8 Skills of Successful Entrepreneurs (And How You Can Develop Them)
Are we living in the age of the entrepreneur?
It certainly seems like it. From Mark Zuckerberg to Elon Musk, successful entrepreneurs are constantly in the media, and there are endless articles about why everyone can and should be an entrepreneur or, at the very least, adopt entrepreneurial ways of thinking. The average person can probably name as many entrepreneurs as politicians or poets.
But what does it take to get out there, set up your own business, and (hopefully) make your first million (or three)? In this article, we look at the skills required to be a successful entrepreneur, and how you can start working on them right now.
As we saw in our recent article on successful tech start-ups, what so many entrepreneurs have in common is noticing a problem, thinking of a solution and then – crucially – making that solution available to a wider audience. In our daily lives, we all notice these problems constantly – before Uber came along, did you ever complain that it was hard to get a taxi? Then you spotted the problem just as much as the people who founded a company worth $60 billion did; the only difference is, they did something about it.
Cultivating your initiative is really just a matter of practice. When you notice a problem in your daily life, instead of grumbling (or maybe as well as grumbling), start trying to figure out what you can do about it. Most problems have dull solutions (e.g. the usual and most effective solution to “there’s a wonky paving tile on the street outside my house” is “email the council”, not “become an expert in pavement tiling”) but creating what’s essentially a fancy app to call taxis is also a pretty dull solution; it’s only the $60 billion price tag that makes it less so.
Unfortunately, initiative has its limits, and that’s where imagination comes in. Some problems that need a solution aren’t immediately obvious; online social networks clearly fill a need, but when online communities first developed, they were seen as a place for geeks who struggled to make friends in real life. Providing a home for geeks is, of course, a valuable goal in its own right, but it took imagination to realise that plenty of other people would welcome the opportunity to communicate online as well.
Even if the problem is easy to identify, coming up with a solution might not be – for instance, going from the problem that Airbnb spotted – that there was often a shortage of budget hotel rooms in cities during big events – to the solution of people renting out their spare rooms only seems obvious because someone else thought of it first.
People sometimes make the mistake of thinking of imagination as bursts of creativity, but it’s a skill that can be practised like any other. If you’re problem-solving, whatever that problem might be (it might be coming up with a birthday party venue that will suit the needs of all of your friends, or redecorating your bedroom on a budget, or even just a school assignment), try to come up with more solutions than the one you need – it’ll help you get into the habit of thinking more creatively in future.
Founding a company requires a significant investment. That’s an investment of all kinds of things: money is the obvious one, but also time, plus other things you might not think of. For instance, you’ll probably need the emotional support of friends and family to succeed, and that means you’ll need to persuade them of the value of your idea as well. That’s another investment – like time and money, other people’s faith in your ideas is valuable and you only get so much of it to spend. It’s obvious that being overcautious won’t get you anywhere, but at the same time, 50% of businesses don’t last five years, so there’s also a sizeable chance that your investment might leave with nothing but experience (valuable as that is). So getting stuck in takes bravery.
There’s a fine line between bravery and foolhardiness, so one thing you can do is look more closely at any major decisions you’d made. Were you held back by fear? Did you make choices impulsively? Did you always have a good back-up plan? With a bit of self-analysis, you can figure out whether your judgments are good, whether you’re overconfident, or whether you’re too swayed by fear – and that’ll help guide you in future to work out when you should hold back and when you should go for it.
Regardless of how naturally talented you are at founding and running a business, at some point you’ll want to get other people on board. In all likelihood, this will come at the stage where you’re asking them for money – so you’ll need to be persuasive.
The difficulty is, practising persuasiveness on occasions when you don’t really need to be persuasive (group projects at school, say, or deciding which film to go and see with a group of friends) is a good way to seem like someone who can’t stand not to get their own way. So the first part of practising persuasiveness is that as soon as anyone notices that you’re trying to talk them round, stop. You want to have people persuaded of your point of view before they even realise that’s what you’re doing.
That can mean things like getting a suggestion in first; plenty of people dislike making decisions, so if you’re prepared to take the lead, you’ll be more likely to be given that role in making decisions in future. Getting a suggestion in first can also help with anchoring people; anchoring bias is the process by which people rely too heavily on the first bit of information they receive. So if you’re collecting money for a sponsored run, for instance, if the first person puts in £10, other people are likely to put in higher amounts than if the first person puts in £2. By asking your most generous friend to donate first, you’ve effectively “persuaded” everyone else to donate more, without saying anything to them about it. You can practise these skills easily and without annoying anyone.
There are very few successful companies in which the boss decides everything – but there are plenty of less successful companies where this is the case. A good example might be Morrisons supermarket – their former CEO was famously resistant to online shopping, so Morrisons only entered that market in 2013, leading to estimates that they were missing out on online grocery sales of £700 million a year. The retailer is still recovering from that bad decision. But you’ve probably seen this on a smaller scale as well, such as a job advert that’s been written by the CEO who won’t allow anyone to correct the spelling mistakes, or a webpage that must be in Comic Sans because that’s what the director’s mother prefers.
It can be hard to let go when you know that it’s your skills that have led something to succeed thus far, but one of the key skills of a successful CEO is the ability to hire skilled people and then delegate appropriately to them. This can be tricky to manage in school, where the only opportunity to practise these skills is in group work, which seldom lets anyone show their strengths. But if you have a leadership role in other areas, such as a team game or in volunteering, then see what you can do to recognise and promote the talents of others around you.
6. Financial skills
This isn’t exciting, but it is necessary. The world of an entrepreneur isn’t all walking and talking, presentations and heated boardroom debates, as disappointing as that might seem. Instead, there’s a whole lot of looking at finances and making predictions that will show your investors that you’ve thought your plans through properly.
Getting your personal finances is order is always a good place to start. Do you know what’s in your bank account? Do you know how much you spend and how much you save, what you’re spending it on and how much interest you’re earning? Could you earn more from your savings? These are elementary questions, but if you haven’t got a handle on them, there’s no point looking at anything more complicated.
On the other hand, if you found the questions above straightforward, “treasurer” is often the least popular role in clubs and societies, and it’s a great place to learn what it’s like to manage finances with a more substantial budget than you’re likely to have personally. Volunteer, get stuck in, and see if you can make yourself the most popular person on the committee by having cash left over for pizza at the end of the financial year.
We’ve left this one relatively low down on the list, as most advice for entrepreneurs seems to focus a little bit too much on confidence; think of the contestants on Dragons’ Den or The Apprentice, who are hugely, absurdly confident despite having very little to be confident about. Confidence, or at least the pretence of confidence, needs to rest on a solid foundation.
But we’re not really talking about the kind of confidence that enables you to walk into a room and declare that your idea is the best thing ever. Arguably more important is the confidence that enables you to pick up the phone to someone very important, and to know that your idea is worthy of their time. Once you’re already in the room, faking confidence is easier; having the confidence to apply in the first place can be rather more challenging.
Compared with some of the other items on this list, this is relatively easy to work on. It comes down to this: what are the things you have to do at the moment, that you’re nervous of doing? Go out and do those things. The best way to develop confidence is to pretend you have it already, until it starts to come naturally.
Empathy isn’t often mentioned as a key skill for entrepreneurs to have, possibly because some of the most celebrated of modern entrepreneurs work in tech and are stereotyped as functioning like robots. But it’s vital. You need empathy to understand whether the problems that you’re trying to solve are actually something that anybody cares about except you – otherwise there isn’t going to be much of a market for your product. You need empathy to understand how to approach your investors, and what they care about most. You need empathy, most of all, to understand your prospective customers and to provide them with the product they need, rather than the product you think they ought to need.
This is all the more crucial if the product you make is for customers who aren’t like you, in whatever way. When Mark Zuckerberg first launched Facebook as a student, he was roughly the same age as his target audience of other students. But the average Facebook user in the USA is now 41 years old, and that number is only going up, while Zuckerberg is just 31. And, of course, the average Facebook user doesn’t have personal wealth of $46 billion. So a little empathy is now required for Zuckerberg to understand what most of his users want.
Facebook is a pretty tame example. The baby boomer generation is famously better off than their children and grandchildren, so an increasing number of successful products will be targeted at capturing the so-called “grey pound”. That means that entrepreneurs in their 20s will need to think themselves into the minds of customers in their 60s, and consider what having children and grandchildren, or going into retirement, might mean for them.
You can try to practise thinking in this way anywhere that you’re with a diverse group of people – say an intergenerational family party, or on a bus journey. Try to think about what each person might be worrying about, or looking forward to, without resorting to stereotypes. You’ll soon get into the habit of seeing things more from other people’s points of view.
What skills do you think an entrepreneur needs? Let us know in the comments!
If you want to equip yourself with the skills, knowledge and tools to become an entrepreneuer, then why not join us at out Business summer school. Learn about business management, financial modelling, leadership and much more.
Image credits: lightbulb; woman at work; taxis; lion cub; snake charmer; stressed man; piggy bank; grumpy pug; shoes