The traditional definition of the word entrepreneur is someone who starts a business and takes a risk, possibly losing money. Lots of money. Of course, huge financial gain is possible. Henry Ford, Steve Jobs and Sam Walton all come to mind as entrepreneurs who found tremendous success.
What types of people make the best entrepreneurs? Typically, entrepreneurs have ideas and the motivation to create opportunities outside of a traditional corporate environment. The motivation/drive piece is the most significant characteristic of entrepreneurs. Natural entrepreneurs have a higher levels of self-confidence, competitive drive and a higher tolerance for risk than their non-entrepreneurial counterparts. Those who lack the natural instincts to take the risk of being entrepreneurial also make successful business leaders with an eye towards innovating within a typical business structure where products and services are more established, capital is more available and timelines are longer. However, true entrepreneurs tend to stay in the start-up or growth phase of organizations, versus mature ones.
Entrepreneurs need to know the basics of business (sales, operations, finance, marketing etc.), but they must focus heavily on new enterprise development. For example, those in a start-up will typically seek angel, seed, and venture capital funding because the revenue stream is not mature and they are spending more money than they can generate in revenue. Additionally, they need to be able to work on a small team to research, create, structure and pitch a new business venture. In essence, they are spending investors’ money with the bet they will take flight before they run out of runway.
“Intrapreneurs” either join a small or innovative firm to pursue some of the same passions for creating and building an organization with less personal financial risk. Even within the cultures of larger organizations, they can be a part of innovation, change management or M&A roles. They tend to seek opportunities where continuous improvement and openness to new ways of doing business allow them to utilize their knowledge and skills.
Studies using the Predictive Index show that many successful entrepreneurs share the same natural motivators, drives and behaviors. Self-confidence, proactivity (a bias for action), risk tolerance, persuasiveness and results orientation traits – all are higher than average when compared to the general population. True entrepreneurs don’t just think it’s cool to be a called an entrepreneur; they have an entrepreneurial mindset, a deep hard wiring for risk and innovation.
Post by Scott Kiefer.