courage and self-confidence with which they embrace change. While most of us prefer to sit on the fence and see changes happen and try our best to protect our turf from them, leaders actually make changes happen and drive them in the direction they believe is best for organisation (or mankind at large).

Driving Change

So what does it take to drive change or to shape the future of an industry? It starts from having a vision. A vision of where do you want to be in next few years, as an individual, organization, society or mankind itself. While each of us has plans for our future, our vision rarely goes beyond the immediate self and family. A leader’s vision typically starts from the other end, i.e. industry or society in general. A leader wants to see the desired change at a much larger level and his only goal is to make that change happen.

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What does being an already successful one-time entrepreneur do to your chances of being successful again?

Any entrepreneurial journey, even the most successful one, is not a straight line up. There are always ups and downs in that journey.

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The experience of having built a successful venture exposes you to many of the challenges that one can face in an entrepreneurial journey. It teaches you to keep your assumptions practical. It helps you understand what it takes to make a sale. It give you the wisdom to keep costs low. It teaches you that there will be ups and downs, and it teaches you to be resilient and teaches one that perseverance can pay.

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How do you decide who becomes the CEO from among the founders?

Well, there is no real logic that can be applied in addressing this question, but a person who understands the dynamics of business better, is good at sales, good at operations management and can be the face of the company to the outside world is a better choice and in the best interest of all, including other co-founders.

Of course, the person who is designated CEO should have what it takes to be a leader, and have the aptitude, the passion and the desire to steer the company in the direction agreed by everyone.

A co-founder who becomes the CEO needs to understand that he/she is NOT the boss who can have special privileges… and that he / she is merely the chief executive who has the responsibility to making critical decisions and making sure that the company is on track to meet/beat targets.

In a startup, a CEO should take up the ADDITIONAL responsibility as a CEO along with an area of the startups business that he/she should take ownership of. E.g. the CEO may take up the responsibility of handling the sales function or operations management or driving the technology piece, etc. But the responsibility of being the CEO is over and above that functional responsibility.

It is also important to designate one person as the CEO from among the founders, as the rest of the team as well as external stake-holders (investors, vendors, partners, etc.) need to know where the buck stops and who would be the decision maker when one needs to be made.

In most cases though, especially when a few friends get together to start a company, who will be the CEO is a tough decision. In such cases, it is best to have a healthy debate within the team and select a CEO. (Some startups, when faced with the task of deciding who the CEO should be have followed the strategy that the founder who will get to be the CEO will give 1% of his/her equity to the other founders i.e. if there are 4 founders, the equity structure will be 22% for the founder who becomes the CEO and 26% each for the other co-founder.

While it is a difficult question, often leading to stress among the team, it is critical to address that and take a decision. Especially if the startup is going to seek VC funding, there will have to be one CEO who is leading the team.

 

What are the qualities of an entrepreneur?

  • High aspiration: Clearly, unless aspiration to achieve is high, it is difficult to create something that is valuable. High does not necessarily mean high in revenues. It could be high in impact as well.
  • Optimism: An entrepreneur must be high on optimism. Simply because they need to believe in the mission, in order to convince others to join them in the journey. However, there is a fine line between optimism and arrogance. An entrepreneur needs to have the humility to test his/her optimism by cross-checking with others.
  • Confidence: Without confidence, all ideas will remain just that – ideas. Taking the first few critical steps, going ahead despite being aware of the challenges, and being wise about taking precautions against these challenges, are traits of successful entrepreneurs. Entrepreneurs however should NOT be blind risk takers. Successful entrepreneurs understand the risks and take necessary steps to mitigate those risks. Confidence in their approach is what helps them deal with the challenges and risks better.
  • Persistence and resilience: Plans will usually not go as you want them to. Hence, resilience (the ability to try again and again) and persistence in pursuing what you believe to be appropriate will help entrepreneurs sail through tough times.
  • Every entrepreneur has to understand ‘sales’: By sales we don’t mean just transactional sales. We mean the ability to convince others about the concept, the value proposition, the plan etc. An entrepreneur does not sell only to customers. He/she has to ‘sell the concept’ to investors, vendors, partners, early employees, parents, early customers etc.
  • Equally important is good communication skills. Unless you are able to explain and pitch the concept clearly to the various stake holders, it will be difficult for them to align themselves to your vision.
  • An entrepreneur has to be good at implementing ideas. Everyone has ideas. But the trick is to successfully implement those ideas into a thriving business. An entrepreneur must have a   deep understanding of the ‘business’ around that idea.

Also, I strongly believe that an entrepreneur must have the courage to face failure and challenges.

Happy entrepreneuring!!

What can you learn from a failed startup?

The failure of your startup, can teach you many valuable lessons, and actually strengthen you – emotionally and professionally – for yet another entrepreneurial journey.

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Here are some things that you could learn, if you introspect deeply and think about why the startup failed:

  • About the product/service: Was the product or service relevant to the consumers/customers? Was the experience of using the product/service good? If the answers to these questions are negative, you could learn about what you could have done better in designing the product/service.
  • Was the value proposition meaningful: i.e. was the product/service addressing a genuine need? Was it solving a problem for consumers/ customers; was it making their life simpler; or simply offering the product/service at a lower price than competition or was it fulfilling an emotional need (e.g. status in the case of premium products). If the answer to these questions is negative, you need to introspect and figure out whether the consumers really had a need for the product or did you ‘manufacture’ a need because you invented some product/service.
  • Was the positioning right: When I was younger, a new brand of packaged burgers was launched under the name ‘Big Bite’. It was an awesome product and priced just right. But, it was actually a mini snack… not actually a big bite. However, consumers, including me, had seen the product being advertised as a ‘BIG BITE’ and expected a ‘BIG BITE”…. and we were disappointed at seeing the actual size of the snack. Now, I feel that if the company had called the snack a ‘Mini Bite’, the product could have been a huge success. This was, to my mind, a big lesson on a great product at a good price-point getting killed because of over-promise and incorrect positioning.
  • Was the communication clear: Sometimes, even with a great product which addresses a real need if the brand communication is unclear or in digression with the product, the company just does not get enough sales as it would have, with more appropriate communication. Often companies led by techies, underestimate the power and importance of quality communication.
  • Was the price-point right: At the concept test stage, it is critical to test the product/service at different price-points and via customer research surveys (even if not in the actual market place).
  • Were the processes appropriate for the venture: Operational issues and their mis-management is one of the most common reasons for startups to fail. Often we see startups do well at the initial phases but falter when it comes to doing the same business at a different scale. Introspecting on whether aspects of operations planning could have been different can teach some very valuable lessons for the future.
  • Was the team right: Did the team have competencies that were required for the venture. If they did not, did they know what they did not know and therefore were they able to reach out to advisors, mentors and consultants or experts who could have helped them in their journey. Sometimes despite having a great team, the team dynamics do not work right. It is also important to have one of the founders declared as the CEO. There has to be one person who is calling the shots and where the buck stops. If there are 2-3 or more founders, each one with an equal say in the direction and decision-making, it often leads to chaos. Introspect and see if you went wrong on the people’s front.
  • Was the company adequately funded: Many a startups burn out because they run out of funds. The enthusiasm and confidence makes many founders more optimistic than practically possible, and this means they end up raising lesser capital than was necessary for the business. Evaluate if you funded your startup right.
  • Changing the business model often: One of the most common mistakes entrepreneurs make is to make changes in strategy and direction too often and without giving enough time for one strategy to be implemented. Often this change is considered as being nimble, and is assumed to be the nature of a startup. However, while it is possible for startups to change direction, it should be a very well debated and a thoroughly considered decision.

Either ways, failure teaches you that you do not have the right to take success for granted. It teaches you that your assumptions and your beliefs may not always be right and that you should validate them. It teaches you the value of being frugal, and that being resource starved actually could lead to more innovation & creativity. It teaches you that planning is important, and failing to plan is planning to fail. Failure makes you stronger. It gives you the confidence to face bigger challenges than you have had previously. It often helps you in gauging who your real supporters & friends are. Failure forces you to introspect and think about what went wrong, and make an attempt to do things differently when you embark on your journey again.

Get up. Dust yourself. Get going.

Happy Restarting !!