10 Concepts Many Successful Entrepreneurs Have Mastered
As a venture capital associate, I’m privileged to speak with entrepreneurs every day about their businesses. In over three years of conversations, I’ve had the chance to speak with all kinds of founders. I’ve spoken with CEOs of varying ages (from the kid who started his business in his dorm room to the 75-year-old third-generation owner), who have businesses in vastly different industries (ranging from software to healthcare to manufacturing and everything in between), and companies of all sizes (from pre-revenue to over $50M of cash flow).
It’s crystal clear that entrepreneurs can come in all shapes and sizes, but I’ve noticed some common traits/qualities/skills and management concepts (not all of them are inherent and most can be learned) from the truly successful ones. Below is my attempt to categorize those ideas.
10 concepts many successful entrepreneurs have mastered
1. Be passionate. I believe passion is contagious – an entrepreneur should be excited about their business and be able to convey that excitement to others. If a CEO isn’t excited about his or her business, how will they ever convince an investor that the business is a worthwhile bet? (More importantly, how will they convince their customers?) Have confidence in your business and believe in what your company does – this will go a long way in earning respect from others and help you to enjoy the journey that much more.
2. Be persistent. I think most entrepreneurs know how slim the odds are of their startup eventually becoming a real, substantial business. I also think that many successful entrepreneurs aren’t afraid of failing – when they believe in their idea they are willing to push to the brink of failure to produce success. Unfortunately, sometimes in that process, businesses do fail. That certainly doesn’t mean that the entrepreneur is a failure or even that it was a bad idea – it could be a number of things that led the business awry (bad economy, lack of funding, market timing, etc.). A bit cliché, I know, but the important thing is to learn from those failures and use that education in your next venture.
3. Surround yourself with great people. Having a great idea is one thing (and a hugely important one), but having the ability to execute is another. When you are looking at building out your team, don’t settle; make sure you get the best and brightest available for the position. These people will be responsible for turning your great idea into a great business. Get the team you want to build the business you want.
4. Delegate. Now that you’ve built a team that you are excited to work alongside, use them. Have confidence in the team you’ve assembled. If you’ve done a good job at gathering the right folks around the table, they should be more effective at their tasks than having you manage everything throughout the organization. It’s certainly important for a CEO to have a handle on multiple fronts of business operations, but it is highly inefficient for them to try and handle everything.
5. Know your numbers. Nobody is expecting an entrepreneur to be a CFO if he or she is really not one. However, it is extremely important to have a good handle on your financials. You should know most of the common operating metrics (revenue, gross margins, growth rate, etc.), but perhaps more importantly you should understand the drivers behind those numbers. Understand your revenue model (subscription, transactional, perpetual license, etc.) and why that is the best way to sell your product. You should have a handle on not only your projections, but WHY you are going to grow by, says, 45%.
6. Listen to feedback. Whether it’s your customers, employees, investors, or someone else, allow people the chance to give you feedback on your ideas, business model, workplace culture, and so on. Without being open to feedback (and potentially criticism), you run the risk of missing huge opportunities or simply becoming stale. You must not only be willing to listen to feedback, but also be open to changing directions if that’s what the business requires.
7. Have an elevator pitch. Be able to describe your business in as concise a manner as possible. It shouldn’t matter whether you are speaking to the CTO of a potential customer or the person sitting next to you on an airplane – have a plain-English, brief description of what your business does. Have a brief case study you can cite of how your solution worked in a particular instance so your audience can have a real-world example of what your company does as well.
8. Know your value proposition. What pain point are you solving for your customer? Is it a have-to-have or nice-to-have? Be able to clearly address whatever issue your product solves and what other solutions exist today. If you can’t make a clear pitch as to how your product will make your customers’ lives easier (one simple way to look at it – does my product save money or generate revenue for my customers, maybe both?), it is going to make for a tough sell.
9. Know your competition. Who are the large incumbents in the space that you are stealing customers away from, and who are the other startups that are attacking the same market? Have an understanding of why potential customers are choosing them over you and figure out a plan to change that.
10. Know your differentiators. Similar to the topic above, it’s important to have a handle on why your product wins against your competitors. What makes your offering different and/or better than theirs? If you can’t easily articulate how your product is different, it may be time to go back to the drawing board.
This list is not meant to be comprehensive, but rather highlight some of the shared qualities of many successful entrepreneurs (at least, entrepreneurs that I’ve been in touch with). It’s also worth noting that being an impressive CEO does not necessarily mean that you will have a successful business, but it certainly can’t hurt.
I’m aware that I’m missing more than a few key qualities and I’m also certain there are plenty of successful CEOs who would disagree with me on one or more topics. Feel free to suggest (in the comments section) other concepts that can increase the chance of entrepreneurial success.