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September 20, 2011 11:00 pm
Over the past few weeks, I have delivered a number of speeches to business owners. Perhaps the most common question I’m asked by audiences is: “What makes an entrepreneur?” My typical answer is that self-confidence and self-discipline are the two most important traits.
That is until I read a fascinating article about educating children in the New York Times (“What if the Secret to Success is Failure?” by Paul Tough). The essay postulates that the most worthwhile indicator of success at school for a child is not background or test scores but character. And the seven aspects of personality that apparently matter most are zest, grit, self-control, social intelligence, gratitude, optimism and curiosity. I realised that such a list could equally be the defining criteria for entrepreneurs.
Many people think character is part of one’s DNA, and not derived from experience. I disagree: as someone once said, “character is not given but earned”. An entrepreneur’s essence is revealed when their company is faced with a crisis; it is the best measure of how they will perform in the long run. As Goethe wrote: “Character is best formed in the stormy billows of the world.”
Even though it is my firm belief that entrepreneurs are made, not born, running your own business is more of a calling than a conventional career. There is no standard training, as there is for so many other vocations, like music, art or medicine. Qualifications, family, connections – these are much less influential than the desire for independence and an appetite for adventure. “Animal spirits” – that curious phrase coined by economist John Maynard Keynes to describe a hunger for opportunity – are clearly paramount. Without that urge to seize the day, then all efforts are likely to come to nothing.
Ambition by itself is almost irrelevant; a capacity for hard work, the courage to execute and the willingness to persevere are far more important.
It seems there might even be a boom in Victorian values. I have just read an excellent new book called Willpower: Rediscovering the Greatest Human Strength. It is part self-help manual, part psychology text. Much of the advice could apply to anyone wanting to run a start-up. In some ways it is a 21st century reworking of Samuel Smiles’ great celebration of the first industrialists, Self-Help. Today there are many more temptations and distractions, and so the need for self-discipline – if one desires to lead a productive life – is perhaps greater than ever.
Most of the tips in the book seem to be about the vices to avoid. I have observed certain recurring weaknesses that bedevil many would-be entrepreneurs. The first is an irrational fear of failure: they cannot put the downsides of self-employment into proportion; the second is procrastination, an unwillingness to make a decision; and the third is an inability to prioritise. Overcome these common problems and one’s chances of making progress are much improved.
The founding capitalists knew about character. J.P. Morgan, the legendary banker, was once asked “Is not commercial credit based primarily on money or property?”. He replied: “No sir, the first thing is character.”
Of course, certain features possessed by entrepreneurs would hardly appear ideal to the ancient moral philosophers. For example, those who create enterprises from nothing are by nature egotists, impressing their vision of a new undertaking upon the world. The truly humble could never carry out a task like that. And prudence is hardly an asset for those who want to make it big in capitalism – indeed the opposite is true to at least a degree. Moreover, all entrepreneurs I know are fiercely competitive – probably not a virtue, but a crucial ingredient, nevertheless.
Most of us acknowledge that our minds and habits evolve from challenges and struggles, rather than easy wins and overindulgence. In a way, the comfort of employment, the safety of a steady job, insulates many from the inevitable hardships of a tough marketplace. Yet such protection is not altogether healthy. Threats overcome, individual victories won after real striving – these are the most rewarding experiences of work. That is surely one of the great purposes in life, and what forges one’s character.
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