I often get asked “what does it take to be a successful entrepreneur?”.
In my opinion, successful entrepreneurship is a combination of three things: (1) Genetics, (2) Circumstance, and (3) Perseverance.
Let’s go through all three.
Over the last six years, we at the Founder Institute have been social-science testing over twenty thousand prospective entrepreneurs, measuring things like “Big 5 Personality Traits”, Fluid Intelligence, IQ, and more. We then watched who became successful, and correlated back the measured traits that best predicted success, in a scientific process along with highly respected social scientists.
The traits that best predict entrepreneurial success are genetic, such as Fluid Intelligence and Openness. BUT, just because you have traits that MAY make you successful as an entrepreneur, does not mean that you WILL be successful. Similarly, just because you are tall does not mean that you are good basketball player.
In other words, you need the raw materials, but you also need other things.
Being in the proverbial “right place at the right time” matters a lot towards your ultimate success as an entrepreneur.
Timing is everything (…almost).
For example, Michael Diamant started iClips, a site exactly like YouTube, a few years before YouTube launched. iClips was a truly well-executed business, but the necessary bandwidth, camera penetration, and streaming technology adoption did not yet exist for it to gain massive traction. He was simply too early for the market.
Circumstances are not all market-specific, either. You can have perfect market-timing, but your personal circumstances might not be optimal. For example, you could have the best idea and timing while you are a high school student, and start to execute on that idea to the the best of your ability – but then a veteran entrepreneur does the same business with millions in venture capital and captures the whole market right from under your feet.
Some circumstances are in your control, and some are simply outside of your control, but most successful entrepreneurs will concede that some of their success is attributable to circumstance.
You only fail in your business when you actually give up, so, in fact, no business would ever fail if people persevered.
I know the Founders of some of the most successful technology companies in the world, and there almost always were (and still are) times when the Founders simply refused to give up despite unbelievable problems, stress, and negative signaling.
Entrepreneurship is like eating glass and walking on hot coals at the same time” – Elon Musk at the Founder Showcase
An entrepreneur faces all of the debilitating problems of their own life, coupled with all of the personal problems of their team, as well as hostile operating environments, limited capital, stretched resources, no time, regulatory burdens, changing technology… the list is endless.
The loneliness and darkness of entrepreneurship is not discussed very often, but it is very, very real.
Those that persevere succeed. Those that do not, do not.
This fact is why I created the Founder Institute, to create a teamwork-oriented environment to help entrepreneurs persevere, and the Founder Lab, to show entrepreneurs the best practices for building an enduring startup in Silicon Valley.
A Side Note on Ideas
You will notice that I have not mentioned your idea as important to success as an entrepreneur. This is intentional.
I am not saying the ideas are worthless, because they are not. And, there are definitely ways to help you determine if a startup idea is good or bad. But, the key operator in my last sentence is “help”. Nobody can ever know for sure, and at best you are making an educated guess.
We see “great ideas” flop all the time, while “bad ideas” become worth billions. For example, Google was a “bad idea”: it was another search engine at a time when everyone thought search engines were dead. Ebay was another “bad idea”: they asked you to send used merchandise through the mail to people that you met online, and mail a $0.23 commission check to eBay (when stamps cost $0.25). These “bad ideas” have a combined market cap of $440 billion today.
In the end, genetics, circumstance, and perseverance are much more important for entrepreneurs than ideas.