After 12 years of research, and after reflecting on my own business ventures I’ve identified the essential traits of the entrepreneurial mindset.
I’ve analysed a variety of definitions (both formal and informal) and considered responses to my posts in various online communities. I’ve consulted with groups who consider themselves entrepreneurs as well as those who hold strong opinions on what makes an entrepreneur. The result of this research is what I believe are the definitive factors that define an entrepreneur, and the traits that determine their success.
I believe it all comes down to the mindset entrepreneurs possess, rather than what they do or how they do it. The mindset is in part innate, but as you’ll see, many of the traits are learned, nurtured and developed over time. It’s not about what you do or say, but what you practice for the long-term.
A formal definition of an entrepreneur, is as follows:
Someone who sets up a business or businesses, taking on financial risks in the hope of profit.
Entrepreneurs take financial risks that an employee wouldn’t take and hope to make money as a result of them. In addition to taking risk and acting upon business opportunities in the pursuit of money, entrepreneurs are often said to be creative. Not all those who would class themselves as creative-types (artists for example) have a great relationship with money. As such not all creatives can be considered entrepreneurs (by this definition at least).
I’ve created my own definition of an entrepreneur which is more grounded in real-world experience. Quite simply:
An entrepreneur solves problems for profit and growth. They create products, services and solutions that matter, make a difference and which make money.
In the context of work, the opposite of an entrepreneur is an employee. Employees value stability and certainty. They take less risk in life and in work they execute tasks on behalf of entrepreneurs, who have taken risks to create businesses that offer employment.
The entrepreneurial mindset then, is by definition the opposite of an employee mindset.
In working with and consulting entrepreneurs, I’ve met the masters and the disasters, the winners and the beginners. I’ve heard the theories and rhetoric and I’ve gathered the opinions of those who claim to be entrepreneurial. I’ve met and worked with those who are enthusiastic about entrepreneurialism and those who are scathing of it.
The definitions and expressions used by these diverse groups can be enlightening, insightful and occasionally contradictory.
Depending on who you talk to entrepreneurs can be thought of as:
- Calculated risk-takers or reckless mavericks
- Self-motivated and driven or self-sabotaging and impatient
- Hungry and enthusiastic, or materialistic and money-obsessed
- Patient and committed or hyperactive and lacking in focus
- Willing to receive feedback and adaptable, or single-minded and meticulous
In reality, an effective entrepreneur will demonstrate many of these traits and all are valuable at different times.
The entrepreneurial mindset comes down to more than rhetoric and buzz-words. It’s about a specific set of skills, beliefs and abilities that are possessed by all, and which are applied repeatedly and consistently for the long-term.
My years of research and experience of encountering the successful and enduring entrepreneurs have shown that these traits are non-negotiable and exist in all who can genuinely describe themselves as entrepreneurs.
1. Entrepreneurs have an increased appetite for risk
As an entrepreneur, nobody pays your mortgage or underwrites the costs or risks of your lifestyle for you. There isn’t a guarantee that risks will pay-off, and often they don’t. True entrepreneurs accept and embrace this fact. Taking risks is part of life. They aren’t reckless or driven by the buzz of living on the edge. Instead, they understand that great reward comes hand-in-hand with risk. They aren’t sufficiently motivated by the stability of a guaranteed wage month-after-month.
Entrepreneurs aren’t born this way. Experienced and wise entrepreneurs iteratively take on more risk as they master the art of turning it into reward.
2. Entrepreneurs are prepared to be uncomfortable, to explore the unknown and to predict future
Entrepreneurs put themselves in difficult positions that others would rather avoid. They sell when they don’t feel comfortable doing so. They build their personal brand where others are embarrassed or fearful. They do things that push them outside of their comfort-zone and they enter the marketplace before they’re a polished and finished article.
Entrepreneurs possess vision and know this is necessary to grow and succeed. They co-exist with the unknown, unsure if they’re going to get paid or whether their product or service will take off. They have no guarantee that years of efforts will pay off, and they accept that.
In creating meaningful products and services that matter and make a difference, and by helping others to solve problems, they have the self-belief and passion to try and predict the future. They’re convinced that they can help others, even if their offering isn’t fully ready. This gives them courage, conviction, passion, and also a little delusion; all of these help them to carry on.
3. Entrepreneurs strive for growth and progress
Entrepreneurs get impatient when they’re standing still and not moving forwards. If not growing, they may as well be decaying. Remaining static is not an option; it creates boredom and frustration. This striving can be innate, or it can come about as a side-effect of the relentless pursuit of risk-based growth. They are motivated by progress and opportunity. What starts out as a drive triggered by external forces ends up being the thing that entrepreneurs live, breathe and need to feel complete. It’s the hunger inside them and the fuel to their fire. Problems are merely opportunities to learn and grow through overcoming.
Entrepreneurs experience doubts, fears and frustrations, but they transcend these emotions as they know the positives of their lives outweigh the drawbacks.
When I experience doubt, I have to remind myself of all the reasons why I chose this life, and the many ways in which life is bigger, better and richer as a result. I have the skills and resilience to overcome problems. I just have to get out of my own way and allow the growth and progress to come as a result.
4. Entrepreneurs start now and get perfect later
Embracing and seeking feedback at all times, they’re prepared to iterate and tweak products and services they’ve created. They turn ideas into products quickly, accepting that procrastination will prevent them from moving forwards. They are prepared to fail regularly on the path to success.
5. Entrepreneurs are okay with not knowing it all (yet)
They are driven towards ongoing learning and education. They accept that they’ll never know it all and are willing to start now, where they are with what they have. They can learn and figure it out as they go. They dance with and embrace the idea that they’ll never be perfect. They are never going to be the finished article and recognise that as a great opportunity for continuous growth.
They consider themselves forever a student, taking opportunities to learn and grow throughout their lives.
6. Entrepreneurs develop self-awareness
Like many of the other key traits this requires an overall attitude of receptiveness to growth, development and a willingness to become. The traits of entrepreneurship are predominantly learned and grown-into through experience. Entrepreneurs may possess innate tendencies and skills, but many traits can only be gained over time, including a growing self-awareness. You don’t need to earn the title of entrepreneur provided you are willing to embrace and demonstrate all these traits; good on you!
Self-awareness is essential to truly know, own and admit your strengths and weaknesses. You shouldn’t over-compensate for the things you need to improve, nor be falsely-humble about things you’re really good at. A far more appropriate response is to leverage your weaknesses to others who can help, rather than being held back by pride or ego. Be humble and prepared to learn about the things you don’t know, and confident as you apply and hone your strengths.
Courage, persistence and relentlessness come when you’re confidently applying your skills; essential to doing this is to have the self-awareness.
7. Entrepreneurs are okay with letting go and accepting help
Entrepreneurs know that it’s not a weakness to let go of control and of tasks they don’t have the time to do or which aren’t the best use of their time. Your admin can and should be done by someone else, to free your time for generating growth and income. Entrepreneurs delegate, and then leave others alone to do their jobs without interfering or micro-managing. They relinquish control and let go of their innate desire for perfection.
In order to grow, you must let go. This simple saying demonstrates perfectly how and why great entrepreneurs such as Richard Branson have grown their businesses and elevated themselves to a higher-plane of entrepreneurship. Branson has five PA’s who have enabled him to scale his ventures by a corresponding multiplier. This only works by trusting in the work, the motives and the diligence of these people. There is no good example of a business that has scaled successfully where the original entrepreneur still does everything themselves.
8. Entrepreneurs deal with the feelings of loneliness and isolation
Entrepreneurship can be a lonely place. When they’re the leader at the top, supporting the staff, paying the salaries and taking the risk, entrepreneurs can feel isolated, lonely and vulnerable. They will tackle this by taking on a mentor or coach to support and guide them. Friends and family are often also there to support. The dark and lonely days still come, where inner-turmoil and negative self-talk cause entrepreneurs to doubt the worth of their business and themselves.
These are hard times, demanding courage and determination to push forwards, manage these feelings and keep going. Entrepreneurs embrace, master and transcend these emotions, seeking out the support of mentors and groups of like-minded entrepreneurs who know the struggle and can support them through it. Entrepreneurs are resilient and know that it’s their responsibility to keep on going. They tackle it with honesty and vulnerability, not false-bravado and denial.
After many years, I still feel this way from time to time (for 2-3 weeks each year on average). It’s our responsibility to each other as entrepreneurs, to not just pretend and shut this out, but to acknowledge it to ourselves and each other, and to help each other through it.
9. Entrepreneurs transcend what people say and think about them
All entrepreneurs will eventually attract rejection, comment, criticism, trolling or even hate at some point. This is unpleasant to deal with and few ever really get used to it. Entrepreneurs do find effective ways of dealing with it so that it doesn’t’ knock them off track. They feed off all energy, not just the positive comments and the likes, but the adverse reactions too. Criticism and praise are equally welcome and the entrepreneur uses both to fuel their actions and their energy. They are motivated by the interaction, even if it comes from negativity, and they redirect the energy it generates outwards rather than internalising it and letting it drive them down.
I love it when I get critics, trolls and haters. I feed off it and take inspiration from others telling me I’m wrong, that I’ll fail or that I’m never going to succeed. It gives me fuel to my fire and a desire to push forwards. Entrepreneurs find their own means of cathartically processing this energy and negativity to help maintain the healthy balance that’s essential; for me that’s through the passion and energy I release into my podcasts and videos!
Another useful outlet for energy that might otherwise be internalised is to redirect it as love and service towards your customers. This could be by reaching out to them proactively, by phone or online to offer help. Disrupting negative feelings or energy imbalance, is essential for restoring your energy to a positive state.
10. Entrepreneurs convert a passion into a profession, a problem into a solution or a pain into a product
Employees supply pre-existing products, deliver existing services or execute tasks. There is little innovation or creativity in their work, but rather they’re following a proven path. Entrepreneurs prefer to innovate, turning ideas into income by identifying customer need and using creative means of addressing this. The inner pain that they identify in themselves or others is used as a prompt to conceptualise and create an outer product or service that solves meaningful problems. Entrepreneurs know that this is the best way of achieving profit and growth in a creative way.
Entrepreneurs aren’t somehow better than employees. They are two different ways of operating and existing in the world. It’s about much more than a label that each possesses in their work.
Some employees are wannabe entrepreneurs but don’t know what it takes. Others may be better off as intrepreneurs; those who demonstrate entrepreneurial traits but who are better suited to the risk-exposure of an employee. For these individuals, it’s still possible to achieve great success, by grabbing onto the coat-tails of a top-dog entrepreneur and delivering tasks for them as an employee, helping them to execute their entrepreneurial ideas!
Being an entrepreneur isn’t about labelling yourself with the title. It’s about learning and applying the traits for the long term, as you grow through life.