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Being an entrepreneur is today’s most coveted occupation. It seems as if everyone you speak with either is, or wants to be, an entrepreneur. Half of Harvard Business School students will become entrepreneurs within 15 years of graduating.[1] Over the past 20 years, MIT has seen a 500% increase in the amount of students taking entrepreneurship classes.[2]
As with any industry, an increase of supply decreases demand, and so with the overabundance of entrepreneurs, it is more difficult to set yourself apart and achieve success.
But some entrepreneurs seem to do it. How? Here are 5 secrets that great entrepreneurs understand that set themselves apart from the rest.
One of our greatest misconceptions is that we attribute value to things we sense. If we see, hear, taste, touch or smell something, it has value. If not, it’s off our radar.
When it comes to spending money, we obsess over every nickel and dime. We still remember that our friend from high school owes us $100. A $40 parking ticket bothers us for days. We value money because we can sense it, and we run our businesses accordingly.
With time, we’re much less careful. During our workday, we engage in meaningless conversations. We take unnecessary meetings. If an activity is even remotely connected to our business, we’ll spend our time indiscriminately. In a report in the Journal of Behavioral Decision Making, University of Toronto Professor Dilip Soman noted that businesses usually account for monetary investments much more thoroughly than time investments.[3]
Successful entrepreneurs know that their most valuable asset is not money. It’s time.
As an advisor and investor, the first thing I teach new entrepreneurs is to value their time. For a start up, most of the initial capital they raise is allocated to salaries, which is their time. Time gives them the opportunity to develop a product, perfect a service or develop the right relationships. Successful entrepreneurs realize that their greatest asset is their time and if they do not budget time carefully, it will cost them dearly.
I once advised company that was on the brink of meltdown. They had a good product, identified a niche and had a team that could deliver. They just couldn’t grow revenues high enough to make their investors happy. When I met with the CEO, it became clear that while he had the vision and capability, he lacked focus. He kept of telling me all the possible paths and opportunities available for the company. The employees were not any better. They took long meetings which ended up in ambiguous detours, and ran around on dinners and lunches freely. I showed them how to value their time like their cash flow. As they valued their time, their focus intensified and their revenues increased.
There is a crucial maxim in business and our personal lives: greatness is found outside our comfort zones.
We each have a comfort zone that helps us navigate through life. It warns us when situations are potentially painful or embarrassing. It protects us from environments that are potentially dangerous.
However, growth only comes when we push past what is comfortable. Our comfort zone is great at keeping us status quo. But status quo doesn’t lead to achieving success in any area.
In life and business, acting outside your comfort zone is where you access your potential. That might mean exploring a more innovative product model, calling a high-profile investor to pitch your idea, or showing confidence to your staff when you’re unsure of what the future holds.
In their study, Anatomy of an Entrepreneur, The Kaufman Foundation found that the most common factor attributed to successful entrepreneurship was the willingness to take a risk. 98% of the over 500 company founders surveyed ranked this trait as important.[4]
I learned this lesson from my trainer. When we first started working out, I would try to get through the workout without enduring too much pain. One day, he gave me a really light work out. When it was done, I was upset. I knew I had just wasted my time. He said to me:
“You have a choice going forward, avoid the pain or confront it, but only through the pain will you get results. Embrace it even though it wont be comfortable.”
He was right. Once I saw the pain as the path to success, I understood that I needed to push myself further each workout.
Great entrepreneurs are not born with more clarity, intelligence or charisma than others. They just understand that their success comes from pushing past their comfort zone. They intuit that if they finished your day without doing something uncomfortable, they haven’t finished their day.
With all the enthusiasm about entrepreneurship these days, it’s easy to miss the point: being an entrepreneur is not an end onto itself. Its only purpose is to solve a need. A business is just an organized way to efficiently solve a need that people have. A great entrepreneur is not passionate about making money, or even about building a company. He’s passionate about giving a unique value to society. He sees a gap and he wants to fill it.
At their core, great entrepreneurs want to give to society more than they want society to give to them.
Recently I received a request to invest in an “innovative” social media app. The glossy executive summary on my desk had an eloquent explanation of how their product will revolutionize the market. It was impressive. But we turned it down – like we do with a lot of innovative companies – because it didn’t really solve a need in people’s lives. When the CEO asked me why I didn’t want to pursue the opportunity, I mentioned that great companies are not concerned with how a product will revolutionize a market, they are concerned with how it will revolutionize their customer’s life.
If you offer a product that can make a big enough difference, it will result in financial benefit. It’s that simple. Copying someone else’s idea to make a couple of bucks doesn’t really work in the long run. Starting a company is not an easy path to cash unless it solves a real issue. If you’re not doing that, you’re in for a long ride.
As a society, we value action. We appreciate people who are always moving. As a result, we plan our days so that we are always doing. We view actions as more valuable than speech and speech as more valuable than actions. However, sometimes it’s just the opposite.
As Abraham Lincoln once said, “If I had eight hours to chop down a tree, I would spend six hours sharpening the saw.”
In 1996, Natan Sharansky won the world chess championship. How did he train? While he was imprisoned for nine years in a Siberian labor camp in solitary confinement, he played himself in thousands of imaginary games of chess.[5] His mind saw every possible move so when it was time for the competition, he excelled.
Many of the successful CEOs I know employ a similar same technique. They wake up early each morning so they can think, plan and strategize. They start their day with a focus, a plan, a vision of their moves before its plays out during the day.
If you’re an entrepreneur you need to spend time in thought. You need to be able create categories that don’t yet exist, sell ideas untested by the market and navigate in unchartered territory. To excel, you need to invest time into thinking, planning and strategizing.
In each class I remind my students that there has never been a time in history when entrepreneurs have had more tools available to them. The greatest challenge for an entrepreneur is not a lack of resources. It’s a lack of clarity. One of their best investments is to spend time each day in thought.
Great entrepreneurs understand that success requires people, lots of them. Businesses need outside help to access money, connections, wisdom, clients, customers and partners. So how do you get others to help you? The answer is simple: ask.
The art of asking is the art of success, and nothing great happens without it. When you ask someone else for help, you exponentially increase the possibilities of success.
So why don’t we do it more often? Because we fear rejection, and that fear is the single greatest threat to our overall success.
When Steve Jobs was in eighth grade, he called up Bob Packard from Hewlett Packard to ask for a part for a device he was building. He picked up the phone, and just asked. And guess what? Packard gave it to him, and offered him a summer job. Jobs said that learning to ask was one of the greatest secrets to his success.
Ask for advice. Ask for connections. Ask for money. Be creative. Just ask, and you may just receive what you need.
[1] http://www.hbs.edu/entrepreneurship/resources/
[2] http://www.bostonmagazine.com/2012/10/mit-important-university-world-harvard/3/
[3] Soman, Dilip, “The Mental Accounting of Sunk Time Costs: Why Time Is Not Like
Money,” Journal of Behavioral Decision Making, July 14, 2001 (169-185)
[4]“The Anatomy of an Entrepreneur,” Published by The Kaufman Foundation, November 2009
[5] http://www.nytimes.com/1996/10/16/world/kasparov-beaten-in-israel-by-russians.html
