Is it possible to identify the qualities that make a successful entrepreneur?
Venture capitalist Tony Tjan says yes. Not only that, but by giving the entrepreneurial community a little bit of self-awareness, Tjan and the co-authors of Heart, Smarts, Guts & Luck, feel the world of startups will be better equipped. “For both aspiring entrepreneurs and experienced founders, we’ve developed a framework for self-awareness, to help to identify your own strengths and those of your team members.”
Consider this the Myers-Briggs of entrepreneurship. Not every entrepreneur fits neatly into a single bucket, says Tjan, but a successful founding team will have leaders with strengths in all four characteristics. “As important as it is to recognize your own strengths, it’s just as critical to understand how, at different stages in the life-cycle of a company, different personalities are going to be more valuable than others.”
An entrepreneur that’s hearts dominant may not always come across as rational, but what they lack in strategic thinking they make up for in passion and a natural storytelling capability. According to research by Tjan and his co-authors venture capitalists, Richard Harrington and leadership advisor Tsun-Yan Hsieh, a staggering 65% of founders are identified as driven by “heart.” Tjan and company call the determining factor of hearts-dominant entrepreneurs “authentic vision,” and say these founders are driven by an unshakable sense of purpose.
Examples of hearts-dominant founders profiled in the book include Guy Laliberte, who parlayed his vision for a revamped circus into the billion-dollar Cirque du Soleil giant and Doris Christopher, the home-economics teacher who believed every home chef should have professional-grade tools. Her Pampered Chef was sold to Berkshire Hathaway in 2002 for a reported $900 million.
The all-consuming passion of heart-driven people is what the authors credit with inspiring “the most infectious pitches in the world,” making this entrepreneur-type well-suited to early-stage companies. “This is a guy you want on your side when you’re looking for investors,” Tjan says.
The smart-dominant entrepreneur is the details guy, and they are at their most critical as a company begins to scale. She is a rational, fact-driven force who takes the reins of a new business and implements process, setting goals and systems of accountability that the hearts-driven founder might have overlooked.
Tjan says the defining factor—or skill-set—if the smarts-driven entrepreneur is pattern recognition, or the ability to learn through trial and error, “a sheer shrewdness… that leads to practical, repeatable habits that in time become second-nature and apply to successful business building.”
Prominent smarts-dominant leaders profiled include Meg Whitman, the Bain consultant turned eBay visionary and Jeff Bezos, who methodically studies mail-order businesses before settling on books when founding Amazon (although, to be fair, he’s now taken on just about every one of them).
What doesn’t define smarts? A high IQ (though it certainly helps). No, business smart is a well-balanced combination of book smarts, street smarts, people smarts, and creative smarts.
“Now when you hit a speed bump,” says Tjan, “And every company does during scaling—maybe growth stalls, maybe you lose some key people–this is where you have to start making trade-offs.” When that happens, a guts-dominant founder is exactly the guy you need. “A guts dominant personality is less marked by heart than by his ability to take action,” he says. “In a moment of truth when you have to get things done, having a person who can make the tough calls is critical.”
We often equate “gutsy” individuals with thrill-seekers, the Richard Bransons of the business world, who are first in line to throw themselves out of airplanes, but Tjan and his co-authors are quick to point out that both risk-takers and risk-toleraters fall into this group. A guts-dominant leader must have the guts to initiate, the guts to endure and the guts to evolve as a new company changes.
“Entrepreneurs need to initiate with conviction,” the authors write, “but for most business, the bigger tests lie in preserving (guts to endure).” For businesses that have already experienced success, having the guts to evolve or pivot can be the challenge—and the difference between a short-lived business and one that’s in it for the long haul.
“We’re not talking about someone who wins the mega-millions or draws the perfect card in Vegas,” says Tjan. “There are obviously people who have dumb luck, but that’s not what the luck-dominant entrepreneur is made of.” Instead, he says, luck-dominant founders—which make up more than 25% of founders in the authors’ studies—are men and women whose positivity and intellectual curiosity create circumstances where a positive outcome is more likely. In other words, “they’re lucky by attitude, not by fate.”
Before you dismiss what sounds like the premise of The Secret, consider your behavior at the last networking event you attended. Did you make a beeline for the most powerful man in the room, competing with other would-be founders for his attention? Or did you talk to everyone who appeared approachable, shaking hands and making connections left and right with the attitude that you just might meet a millionaire investor by chance? If you did meet that millionaire, and he funded your company, you’d be called lucky. But you would have made that luck possible.
The underlying traits of what Tjan defines as the luck-dominant entrepreneur are humility, intellectual curiosity, and optimism. “People that start with a baseline of humility gives them the capacity to explore,” he says. “It’s very hard to conceited people to be curious—because they think they know it all.” A curious founder is a voracious reader, a world traveler, and is always on a quest to better herself—more likely to place herself in situations to meet new people. But perhaps most critical in this personality type is optimism, which Tjan says is the attitude to allow them to take advantage of “lucky” situations and parlay them into success.