Copyright: First published on FT.com (Financial Times) on May 6th 2013
Entrepreneurs are a peculiar breed of the human species. John Doerr, venture capitalist and an early investor in Google, Amazon and Twitter, referred to them as the ‘provocateurs of our era’ in a talk he gave at Stanford.
I’ll try to analyse the traits which distinguish these mesmerising creatures in a taxonomical fashion.
There is of course no single set of spots or stripes that enable us to pinpoint a formidable entrepreneur. They come in all shapes and sizes because different companies or industries are better suited to different leadership styles. Yet there are certain attributes shared by many of the great founders.
Firstly, entrepreneurs tend to have premature, almost unfounded confidence. Vinod Khosla, founder of Sun Microsystems and a leading venture capitalist, described them as “People who are foolish enough to make dreams come true” when he spoke recently on campus. There is a certain value to the naivety that comes with attacking a problem from a fresh perspective; if entrepreneurs knew everything about an industry they would know all the reasons why it would not make sense to disrupt it. As Seneca noted, humans are more limited by what they think they can do, than by what they can actually do.
It’s all very well being confident, but start-ups are founded on original and well-executed ideas. After all, the obvious things have already been done. Thus, entrepreneurs are irreverent: they need to be contrarian thinkers to make differentiated products.
“Being an entrepreneur is about working on things that nobody knows are important” (Khosla). This requires creativity but notably also audacity, because contrarian ideas that fail to get traction make their creators look like fools. In fact, many entrepreneurs’ projects initially appear foolish. Take the young Stanford founders of Skybox Imaging, whose goal was to create a constellation of tiny, low-cost satellites to change the way high-resolution imagery is distributed. Most venture capitalists in Silicon Valley told them it was an interesting but crazy idea. They struggled to sell the idea, but eventually Khosla invested in them, and last year they went on to raise $70m in Series C financing and are changing the satellite industry.
This highlights that having a contrarian vision is necessary but not sufficient for success. Great entrepreneurs are also highly persuasive salesmen, selling this vision to investors, employees, customers, suppliers and even the press. They convey overwhelming conviction in their products, while remaining highly receptive to feedback. They know how to hustle. The best entrepreneurs can sell anything, literally. They could sell 90s neon rave gear to grandmothers.
Entrepreneurs also show perseverance, despite the draining unpredictability of new ventures. Mark Pincus (founder of Zynga) came to a class and took us through the emotional rollercoaster he lived through his various ventures. For example, he had to endure the pain of letting his social network Tribe die, but the satisfaction of seeing Zynga go public. Entrepreneurs cannot be paralysed by the fear of failure; they need to accept to “Try and fail, but not fail to try” (Stephen Kaggwa). As Maya Angelou prescribed, “You may encounter many defeats, but you must not be defeated”.
Finally, entrepreneurs need the humility to realise they cannot do it alone. The best ones hire people who are even brighter than themselves. Their companies are rocket-ships travelling incredibly fast and they need to fill the ship with the best astronauts they can find. Those first 100 seats on any rocket-ship are worth gold and are critical to their culture, so it is worth investing time to hire visionaries. It is not surprising that Dropbox’s co-chief executive Arash Ferdowsi has personally interviewed most of Dropbox’s several hundred employees, because great employees allow companies to continue to innovate. As Jack Dorsey (founder of Twitter and Square) emphasised this evening at Stanford Business School, the best companies have multiple founding moments and these are often defined by employees other than the founders.
Most people are not entrepreneurs (these are not easy traits to develop) and there is no shame in not belonging to the breed. However, everyone should support entrepreneurs to help them survive the challenges. Being an entrepreneur is like climbing Everest: most fail and those who do succeed must cross seemingly endless crevasses along the way. For early stage entrepreneurs, it is harder still, akin to clambering up Everest alone (no team established), in darkness (no precedent to follow), without oxygen (limited financial resources) and without ice axes or the ability to read a compass (limited tools and skills).
We should propel our provocateurs forward. We should honour their confidence, irreverence, persuasiveness, perseverance and humility. We should help them climb Everest. We should join their revolutions.