In recent years entrepreneurship has become trendy; inspired by Facebook, Uber, Airbnb, Apple and Google, tens of thousands of hopefuls have set up technology businesses with the hope of hitting a home run.
This has filtered down into our culture; shows like Shark Tank, Dragons Den and The Apprentice have captured our imagination – spawning many new businesses. From side hustles to blogs, to home crafts and restaurants, there seem to be more entrepreneurs than ever before.
Part of the trend is driven by the ease of setting up a business; online platforms like Upwork and Etsy mean that there are ready markets for people that want to set up and start selling products or services.
It may be popular to set up a business, and the tools are certainly there to help entrepreneurs, but many things haven’t changed in the last 2000 years – the skills needed to succeed.
Entrepreneurial skills are rarely discussed; people prefer to talk about the quality of an idea or point to famous entrepreneurs like Steve Jobs, or Elon Musk as role models.
This can lead prospective entrepreneurs into thinking they need to have some kind of superpower to succeed. Being successful in business is about developing a set of skills that can be acquired over years of dedication. In this article we’re going to take a detailed look at some of the skills entrepreneurs need for success.
Table of Contents
In her popular TED Talk, Angela Lee Duckworth talks about the importance of grit. After giving up a high-flying career, she became a seventh-grade Maths teacher and noticed that children with grit did better. This made her look into the concept of grit more; Duckworth looked at the United States Military Academy (also known as West Point) and found that a key determinant of success was in fact, grit.
She defines grit as: “sticking with things over the long-term until you master them”.
Building a successful business often takes years and decades; this post about the ten-year journey of Farfetch from startup to IPO is typical in the timeframes involved – although few startups enjoy this level of success.
Grit alone is not enough, but to keep going when things are difficult is an essential skill and if you don’t have it then maybe entrepreneurship isn’t a good career choice.
In his book, The Dip Seth Godin tempers the notion of blind grit by discussing the concept of knowing when you should give up and when you should press on.
Image courtesy of www.amazon.com
This article from Forbes looks at why grit is more important than IQ.
Numbers are the language of business; it’s true that some successful entrepreneurs boast of having a poor grasp of figures – Felix Dennis was one such entrepreneur. He succeeded in spite of his lack of financial literacy, certainly not because of it. It helps immeasurably to know at least the basics of profit & loss, balance sheets and cash flow forecasts.
Understanding the numbers behind a business helps you plan, manage stress, and keep you focussed on key targets.
Fortunately, there is no shortage of resources to help get you up-to-speed; Udemy is a good place to find a quick course that will get you up started. For example, Introduction to Finance, Accounting, Modelling and Valuation is a comprehensive course that goes way beyond the basics.
Alongside the basics of accounting, understanding the key metrics that drive your business is important. Basic concepts like the cost of acquisition (how much it costs to get a new customer) and lifetime value (the average value of a customer) are helpful when zeroing in on the areas that are important.
For example, if a business is spending more to acquire customers than the profit they reap from them this is critical and needs to be addressed; the collapse of Pets.com is an interesting story of a business where the numbers never added up.
If you are running a SaaS business, this article from Hubspot on key metrics is a useful introduction.
In his book The Big Miss: My Years Coaching Tiger Woods, Hank Haney describes a time when he explained to Woods that the reason he failed to win some tournaments wasn’t that he was missing 20-foot birdie putts but because he was three-putting a few times a round; a critical metric that allowed Woods to change his focus.
In his book Influence: The Psychology of Persuasion, Robert Cialdini lays out six key principles to gaining influence: reciprocity, commitment and consistency, social proof, authority, liking and scarcity. While the list it hotly debated and no list can be considered conclusive, it’s an interesting place to start thinking about the concept.
Image courtesy of www.amazon.co.uk
Entrepreneurs need to influence different types of people all of the time: from the employee who needs to be motivated, to the supplier who you need a discount from, to the investor who needs to believe your business is the next big thing.
Every business is different in terms of who you need to influence, but there are likely to be key moments in your entrepreneurial journey where you need to get people to do things – for this you need the skill of influence.
The Film A Hijacking is centred around one long negotiation between the owners of a vessel and Somali pirates. A great crash course in deploying influence under pressure.
Relationship building in business is important for entrepreneurs because solid relationships are needed to withstand constant stresses.
Relationships with co-workers, suppliers, clients, investors and a host of other stakeholders is important. Great relationships that sustain over time take a lot of work and a lot of skill. There are some great books on diplomacy that will get you thinking about keeping relationships positive under a ton of external pressures.
Dale Carnegie’s famous book How to Win Friends and Influence People is a great read for entrepreneurs and highlights the importance of every interaction as an opportunity to build a relationship.
Having a good relationship is centred on trust, and if you can build the feeling of trust in you and your business, this will be very helpful. Focusing on creating win-win situations and asking yourself how you can make things better for the other person is a useful way to develop trust and relationships.
Ego is the Enemy by Ryan Holiday looks at the damaging impact of ego; the concept of how it can destroy relationships is prevalent in the book.
As an entrepreneur your biggest asset if yourself; being able to understand, moderate and improve your performance is important.
Entrepreneurs with self-awareness can understand their strengths and weaknesses which can help in many ways, for instance, hiring people whose strength is one of your areas of weakness.
Self-awareness is also about feelings; entrepreneurship is a difficult and at times a lonely journey. This can bring a range of emotions, many of which are unhelpful. If an entrepreneur can sense when they’re becoming stressed or are having unhelpful emotions they have a chance of breaking the cycle.
It’s thought that people are generally not as self-aware as they think, as summarised in the Atlantic. That considered it’s a good idea to deliberately try and become more self-aware; the Harvard Business Review gets us started with its article 5 Ways to Become More Self Aware.
Why self-aware leaders are more effective and productive in the Telegraph.
Businesses are awash with projects, some small and some large. The business itself is a project, and so are small tasks like getting the website branding completed. Being able to get things done quickly and efficiently is a vital skill.
Many entrepreneurs have great ideas but cannot execute them effectively. So how do you execute effectively? You need to start with the concept of project management.
Project management is a catch-all term that covers scoping, tracking and delivering a project of some kind. This article from Project Manager gives a little more detail on project management for entrepreneurs.
Project management is a mind-set; many entrepreneurs see themselves as visionaries who come up with plans that others execute. The best entrepreneurs can get down into the detail and execute effectively as well because in the early days there will be no-one else to do that for you.
Making Things Happen by Scott Berkun.
Nick Kokonas, the founder of world-renowned Chicago restaurant Alinea said in a Tim Ferris podcast interview that his first job was as a writer.
Jason Fried – one of the founders of Basecamp – said the number one skill they look for when recruiting is clear written communication.
Jason Fried of Basecamp, image courtesy of www.cnbc.com
Succinct and clear communication is difficult; most people say a lot without saying very much at all. As an entrepreneur, you need clarity of thought and the ability to translate these thoughts to other stakeholders, especially investors, team members and the press.
Unquestionably, clear verbal communication is just as important. In this Guardian article, Alex Ferguson talks about communication and the importance of tailoring it to different players.
Communicating ideas and instructions is important for entrepreneurs because they need buy-in from so many stakeholders, and a key way to get buy-in is by having a strong message. Clear communication can also quicken delivery by getting people working on the right things. The list goes on and on – communication is a core skill.
Difficult Conversations: How to Discuss What Matters Most will help you communicate when the heat is on.
How to Improve Your Business Writing in the Harvard Business Review will help you stay lean and get your message across.
As an entrepreneur, you need to see something that doesn’t yet exist. Whether that is a new Italian restaurant or commercial flights to Mars you need to be able to envisage where you want to go.
This is where we can learn from some of the big names:
- Steve Jobs showed great vision to build beautiful Apple products
- Elon Musk showed great vision to build electric cars
- Jeff Bezos showed great vision to build a retail empire
- Mark Zuckerberg showed great vision to build Facebook
- Henry Ford showed great vision to build the motor car
You don’t need to be at the level of these guys, but imagination will help you pick an idea and concept that can add something valuable to the market.
The Harvard Business Review goes as far as to say the future of work is imagination, creativity and strategy.
Certainly in business, even today, the ability to devise concepts and bring all the parts together necessary for its success requires the ability to see what is currently not there: to have imagination.
Creativity Inc, a book on Pixar, shows how powerful imagination can be in business.
Image courtesy of www.pixar.com
Top 10 Books to Expand Your imagination is aimed at actors but relevant for entrepreneurs.
Measured Risk Taking
A lot of people define entrepreneurs as big risk takers, staking it all to win big. But the best entrepreneurs are best at making small good value bets.
The concept of the Lean Startup talks about continuous innovation; having a hypothesis and testing it out in the most simple way which leads to innovation over time. This is the opposite approach to that taken in the film Startup.com where millions were bet on an idea before it was even built.
So if small incremental risks are better than bigger risks, then how can entrepreneurs make better forecasts about the future? The book Superforecasting: The Art and Science of Prediction looks at how a group of amateur forecasters using certain techniques can beat experts at predicting events.
Great entrepreneurs are generally good at predicting what will work or what will not – and those that aren’t can get to the answer by way of measured trial and error.
This article in Entrepreneur magazine: 5 Things Every Entrepreneur Should Know About Risk Taking.
How Climbers manage risk: The Push: A Climber’s Journey of Endurance, Risk and Going Beyond the Limits.
There is no magic formula to being a successful entrepreneur but seeing it as a career with a set of skills that can be developed over time is a good mindset.
Good luck on your journey.