Founding a new business can be wonderful and scary. It’s wonderful when you see people around you getting excited about your idea, buying in to it, and making commitments. It’s scary when you are all alone, thinking of the commitments, and asking yourself do I really have what it takes to pull this off?
Both founders and investors need to ask if the founder is fit to become an entrepreneur. For the investor, qualities of the founder is pretty much the only yardstick that can be used to predict execution. For the founder it’s a bit more profound question: Am I investing my time, effort and money wisely by choosing the career of an entrepreneur? Am I fit to found?
With this blog post series, I am focusing on the individual qualities that entrepreneurs share, and the ones that might be beneficial for their success. The perspective is not new: scholars have investigated the makings of entrepreneurs since 1930’s. I simply make a pick from the literature, and suggest a few elements for the ultimate entrepreneurial aptitude test.
Entrepreneurs share cognitive properties, traits and motivational drivers
Researchers have identified a number of cognitive properties, traits and motivational drivers shared by entrepreneurs. These qualities can be seen in individuals who identify and choose to pursue entrepreneurial opportunities. Few of the most interesting include:
- Cognitive properties such as the ability to identify new means-ends relationships (i.e. connecting the dots). For example, sometimes technologically competent inventor fails to see the commercial opportunities in their invention. Experienced entrepreneurs tend to see opportunities where others see risks, and rarely engage in counterfactual thinking, mourning for missed opportunities.
- Traits and qualities such as self-esteem, persistence, proactivity, optimism and the ability to cope with uncertainty have been identified amongst entrepreneurs. Self-efficacy, individual’s belief in his or her innate ability to achieve goals, is very much related to optimism, and one of the key traits shared by successful entrepreneurs.
- Motivational drivers include the need for autonomy and self-actualization, but also passion. Sami Kuusela, Finnish serial entrepreneur, describes the passion as group psychosis, where founders invest their energy on exploiting the opportunity without any deeper rationale. Anita Roddick, founder of Bodyshop, says “to succeed you have to believe in something with such a passion that it becomes a reality”.
These qualities are natural for some, but they can also be developed. A business degree will surely help in identifying commercial opportunities, and many entrepreneurs have built their persistence and ability to cope with uncertainty on the job.
The entrepreneur’s aptitude test
The list of individual qualities can be very useful for someone considering entrepreneurship as a career choice. There are no formal aptitude tests to take for setting up a new business – the key person you need to convince is usually the one in the mirror. Therefore, self-assessment is one of the key entrepreneurial skills.
To take your self-awareness as a prospective entrepreneur to a next level, ask yourself:
- Can I create new ideas based on existing information?
- Do I see opportunities where others see risks?
- Do I only rarely regret lost opportunities?
- Do I believe in my ability to achieve goals?
- Am I persistent in achieving my goals?
- Am I self-confident and proactive?
- Can I cope with uncertainty well?
- Am I passionate about this?
The answers should help you as prospective entrepreneur to discover your strengths and weaknesses, and act upon them. Long list of no’s will not disqualify you as an entrepreneur – it simply means you are more aware of your shortcomings.
Next up in the blog post series: Entrepreneur, learn how to profit through information
Mikko Järvinen is an entrepreneurship scholar, author and practitioner, currently working as a Project Manager at Haaga-Helia StartUp School. The article is adapted from “Yritä, erehdy, onnistu”, a guidebook for the entrepreneur-to-be. The book is written by Mikko Järvinen and Matti Kari, and published by Otava in 2017.