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matthew-buckland

What’s the secret ingredient that makes entrepreneurs successful? [Opinion]

Am I an entrepreneur? It’s the question asked of me the most. It’s the question I thought would be the perfect start to this regular column on entrepreneurship, venture capital and the world of startups – a sector of our economy which is booming.

Despite the economic and political challenges we face in the country, our startup scene is a parallel universe of overwhelming optimism, innovation, job creation, creativity and wealth creation.

When we were in the midst of downgrades, juxtaposed was the country’s startup sector with positive news of new funds coming online, startups winning funding, and entrepreneurs exiting from their businesses.

Being an entrepreneur means you are by default an optimist: you believe your business idea or startup will flourish into something bigger. Entrepreneurs, especially startup entrepreneurs, have doses of this optimism in high quantities.

Entrepreneurs come in many different flavours, shapes, sizes, ages, backgrounds, and personality types

But founders of companies are not a homogenous bunch. They also come in many different flavours, shapes, sizes, ages, backgrounds, and personality types. Entrepreneurs can be intraverted, extraverted, can be conservative or flamboyant.

Young entrepreneurs are able to throw caution to the wind and approach their startup with boundless energy with little tying them down. Older entrepreneurs can use accumulated capital, experience and extensive networks to make their businesses fly.

Wealthy entrepreneurs can leverage capital, the less wealthy entrepreneurs substitute capital for hunger and resourcefulness.

There are corporate entrepreneurs too. Entrepreneurs are not just exclusively the Silicon Valley stereotype. Some corporate entrepreneurs take on risk to create massively scaled businesses using the corporate machinery and money behind them.

Three types

A useful framework for understanding different entrepreneur types comes from a New York-based organisation, associated with Linkedin founder Reid Hoffman, called Endeavor.

It’s an international incubator organisation that selects, mentors and accelerates “high-impact entrepreneurs” around the world. It has an active South African chapter which has fed many impressive entrepreneurs through its system over the years.

Endeavor defines four types of entrepreneurs: the rocketship, transformer, diamond and star.

Rocketship entrepreneurs are strategic thinkers who relentlessly focus on efficiency and making things cheaper, faster and better. They are often “minnovators” who apply or adapt a proven model to fill a market gap. Their businesses have a clear revenue model and are poised for exponential growth. Examples of these entrepreneurs include Amazon’s Jeff Bezos.

The key question with aspiring rocketship entrepreneurs is: Can this entrepreneur or company execute flawlessly to sustain growth?

Transformer entrepreneurs are ambitious leaders operating an established business in a traditional industry aspiring to reach next level of growth through innovation and differentiation.

Think Adrian Gore from Discovery, Koos Bekker from Naspers (for visionary innovative investment strategy as opposed to organic innovation) or Ray Kroc from McDonald’s. Some are socially-oriented and combine profit focus with a desire to change society and create jobs.

The key question for aspiring transformer entrepreneurs: Is there real, sustainable differentiation to turbocharge growth?

The diamond entrepreneur is a big dreamer who starts innovative and disruptive companies, which often create a brand new way of solving problems. Their businesses have an unpredictable growth trajectory, but can become game-changers if they succeed.

They can also fail fast too. The question for aspiring diamond entrepreneurs is: Is this startup the next big idea? Successful diamond entrepreneurs include Mark Zuckerberg, Elon Musk and Steve Jobs.

Lastly, the star entrepreneurs are big, charismatic personalities who start branded companies, often consumer focused and creative in nature. Think Richard Branson and his Virgin Group. Their businesses typically inspire deep customer loyalty through differentiated design
and customer experience.

The key challenge with aspiring star entrepreneurs is can their company be the next big brand and scale beyond just the founder?

Is there a secret ingredient?

But by saying that an entrepreneur can be almost anything we run the risk of defining nothing. So there must be some kind of secret ingredient that makes entrepreneurs successful?

In all their diversity, there is a key quality all entrepreneurs share. Apple founder Steve Jobs called it “pure perseverance”. It’s perseverance through the intense ups and downs, failures and challenges of building a company from nothing. People often do not succeed because they, simply, give up.

The successful entrepreneur, however, keeps trying in the face of failures, mistakes, people saying “no” or telling them their business “won’t work”. However, these entrepreneurs just keep bashing down doors and problem-solving with gritty determination until they have got what they want.

In reality a business is a series of many mistakes and failures, and it’s just the 10 successes out of the 1000 failures that move you forward. These are terrible ratios, and when you are in the thick of it, it may feel like you are not succeeding.

Oh, but the persistent entrepreneur is succeeding. Just as long as they keep going.

Matthew Buckland is an investor, entrepreneur and the founder of Burn Media Group, which publishes Ventureburn.com. This column was first published in Business Day. See the original version here.

Author Bio

Matthew Buckland
Matthew Buckland is a web guy who has over the years worked in a programming, editorial and business capacity within the online media environment. He is the founder of the Burn Media Group. He founded Creative Spark(Ventureburn.com's former parent company), of which he sold a majority share to M&C... More
  • JayDub

    There is a significant aspect of entrepreneurship that is completely missed here, and is critical to success. It is not quite so much a personality trait as it’s a habit: planning and the related ability to create repeatable processes. Persistence is nothing without a plan. Ideas are worthless without proper execution. That’s the reality.

    I started my first company in 1980, and have had several since, even raising millions for a couple of them in Silicon Valley. Over the past ten-plus years I’ve worked with dozens of startups and entrepreneurial groups within Fortune 100 companies. I helped put several plans in place and have introduced approaches that we know work, like from Michael E. Gerber, the founder of E-Myth, and the University of Michigan’s Positive Management group in the Ross School of Business.

    Yes, persistence is very important, as is a strong positive outlook. But, there is no magic, no particular trait, and certainly no particular metric on whether an idea is good or bad. I’ve seen, first-hand, wildly successful companies borne out of a better way of doing something in an industry that has been around for, literally, hundreds of years (Pizza chain created in an apparently glutted market then sold for over $350M). And, I’ve seen (increasingly rare), truly new, disruptive ideas that have gone absolutely nowhere.

    The business is not the idea. It is the mechanism through which the value of that great idea is delivered to the people who need it the most. That mechanism must have reliable structure, and must be constructed so each of the main parts of a business (product development, marketing, accounting, etc.) are treated equally importantly. Without one of those cylinders firing, the engine can’t pull the company along and the idea dies.

    The business structure and processes must be considered separately from the idea, and there is no better time to begin to create structure around an idea than at the beginning. The big fallacy – that, frankly, continues to perpetuate from the flawed Silicon Valley model – is it’s okay for entrepreneurs to “wing it” as the idea develops into a business. Terms like pivot and fail-forward are tossed around without context. This is a sure-fire way to avoid success. Regardless of how smart or persistent a founder is, they must understand what they’re creating: The idea is only valuable when it solves a particular problem, when it is understandable, when it is easy for the target audience to access, when it can be supported properly, and when it can be repeated.

    Boring grunt work for some high-energy, idea-factory entrepreneurs? Sure. But being bored is far better than wasting several years of a life, and taking down with you all those new employees, suppliers and their families because you think you’re smart enough to not have a plan.

    It’s serious business, entrepreneurship. And it needs to be treated as such.