What Makes an Entrepreneur (5/11) — Inspiration

This is part of my new series on what makes an entrepreneur successful. I originally posted it onVentureHacks, one of my favorite websites for entrepreneurs. If you haven’t spent time over there you should.

I started the series talking about what I consider the most important attribute of an entrepreneur : Tenacity. I then covered Street Smarts, Ability to Pivot and Resiliency.

Several people asked about the differences between tenacity and resiliency. I like to describe tenacity as “leaning forward.” It’s those things that you push for — in which you never accept “no” for an answer. Resiliency, on the other hand, is about being able to withstand punches and still keep fighting. What to understand resiliency? Watch this awesome 46 second video from Rocky. Anyone who has been an entrepreneur before will tell you that much of being successful in the early days is about pure survival. Much is also about luck and timing.

And we know that being stubbornly tenacious without the “street smarts” to know when market conditions are changing and then “pivoting” when they are changing is a recipe for failure. It’s why I believe PalmPilot missed the important shifts to email that RIM (Blackberry) saw. In turn Blackberry missed the Internet and still has a sucky browser after all these years.

So tenacity and resiliency alone are not enough. All traits of an entrepreneur must be exercised in concert.

Toby Murdock told this interesting story in the comments of my last post (typos fixed):

… my last start-up was seed funded by a mega-successful angel … [but] they would not be investing in the third tranche … I had already burned the little savings I had to get the business going and with the story of this investor pulling out hanging around us, it was going to be very difficult to raise from somewhere else. We were screwed. Visions of not being able to afford my mortgage, moving my wife and kids out, shot into my head.

But in that moment of hearing the news, I tried to remind myself that dwelling in the negative never helps, that in fact every kick to the head provides motivation to crank it up. So instead of being horrified and deflated for the rest of that meeting, I let it rip and dazzled him about the progress that we’d made and where we were headed. He … said that his fund would actively help in getting us the next round.

… Not too long thereafter the angel was back in, in a bigger round, no more tranche’s, with new investors to boot. And the end of the story was ultimately a successful sale of the company … so much of entrepreneurship is not sexy but brutal. You have to push ahead through the kicks to the head … such setbacks are a normal part of the process and the key element is just how you react to them.

Many entrepreneurs struggle with their setbacks. Many become bitter at investors or circumstances. Some “kick it up a gear” and react how Toby did. And I’ll bet that the leadership he displayed helped his angel decide he had the character worth backing.

Some readers of this blog also pointed out that “pivoting” can be disruptive on the employees of an organization. So can all of the constant hiring & firing — the natural churn of an early-stage business. That’s true. But that’s where the next trait becomes so critical.

5. Inspiration/ Leadership — As an entrepreneur you’re always under-resourced. You want to hire a crack team of developers but you haven’t raised enough money yet. You want that key marketing resource from Google but he’s on afat salary that you can’t match. You’re trying to get you contacts to get you that introduction to Ron Conway to sprinkle his legitimacy on your company through an angel investment. All of these things are nearly impossible for most entrepreneurs. And tenacity alone won’t yield positive results. In fact, tenacity with no inspiration is often annoying yet with a little ‘inspiration’ and charm it can be motivating.

Often entrepreneurs show me their management team slides with the names of the people who are going to join him once they’re funded. I usually jokingly respond, “maybe you’re not an entrepreneur?” This always gets people to sit up straight ;-) I say, “listen, nearly every successful entrepreneur I’ve ever met has a certain ‘X-Factor’ about them that makes people take notice. I know that these people who you want to join you are in comfortable positions at brand name companies and don’t want to take the risk of joining you. But when the right entrepreneur comes along they think, ‘I’ve got to join this person now. I think this is going to be hugely successful and I don’t want to miss the opportunity.’”

The best entrepreneurs are like that. When you’re around them it’s almost contagious. They are passionate about what they’re doing, they’re confident about their success and they’re driven to make it happen. Sure, they have self doubt when they’re alone in the mirror but you’d never know it from seeing them in the office. And what you need to know is that for every chart you put up with the people who are going to join you when you’re funded I see companies that have actually gotten the team on board with no more cash in the bank than you have.

Whenever I’m watching someone present to me I’m often thinking to myself, “Can this person inspire others? And inspiration is so important because not only is it required to hire and lead your team but it’s required to get customers to work with you when by all means they should not. You’ve got less than 6 months’ cash in the bank and your product isn’t really fully baked. But they have confidence that you’ll get there even if they don’t acknowledge this to themselves. TechCrunch is going to cover you. They probably shouldn’t because you’re a bit more hype than reality right now. But they sense your trajectory. They get a sixth sense that you’re going to pull this thing off.

Inspiration goes a long way in business. And in life. Go watch Invictus — you’ll see what I mean.

Next post is Perspiration. Because inspiration isn’t enough.